9911796707
TMI Blog2018 (4) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... Rao ` 16000 5. S. Subba Rao ` 17000 6. P. Chandra Sekhar ` 16000 7. P. Gayatrinath ` 15000 8. M. Rama Krishna ` 17000 9. K. Dora Babu ` 16000 10. N. Venkateswara Rao ` 15000 Since the assessee could not furnish any explanation with regard to the source and nature of credits, the A.O. completed the assessment by making addition of Rs. 1,61,000/- and disallowed the interest relatable to the unsecured. 3. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A) and the Ld. CIT(A) confirmed the addition made by the A.O. as under: 8.4) I have carefully considered the written submissions and the facts of the case. There is no dispute regarding the action u/s.132 of the Act carried on 03.02.2008 in the group cases. It is also not disputed by the AR that certain documents were seized wherein the details of income of appellant was mentioned. The AR has raised a doubt as to how the Assessing Officer was satisfied on the said material in order to invoke provisions u/s.153C of the Act. I have perused the material on record. It contains transactions relating to construction of residential house. It is also seen that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmation letters and the claim of repayment of Loan remain self serving statements. The rigors of Section 68 are stringent in the case of credits. What the appellant needs to demonstrate is identity, genuineness and creditworthiness of loan creditors. Absence of any one of these elements will render the loan as unexplained and liable to be taxed u/s.68 of the Act. In the instant case, the appellant had failed to prove the genuineness and creditworthiness of creditors. 8.7) In view of the above facts and circumstances, I uphold the addition of Rs. 1,61,000 - on account of loan creditors made by the Assessing Officer. Having held that the loans a unexplained, the interest claimed by the appellant is also held as unexplained expenditure Accordingly, the claim of the appellant is hereby rejected and the order of the Assessing Officer is confirmed. 4. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. During the appeal hearing, the Ld. A.R. argued that in this case, the assessee has filed a return of income on 23.11.2007 and the time limit for issue of notice u/s 143(2) of the Act got expired on 30.9.2008. Therefore, the assessment is completed assessment, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Consequent to search action u/s 132 of the Act, the assessee case has been centralized and accordingly fresh assessment proceedings have been initiated by issuing notice u/s 153A/153C of the Act for the six assessment years immediately preceding the assessment year in which search was conducted. The assessee has filed revised returns in response to notice u/s 153A of the Act and admitted the additional income disclosed during the course of search. The case has been selected for scrutiny. During the course of assessment proceedings, the assessee was asked to produce books of accounts and relevant bills & vouchers in support of expenditure claimed. In response, the assessee filed written submission and stated that the books of accounts are not available and hence cannot be furnished. Therefore, the A.O. issued a show cause notice and asked to explain why the net profit from the business shall not be estimated. In response to show cause notice, the assessee has filed a written reply and contended that the income for the assessment year 2004-05, 2005-06 and 2007-08 cannot be tinkered with, as there was no incriminating material found during the course of search for the above asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy abated and completed assessments, the natural meaning assigned to it should be given to interpret the provisions in such a way that which shall not cause undue hardship to the tax payers. The provisions of sect on 153A of the Act explained the procedure of assessments, abated assessments and the manner in which the assessment should be framed, which was further supported by circular no.7 of 2003 issued by the CBDT. When the law has explained the position of abated assessments, then the same way the completed assessment should be treated so as to understand that those assessments are reached finality and which cannot be tinkered with unless there was a seized document. Therefore, we are of the considered opinion that where search is initiated, all pending assessments are merge into one and only one assessment for each assessment year shall be made separately on the basis of findings of search and other material existing or brought on record by the A.O. In respect of non abated o completed assessments, the assessment will be made on the basis of books of accounts or other relevant documents found during the course of search, but not produced in the course of original assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer tried to reagitate the assessments. According to us, the learned Tribunal has rightly held that the Assessing Officer has no jurisdiction to reagitate the assessments which were already completed and subsisting. We therefore do not find any element of law to be decided in this appeal. Hence, the appeal is dismissed. There will be no order as to costs." 7. The similar issue has been considered by the Hon'ble ITAT Kolkata bench in the case of Smt. Yamini Agarwal Vs. DCIT (Central Circle)-3, Kolkata reported in 83 Taxman.com 209 after considering the decision of special bench ruling in the case of All Cargo Logistics and the decision of Hon'ble Karnataka High Court in the case of Canara Housing and the Bombay High Court decision in the case of Anil Kumar Bhatia and expressed a view that in respect of assessments completed prior to the date of search the scope of proceedings u/s 153A of the Act has to be confined only to the material found in the course of search. For the sake of convenience, we extract the relevant para-25 & 26 of the cited order. 25. We therefore hold that the scope of the proceedings u/s.153A in respect of assessment year for which asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me limit laid down in that section. Such assessment did not abate on the date of search which took place on 28.3.2008. In respect of assessments completed prior to the date of search that have not abated, the scope of proceedings u/s.153A of the Act has to be confined only to material found in the course of search. Since no material whatsoever was found in the course of search, the additions made by the AO in the order of assessment for both the Assessment years could not have been subject matter of proceedings u/.s.153A of the Act. Consequently, the said various additions made in the orders of Assessment ought not to have or could not be made by the AO. Gr.No.1 raised by the Assessee in both the appeals are accordingly allowed. 8. As per the provisions of section 153C of the Act also, the A.O. required to issue the notice only on the basis of money, bullion, jewellery, other article or thing seized or requisitioned belonged to or any books of accounts or documents seized or requisitioned pertains to or pertain to the assessee. For ready reference we extract section 153C of the Act, which reads as under; "153C(1) Not withstanding anything contained in section 139, section 147, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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