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2019 (5) TMI 741

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..... Act, 1961 (in short the Act ) arising out of the order dated 30.03.2014 passed by the Deputy Commissioner of Income Tax, Central Circle - 2(3), Ahmedabad for the Assessment Year 2009-10. 2. The facts leading to this case is this that in the case of Jayesh Steel Group, search operation u/s 132 of the Act was conducted on 13.10.2011. The assessee s case was also covered in the said search action. Subsequently, notice u/s 153A was served upon the assessee upon which return of income on 27.12.2013 for A.Y. 2009-10 was filed declaring total income at ₹ 28,240/- and book profit under Section 115JB of the Act at ₹ 28,240/-. Notice dated 17.09.2013 u/s 143(2) was served upon the assessee followed by a further notice u/s 143(2) dated 02.12.2013 and 142(1) along with a questionnaire. The AO during the assessment proceeding observed that the share capital of the assessee has increased by ₹ 1,79,25,000/- (₹ 20,00,000/- for A.Y. 2010-11). The details/evidences were called upon from the appellant with regard to the same and after considering the same the Learned AO concluded that the share capital introduced by the assessee company in this year is its unexplained cash cr .....

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..... e AO erred in "interfering with" assessments which remained unabated as on the date of search. As such, when the examination of seized material by the AO did not lead him to any incriminating document/entry for the year under reference, he was indeed duty-bound to "reiterate" the total income which had attained finality before the date-of search, and he indeed exceeded his jurisdiction in firstly taking up the roving enquiries unfounded on incriminating seized documents, and secondly, in making the impugned additions. This view in Kabul Chawla (supra) has been reiterated by Ahmedabad Bench of Tribunal in Saumy a Construction (supra), which in turn, and eventually, has also now been approved and reiterated by the Hon. Gujarat High Court. In Saumya Construction, Ahmedabad Tribunal disapproved the AO's action of making addition of ₹ 11,05,51,000/- u/s 68 as unexplained investment in "unabated" assessment being refrained u/s 153A on the ground that the AO's action of making addition u/s 68 was not based on any incriminating seized documents. Tribunal, while relying on Sanjay Agarwal 47 taxmann.com 210 (Del), observed that the AO while reframi .....

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..... aterial unearthed during the course of search................. . 7. We see no reasons to take any other view of the matter than the view so taken by the coordinate bench. Respectfully following the same, and having noted that the additions of ₹ 11,05,51,000/- is not based on any incriminating material found during search operations on the assessed, we delete the said addition....." Saumya Construction ITA No.24/2016 dated 14/3/2O16 (Gujarat HC) "....18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided wider section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of ₹ 11,05,51,000/-on the basis of the material which was not found during the course of search, but on the basis .....

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..... the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails: and is, accordingly, dismissed. 7. In view of the above, arid in view of by now settled legal position as enunciated by Jurisdictional HC, the AO, in re-assessments of any of unabated and finally concluded assessments framed u/s 153A/153C, is not. authorized to 'interfere" except on the basis of and except having been prompted by incriminating seized documents relatable to that assessment year. It is clear that the additions as explained share capital made by the AO are not based on any seized documents. As such, as per even the AO in the assessment order, the additions; based on "post-search" enquiry on and verification of information which was already available in the pre-search return of income filed by the appellant which had attaint finality as on the date of search. It is also clear that the .....

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..... t Ltd [(2016) 387 ITR 529 (Guj)] has observed as follows: ……….it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of ₹ 11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made .....

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