TMI Blog2022 (10) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no incriminating material found during the course of search on the basis of which deduction claimed under Section 80IA(4) was disallowed by the Ld. Assessing Officer and also confirmed by Ld. CIT(Appeals). In view of well settled proposition of law that completed assessment can be interfered by the Ao while making assessment u/s 153A only on the basis of some incriminating material unearthed during the course of search documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made in the course of original assessment, we are of the considered view that in the instant facts, the Ld. CIT(A) has erred in facts and in law in upholding the additions - Decided in favour of assessee. - ITA No. 218/Rjt/2015 And ITA Nos. 204/Rjt/2015 - - - Dated:- 28-9-2022 - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri D.M. Rindani, A.R. For the Revenue : Shri Aarsi Prasad, CIT-D.R. ORDER PER BENCH:- These appeals have been filed by both the Assessee and the Revenue against the order passed by the Ld. CIT(Appeals)-11, Ahmedabad in App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him and listed in grounds No. 2 above. The appellant craves to add, amend, alter and withdraw any ground of appeal anytime up to the hearing of this appeal. 3. The Revenue has taken the following grounds of appeal:- 1. The Ld. CIT(A) has erred in law and on facts in allowing the deduction U/s 80IA(4) in respect of various projects by treating the assessee as developer instead of work contracts as treated by the A.O. 2. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 3. It is, therefore, prayed that the order of the CIT(A) be set aside and that of the A.O. be restored to the above extent. 4. At the outset, the Counsel for the assessee has raised the issue of jurisdiction of passing the assessment order for the above year under Section 153A r.w.s. 143(3) of the Act on the ground that assessment for the above year were already concluded/unabated and during the course of search initiated on the assessee for the impugned assessment years, no incriminating material was found so as to justify the aforesaid additions. The Counsel for the assessee relied on several judicial precedents in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1). 3. On the basis of details collected during the course of search and subsequent assessment proceedings it is seen that the receipts of the assessee on which deduction u/s. 80IA(4) of the Act is claimed, is from works contract with the Central or State Govt. or it's enterprises or Semi Govt. Bodies. The assessee was therefore, requested to show cause as to why the deduction u/s.80IA(4) claimed by the company should not be disallowed, which is apparently a wrong claim and against the provisions of law as discussed above. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 5. The arguments put forth by the assessee company have been carefully considered and a claim of the assessee has been thoroughly examined in the light of provisions of section 80IA(4) read with explanation inserted after sub section (13) of section 80IA of the Act. On perusal of the reply submitted by the assessee it is seen that the same is not acceptable for the reasons discussed in the following paragraphs .. 6. From the observations of the Ld. Assessing Officer reproduced above, apparently, no incriminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Assessment Years preceding the year in which search has been initiated. Thereafter, he has to assess or reassess the total income of these six years as provided u/s 153A (1)(b). It was furtherclarified that only the assessments or assessments pending on the date of initiation ofthe search or requisition shall abate. The second proviso does not contain any word or words to the effect that no reassessment shall be made in respect of completed assessments. The courts have unanimous view that the language is clear in this behalf and therefore, literal interpretation should be followed. The Bombay Tribunal (special bench) held that such interpretation does not produce any manifestly absurd or unjust results as Section 153A (I) (b) and the first proviso clearly provide for assessment or reassessment of all six years. 6.1 The ratio of the decisions of the courts makes it abundantly clear that once action u/s 132 was carried or requisition u/s 132A initiated, it becomes mandatory to the AO. to initiate assessment proceedings in 6 A.Y s, preceding to year in which search was carried out or requisition was made, it is not relevant whether any incriminating material was found in any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to material disclosed during search requisitioned. If no incriminating material was found during search, no addition can be made on basis of material collected after the search. The Delhi High Court in the case of Kabul Chabla (2015) 380 ITR 573 (Delhi High Court) has held that completed assessment can be interfered by the Assessing Officer while making assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which ware not produced or not already disclosed or made in the course of original assessment. The SLP filed by the Revenue against the above decision of Delhi High Court was dismissed by the Hon'ble Supreme Court vide SLP(C)No.018651/2016.The Gujarat High Court in the case of Pr. CIT v. Sunrise Finlease 89 Taxman.com 1 (Gujarat) has held that where no incriminating evidence against assessee was found or seized during the course of search so as to attract provisions of Section 153A proceedings, no additions could be made on the basis of statement of director of assessee company which were recorded under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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