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TMI Blog2021 (12) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... al has been found as a result of search warranting impugned addition. 2. That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 1,77,72,706/- as deemed dividend u/s 2(22)(e) of the Act without considering the submissions of the assessee and without observing the principles of natural justice. 3. That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 1,77,72,706/- as deemed dividend u/s 2(22)(e) of the Act, without considering the fact that shareholding of assessee is less then 10%. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 3. Briefly the facts as per record are that a search was conducted at the the residential premises of the assessee and business premises of M/s Bhagwati Lacto Vegetarian Exports Pvt. Ltd., Ferozepur Cantt., M/s Bhagwati Lacto Foods Pvt. Ltd., the two companies in which the assessee's latter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal shareholding of the Company has been shown at 46,23,000 shares. In the remand report, the AO has mentioned that during the post search enquiry, details from the group companies including the 'shareholding pattern' was called and in the reply filed by M/s. Bhagwati Lacto Foods Pvt. Ltd., the assessee held 10,10,000 shares of the company M/s Bhagwati Lacto Foods Pvt. Ltd. as on 31.03,2015 out of the five shareholders and no share was held by M/s. Bhagwati Lacto Vegetarian Exports Pvt. Ltd." 5. The appellant assessee being aggrieved by the impugned order, is in appeal before us. 6. The ld. Counsel for the assessee submitted that, in this case assessment has been completed u/s 153A r.w.s. 143(3) of the FT. Act 1961, consequent to Search operation u/s 132(1} of the Act, was conducted at the residential premises of the assessee on 11.02.2016 as evident from para 1 of page 1 of the Assessment Order. He argued that the AO has made addition on the basis of return of income and disclosed bank statements which were filed by assessee itself during assessment proceedings (Page 2 para 1 of the Assessment Order). The Ld. AR further argued that there was no incriminating material, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the bench that in a case, where no incriminating material is found during course of search proceedings; and the assessment proceedings remain un-abated as on the said date, no addition can be made validly in the hands of assessee" Smt. Manju Mittal Vs DCIT ITA No.l93/ASR/2019 dated 01.01.2020 wherein the Hon'ble Jurisdictional Bench held as under: Search and seizure Assessment under s. 153A-Compulation of undisclosed income vis-a-vis absence of incriminating material Return filed by the assessee for the relevant assessment year has already been processed by the Revenue under s. 143(1) and it is not the case of the Revenue that the assessment proceedings were still alive as on the date of search operation From the orders passed by the authorities below there is nothing to suggest as to what incriminating material has been found during the search from the assessee's possession or premises, on the basis of which the additions have been made Additions not sustainable CIT vs. Kabul Chawla (2015) 281 CTR (Del) 45 : (2015) 126 DIR (Del) 130 : (2016) 380 ITR 573 (Del), Principal CIT vs. Meeta Gutguiia (2017) 295 CTR (Del) 466 : (2017) 152 DTR (Del) 153(2017) 395 ITR 526 (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax, [2014] 41 taxmann.com 485 (Delhi - Trib.) Section I53A of the Income-tax Act 1961 - Search and seizure - Assessment in case of (Computation] Assessment rears 2003-04 to 2007-08 - Whether in course of proceedings under section 153/1 addition should he made only on basis of material seized during course of search, particularly when no assessment was pending on date when search had taken place - Held, yes [Para 14] [In favour of assessee] M/s Marigold Merchandise (P) Ltd. vs. DCIT, (2014) 164 TTJ 0448 (Del) Search and seizure -Assessment u/s. 153A - Validity of-Pursuant to search and seizure operations conducted in assessee's premises notice (2014) 164 TTJ 0448 (Del) u/s J53A was issued- Additions was made u s USA Assessee had claimed that in absence of any incriminating material found during course of search no addition can be made by AO as undisclosed income us 153A Held, it is settled law that no addition can be made unless some incriminating material in this behalf is found as result of search-It was not disputed that no incriminating material in behalf of purchase of these lands and sale of these lands was found as result of search - also purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies, wherein he become share holder. 9. It is seen that the assessee has claimed before the authorities below that where no assessment proceeding for the year under consideration is pending, in that eventuality, in the absence of any incriminating evidence found during the course of search and seizure proceedings, no addition/disallowance can be made qua unabated assessment for the said year, however the authorities below held that the Hon'ble Kerala High Court in the case of "E.N. Gopal Kumar vs. CIT(Central) (Supra)", there is no condition that the Department has to unearth some incriminating material to conclude some method against the assessee in events where the assessment is triggered by a notice under Section 153(1)(a) of the Act. 10. The question of law involved in the instant case pertains to the issue that where no assessment proceeding for the year under consideration is pending, in that eventuality, in the absence of any incriminating material found during the course of search and seizure proceedings, whether the addition can be made qua unabated assessment for the said year? An identical question on identical fact has been examined and adjudicated by Coordinate Be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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