TMI Blog2021 (12) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... . Meena, AM: This appeal of the assessee is directed against the order of Ld. CIT(A)-5, Ludhiana dated 27.11.2018. 2. The assessee has raised the following grounds of appeal: 1. (a) 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 assuming jurisdiction and framing the impugned assessment order u/s 153 A/143(3) of the Act is bad in law and against the facts and circumstances of the case and is not sustainable on various legal and factual grounds. (b) That in any case and in any view of the matter, additions made in the impugned order are beyond jurisdiction and illegal also for the reason that these could not have been made since no incriminating material 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts of the case, the basis of addition made by the AO and the arguments of the AR during the appellate proceedings have been considered. The AR argued that the assessee received a sum of Rs. 9.5 crore from M/s. Bhagwati Lacto Foods Pvt. Ltd., out of which the amount of Rs. 4.5 crore was returned back on the same day and hence the total amount of Rs. 5 crore was due to Company on 31.03.2015. It was submitted that shareholding of the assessee in M/s. Bhagwati Lacto Foods Pvt. Ltd. was only 10,000 shares and as per AR, assessee's shareholding was merely 0.2163% i.e. far less than 10% requirement, as per provision of Section 2(22)(e) of the Act. The AR claimed that this shareholding was as per the revised Annual Return filed with ROC on 26.06.2018 wherein the total 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k statement disclosed in return of income, which were filed by assessee itself is evident from the Assessment Order Page 2 para 1 which states as under: While Examining the assessee s bank account no . Thus addition is not based on any incriminating material. Thus, there was no incriminating material, much less, in respect of the impugned addition and hence impugned addition has been made in the absence of any incriminating material unearthed from the search, which is not permissible in law and it is supported bv the as sense's group case and other following judicial decisions: - Smtt. Sanjana Mittal As. DOT ITA No. 487/Asr/20l8 dated 11.03.2019, wherein the jurisdictional bench of Hon ble ITAT, Amritsar held that .... ....no incriminating material has been found, no assessment proceedings were pending on the date of search proceedings, therefore, it was held 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 whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the said AYs u/s 2(22)(e) was not sustainable because no incriminating material concerning such additions were found during the course of search and further no assessments for such years were pending on the date of search Held, present appeals concerned AYs. 2002-03, 2005-06 and 2006-07 - On the date of the search the said assessments already stood completed Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed - Question framed by the Court was answered in favour of the assessee and against the Revenue Revenue s appeal dismissed CIT-II, Thane vs. Continental Warehousing Corporation (Nhava Sheva) Ltd, [2015) 58 taxmann.com 78 (Bom HC) IT: So addition can be made in respect of assessments which have become final if no incriminating material is found during search. Parivar Properties (P.) Ltd. v. Deputy Commissioner 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 bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not disputed that the assessee has filed its Income Tax Return 30.09.2015 for the relevant assessment year 2012-13 which has been processed u/s 143(1) of the act on dated 23.03.3013. Subsequently, a search operation u/s 132 was carried out at the residential premises of the assessee on 11.02.2016. Further, another peculiar fact is that alleged incriminating material i.e., back up data stored in various computers lying in the business premises of M/s Bhagwati Lacto Foods Pvt. Ltd., and the Laptop of Sh. Manjeet Singh, Accountant of the Company, in the form of typed balance sheet, bank statement which was used against the assessee was already disclosed in its audited books of account the return of income filed with the Department. The ld. Counsel, contended that no documents or suspicious material of incriminating nature has been found or seized either from the premises of the assessee or the companies, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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