TMI Blog2022 (11) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal assessment, we are of the considered view that in the instant facts, the Ld. CIT(A) has not erred in facts and in law in deleting the additions Decided in favour of assessee. - IT(SS)A Nos. 153, 154 & 155/Ahd/2016, Cross Objection Nos. 186, 187 & 188/Ahd/2016 (In IT(SS)A Nos. 153, 154 & 155/Ahd/2016) - - - Dated:- 23-11-2022 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER For the Appellant : Shri K.C. Thacker, A.R. For the Revenue : Shri Shramdeep Sinha, CIT-D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- These three appeals filed by the Revenue and three cross objections filed by the assessee are against the order of the ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad, in proceeding u/s. 143(3) r.w.s.153A(1)(b) of the I.T. Act vide order dated 28/02/2016 passed for the assessment year 2006-07 to 2008-09. 2. We observe that the assessee has filed an application dated 07-062022 for withdrawal of Cross Objections filed for assessment years 2006-07, 2007-08 and 2008-09 in CO numbers 186, 187 and 188/Ahd-2016. Accordingly, CO numbers 186, 187 and 188/AHD-2016 are dismissed as withdrawn. 3. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made by the A.O. by holding that the additions made by the A.O. de hors the reference or foundation in incriminating seized material are not sustainable. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that as the ground on legality of additions is allowed, the other grounds on merits are considered not necessary to be adjudicated as the same are purely academic. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 81,47,598/- on account of disallowance of Power Fuel expenses. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting addition of Rs. 7,71,000/- on account of disallowance of ROC expenses. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting addition of Rs. 6,30,000/- on account of sale made to group concern. 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting addition of Rs. 80,00,000/- on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stored to the above extent. 5. The brief facts in relation to the case are that an action under section 132 was carried out on 15-06-2011 at the business premises of the assessee, as also at the residence of the partners of the Friends group. Consequent upon the search action, assessment proceedings were initiated by issuance of notice under section 153A dated to 02-01-2013. During the course of assessment proceedings under section 153A of the Act, the AO issued direction under section 142(2A) dated 26-03-2014, directing the assessee to obtain audit report from special auditor appointed by the AO after due approval from the CIT, Central-2, Ahmedabad. The assessment was completed on 20-11-2014 and various additions were made during the course of assessment for the impugned assessment years as tabulated below: Sr. No. A.Y. Description of addition Addition Total amount of addition 1 2006-07 Disallowance Power 86 Fuel Exp. 61,22,360 1,84,52,634 ROC Exp. 7,71,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as under: The learned AO has further erred in law and on facts in making disallowance dehors incriminating material found during the search in making assessment that had attained finality prior to search. 8.1 It is seen that the appellant has challenged the additions made by the Id. AO in the assessments under appeal on the ground of legality of the disallowance. The Id. AR has made detailed written submissions and argued the case at length. The Id. AR reiterated the submissions made before the AO and relied on various Authorities to support the arguments that no addition de hors the incriminating material seized during the course of the search can be made in these unabated assessments reframed u/s 153A. The Id. AR further argued that original assessment for the assessment years under reference were earlier and before the date of the search completed and concluded, as under, and thus, these assessments did not abate within the meaning of second proviso to section 153A(1). Sr. No. A.Y. Order u/s Date of order 1 2006-07 143(3) 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e during 153A proceedings in unabated and concluded assessments de hors the incriminating seized material are in contravention of law laid down by Binding Authorities and therefore not sustainable. The relevant portion of the order, which encapsulates the Authorities relied upon by me in this behalf, is reproduced as under: 5.6 Turning to the ratio of All Cargo Global 23 Taxmann.com 103 dated 6/7/2012 - cited before the AO, the Special Bench had unambiguously and expressly answered the question referred to it as under: Thus, question raised before the Special Bench No. 1 is answered as under: (a) In assessment that are abated, the Assessing Officer retains the original jurisdiction as well as Jurisdiction conferred on him under section 153A for which assessments shall be made for each I of the six assessment years separately; (b) In other cases, in addition to the income that has already been assessed, the assessment under section I53A will be made on the basis of incriminating material, which in the context of relevant provisions means books of account, other documents, found in the course of search but not produced in the course of original assessment, and undisclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during; search, no addition can be made in respect of unabated assessments and which have become final as on the date of search. The completed assessments for the years under appeal have become final and are not abated since they are not pending as on the date of search. Therefore, even though pursuant to issue of notice u/s. 153A, assessments for 6 years immediately prior to the date of search are to be framed u/s. 153A, but in respect of unabated assessments which have become final and no incriminating material is found during the course of search for those years, no addition could be made in respect of such unabated assessments. In this regard, Hon'ble Bombay High Court in case of Continental Warehousing Corporation (58 Taxmann.com 78) has held as under: ....................................... Similar view has also been held by the Pune ITAT in the case of SRJ Peety Steels Put. Ltd. (137 TTJ 627) and the Delhi ITAT case of Sanjay Aggarwal (47 Taxmann.com 210). In view of binding precedents, Revenue authorities were not justified in making disallowance claimed u/s. 80IA in respect of unabated assessments because there was no incriminating document found during search wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Authorities as discussed above, it is doubtlessly imperative that the AO and I both respectfully follow the principle that no additions de hors the incriminating material seized during search can be made or sustained in unabated assessments framed u/s 153A. On facts, there is no dispute that the assessments under reference were concluded and unabated on the date of the search. There is also no dispute that there is no incriminating seized material used, relied upon or referred to by the AO or pointed out during the course of hearing, for making or supporting any of the additions. Thus, the appellant's case is squarely covered by the ratios of the binding Authorities discussed, and therefore, any of the additions made by the AO for any of the year under appeal are not sustainable. Thus and therefore, all the additions made by the AO in contravention of law laid down by Binding Authorities discussed supra are deleted for all the three years under reference............... 8.4 In view of the discussion as above, it is imperative that I follow the view already taken by me in earlier decision in M/s Arvind V. Joshi Co. as extracted above. It is not in dispute that the thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th assessment years in question, notice issued under section 153C had rightly been quashed and set aside. In the case of PCIT v. Meeta Gutgutia [2018] 96 taxmann.com 468 (SC), Supreme Court held that invocation of section 153A to re-open concluded assessments of assessment years earlier to year of search was not justified in absence of incriminating material found during search qua each such earlier assessment year. In the case of Pr. CIT v. Saumya Constructions 81 Taxman.com 292 (Gujarat), the Gujarat High Court held that under section 153A, an assessment has to be made in relation to search or acquisition, namely, in relation 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 u/s. 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 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed u/s 143(3) r.w.s. 153A(1)(b) of the Act and while passing the assessment order, Ld. Assessing Officer has not referred to any loose paper/ material found during the course of search at the premises of the searched party on the basis of which the instant additions were made. The contention raised by the assessee that addition made in Assessment Order is not based upon incriminating material found during the course of search has also been pointed out by Ld. CIT(A) at para 8.4 of order of appellate order. The AO has not made additions in the impugned assessment year based upon any incriminating material found during the course of search. Even before us the Ld. DR has not pointed out to any specific incriminating document unearthed during the course of search which formed the basis of additions made in the assessments for the years before us. Therefore, in view of well settled proposition of law that completed / unabated assessment can be interfered by the Assessing Officer while making assessment u/s. 153A / 153C of the Act only on the basis of some incriminating material unearthed during the course of search documents or undisclosed income or property discovered in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X
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