TMI Blog2024 (5) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, the seized documents used by the AO for making the additions u/s 153A while making assessment of the assessee were found and seized from the third persons as noted above. Thus, the only legal recourse available to the Revenue is to proceed on the assessee in terms of section 153C of the Act. Whether the addition can be made u/s 153A in an unabated year, in absence of incriminating material found and seized in the course of search conducted on the assessee, for the additions made by the AO? - We take note of the recent decision of Abhisar Buildwell Private Limited [ 2023 (4) TMI 1056 - SUPREME COURT ] wherein the assessment framed u/s. 153A of the Act are liable to be quashed where additions have been made without reference to any incriminating material found in the course of search relating to the addition so made. There is no reference to any incriminating material found and seized during the course of search from the premises of the assessee in his search, in respect of the additions made. It is also undisputed that the year under consideration is an unabated year, considering the date of conduct of search within the meaning of section 153A of the Act. Admittedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjection raised by the assessee are reproduced as under: 1. That under the facts and circumstances of the case, the addition of Rs. 20,00,000/- as an unexplained investment u/s 153A in M/s Anjanay Rice Mills Pvt. Ltd. on the basis of seized material JPC- 04/ Page 108 found from possession of third person, not from assessee without recording the satisfaction and without issue of notice u/s 153C, the addition so made is violative of the provisions contained in section 153C and CBDT instructions is bad in law and liable to be deleted. 2. That under the facts and circumstances of the case, the addition of Rs. 2,42,50,900/- u/s 40A(3) r.w. 153A on the basis of seized material RKM - 35/Page No. 26 to 53 found from the possession of third person, not from the assessee without recording the satisfaction and without issue of notice u/s 153C, the addition so made is violative of the provisions contained in section u/s 153C and CBDT instructions is bad in law and liable to be deleted. Additional grounds taken by the assessee in his CO are reproduced as under: 1. Whether in absence of any incriminating material found in the course of search at the premises of assessee, the addition of Rs. 5,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is for the purpose of completion of formalities so that, it can be posted before the Bench when it s turn comes. Therefore, the initial date in a way is a tentative date. In the present case, the assessee has filed the cross-objection well in advance of the hearing of the appeal on the board. The second reason for condoning the delay is that, the impugned order on which the cross-objection has been filed by the respondent/assessee is open for debate in the appeal of the appellant/revenue. Therefore, for the just decision of the controversy, it is incumbent upon us to condone the delay. The respondent/assessee has explained the reason for such delay in the petition placed on the record. We have gone through the same containing the explanation for delay. Accordingly, we condone the delay in filing of the cross-objection and proceed to adjudicate on the same. 6. Since the assessee has raised legal issue in his cross objection through additional grounds, we take up the same first for adjudication. 7. Brief facts as culled out from records are that the search and seizure operation under section 132 was carried out on 03.09.2014 at the business and residential premises of the Jagdamba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel referred to the Panchnama drawn jointly in the case of Anjanay Rice Mills Private Limited and Jagadamba Polyfabs Private Limited with the address noted as NH-2, Khudika Byepass, Salanpur, Burdwan. In the list of books of accounts etc. found and seized, the identification marks placed are with the words as RKM. He referred to the Panchnama of Jai Maa Jagdamba Flour private Limited with the address as Factory cum Office Premise at Damkara Barwa, Dhanbad for which the identification marks placed contain the words JMJFL. He also referred to the memo of annexure drawn in the case of Shri Jay Prakash Choudhary containing address as Flat No. E, 4th Floor, Appt. Asansol for which the seized documents have been marked with identification as JPC. Further he referred to the annexure for list of books of accounts and documents found and seized in the case of Jagat Jagdamba Flour Mills Private Limited with the address at Krishnapura, Balukham, Vaishali, and the mark of identification used as JJFL. 11. Ld. Counsel, thus submitted that Assessing Officer has referred to the documents found and seized from the premises of other third persons for making additions in the hands of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 5 lakhs, Assessing Officer has noted During the course of scrutiny it was observed from the balance sheet as on 31.03.2012 that the assessee has taken unsecured loan from Shri Jitendra Srivastava, during the year under consideration. 2. In respect of addition made of ₹ 21 lakhs, Assessing Officer has noted During the course of examining the seized material it was observed that as per page-76 of seized material marked as RKM-36 which is ledger copy of share application money of M/s Jagdamba Agro Food Private Limited, the assessee has invested Rs. 21,00,000/- as share application money in M/s Jagdamba Agro Food Pvt. Ltd. 3. For the addition of ₹ 20 lakhs, the Assessing Officer noted During the course of examining the seized material it was observed that as per seized material marked JPC-04 which was found at the residence of Shri Jai Prakash Choudhary one of the directors in group companies. Page no. 108 from JPC-04 is the extract from the account books of M/s AnjanayRice Mills Private Limited and the same contained ledger of Shri KM Choudhary in the books of Anjanay Rice Mill Private Limited. 4. In respect of addition of ₹ 2,42,50,900/-, the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of search conducted on the assessee, for the additions made by the Assessing Officer. We take note of the recent decision of the Hon ble Supreme Court in the case of Abhisar Buildwell Private Limited [2023] 149 taxmann.com 399 (SC) wherein the assessment framed u/s. 153A of the Act are liable to be quashed where additions have been made without reference to any incriminating material found in the course of search relating to the addition so made. The Hon ble Supreme Court in para 14 in the above case has categorically held as follows :- 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no dispute on documents relied upon by the Ld. AO which were found and seized from the persons who were assessed during this search operation and not from the premises of the assessee. Thus, Ld. AO ought to have taken note of the relevant seized material for the purpose of making assessment u/s. 153A of the Act. The relevant material in such a case would be the material found and seized in the course of search of the assessee from the premises for which a Panchnama was drawn in the name of the assessee. It was incumbent upon the Ld. AO to utilise the seized material marked for identification with the respective acronyms already noted above in the case of respective entities/assessees as he was of the one who was making all the assessments. At best, he could have resorted to initiate proceeding u/s. 153C of the Act by making necessary compliance thereof if the material found and seized from the third person was required to be utilised in making the assessment in the case of the assessee. In the present case before us, Ld. AO has made the assessment u/s 153A of the Act and has referred to the material found and seized from third persons in their respective premises in their respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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