9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (7) TMI 897 - AT - Income TaxSearch assessment u/s 153A No incriminating materials found during search Held that - Assessment of income in case of search u/s 153A is to assess or reassess income for specified period CIT(A) found that no specific seized document, much less incriminating, has been found, seized or brought on record by the AO in case of the assessee pertaining to the year - CIT(A) noticed that in the assessment order the AO has made discussion about list of 61 dummy concerns with bank accounts, undisclosed bank accounts & unaccounted business transactions pertaining to K.S. Oils Ltd., but none of them belongs or pertains to the assessee for the year under consideration nor there is any material on record proving assessee s connection with the dummy concerns or undisclosed bank accounts or unaccounted transactions. Relying upon All Cargo Global Logistics Ltd. vs. Deputy Commissioner of Incometax, Central Circle-44 2012 (7) TMI 222 - ITAT MUMBAI(SB) - AO referred the material/incriminating material in respect of the group, K.S. Oils Limited as noted by the CIT(A) in his order - not a single document has been pointed out relating to the assessee even after specifically asked by the assessee - no incriminating documents or material were found during the course of search in the case of the assessee - Revenue has failed to point out any contrary material to the facts recorded and finding given by the CIT(A) - the additions are not warranted in the hands of the assessee - assessee has filed return for the AY under consideration in due course on 21.10.2004 declaring income which is same as per return filed u/s. 153A on 16.09.2011 after the search operations on 11.03.2010 - there are no pending proceedings to be abated, therefore, routine additions are not warranted - CIT(A) has rightly decided the issue in favour of the assessee Decided against Revenue.
Issues Involved:
1. Validity of the assessment completed by the AO under section 143(3)/153A of the Income Tax Act, 1961. 2. Scope of the Assessing Officer's power under section 153A of the Income Tax Act, 1961. 3. Legality of additions made by the AO in the absence of incriminating documents found during the search. Issue-wise Detailed Analysis: 1. Validity of the assessment completed by the AO under section 143(3)/153A of the Income Tax Act, 1961: The Revenue appealed against the cancellation of the assessment completed by the AO under section 143(3)/153A. The CIT(A) canceled the assessment on the grounds that no incriminating documents or materials were found during the search. The AO made several additions based on the assessee's balance sheet, such as partners' capital account, unsecured loans, sundry creditors, and advances from customers, without any incriminating evidence found during the search. The CIT(A) held that the AO could not make additions based on regular assessment items in the absence of incriminating material found during the search. 2. Scope of the Assessing Officer's power under section 153A of the Income Tax Act, 1961: The Revenue questioned whether the AO was empowered to make additions under section 153A beyond the scope of incriminating documents found during the search. The CIT(A) concluded that section 153A did not empower the AO to reassess areas unrelated to the incriminating material found during the search. The CIT(A) cited various judicial precedents to support the view that the AO could not disturb the finality of concluded assessments without any material indicating undisclosed income found during the search. 3. Legality of additions made by the AO in the absence of incriminating documents found during the search: The CIT(A) found that the AO made additions without any incriminating documents or materials found during the search. The AO's additions were based on regular assessment items, such as partners' capital, unsecured loans, sundry creditors, and advances from customers, which were already disclosed in the assessee's balance sheet. The CIT(A) held that the AO could not make such additions under section 153A without any incriminating evidence found during the search. The CIT(A) also noted procedural lapses by the AO, such as passing the assessment order before the date fixed for hearing and not maintaining regular order sheets during the assessment proceedings. Conclusion: The Tribunal upheld the CIT(A)'s decision to cancel the assessment completed by the AO under section 143(3)/153A. The Tribunal agreed with the CIT(A) that the AO could not make additions based on regular assessment items in the absence of incriminating material found during the search. The Tribunal also noted that the Revenue failed to provide any contrary material to challenge the CIT(A)'s findings. Consequently, the Tribunal dismissed the Revenue's appeal, and the Cross Objection filed by the assessee became infructuous. Final Order: The appeal by the Revenue was dismissed, and the Cross Objection by the assessee was deemed infructuous. The order was pronounced in the open Court.
|
