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2017 (12) TMI 1744 - AT - Income TaxAssessment u/s 153A - HELD THAT - We find that the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench of the Tribunal in the case of Rajiv Kumar Vs. ACIT 2016 (12) TMI 1722 - ITAT CHANDIGARH and CIT (Central) Vs. Raj Kumar Jaiswal and others 2017 (2) TMI 1276 - ALLAHABAD HIGH COURT . The Hon'ble Allahabad High Court (supra) while deciding the identical issue on framing of assessment u/s 153A of the Act for the assessment year relevant to the search year has observed that when a power is exercised under a particular provision and in the manner, it is so contemplated in such substantive provision, then this defence is not open that it may be treated as a mere mistake of wrong provision of statute - Decided in favour of assessee.
Issues:
1. Validity of assessment framed under section 153A of the Income-tax Act, 1961 for the assessment year 2007-08. 2. Addition of Short Term Capital Gain and excess jewellery in the assessment. Issue 1: Validity of assessment under section 153A: The appellant challenged the assessment framed under section 153A for the assessment year 2007-08, arguing that the assessment was invalid as it exceeded the scope of the provision. The appellant contended that as per section 153A, the Assessing Officer can assess or re-assess the total income of six assessment years preceding the relevant assessment year. The appellant asserted that since the search was conducted in 2006, the assessment under section 153A could only be for the years 2001-02 to 2006-07, not for the year 2007-08. The appellant relied on precedents, including the decision of the Chandigarh Bench of the Tribunal and the Allahabad High Court, to support their argument. The Departmental Representative argued that mentioning the wrong section in the assessment order was a clerical error and did not invalidate the assessment proceedings. The Tribunal examined the issue and found in favor of the appellant, citing the decisions of the Tribunal and the Allahabad High Court. The Tribunal held that the assessment for the year 2007-08 was void, and consequently, the additions made in the assessment were ordered to be deleted. Issue 2: Addition of Short Term Capital Gain and excess jewellery: The Assessing Officer had made additions to the appellant's income, including a Short Term Capital Gain of ?9,41,584 related to the sale of a property and an additional amount of ?3,56,900 for excess jewellery found during the search operation. The appellant contested these additions before the CIT(A) but was unsuccessful. In the appeal, besides challenging the additions on merits, the appellant raised the legal ground of the assessment's invalidity under section 153A. The Tribunal, after deciding in favor of the appellant on the legal issue, held that the additions made in the assessment, including the Short Term Capital Gain and excess jewellery, were to be deleted. Consequently, the Tribunal allowed the appeal of the assessee, and the order was pronounced in open court on 11.12.2017. This judgment by the Appellate Tribunal ITAT Chandigarh addressed the validity of an assessment under section 153A for the assessment year 2007-08 and the additions made in the assessment, including Short Term Capital Gain and excess jewellery. The Tribunal ruled in favor of the appellant, declaring the assessment void due to exceeding the scope of section 153A and ordering the deletions of the additions made.
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