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2018 (3) TMI 1975 - AT - Income TaxAssessment u/s 153C - Date of initiation of search or making of requisition - HELD THAT - It is prescribed that for the purposes of examining the efficacy of the second proviso to Sec.153A(1) - reference to the date of initiation of search or making of requisition contained therein, shall be construed as reference to the date of receiving of books of account or documents or assets seized or requisitioned by the AO having jurisdiction over the other person from the AO of the searched person. In the present case, it transpires that the AO of the searched person, as also the AO of the captioned assessee, who is the other person , are the same. Onus was on the AO to canvass as to what is the date on which he formed a satisfaction that the material found in the search of M/s. Reliable Paper (India) Ltd. related to the captioned assessee. The said onus obviously has not been discharged by the Assessing Officer inasmuch as it has been canvassed before CIT(A) that he was unable to do so. Be that as it may, under these circumstances, the only option left to the CIT(A) was to take the date of issuance of notice u/s 153C of the Act as the date referred to in the first proviso to Sec 153C(1) - Considered on that basis, CIT(A) concluded that the original assessments for the captioned assessment years did not abate, as the same were not pending on that date. As perused the additions which have been made to the returned income and find that none of them contain any averment by the AO that the same flow out of any incriminating material found in the course of search. This finding has also been arrived at by the CIT(A), and in the absence of any rebuttal by the Revenue, we hereby affirm the same. In this fact-situation, the ratio of the judgment in the case of Continental Warehousing Corporation (Nhava Sheva Ltd) 2015 (5) TMI 656 - BOMBAY HIGH COURT is squarely attracted, and CIT(A) made no mistake in deleting the additions. The order of CIT(A) is hereby affirmed. Thus, the appeals of the Revenue for AY 2004-05 to 2009-10 are dismissed as above. Insofar as the reliance placed by the Revenue on the judgments of the Hon'ble Kerala High Court in the case of CIT vs. St. Francis Clay Decor Tiles 2016 (6) TMI 378 - KERALA HIGH COURT , CIT vs. Dr. P. Sasikumar 2016 (7) TMI 1227 - KERALA HIGH COURT and E.N. Gopakumar vs. CIT 2016 (11) TMI 72 - KERALA HIGH COURT , are concerned, in our view, the same are untenable since the judgment is directly available on the point and the same has been justifiably invoked by the CIT(A) to delete the impugned additions, which is hereby affirmed. - Decided against revenue.
Issues involved:
Appeals by Revenue involving common issues; Interpretation of Sec. 153C of the Income Tax Act; Application of the judgment of the Hon'ble Bombay High Court in CIT vs. Continental Warehousing Corporation (Nhava Sheva Ltd); Assessment Years 2004-05 to 2009-10 for M/s. Speciality Paper Ltd.; Additions made under various heads without incriminating material; Date of receiving seized material for invoking Sec. 153C; Admissibility of additions without incriminating material; Comparison with judgments of Hon'ble Kerala High Court; Dismissal of appeals by Revenue; Application of judgment to M/s. Global Paper Impex Pvt. Ltd. Comprehensive Analysis: The judgment by the Appellate Tribunal, ITAT Mumbai, involved appeals by the Revenue concerning common issues related to the interpretation of Sec. 153C of the Income Tax Act and the application of the judgment of the Hon'ble Bombay High Court in CIT vs. Continental Warehousing Corporation (Nhava Sheva Ltd). The appeals pertained to Assessment Years 2004-05 to 2009-10 for M/s. Speciality Paper Ltd. The primary dispute revolved around the additions made under various heads in the absence of incriminating material found during a search. The Assessing Officer assumed jurisdiction to make assessments under Sec. 153C based on notices issued post a search conducted at M/s. Reliable Paper (India) Ltd. The CIT(A) held that without incriminating material, no additions are permissible in assessments under Sec. 153C, following the precedent set by the Hon'ble Bombay High Court. The Assessing Officer failed to produce relevant material regarding the date of receiving seized items, leading the CIT(A) to consider the date of notice issuance as the reference point. The CIT(A) deleted the additions based on the lack of incriminating material, a decision upheld by the Tribunal. The Tribunal affirmed that the additions lacked any connection to incriminating material and dismissed the Revenue's appeals. Regarding the judgments cited by the Revenue from the Hon'ble Kerala High Court, the Tribunal deemed them untenable as the Hon'ble Jurisdictional High Court's decision was directly applicable and invoked by the CIT(A) to delete the additions. The judgment's application to M/s. Global Paper Impex Pvt. Ltd. for Assessment Years 2005-06 to 2009-10 was also confirmed, resulting in the dismissal of all Revenue's appeals. The Tribunal's order was pronounced on 21st March 2018, settling the disputes in favor of the assessees based on the interpretation of Sec. 153C and the requirement of incriminating material for additions in assessments under the Income Tax Act.
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