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2013 (11) TMI 4 - AT - Income TaxAssessment u/s 153A of the Act - How the assessment to be done when there in pendency and no incriminating documents found Held that - Assessment to be done on the original figures of final assessment Reliance has been placed upon the case of ACIT vs Pratibha Industries Ltd. 2012 (12) TMI 760 - ITAT MUMBAI , wherein, it has been held that in case there is no incriminating material, in such a case assessment u/s 143(3) read with 153A shall be made at the original figure of finalized assessment - Directed the AO to frame the assessment afresh.
Issues:
1. Disallowance under Section 14A of the Income Tax Act, 1961 r.w. Rule 8D of I.T. Rules, 1962. 2. Scope of assessment under section 153A without incriminating material. Analysis: Issue 1: Disallowance under Section 14A of the Income Tax Act: The appellant filed three appeals against the CIT(A)'s order confirming the AO's action under Section 14A of the Income Tax Act, 1961 r.w. Rule 8D of I.T. Rules, 1962. The grounds raised in the appeals were common across all three years. The AR pointed out that the issue was covered by a previous co-ordinate Bench order for the assessment year 2008-09, where certain disallowances were deleted. The AR argued that the disallowance under Rule 8D should be re-examined based on the source of funds used for investments. The Tribunal agreed with the AR's contentions and set aside the CIT(A)'s order, directing the AO to re-evaluate the disallowance under Rule 8D based on the source of funds used for investments. The Tribunal allowed the appeals for statistical purposes. Issue 2: Scope of assessment under section 153A without incriminating material: In the assessment year 2001-02, the AR argued that additions were made without any incriminating material found during search operations. The AR relied on legal precedents and requested the deletion of the disallowance. The DR suggested the issue be re-examined by the AO due to lack of evidence. The Tribunal directed the AO to verify the pendency of proceedings and the presence of incriminating documents related to the assessment year 2001-02. Depending on the findings, the assessment was to be framed afresh. The Tribunal set aside the CIT(A)'s order on this legal issue and allowed the appeals for statistical purposes. In conclusion, the Tribunal addressed the issues of disallowance under Section 14A of the Income Tax Act and the scope of assessment under section 153A without incriminating material. The judgments were in favor of the appellant, setting aside the CIT(A)'s orders and directing the AO to re-evaluate the disallowances and frame the assessments afresh, respectively.
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