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TMI Blog2016 (10) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... ed material or other material for the year under consideration having being found during the course of search in the case of assessee - Decided in favour of assessee. - I.T.A. No. 1906/DEL/2013, C.O. No. 56/DEL/2014 - - - Dated:- 3-10-2016 - Shri H. S. Sidhu, Judicial Member And Shri L. P. Sahu, Accountant Member Revenue by : Sh. A.K. Saroha, CIT(DR) Assessee by : S / Sh. Ved Jain, Adv. Ashish Chadha, CA ORDER Per H. S. Sidhu, JM The Revenue has filed the Appeal and Assessee has filed the Cross Objection against the Order dated 09.1.2013 of the Ld. CIT(A)-I, New Delhi relevant to assessment year 2006-07. 2. The grounds raised in the Revenue s Appeal read as under:- 1. The order of the Ld. CIT(A) is not cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law in rejecting the contention of the assessee that the assessment framed under Section 153A/143(3) being against the statutory provision of the Act and the procedure prescribed under the law, is bad and the same is liable to be quashed. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment framed is against the spirit of Section 153A of the Act whereby the reassessment is to be confined to the additions and, disallowances consequent to the material found during the course of the search and does not give power to the AO to make additions and disallowances without any incriminating material found during the course of search. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding the validity of the order of assessment passed u/s. 153A on 27.12.2010, is squarely covered in favor of the assessee by the decision dated 28.8.2015 of the Hon ble Delhi High Court passed in the case Commissioner of Income Tax vs. Kabul Chawla reported (2016) 380 ITR 573 (Del.) wherein the Hon ble High Court has held that if the additions are made, but not based on any incriminating material found during search operation, then these additions are not sustainable in the eyes of law. He further stated in the present case the AO has made the addition of ₹ 57,00,000/- in a proceeding under section 153A, without there being any incriminating material found during the course of the search in respect of such addition. He further state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt and hence, requested that the appeal of the Assessee may be dismissed. - Filatex India Ltd. vs. CIT (2014) 49 taxmann.com 465 (Delhi) 10. We have heard both the counsel and perused the relevant records available with us, especially the orders of the revenue authorities and the cases referred by the Ld. Counsel of the Assessee and the Ld. DR. We find that the additions made by the AO are beyond the scope of section 153A of the Income Tax Act, 1961, because no incriminating material or evidence had been found during the course of search so as to doubt the transactions. It was noticed that as on the date of search i.e. 28.8.2008, no assessment proceedings were pending for the year under consideration and the AO was not justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153 A does not say that additions should be strictly made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The present appeals concern AYs, 2002-03, 2005-06 and 2006- 07.On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. 11. Respectfully following the precedent of the Hon ble Jurisdictional High Court in the case of CIT vs. Kabul Chawla, as aforesaid, we quash the assessment made u/s. 143(3) r.w.s. 153A of the I.T. Act and decide the legal issue in favour of the Assessee and accordingly, allow the Cross Objection filed by the assessee. 12. As regards, the Revenue s appeal is concerned, since we have already quashed the assessment while dealing with Assessee s Cross Objection, as aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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