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TMI Blog2017 (3) TMI 1323X X X X Extracts X X X X X X X X Extracts X X X X ..... um of Rs. 5,12,000/- under provisions of the section 40A(3) of the Income Tax Act, 1961. 2. That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in assuming jurisdiction to pass impugned assessment order under section 153A, more so in making impugned disallowance which ought not to have been made under the law. 3. That in any case and in any view of the matter, action of the Ld. CIT(A) in confirming the action of AO in making the impugned disallowance and framing impugned assessment order is contrary to law and facts, void ab initio, beyond jurisdiction and the same is not sustainable on various legal and factual grounds. 4. That having regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 40A(3) of the Income Tax Act, the explanation of the assessee was sought and the in response to the same, assessee filed the written explanation on 31.12.2012. After considering the same, AO observed that since the assessee made the payments aggregating to Rs. 25,60,000/- to various persons in cash during the FY 2006-07, therefore, under the provisions of section 40A(3) of the Income Tax Act, 1961, 20% of the said expenditure which comes to Rs. 5,12,000/- was added back to the total income of the assessee company and assessment was completed an income of Rs. 4,91,720/- vide his order dated 22.1.2013 passed u/s. 153A of the I.T. Act, 1961. 3. Against the aforesaid assessment order dated 22.1.2013, assessee preferred an appeal before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with them. Hence, the appeal of the Assessee may be dismissed. 7. 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 in the shape of Paper Book. 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. 21.1.2011, no assessment proceedings were pending for the year under consideration and the AO was not justified in disturbing the concluded assessment without there being any incriminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment 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 on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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