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TMI Blog2018 (11) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Tribunal in the case of M/s Tanuj Holding Pvt. Ltd [2016 (2) TMI 426 - ITAT KOLKATA] wherein as held addition towards deemed dividend u/s 2(22)(e) of the Act in the assessments framed u/s 153C of the Act for the Asst Years 2007-08 to 2010-11 without any incriminating materials found during the course of search with respect to those assessment years, is not warranted and held as not in accordance with law. - decided in favour of assessee - ITA No.205/CTK/2018 - - - Dated:- 16-11-2018 - SHRI N. S. SAINI, AM AND SHRI PAVAN KUMAR GADALE, JM For The Assessee : Shri P.K.Mishra, AR For The Revenue : Shri S.M.Keshkamat, CIT DR ORDER Per Shri Pavan Kumar Gadale, JM: This is an appeal filed by the assessee against the revision order u/s.263 of the Act passed by the Pr.CIT(Central), Visakhapatnam, dated 20.03.2018. 2. The assessee has raised the following grounds :- 1. That on the facts and in the circumstances of the case, the Ld. Pr. CIT (Central) has erred in law by invoking section 263 with a presumption that the assessment order passed U/s- 153C has erroneous and prejudicial to the interest of the revenue particularly when the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed earlier on 28.02.2015 in lieu of notice u/s.153C of the Act. Subsequently, notice u/s.143(2) 142(1) of the Act was issued. The assessee was also served with questionnaire and in respect of same, ld. AR appeared and filed the documents and after discussion, the assessment was completed with assessed income at Nil. Subsequently, the Pr. CIT(Central), Visakhapatnam has issued notice for the revision in respect of the claim that the assessee has obtained unsecured loan advances from the group company where the assessee is holding a substantial share of 49.72% and the company being a substantial shareholder, therefore, the provisions of Section 2(22)(e) is applicable. In response to notice ld. AR appeared and filed the written submissions on 28.10.2017 mentioned and explained that there is no applicability of section 2(22)(e) of the Act in the said case. The Pr. CIT while dealing with the issue, relied on the decision of Hon ble Kerala High Court in the case of E.N.Gopakumar vs. CIT [2017] 390 ITR 131 (Ker.) and observed that the loan or advance received by the assessee-company would be taxable as deemed dividend, therefore set aside the assessment order u/s.153C r.w.s.143(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Bench of the Tribunal in the case of M/s Tanuj Holding Pvt. Ltd.(supra) has held at para 5.5 as under :- 5.5. We also find that no incriminating materials were found during the search in respect of the issue of deemed dividend. Hence it cannot be the subject matter of addition in 153C proceedings in respect of completed assessments. We hold that when an addition could not be made as per law in section 153Cproceedings, then the said order cannot be construed as erroneous warranting revision jurisdiction u/s 263 of the Act. This addition was made based on audited accounts already available with the revenue. Hence on this count also, the addition contemplated by the Learned CIT in section 263 proceedings is not in accordance with law. Reliance in this regard placed by the Learned AR on the decision of the Bombay High Court in the case of CIT vs Murli Agro Products Ltd ( ITA NO. 36 of 2009 dated 29.10.2010- Bombay HC) is very well placed. The question before their Lordships and decision rendered thereon is as under:- Question: 2) Although several questions are framed by the revenue, the basic question raised in this appeal is, whether the Income Tax Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the C.I.T. 8. We find it difficult to accept the above contention raised on behalf of the revenue. The object of inserting Sections 153A, 153B and 153C by Finance Act, 2003 by discarding the existing provisions relating to search cases contained in Chapter XIVB of the Income-tax Act, as stated in the Memorandum explaining the provisions in the Finance Bill 2003 (see 260 ITR (St) 191 at 219) was that under the existing provisions relating to search cases, often disputes were raised on the question, as to whether a particular income could be treated as ' undisclosed income' or whether a particular income could be said to be relatable to the material found during the course of search, etc., which led to prolonged litigation. To overcome that difficulty, the legislature by Finance Act 2003, decided to discard Chapter XIVB provisions and introduce Sections 153A, 153B and 153C in the IT Act. 9. What Section 153A contemplates is that, notwithstanding the regular provisions for assessment/reassessment contained in the IT Act, where search is conducted under Section 132 or requisition is made under Section 132A on or after 31/5/2003 in the case of any person, the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t finalized on 29.12.2000 has attained finality, then the deduction allowed under section 80HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the AO while passing the independent assessment order under Section 153A read with Section 143(3) of the I.T Act could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. 13. In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section 80HHC was erroneous. In such a case, the AO while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalized on 29.12.2000 relating to Section 80HHC deduction and consequently the C.I.T could not have invoked jurisdiction under Section 263 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the income disclosed therein. However, the scope of enquiry though not confined essentially revolves around the search or the requisition under section 132A , as the case may be. The provision deals with those cases where assessment or reassessment, if any, relating to the assessment years falling within the period of six assessment years referred to in sub-section (1) of section 153A were pending. If they were pending on the date of the initiation of the search under section 132 or making of requisition under section 132A , as the case may be, they abate. It is only pending proceedings that would abate and not where there are orders made of assessment or reassessment and which are in force on the date of initiation of the search or making of the requisition. The assessee was engaged in the operation of a container freight station. It claimed deduction under section 80-IA(4) producing a certificate dated July 13, 2006, from the Jawaharlal Nehru Port Trust Nhava Sheva declaring that the assessee was considered an extended arm of port-related services. The education was disallowed on the ground that the certificate was withdrawn on October 5, 2007. The Commissioner (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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