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TMI Blog2018 (12) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided in favour of the assessee AO jurisdiction to revisit the claim u/s 80HHC allowed in the original assessment u/s 143(3) - Held that:- Assessing Officer had no jurisdiction to revisit the claim u/s 80HHC allowed in the original assessment u/s 143(3), which was completed well before the search; it was because no incriminating material was found in search or in subsequent enquiry. Since, no evidence was found during search and there is no remote nexus with the determination of claim u/s 80HHC, the Assessing Officer had no jurisdiction to revisit the claim in re-assessment u/s 153A. - ITA No. 3623/Del/2008, ITA No. 3642/Del/2008, C.O No. 230/Del/2009 And ITA No. 3624/Del/2008 - - - Dated:- 29-11-2018 - Shri R. K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Appellant : Sh. S. D. Kapila, Adv Sh. R. R. Mauriya, Adv For the Respondent : Sh. S. S. Rana, CIT(DR) ORDER PER SUCHITRA KAMBLE, JM These appeals are filed by the assessee and Revenue as well as Cross Objection is filed by the assessee against the order dated 22/09/2008 passed by CIT (A)-III, Delhi for Assessment Year 2002-03, 2003-04 2004-05 respectively. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough he held that once valid proceedings are initiated u/s 153A the AO has not only the jurisdiction but also the duty to levy tax on the total income of the relevant assessment year. 3. Whether on the facts and in the circumstances of the case, the CIT(A) was correct in law and on facts in holding that the said issues had already been decided in the earlier assessment completed u/s 143(3) when the said issues had neither been considered by the Assessing Officer nor adjudicated upon by the Appellate Authorities. 4. Whether on the facts and in the circumstances of the case, the CIT(A) was legally correct in holding that the aforementioned disallowance of deduction u/s 80HHC in the assessment u/s 153A amounted to a review of the assessment order passed earlier u/s 143(3). 5. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in not deciding the issue on merits as the afore mentioned disallowance of deduction u/s 80HHC was on account of income from cancellation of foreign exchange contracts and interest income on FDRs which was independent income and had no nexus to the profits derived from export business of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reto. 2. That the Commissioner of Income-tax (A) erred on facts and in law in confirming the action of the assessing officer in treating interest earned on FDRs placed with banks as margin money for obtaining bank guarantee / opening of letter of credits as income from other sources . 3. That the Commissioner of Income-tax (A) erred on facts and in law in confirming the action of the assessing officer in denying deduction under section 80HHC of the Act with reference to the aforesaid interest income. 3. The Ld. AR submitted that the appeal filed by the Assessee for A.Y. 2002-03 is on the issue of challenging the proceedings initiated u/s 153A and Revenue filed appeal in A.Y. 2003-04 wherein the CIT(A) deleted the addition by holding that there is a case of change of opinion and review of issues already settled u/s 143(3). The Revenue challenged the order of the CIT(A) for A.Y. 2003-04. Therefore, the Ld. AR argued the case for Assessment Year 2002- 03. We are taking up the facts of Assessment Year 2002-03. The Ld. AR further submitted that for Assessment Year 2004-05, there is no preliminary ground as to the challenge of Section 153A proceedings. 4. Facts for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for making addition. Thus, if there is no fresh facts and the same set of facts were found during search that does not amount to incriminating material so as to attract invocation of Section 153A of the Act. The Ld. AR relied upon the following case laws on merits: i. Kabul Chawla 380 ITR 473(Del.) ii) Best Infrastructure India (P.) Ltd. 397 ITR 82(Del) iii) Aggarwal Entertainment P. Ltd. (2016) 72 Taxmann.com 340( Del. Tri.) iv) Ravneet Solutions P. Ltd. (2018) 93 Taxmann.com 59 (HN) 7. The Ld. DR submitted that as mentioned in Para 3 of assessment order, the assessee surrendered an amount of ₹ 1,04,16,783/- u/s 132(4) for A.Y.2002-03 ₹ 6,80,35,942/- for A.Y.2003-04. The assessee filed return of income u/s 139(1) disclosing income of ₹ 1,76,33,950/-. In response to notice u/s 153A, the assessee filed return of income declaring income of ₹ 2,74,03,496/- for A.Y.2002-03. Similarly, the assessee filed return of income u/s 139(1) disclosing income of ₹ 6,80,35,942/-. In response to notice u/s 153A, the assessee filed return of income declaring income of ₹ 10,42,52,340/- for A.Y.2003-04. In view of the above facts, decision in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s 143(2)/148 was admittedly not issued by the Assessing Officer. For Assessment Year 2003-04, assessment u/s 143(3) had already been made on 27/9/2005. For Assessment Year 2004-05, return was accepted u/s 143(1) and claim of the assessee was accepted. Thus, no assessment proceeding was pending for Assessment Year 2002-03 2003-04 on 17/1/2006 i.e. the date of search u/s 132 of the Act. Admittedly there was no incriminating material found during the search or in the post search enquiry. The claim of the assessee u/s 80HHC (4) was duly supported with the evidence placed before the Assessing Officer which was accepted in the completed assessment u/s 143(1). The CIT(A), however, held that since the original assessment was made u/s 143(1) for Assessment Year 2002-03, the Assessing Officer had preliminary power u/s 153A to make assessment on any issue in a case where no assessment was made u/s 143(3). But in the present case, no assessment proceeding was pending for Assessment Year 2002-03 2003-04 on 17/1/2006 i.e. the date of search u/s 132 of the Act. Therefore, Assessment u/s 153A itself is bad in law. The CIT (A) relied on the decision of the Hon ble Apex court in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) held that Assessing Officer had no jurisdiction to revisit the claim u/s 80HHC allowed in the original assessment u/s 143(3), which was completed well before the search; it was because no incriminating material was found in search or in subsequent enquiry. Since, no evidence was found during search and there is no remote nexus with the determination of claim u/s 80HHC, the Assessing Officer had no jurisdiction to revisit the claim in re-assessment u/s 153A. Thus, for Assessment Year 2003-04, the CIT(A) s order is in consonance with the judgment of Hon ble Delhi High Court in the case of Kabul Chawla 380 ITR 573 and therefore there is no need to interfere with the said finding in A.Y. 2003- 04. We are not interfering with the findings of the CIT(A) and the same is not challenged by the Revenue in its appeal. Therefore, we are dismissing the appeal of the Revenue for A.Y. 2003-04 and the cross objections filed by the assessee are also stands dismissed. 14. In result, ITA No. 3642/Del/2008 filed by the Revenue and CO 230/Del/2009 for A.Y. 2003-04 filed by the Assessee are dismissed. 15. As regards, Assessment Year 2004-05, the Ld. AR submitted that the CIT(A) agrees with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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