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TMI Blog2018 (12) TMI 1673X X X X Extracts X X X X X X X X Extracts X X X X ..... assessments, fresh assessments are to be framed by the AO u/s 153A of the Act which would have a bearing on the determination of the total income by considering all the aspects, wherein the existence of incriminating materials do not have any relevance. However, in respect of unabated assessments, the legislature has conferred powers on the AO to follow the assessments already concluded unless incriminating materials are found in the course of the search. Disallowances made for the Assessment years i.e. 2008-09, 2009-10, 2010-11 2011-12, which were unabated/concluded assessments as on date of search cannot be made in the search assessments in the absence of any incriminating material found in the course of search and accordingly all those additions are directed to be deleted. Since the legal issues are addressed, we refrain from giving our findings on the merits of disallowances under the provisions of the Act. Accordingly, grounds raised by the assessee for Assessment Years i.e. 2008-09, 2009-10, 2010-11 2011-12, are allowed. Addition on account of dividend income - Year of assessment - HELD THAT:- Dividend income was not received by the assessee in the year ending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on legal ground and refrain ourselves to adjudicate the issue raised on other ground and on the merit. - Income Tax (SS) Appeal Nos. 79 to 84/Ahd/2018 (Assessment Years : 2008-09 to 2013-14) - - - Dated:- 12-12-2018 - Shri Waseem Ahmed, Accountant Member And Smt Madhumita Roy, Judicial Member Appellant by : Shri Anil Kshatriya, A.R. Respondent by: Shri Subhas Bains, CIT-D.R. ORDER Waseem Ahmed, These are six appeals filed by the assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-13, Ahmedabad, dated 19-01-2018 for the Assessment Years (AYs) 200809, 2009-10, 2010-11, 2011-12, 2012-13 2013-14. 2. In ITA No.79/Ahd/2018 for A.Y. 2008-09 the Grounds of appeal are as follows: 1. On the facts and in the circumstances of the case as well as in law the assessment order passed by the A.O. is arbitrary, illegal and bad in law in as much as that in absence of any evidence or incriminating material found and seized, for the assessment year under consideration having bearing upon the existence of any undisclosed income in the hands of the appellant, there was no v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case as well as in law, the impugned assessment order so passed by the Assessing Officer is liable to be quashed having been passed in violation of set procedure in law inasmuch as that no regular assessment for the year under consideration was pending within the meaning of 2nd proviso to section 153A (1) of the Act. 3. On the facts and in the circumstances of the case as well as in law the Ld. CIT(A) has grossly erred in rejecting the contention of the appellant and sustaining impugned addition of ₹ 2,61,00,000/- on account of unaccounted investment in shares, when the same is wholly unwarranted. 4. On the facts and in the circumstances of the case as well as in law the Ld. CIT(A) has grossly erred in rejecting the contention of the appellant and sustaining impugned addition of ₹ 44,68,971/- on account of dividend income from Srilankan Company, when the same is wholly unwarranted. 5. On the facts and in the circumstances of the case as well as in law the Ld. CIT(A) has grossly erred in rejecting the contention of the appellant and not allowing concessional rate of tax u/s. 115BBD of the Act on the dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. In ITA No.82/Ahd/2018 for A.Y. 2011-12 the Grounds of appeal are as follows: 1. On the facts and in the circumstances of the case as well as in law the assessment order passed by the A.O. is arbitrary, illegal and bad in law in as much as that in absence of any evidence or incriminating material found and seized, for the assessment year under consideration having bearing upon the existence of any undisclosed income in the hands of the appellant, there was no valid jurisdiction for legally initiating proceedings u/s. 153A of the Act in the case of the appellant and as such the illegal notice issued u/s. 153A and the consequent order passed are liable to be quashed/annulled or cancelled. 2. Without prejudice to the above, on the facts and in the circumstances of the case as well as in law, the impugned assessment order so passed by the Assessing Officer is liable to be quashed having been passed in violation of set procedure in law inasmuch as that no regular assessment for the year under consideration was pending within the meaning of 2nd proviso to section 153A (1) of the Act. 3. On the facts and in the circumstances of the case as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional rate of tax u/s. 115BBD of the Act on the dividend received from Srilankan company when the same is legally available in the case of the appellant. 5. On the facts and in the circumstances of the case as well as in law the Ld. CIT(A) has grossly erred in rejecting the contention of the appellant and not allowing credit of tax paid in Srilanka on dividend 7. Assessee vides application/letter dated 01/12/2018 amended the ground no. 3 in ITA No.83/Ahd/2018 for A.Y. 2012-13 which is reproduced as under: 3. On the facts and in the circumstances of the case as well as in law, the ''Ld.CIT(A) has grossly erred in not deleting the impugned addition of ₹ 43,12,165/- so made by the A.O on account of dividend income from Srilankan Company, when the same is wholly unwarranted. 8. In ITA No.84/Ahd/2018 for A.Y. 2013-14 the Grounds of appeal are as follows: 1. On the facts and in the circumstances of the case as well as in law the assessment order passed by the A.O. is arbitrary illegal and bad in law in as much as that in absence of any evidence or incriminating material found and seized, for the assessment year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant and not allowing credit of tax paid in Srilanka on dividend under foreign tax credit system of DTAA, when she ought to have allowed such relief. 9. Assessee vides application/letter dated 01/12/2018 amended the ground no. 2 in ITA No.84/Ahd/2018 for A.Y. 2013-14 which is reproduced as under: 2. On the facts and in the circumstances of the case as well as in law, the impugned assessment order dated 23.12.2016 passed u/s.153A r.w.s. 143(3) of the Act is framed beyond the time limit for completion of assessment u/s.153A, as prescribed in clause (a) of sub-sec. (1) of section 153B of the Act, which in the instant case was 31.03.2016. 10. The preliminary issue to be decided in all these appeals is as to whether in respect of unabated assessments (no pending proceedings) as on the date of search, the ld. AO could frame the search assessment u/s 153A of the Act by making certain additions without any incriminating materials found during the course of the search. 11. The brief facts appearing, in this case, are that there was a search and seizure operation conducted u/s 132 of the Act in the Rubamin Group of cases on 26.04.2013 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove. Therefore no addition can be made in the present case. Hence all the assessments framed u/s 153A/143(3) by the AO is not valid in view of the non-availability of the incriminating materials. 13. The assessments were framed u/s 153A/143(3) of the Act after making the following additions/disallowances as detailed under : SI. No. Assessment Year Amount (Rs.) Remarks 1 2008-09 ₹ 17,48,083/- -On account of dividend income from a company based in Sri Lanka 2 2009-10 ₹ 44,68,971/- -On account of dividend income from a company based in Sri Lanka ₹ 2,61,00,000/- On account of investment in shares 3 2010-11 ₹ 43,12,185/- -On account of dividend income from a company based in Sri Lanka 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating materials found during the course of the search. The scheme of the Act provides for abatement of pending proceedings as on date of search. It is not in dispute that the assessment for the assessment year from 2008-09 to 2011-12 falls under the ambit of unabated assessment as on the date of search. There is no differentiation as found in the intent of the legislature to differentiate whether the assessments were originally framed u/s 143(1) or 143(3) or 147 of the Act. Therefore, if any incriminating material is not found during the course of search related to those concluded years, the Act does not confer any power on the ld. AO to disturb the finding given thereon and income determined thereon as finality has already been reached and no proceedings were pending on the date of search. 17. We find that the decision of the Hon ble Delhi High Court in the case of CIT Central-III vs. Kabul Chawla reported in 380 ITR 573 (Del) has duly considered various decisions and held as under : 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 18. We also find that the Hon ble Jurisdictional Gujarat High Court in the case of Principal Commissioner of Income Tax vs. M/s. Saumya Construction Pvt. Ltd. reported in 387 ITR 529 has decided the issue in favor of the assessee by observing as under: 16. Section 153A bears the heading Assessment in case of search or requisition . It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur findings on the merits of disallowances under the provisions of the Act. Accordingly, grounds raised by the assessee for Assessment Years i.e. 2008-09, 2009-10, 2010-11 2011-12, are allowed. 20. Coming to the ITA No. 83/AHD/2018 21. At the outset, the learned counsel for the assessee submitted that he had been instructed not to press ground No. 1 and 2. Therefore we dismiss the same as not pressed. The ground No. 3 raised in the original grounds of appeal has been substituted as discussed above which bears the resemblance with the original grounds of appeal raised by the assessee. As such we find that the issue raised in the amended ground of appeal is arising from the order of authorities below and there is no need to make any reference to any additional documents. The learner DR also did not raise any objection on the amended ground filed by the assessee. Hence we admit the same and proceed to adjudicate the issue. 22. The issue raised by the assessee in her amended ground No. 3 is that the learned CIT-A erred in confirming the order of the AO on account the of dividend income. 22.1 The ld. AR before us contended that there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove dividend issue on the Ordinary Shares held by you as shown below. Please ensure that you retain this notice carefully for your income tax purposes as duplicates cannot be Issued. Endorsement of the warrant will be sufficient receipt. We hereby certify that Dividend tax shown .in cage 2 (B) has been paid to the Commissioner General of Inland Revenue. Note: Net dividend is the equivalent of (A)- (B) NAVAM LANKA LIMITED .. SECRETARIES ESJAY CORPORATE SERVICES (PRIVATE) LIMITED (A) GROSS DIVIDEND (B) DIVIDEND TAX (RS) (C) NET DIVIDEND EXEMPT NIL NIL NIL 1 TAXABLE 4,312,165,00 431.217.00 3.880.949,00 2 TOTAL 4,312.165.00 431.217,00 3.880.949,00 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see become academic and do not require any separate adjudication. Accordingly, we direct the AO to delete the addition. Hence the ground of appeal of the assessee is allowed. 25. In the result the appeal of the assessee is partly allowed. 26. Now coming to the ITA No. 84/AHD/2018 for the assessment year 2013-14. At the outset, the learned counsel for the assessee submitted that he had been instructed not to press ground No. 1 and 3. Therefore we dismiss the same as not pressed. The ground No. 2 raised in the original grounds of appeal has been substituted as discussed above which bears the resemblance with the original grounds of appeal raised by the assessee. As such we find that the issue raised in the amended ground of appeal is arising from the order of authorities below and there is no need to make any reference to any additional documents. The learner DR also did not raise any objection on the amended ground filed by the assessee. Hence we admit the same and proceed to adjudicate the issue. 26.1 During the time of hearing the bench noticed that the AO passed the assessment order for the assessment year 2013-14 on 23rd December 2016 ..... 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