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TMI Blog2019 (8) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... unds of appeal:- "1. That on the facts and circumstances of the case, the ld. CIT(A) erred in confirming addition which was outside the purview of section 153A of the Act as no documentary evidences or any other material in respect of addition made were found or seized at the time of search. 2. That on the facts and circumstances of the case, the ld. CIT(A) erred in confirming addition of Rs. 2,14,211/- in respect of unrecorded income u/s 56 of the Act. 3. That on the facts and circumstances of the case, the ld. CIT(A) erred in confirming addition without considering explanation furnished by the assessee. 4. That on the facts and circumstances of the case, the ld. CIT(A) ought to have deleted the addition made by the ld. AO in light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) has deleted the disallowance of Rs. 71,085/-. However, interest income of Rs. 2,14,211/- on account of undisclosed interest has been confirmed against the said finding. The assessee is now in appeal before us. 4. During the course of hearing, the ld. AR submitted that no incriminating documents were found during the course of search in relation to interest income and in absence of any incriminating documents, no additions can be made while completing the assessment u/s 153A. It was submitted that time limit for issue of notice u/s 143(2) has expired well before the date of search and the assessment in respect of return originally filed was not pending as on the date of search. In support, the reliance was placed on the Hon'ble Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted during the course of assessment proceedings that he has not shown interest income received from SBBJ Account as well as interest on income tax refund totaling to Rs. 2,14,211/-, there is no infirmity in the order of the Assessing officer where he has brought the interest income to tax u/s 56 of the Act. It was further submitted by the ld DR that there is no evidence on record that the assessee has offered the interest income in the subsequent assessment year. 6. Further, our reference was drawn to the findings of the ld. CIT(A) which is contained at para 7.1 of the order which is reproduced as under:- "7.1 As regards Ground No. 1 of appeal, at the outset, it is to be emphasized that it is not at all contested by the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the instant appeal, the assessment year under consideration is A.Y 2010-11. On the date of search, i.e 02.07.2015, four years had lapsed from the end of the assessment year but six years had not lapsed. There was escapement of income above Rs. 1,00,000/-, namely interest income alone is Rs. 2,14,211/-, thus, for the assessment year under consideration, A.Y 2010-11, action u/s 148, was legally sustainable on the date of search. 7.1.3 However, search having been conducted in the case of the assessee on 02.07.2015, the only section under which the assessment or reassessment could be made for A.Y 2010-11, under consideration, is u/s 153A. However, as discussed above, reassessment u/s 148, was legally possible on the date of search, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... know that the assessee has earned interest income from bank. Therefore, no addition can be made in the hands of the asseesee in the impugned assessment year and we thus agree with the following findings of the ld CIT(A) where she stated as follows: "Undisputedly, as on the date of search, 02.07.2015, notice u/s 143(2) could not have been issued for the A.Y 2010-11, and, in view of the various judicial pronouncements on the scope of assessment u/s 153A, including the decision of the Hon. Rajasthan High Court in case of Jai Steels, u/s 153A the A.O would not have the powers as in original assessment u/s 143(3) and could only make additions to income based only on incriminating material found during search." 8. At the same time, it may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the interest income has not been reported to tax as so claimed by the assessee even in the subsequent assessment year, the Assessing officer will be at liberty to take action as per law to bring such interest income to tax. 9. However, under the present proceedings which has been initiated u/s 153A, given that the original proceedings were not abated as on the date of search and in absence of any incriminating material found during the course of search, no addition can be made in the hands of the assessee and the same is hereby directed to be deleted. 10. In the result, the appeal filed by the assessee is allowed in light of aforesaid directions. 11. In ITA No. 675/JP/2019, both the parties fairly submitted that the facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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