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TMI Blog2019 (9) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... ly engaged in the business of engineering and mining, site leveling, excavation, evacuation, surface mining, drilling and blasting, transportation or etc. According to the AO pursuant to the notice u/s 153A of the Income Tax Act, 1961 (herein after referred to as the 'Act') for the AY 2009-10 assessee filed return disclosing total income of Rs. 3,54,42,880/-. Thereafter in the assessment order, the AO recorded that the assessee for the FY 2011-12 to 2013-14 has made a disclosure of Rs. 13,75,00,000/-. According to the AO, it is seen that the assessee-company had taken a loan of Rs. 5,16,58,811/- from M/s. Metmin Techno Pvt. Ltd. and that the assessee held 20.3% of shares of M/s. Metmin Techno Pvt. Ltd.; and taking note that it had accumulated profits of Rs. 89,22,250/- proposed to add the same as deemed dividend u/s 2(22)(e) of the Act. 4. Pursuant to the show cause notice the assessee replied that M/s. Metmin Techno Pvt. Ltd. was a sub-contractor in some projects with which the assessee was engaged in contract work; and that several payments were made by the assessee company on behalf of the M/s. Metmin Techno Pvt. Ltd. It was taken note by the AO in his order that assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l unearthed during search. We note that the assessee had filed the original return of income on 30.09.2009 and thereafter, the AO assessed the assessee u/s 143(3)/153C by an order dated 29.12.2011 which has been annulled by the ITAT vide order dated 09.11.2016. We note that on the date of search on 30.08.2012 no assessment was pending before the AO qua this assessment year. Therefore, the assessment year 2009-10 is an unabated assessment and, therefore, the trite law is that the AO can reiterate the assessment made in earlier if any in the original assessment under 143(1) or 143(3) as the case may be. No addition / disallowance can be made without the aid of incrimination material unearthed during search u/s 132 of the Act. It has been held by the Hon'ble Delhi High Court in CIT Vs. Kabul Chawla (2016) 380 ITR 573 (Del), wherein their lordships have held as under: "Summary of legal position 37. On a conspectus of Section 153A(1) of the Act, read with provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Karnataka High Court that incriminating material is pre-requisite before power could have been exercised u/s 153(C) r.w Section 153(A). In the case before us, the AO has made a disallowance of the expenditure, which was held disclosed, for one reason or the other, but such disallowances made by the AO were upheld by the LD.CIT(A) but the Ld. Tribunal deleted these disallowance. We find no infirmity in the aforesaid Act of the Ld. Tribunal. The appeal is, therefore, dismissed". 9. We note that the AO in the present case has not taken the aid of any incriminating material unearthed during the search conducted on 30.08.2012 qua this assessment year for making the additions / disallowances. The items discussed above are only expenditure/transactions which are booked in the regular books of accounts. The AO has not made any reference to any incriminating material for making the additions. We note that the AO in this year has only mentioned about the deemed dividend of Rs. 89,22,250/-. In this addition also he has not bothered to make any averment in respect of any seized material found during the search. Whereas it was brought to our notice that the transactions by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n here that in this case, on the date of search, no assessment for this year was pending. Therefore, keeping in view the ratio decided by the Jurisdictional bench of Kolkata Tribunal in cases referred above and the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd. (supra) in the light of CBDT's decision of not filing SLP in this case in the Supreme Court and keeping in view the Apex Court's decision to dismiss SLP on similar issue in the case of Pr. CIT vs Kurele Paper Mills Pvt. Ltd. "SLP (C) NO. 34554 of 2015 dated, I am of this view that in order to maintain judicial continuity on this issue and respectfully following the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd. (supra), assessee's appeal on grounds no. 1 is allowed and as such I am not inclined to adjudicate appeal on ground no. 2 on merit." 11. In the light of the discussion made above and taking notice of the judicial precedence cited by the ld. CIT(A) as well as other judicial precedence we are inclined to uphold the order of the Ld. CIT(A) and dismiss this appeal of the Revenue. Coming to IT(SS)A No. 16/Kol/2017, AY 2010-11 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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