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TMI Blog2017 (10) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be disturbed except only in the case where there is any undisclosed income found in the course of search or any incriminating documents pointing towards such undisclosed income is found in course of search or in the course of assessment proceedings U/s.153A of the Income Tax Act, 1961. 3. He failed to appreciate and ought to have held that in the present case, no incriminating material has been found which requires reexamination/review of any of the items which were the subject matter of examination in course of original assessment proceedings or in the proceedings under section 153A read with section 143(3) / 143(1) of the Income-tax Act, 1961. 4. The Appellant therefore prays that the order passed by the Assessing officer U/s 143(3) rws 153A of the IT Act, 1961 is arbitrary, contrary to the provisions of law, and the settled legal position and hence is liable to be quashed. Ground II: Amortizing the amount of business expenditure and depreciation aggregating of Rs. 2,92,58,647/-: 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the action of the Assessing Officer in amortizing the amount of business expenditure and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2009-10 in which the IPL - First season took place as all the expenses incurred were revenue in nature and were incurred after set up of business so as to be ready to participate in IPL Season1 which took place from April 18, 2008 to June 1, 2008. 2. The Appellant therefore prays that the Assessing Officer be directed to allow deduction of operating and administrative expenses of Rs. 2,91,06,793/- and claim of depreciation as per income tax of Rs. 1,51,854/- in the subsequent assessment year i.e. assessment year 2009-10 since all these expenses were incurred after set up of business so as to be ready to participate in IPL Season -1 which took place from April 18, 2008 to June 1, 2008. Ground V: The Appellant craves leave to add, alter and/or amend all or any of the foregoing grounds of appeal." 3. Regarding Ground No. 1, it is submitted by the learned AR of the assessee that this issue is covered in favour of the assessee by the tribunal order rendered in the case of ACIT vs. M/s Cornerstone Properties Pvt. Ltd. in ITA No. 1714 to 1717/bang/2013 dated 08.09.2017. He submitted a copy of this tribunal order. Learned DR of the revenue supported the order of CIT (A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-1 land based upon which the assessment completed U/s. 143(1) claiming the loss amount was found correct and consequently no reopening of assessment by resorting to the provisions of section 147 or revision of assessment by resorting to the provisions of section 263 was made, It is contended that having regard to the second proviso to section 1534 the completed assessments cannot be disturbed except only in the case where there is any undisclosed income found in the course of search or any incriminating documents pointing towards such undisclosed income is found in the course of search or in the course of assessment proceedings u/s.153A of the Act. Treatment by AO: 2.5 The Assessing Officer on completion of assessment u/s 143(3) rws 153A has disallowed the claim of operating and administrative expenses of Rs. 2,91,06,793/- incurred by the Appellant and claim of depreciation as per income tax of Rs. 1,51,854/- as claimed in the return of income by holding that the same was incurred prior to commencement of business and hence the same needs to be amortised in 10 equal instalments commencing from AY 2009-10 onwards. Appellant's submission: 2.6 At the Outset it is submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sanjay in ITA Nos. 1691, 1692 & for Assessment Years : 2003-04, 2004-05 & 2005-06. (xx) Delhi High Court in the case of Commissioner of Income-tax-VII v. Chetan Das Lachman 25 taxmann.com 227 (Delhi) (xxi) Delhi High Court in the case of ACIT, Central Circle-4, New Delhi v. India Ltd in ITA No.2637 /DEL/ 2010 for Assessment Year: 2003-2004. (xxii) New Delhi ITAT in the case of MGF Automobiles Ltd Vs. ACIT in ITA Nos.4212 a 4213/DEL/2011 for Assessment Year: 2004-05 a 2005-06 (xxiii) Mumbai ITAT in case of Assistant Commissioner of Income-tax, Cent. Cir. 33, Mumbai v. Jayendra P. 46 taxmann.com 457 (Mumbai - Trib.) 2.8 The appellant has Further contended that it is a settled position in law that in Assessment U/s 153A/153C additions cannot be made unless they are based on any incriminating material or inquiries based on such material and in support_of same has placed reliance on the following decisions: (i) ACIT vs. Shri Manoj Narain Aggarwal (ITA T Delhi), ITA Nos. 5518 to 5524/De1/2012, Date of Order : 30.01.2014 (ii) All Cargo Global Logistics Ltd. v. DCIT (2012) 18 ITR (Trib) 106 (Mumbai)(SB) (iii) Gurinder Singh Bawa v. DCIT (2012) 28 Taxmann.com 328 (Mum trib) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of CIT v. Smt. Shaila Agarwal (2012) 346 ITR 130 (Allahabad) o CIT v Kabul Chawla (61 Taxman.com 412) (Del) (High Court) 6.2.3 In the case of Canara Housing Development Co 62 taxmann.com 250 (Karnataka), the Hon'ble Karnataka High Court has discussed the issue of conditions in which notice a/s 153A can be issued as under: 10. Section 153A of the Act starts with non obstante clause. The letters imposed upon Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub- section (1) of Section 153A opens. The time limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order is passed it stands reopened. In the eye of law there is no order of assessment, Re-opened means to deal with or begin with again. It means the Assessing Officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the-interest of the revenue which confers jurisdiction on the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted are certainly in favour of the appellant but they are not the decision of the jurisdictional High Court. As of now, the decision of Canara Housing development Co vis binding on me, for the reasons discussed in the above paragraphs, In a recent decision in the case of St Francis Clay Decor Tiles 70 taxmann.com 234 (Kerala), a Similar view has been taken while discussing section 153A, The relevant para is under: "On a plain reading of section 153A it is clear that once search is initiated under section 132 or a requisition is made under section 132A after 31-5-2003, the Assessing Officer is empowered to issue notice to such person requiring him to furnish return income in respect of each assessment year following within six assessment years referred to in Clause (b). It further treats the returns so filed as if such return were a return required to be furnished under section 139. So that on reading of Section 153A(1) it is Categoric and clear that once a notice is issued and the Assessing Officer bag required the assessee to furnish return for a period of six assessment years as contemplated under clause (b) then the assessee has to furnish all details with respect to each asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention of the appellant that the Assessing Officer is not empowered to review/re-examine any issue in the proceedings under section 153A is not acceptable. Accordingly, this ground of appeal is, therefore, DISMISSED. 5. As per these paras reproduced from the order of CIT (A), it is seen that there is no finding to the effect that any incriminating material was found in search. As per the assessment order also, there is no reference to any incriminating material found in search. Learned CIT (A) has decided the issue against the assessee on this basis that the judgment of Hon'ble Karnataka High Court rendered in the case of Canara Housing Development Co. vs. DCIT, 274 CTR 122 is applicable and not the subsequent judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Lancy Construction, 383 ITR 168 because in this later judgment, the earlier judgment rendered in the case of Canara Housing Development Co. vs. DCIT (Supra) was not considered. In the tribunal order cited by the learned AR of the assessee, both these judgments were duly considered and it was held that as per the earlier judgment rendered in the case of Canara Housing Development Co. vs. DCIT (Supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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