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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 ..... in, C. A. Revenue by: Shri Biswaranjan Saswal, CIT DR ORDER Shri A.K. Garodia, This is an assessee s appeal directed against the order of CIT (A) 11, Bengaluru dated 29.08.2016 for Assessment Year 2008 09. 2. Grounds raised by the assessee are as under:- Ground I: Review / re-examine any issue in the proceeding U/s 153A: 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the action of Assessing Officer in determining total income at ₹ 2,66,740/- as against the amount of returned loss of (-) ₹ 2,89,66,908/- under normal provisions on completion of assessment U/s 143(3) rws 153A of the IT Act, 1961. 2. The CIT(A) failed to appreciate and ought to have held that having regard to the second proviso to section 153A, the completed assessment(s) 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 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nality and hence cannot be disturbed in the proceedings U/s. 153A of the Income tax Act, 1961. 4. The Appellant therefore prays that the Assessing Officer be directed to allow the claim of business loss of ₹ 2,89,66,908/- and set off of same in subsequent assessment years as per the decision given in original assessment proceedings. WITHOUT PREJUDICE TO THE ABOVE: Ground IV: Disallowance of claim of operating and administrative expenses of ₹ 2,91 ,06,793/-: 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the action of Assessing Officer in not allowing deduction towards operating and administrative expenses of ₹ 2,91,06,793/- and claim of depreciation as per income tax of ₹ 1,51,854/- treating the same as enduring in nature instead of allowing deduction of same in the subsequent assessment year i.e. assessment 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant's application u/s 154 dated April 05, 2013 submitted for AY 2010-11 after verification/examination the amount of said business loss of assessment year 2008-09 was given set-off in the rectification order passed U/s 154 dated April 16, 2013 for the assessment year 2010-11. 2.4 It is respectfully submitted that the said issue has been examined in detail in the assessment proceedings for Assessment Year 2009-10 as per details given in above para as well as while giving set off of same in the assessment for the Assessment Year 2010-11. Thus, in the course of such assessment proceedings full enquiry, scrutiny and examination was made in respect of all transactions, income and expenses claim, entitlement to carry forward of losses and set off of same in subsequent assessment years based upon the material available on record that were filed in course of the assessment proceedings for Assessment Year 2009-10 and 2010-1 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Trib.) 579 (Jodhpur-Trib.) (x) ACIT v. Pratibha Industries Ltd. [2012) 141 YTD 151 (Mum); (xi) Guruprerna Ent. v. ACIT, Murnbai Bench 'G', order dated 7/1/2011 (xii) LMJ International Ltd. v. DCIT 119 TTJ 214 (Kol) (xiii) Delhi ITAT in the case ofACIT vs PACL in ITA No ITA No 2637/Del/2010 (xiv) Agra ITAT in the case of Dy CIT vs Kalyani Chaturvedi in ITA No 92/Agra/2014 (xv) ACIT vs KS Food Products (ITA No. 519/Agra/2012; order dated 17th May 2013). (xvi) Mumbai ITAT in the case of Shri Gurinder Singh Bawa vs Dy CIT in ITA No 2075/Mum/2010 for A Y 2005-06 (xvii) Mumbai I TAT in the case of M/S. Vama Apparels (India) Pvt Limited Vs. Asst. CIT in 1. T.A. No. 5835/Mum/2005 for Assessment year-2002-03 (xviii) Mumbai IT AT in the case of A.C.I.T. Central Circle 2 vs Veena Developers in ITA Nos. 5820, 5821 822/Mum/2012 for Assessment Years: 2004-05, 2005-06 2006-07 (xix) Chennai Tribunal in the case of Shri A.B.S. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough the facts of present case. In this case originally the return furnished by the appellant was processed under section 143(1) and the case was not selected for scrutiny assessment. Hence, in view of the same it cannot be said that the issue brought out in the assessment order passed pursuant to 153A proceedings was ever examined before. The appellant has challenged the addition on the ground that re examination or review is not permissible u/s 153A, in absence of any incriminating material. The appellant has cited some case laws in his favour: o Rajasthan High Court in the case of Jai Steel (India) v. ACIT ((259 CTR 281) (Raj.)] o Bombay High Court in the case of CIT v. Continental Warehousing Corporation (NhavaSheva) Ltd in ITA No.523 of 2013 well as in the case of CIT V. All Cargo Global Logistics Ltd in Appeal No. 1969 of 2013 [2015] 58 taxmann.com 78 (Bombay) o CIT vs Murli Agro Products Limited (49 taxmann.com 172) for AY 2008-09 o Allahabad High Court in the 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 (Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment gets reopened. The block assessment roped in only the undisclosed income and assesstnent proceedings were preserved; resulting in multiple assessments. Under Section .153A, however, the Assessing Officer has been given the power to assess or reassess the total income of the six assessment years in question in separate assessment orders. The Assessing Officer is empowered to reopen those proceedings and reassess the total, income, taking note of the undisclosed income, if any, unearthed during the search. He has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153/4, by even making reassessments without any fetters. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. When once the proceedings are initiated under Section 153A Of the Act, the legal effect is even in case where the assessment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same accounts which were submitted by the assesseee, on the basis of which Assessment had been concluded, cannot be reappreciated by the Assessing Officer merely because a search had been conducted in the premises of the asssee. This decision has been given on 15.12.2015 which is subsequent to the decision of Canara Housing Development Co (cited supra), but the earlier decision of the jurisdictional court has not been considered by the later decision. Hence, Canara Housing development Co still holds good. Similarly, in the case of IBC Knowledge Park cited supra, the main issue before the Hon'ble High Court was related to section 153C. The Hon'ble Karnataka High Court has held that where no material belonging to a third party was found during a search, but only inference of undisclosed income was drawn, section 153C would have no application, That ease can not be, in my humble opinion, a binding precedent for an issue related to section 153A. 6.2.4 The other decisions cited 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 reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to initiate proceedings under section 153A. In the case of Anil Kumar Bhatia 24 Taxmann.com 98 (Deihi), it was held that Post search reassessment in respect of all 6 years can be made even if original returns are already processed u/s 143(1)(a) - Assessing Officer has power u/s 153A to make assessment for all six years and compute total income of assessee, including undisclosed income, notwithstanding that returns for these years have already been processed u/s 143(1)(a). In the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 64 taxmann.com 34 (SC), SLP has been granted against High Court's ruling that no addition can be made in respect Of assessments which have become final if no incriminating material is found during search or during 153A proceeding. 6.2.5 Therefore, in view Of the above judgements, it is held that the Assessing Officer is bound to assess and reassess the total income of an assessee in whose case a notice u/s 153A has been issued. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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