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TMI Blog2022 (4) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and the law in this matter, the Ld. CIT(A) is not justified in deleting the addition stating that the assessment for the Ay 2014-15 is non-abated and stood already completed despite the fact that the original assessment in this case for AY 2014-15 against the return filed on 31.07.2014 was abated and the assessment u/s. 153A r.w.s. 143(3) on 31.12.2018 is an abated assessment. 2. The Ld. CIT(A) was not justified in deleting the addition stating that in absence of any incriminating material the addition made by the Ao in the impugned order is deleted while the original assessment in this case for Ay 2014-15 was abated." 4. From a perusal of the aforesaid grounds of appeal raised by the revenue, the issue raised are (i) against the finding of the Ld. CIT(A) that the assessment for AY 2014-15 is not abated whereas according to the revenue it is an abated assessment (ii) that there was no incriminating material justifying the addition made by the AO whereas according to the revenue this action of the Ld. CIT(A) is wrong. 5. Brief facts as noted by the AO are that he noticed that during the AY 2014-15 the assessee had earned income from salary, capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per section 153A of the Act [as per second proviso to section 153A of the Act] which is not the case in any of the three appeals before us. 8. As noted, a search and seizure operation u/s. 132 of the Act took place from 02.06.2016 to 07.07.2016 meaning thereby it took place in AY 2017-18 and the relevant assessment year before us is AY 2014-15. As per section 153A of the Act assessment in case of search has to be done u/s. 153A of the Act which empowers the AO to issue notice to the assessee for assessment/reassessment of six assessment years immediately preceding assessment year relevant to previous year in which such search has been conducted. Therefore, the AO was well within his jurisdiction to issue notice u/s. 153A of the Act to the assessee for AY 2014-15 since it falls in the ken of six assessment years u/s. 153A of the Act. However, second proviso to section 153A of the Act provides that if an assessment order/reassessment pertaining to any of the assessment year falling within the period of six assessment years, if pending on the date of initiation of the search u/s. 132 of the Act, then such assessments shall be treated as abated and the AO has all the powers to dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision in Rajesh Jhavery Stock Brokers Pvt. Ltd (supra) is not applicable to the facts and law pertaining to the issue in hand because the observation was in respect of reopening u/s. 147 of the Act and the question was whether the additional requirement of law as per the proviso to section 147 of the Act would be attracted in a case wherein admittedly no scrutiny assessment was carried out and only intimation u/s. 143(1) of the Act took place. In the aforesaid facts, the Hon'ble Supreme court held that the provision which required additional condition to be satisfied u/s 147 of the Act does not exist because intimation u/s. 143(1) of the Act cannot be equated with that of scrutiny assessment u/s. 143(3) of the Act, which ratio is not applicable in this case. 11. The next issue is with regard to the Ld. CIT(A)'s finding that since there was no incriminating material and since the assessment year 2014-15 is an unabated proceeding, no addition was warranted without any incriminating material. The Ld. AR drew our attention to the fact that the AO has made the addition only on the basis of a statement given by the assessee 's father which was retracted within ten days. And the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the cost of repetition, it is clear from the ratio of the above judgments, that the law is trite that in assessments under Section 153A, with regard to years where the assessment have been completed i.e. unabated assessment year, the scope of addition is to be restricted only to the extent of incriminating material found and there is no scope for any general or routine addition or disallowance. In view of the above facts, and in the absence of any reference to any incriminating material as regards the impugned addition, found during the course of search, I have no hesitation in holding that the impugned addition which has been made solely on the basis of a retracted statement and without reference to any incriminating material or document found during the course of search is outside the realm of the assessment proceedings under Section 153A of the Act. In view of the above discussion, I find no hesitation in deleting the impugned addition of Rs. 4,23,30,000/- as the same has been made for a year whose assessment stood already completed by virtue of expiration of time limit to issue a notice under Section 143(2) of the Act and without there being any reference to any incriminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each A Y on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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