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TMI Blog2022 (2) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... order for the assessment year 2011-12 in respect of capital gains as there were no incriminating seized materials suggesting that the capital gains has been wrongly computed. Hence, provisions of section 263 of the Act cannot be invoked to revise of order u/s 153A of the Act. On this short point we allow the appeal of the assessee and quash the impugned order u/s.263 - Assessee appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... t financial year in which the order sought to be revised was passed has already expired as on 31.3.2016. For the above proposition, the assessee relied on the decision of Hon'ble Supreme Court in CIT v. Alagendran Finance Ltd 293 ITR 1 (SC). The facts of the case before the Hon'ble Supreme Court are that the assessment was completed u/s. 143(3) of the Act accepting the returned income and allowing the deduction towards "Lease Equalisation Fund" after due verification. The case was reopened and assessment was completed u/s. 147 of the Act after making disallowances related to share issue expenses, bad and doubtful debts and excess depreciation. Therefore, the "Lease Equalisation Fund" was not an issue involved in reassessment proceedings. The learned Commissioner invoked section 263 of the Act and held that the order u/s. 147 of the Act is erroneous and prejudicial to the interests of the revenue since the issue regarding the "Lease Equalisation Fund" is not examined in the said order. The Hon'ble Supreme Court held that the reassessment has nothing to do with the said issue and therefore, doctrine of merger would not apply to the present case and the revision of order u/s. 147 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rival submissions. It is seen that the order u/s. 153A of the Act is made accepting the returned income. There was no addition made in the order u/s. 153A of the Act based on any seized materials. There was no seized material found leading to undisclosed income. It is a settled proposition that in respect of non-pending / unabated assessments, any addition can be made only on the basis of incriminating material in an assessment u/s 153A of the Act. It has been so held in the following decisions: a) CIT v. Sinhgad Technical Education Society 397 ITR 344 (SC) b) CIT Vs IBC Knowledge Park P. Ltd 385 ITR 346 (Kar) c) ACIT Vs Cornerstone Properties Pvt Ltd (ITA No. 1714 to 1717/Bang/2013) d) CIT Vs Kabul Chawla 380 ITR 573 (Del) e) Sree Lakshmi Venkateshwara Minerals v. DCIT 186 ITD 695 (Bang) (Para 31) 9. The Hon'ble Karnataka High Court in the case of Canara Housing Development Co., (2014) 49 taxmann.com 98 in a case relating to proceedings under section 153A of the Act held that once there is a search all past assessment orders will not subsist and it is only the order passed u/s.153A of the Act that will survive. The Hon'ble Karnataka High Court in the case of IBC Knowl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofar as the incriminating material of the searched person or other person detected during the course of search is concerned, the same can be considered during the course of assessment. Further, such incriminating material must relate to undisclosed income which would empower the Assessing Officer to upset or disturb a concluded assessment of the other person. Otherwise, a concluded assessment would be disturbed without there being any basis for doing so which is impermissible in law. Even in case of a searched person, the same reason would hold good as in case of any other person. As observed by us, detection or the existence of incriminating material is a must for disturbing the assessment already made and concluded. But, at the same time, such am be at three stages: one, at the stage when the reassessment is initiated, the second, at the stage during the course of reassessment and third, at u sage where the reassessment is altered by a different assessment in respect of searched person or in. respect of third party. In this regard, reference may be made to the decision of Apex Court in case of M/s. Calcutta Knitwear (supra) and based on the said decision, the CB DT has also iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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