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TMI Blog2022 (6) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... to the previous year in which search is conducted or requisition is made. In other words, the assessment was to be framed u/s 153C only for AYs 2007-08 to 2012-13 and not for AY 2013-14. Therefore, we do not find any substance in the legal grounds raised by the assessee. Addition u/s 14A - We find that neither assessee nor revenue has made an attempt to draw the nexus of borrowed funds vis- -vis its usage by the assessee. Naturally, if the borrowed funds were used to make the investments in the firms from which interest was earned, the assessee was entitled to claim the interest on borrowed capital otherwise not. In case of mixed funds, a presumption could be drawn in assessee s favor that the borrowed funds were utilized to make i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uity, natural Justice and fair play. 2. For that the learned Commissioner of Income Tax (Appeals) has erred in not considering the fact that Learned Assessing Officer had erred in not initiating proceedings U/s.153C r.w.s.153A under the facts and circumstances of the case. 3. For that the Learned Commissioner of Income tax (Appeals) erred in not considering that the Assessing Officer has erred in not providing Satisfaction Note as per provisions of section 153C r.w.s 153A under the facts and circumstances of the case. 4. For that the Learned Commissioner of Income tax (Appeals) has erred in confirming that Assessing Officer was right in not invoking section 153C but initiating the proceedings u/s. 143(2) r.w.s.143(3). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. Delete the addition of Rs.89824/- in respect of Proportionate disallowance of expense u/s 14A. d. Pass such other orders as this respectful authority may deem fit. 2. The Ld. AR assailed the jurisdiction of Ld. AO to submit that the assessment was based on incriminating material and therefore, the assessment should have been framed u/s 153C. The Ld. AR also assailed the additions on merits. The Ld. CIT-DR, on the other hand, justified the assessment proceedings and submitted that there was no reference to any documents found during the course of search action to make the assessment in the hands of the assessee. Having heard rival submissions, our adjudication would be as under. Assessment Proceedings 3.1 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During appellate proceedings, the assessee assailed the validity of assessment proceedings on the ground that no satisfaction note was drawn and no incriminating material was found and used in the assessment order. However, Ld. CIT(A) held that Ld. AO did not initiate proceedings u/s 153C for this assessment year rather the case was assessed as regular scrutiny case well within the time provided under the act. Just because a search has been conducted in the case of assessee s father, the department was not precluded from initiating regular assessment proceedings. The Ld. AO did not make use of any search documents and the assessee could not take objection to the same. Accordingly, the legal ground was rejected. 4.2 On merits, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny assessment proceedings. The assessee group was searched on 19.04.2012 which falls in AY 2013-14. The provisions of Sec.153C, as stood at that point, mandate Ld. AO to determine the total income of such other person for six assessment years immediately preceding the assessment year (2013-14 in the present case) relevant to the previous year in which search is conducted or requisition is made. In other words, the assessment was to be framed u/s 153C only for AYs 2007-08 to 2012-13 and not for AY 2013-14. Therefore, we do not find any substance in the legal grounds raised by the assessee. The same stand dismissed. 6. On merits, we find that neither assessee nor revenue has made an attempt to draw the nexus of borrowed funds vis- -v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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