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TMI Blog2022 (11) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawn. 3. Since common issues are involved for all the years under consideration in the appeals filed by the Department and all the appeals are emanating out of common order passed by Ld. CIT(Appeals), the same are being disposed of by way of a common order for all the years under consideration. 4. The Department has raised the following grounds of appeals:- Assessment year 2006-07 "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the additions made by the A.O. by holding that the additions made by the A.O. de hors the reference or foundation in incriminating seized material are not sustainable. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that as the ground on legality of additions is allowed, the other grounds on merits are considered not necessary to be adjudicated as the same are purely academic. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 61,22,360/- on account of disallowance Power & Fuel expenses. 4. On the facts and in the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of transportation expenses. 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting Rs. 1,60,56,198/- on account of disallowance of interest expenses u/s 36(1)(iii) of the I.T. Act. 8. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 9. It is, therefore, prayed that the order of the CIT (A) be set aside and that of the A.O. be restored to the above extent." Assessment Year 2008-09 "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the additions made by the A.O. by holding that the additions made by the A.O. de hors the reference or foundation in incriminating seized material are not sustainable. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that as the ground on legality of additions is allowed, the other grounds on merits are considered not necessary to be adjudicated as the same are purely academic. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30,000 Disallowance Transportation Exp. 80,00,000 Interest expenses 1,60,56,198 3 2008-09 ROC Exp. 7,71,000 13,94,76,350 Sale made to sister concern 1,48,19,000 Under valuation of Closing stock of salt 8,73,09,636 Interest expenses 3,21,81,532 Depreciation on land cost of windmill 3,38,000 6. During the course of appellate proceedings, the assessee gave submissions both challenging the legality of the additions on the ground of jurisdiction and also made submissions on the merits of the aforesaid additions mentioned above. 7. On the issue of challenge on the grounds of jurisdiction to make the aforesaid additions, the assessee submitted that all the years under consideration are unabated assessment years and the additions made as above are not based on any incriminating material found during the course of search. Ld. CIT(Appeals) accepted the assessee's contention on the grounds of challenge to jurisdiction and allowed the assessee's appeal on the ground that that the assessments in above cases were unabated and it is settled law that in unabated assessments under section 153A of the Act, no addition/disallowance can be made de hors the incriminating documents se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorities to highlight the binding ratio that "in unabated assessments u/s 153A, no addition/disallowance can be made de hors the incriminating seized documents", and accordingly further urged me to delete these additions made de hors any incriminating material seized during the course of search, and thus, made in contravention of the law laid down by Special Bench, Jurisdictional HC and Jurisdictional Tribunal. The AR also took me through detailed written submissions made on behalf of the appellant. The Id. PR who was present could not point out any incriminating material found and seized during the course of search on which the additions are based. The Id DR also could not contradict or controvert the averment of the Id. AR that the additions are based exclusively on the same books of accounts which formed the basis of returns of income filed at relevant time u/s 139 and which were already considered by the AO while framing the original assessment u/s 143(3) or u/s 143(1). 8.3 I find that identical ground based on similar facts and similar arguments on either side has already been decided by me in appeals in the case of Arvind V. Joshi & Co. (supra), wherein it has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Kabul Chawla 61 taxmann.com 412 (Del) and Desai Construction (Ahd Trib) and Saumya Construction (Ahd Trib) the copies of which have been furnished: Kabul Chawala Sl taxmann.com 412 (Del) "Summary of the legal position 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i ......... ii ............ in ............ vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment..........". Desai Construction P. Ltd., v. ACIT dated 22/7/2O15 IT(SS)A. Nos.12 & 13/Ahd/2012 (Ahd) ".............................. 3.2 ................ There is nothing on record to suggest that any other evidence including any incriminating material was found during course of search for the relevant assessment years in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that where an assessment order has already been passed for a year (s) within the relevant six assessment years, then also the AO is duty bound to reopen those proceedings and reassess the total income but by 'taking note of the undisclosed income if any 'unearthed during the search". The expression 'unearthed during the search' is quite significant to denote that in respect of completed or nonpending assessments, the Assessing Officer is albeit duty bound to assess or reassess the total income but there is a cap on the scope of additions in such assessment, being the items of income 'unearthed during the search'. In other words, the determination of 'total income; in respect of the assessment years for which the assessments are already completed on the date of search, shall not be influenced by the items of income other than those based on the material unearthed during the course of search................. 7. We see no reasons to take any other view of the matter than the view so taken by the coordinate bench. Respectfully following the same, and having noted that the additions of Rs. 11,05,51,000/- is not based on any incriminating material found duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the years under appeal." 8. Before us, the DR argued that certain material were indeed found during the course of search and hence the case of the assessee cannot be equated with Saumya constructions supra. In response, the counsel for the assessee submitted that even at page 10, paragraph 8.4 of the Ld. CIT(Appeals) order, it has been specifically pointed out by Ld. CIT(Appeals) that the learned DR present has also not pointed out to any distinguishing facts or any incriminating material seized in support of any of the additions made by the AO for any of the years under reference. Accordingly, the counsel for the assessee placed reliance on the observations made by Ld. CIT(Appeals) in the appellate order. 9. We have heard the rival contentions and perused the material on record. In the case of CIT v. Sinhgad Technical Education Society[2017] 84 taxmann.com 290 (SC), Supreme Court held that where loose papers found and seized from residence of resident of assessee, an educational institution, indicating capitation fees received by various institutions run by assessee did not establish co-relation document-wise with assessment years in question, notice issued under section 153C h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceedings and such assessment had abated.The ITAT Rajkot Bench in the case of a Rajat Minerals v. DCIT 114 Taxman.com 536 (Ranchi-Trib) held that where no incriminating evidence against the assessee was found or seized during course of search, invocation of provisions of section 153A and making additions/disallowances on basis of tax evasion petition found much after search was unjustified. The Delhi High Court in the case of Pr. CIT v. Jaypee financial services Ltd 127 Taxman.com 419 (Delhi), held that where AO during the course of post search proceedings under section 153A against assessee-share trader found certain evidences showing client code modification done by assessee which were not for genuine reasons and, accordingly, made addition on account of such client code modification, since impugned addition was not made by AO based on any incriminating material found during search against assessee and assessment was not pending on date of search, impugned addition was unjustified and same was to be deleted. 10. Now to coming to the instant facts before us, it is observed that the assessment order was passed u/s 143(3) r.w.s. 153A(1)(b) of the Act and while passing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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