9911796707
TMI Blog2024 (12) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure incurred by the assessee in terms of exempt income earned as specified u/s 10 of the Act, the matter requires to be restored back to the files of Ld. AO, for fresh adjudication. Assessment u/s 153A - incriminating material in assessments or not? - Restore this matter back to the files of the Ld. AO to consider if the year under consideration is an unabated assessment year and no incriminating material was surfaced for the year concerned, then no addition can be made. However, the completed/unabated assessments can be reopened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. For this purpose, the principal of law laid down in the case of Abhisar Buildwell [ 2023 (4) TMI 1056 - SUPREME COURT] is binding on the revenue authorities. - Shri Ravish Sood, JM And Shri Arun Khodpia, AM For the Assessee : Shri R. B. Doshi, CA For the Revenue : Shri S. L. Anuragi, CIT-DR ORDER PER ARUN KHODPIA, AM: The captioned two appeals pertain to the same assessee for different assessment years directed against the order of Commissioner of Income Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Learned ACIT, Central Circle - 1, Raipur on 27th December, 2019 determining the total income of the Appellant assessee at Rs. 20,88,680/- was without giving proper and meaningful opportunity of being heard to the appellant is in gross violation of the principles of Natural Justice and hence Illegal, arbitrary and bad in law. 2. That the impugned assessment order passed by the Learned ACIT, Central Circle 1, Raipur is liable to be quashed since it has been passed in haste without application of mind in violation of the principles of natural justice. 3. The Learned ACIT, Central Circle- 1, Raipur erred in arbitrarily making an addition of Rs 20,88,680/- in the total income of the assessee for the year under consideration on account of disallowance of Rs. 20,88,680/- made u/s. 14A in the relevant assessment year during the regular scrutiny proceedings u/s. 143(3) is included in the book profit u/s. 115JB for tax calculation. 4. That the Ld. ACIT, Central Circle 1, Raipur erred in facts in stating in Assessment Order that several/sufficient opportunities were given to the assessee for making compliances, whereas no proper notices were issued and no proper opportunity of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.-2012-13. Initiate penalty u/s 271(1)0 for A.Y.-2012-13. 7. During further examination of record, it is found that in the A.Y, 2013-14 the AO has made addition worth Rs. 20,88,684/- on account of expenditure incurred in relation to income which does not form part of the total income under section 14A r.w.r. SD. The said amount however not considered for increasing book profit u/s 115JB resulted in understatement of book profit by Rs. 20,88,684/- as below:- Addition as above in book profit Rs. 2088684/- (rounded to nearest ten) Rs. 2088680/- Further, sub section 4 of section 115JB provide that every company to which MAT is applicable should furnish with its return of income a report from a chartered accountant in 'Form 29B' certifying that the book profit has been computed in accordance with the provision of the section. However, no such report was submitted by company. 7.1 The assessee was asked vide query dated 29.01.2019 to explain, justify why Rs. 20,88,680/- may not be added in your total income for the A.Y.-2013-14. A report of CA in form 29B is also required to be submitted with your submission. The assessee filed submission which is examined and placed on record. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to be correct. In view of the above the grounds of appeal mentioned in Sr. 1 to 6 are dismissed. 7. Dissatisfied with the aforesaid decision by the Ld. CIT(A), assessee preferred an appeal before the Tribunal which is under consideration in the present case before us. 8. At the threshold, Ld. AR assailed on the issue and have placed multiple contentions against the addition made by the Ld. AO and confirmed by the Ld. CIT(A). 9. The First Contention raised by the Ld. AR was with a reliance on the order of Hon ble Delhi High Court in the case of ACIT vs. Vireet Investment Pvt. Ltd. (2017) 58 ITR 313 (Delhi), wherein Hon ble Delhi High Court had dealt with the issue regarding permissibility of adjustment for addition u/s 14A, when the book profit is calculated under the provisions of Section 115JB. The relevant findings of the Hon ble Delhi High Court, are extracted as under: Hon'ble Delhi High Court in the case of Pr. CIT V. Bhushan Steel Ltd. has upheld the decision of the Tribunal in holding that disallowance under section 14A read with Rule 8D cannot be added while computing book profits as per section 115JB as Explanation to that section does not specifically mentions sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue, therefore, in terms of judgment by the Hon ble Apex Court in the case of Abhisar Buildwell Pvt. Ltd., the addition made cannot be sustained. The Findings of Hon ble Apex Court in the case of Abhisar Buildwell, are as under: 11. As per the provisions of Section 153A, in case of a search under section 132 or requisition under section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and sub-section (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction to re-open the assessments made under section 143(1)(a) or 143(3) of the Act, 1961 and to reassess the total income taking notice of undisclosed income even found during the search and seizure operation. 15.1 In view of the discussion hereinabove, once during search undisclosed income is found on unearthing the incriminating material during the search, the AO would assume jurisdiction to assess or reassess the total income even in case of completed/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was available at the time of original assessment does not require any interference. Under the circumstances, the aforesaid appeals preferred by the assessee M/s Kesarwani Zarda Bhandar, Sahson, Allahabad deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, no costs. Civil Appeal Nos. 15617/2017, 10267/2017, 10266/2017 10268/2017 16. Insofar as the aforesaid appeals filed by the assessee Day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome can be made for computing the books profit u/s 115JB as per clause (f) of explanation 1 to section 115JB(2) which requires increase in the book profit by the amount or amounts of expenditure relatable to any income to which [Section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply], without resorting to the amount calculated u/s 14A r.w. Rule 8D, therefore, for verification of such facts that whether there is any expenditure incurred by the assessee in terms of exempt income earned as specified u/s 10 of the Act, the matter requires to be restored back to the files of Ld. AO, for fresh adjudication following the ratio of law accorded by the Hon ble Delhi High Court in the case of ACIT vs Vireet Investment Pvt. Ltd. (supra). 17. Apropos, assessee s reliance on the judgment of Hon ble Apex Court in the case of Abhisar Buildwell (supra), we may observe that the premises of the assessee were searched u/s 132 of the Act on 31.08.2017 and the assessment were conducted u/s 153A r.w.s. 143(3) for the AY 2011-12 to 2017-18. The year under consideration before us is AY 2012-13. It was the submission by Ld. AR that the year under considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
