Jignesh P. Shah vs. DCIT (ITAT Mumbai)

DATE: February 13, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2002-03 & 2004-05
FILE: Click here to download the file in pdf format
S. 153A: Assessments which have attained finality cannot be disturbed or varied if no incriminating material is found qua the addition made

During the course of search and seizure action, no incriminating document, material or unaccounted assets were found from the assessee. Even for the year of search i.e. A.Y. 2008-09, no addition has been made. The assessing officer without there being any incriminating material found in the course of search relating to the deemed dividend has made the addition on the basis of information already available in the return of income. This is also evident from the copy of panchnama and statement on oath of the assessee recorded at the time of search, the copy of which have been placed in the paper book form pages 135 to 139. Even in the assessment order there is no whisper about any material or document found at the time of search relating to the transaction of deemed dividend. The Ld. AO he has noted the facts about receiving of the payments by the assessee from M/s. Lotus investment, which was a division of M/s. La-fin Financial Services Pvt. Ltd. in which the assessee held 50% of share, from the balance sheets and records already filed along with the return of income. Since the assessment for the A.Ys. 2002-03 & 2004-05 had attained finality before the date of search and does not get abated in view of second proviso to section 153A, therefore, without there being any incriminating material found at the time of search, no addition over and above the income which already stood assessed can be made. This proposition he said, is squarely covered by the decision of All Cargo Global Logistics Ltd. Vs. DCIT reported in (2012) 137 ITD 287 (SB) (Mum). Even the Hon’ble jurisdictional (Bombay) High Court in the case of CIT Vs. M/s. Murli Agro Products Ltd. ITA No. 36 of 2009 order dated 29.10.2010, has clearly held that, once the assessment has attained finality before the date of search and no material is found in the course of proceedings u/s 132(1), then no addition can be made in the proceedings u/s 153A. This proposition has been reiterated by Hon’ble Rajasthan High Court in the case of Jai Steel (India) Vs. ACIT reported in (2013) 259 CTR (Raj) 281. Thus, the addition of deemed dividend made by the assessing officer is beyond the scope of assessment u/s 153A for the impugned assessment years. Satish L. Babladi Vs. DCIT passed in ITA Nos. 1732 & 2109 order dated 19.03.2013 distinguished

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