| The Tax Publishers2020 TaxPub(DT) 0396 (Ahd-Trib) INCOME TAX ACT, 1961
Section 153A
In absence of any connection with incriminating material unearthed in search proceedings of assessee, additions/ disallowances/ realignment of income already declared in the regular course in respect of concluded statements, are not permissible in law.
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Search and seizure - Assessment under section 153A - No incriminating material unearthed during search -
A search action under section 132 was carried out in premises of assessee-company. Consequently, a notice under section 153A was issued. While framing assessment, AO noticed that the assessee declared rental income from three shops as 'business income'; however, the AO was of the view that the said income would be taxable under the head 'Income from house property'. Assessee submitted that the assessment of relevant assessment year stood concluded by operation of law prior to search and was not pending at the time of search, therefore, the assessment framed under section 153A after search could be done only in respect of income bearing a reference to the incriminating material found in the course of search. Accordingly, the assessee concluded that the AO was not justified in re-appreciating the nature of income and realigning the taxability from one head to another without any reference to the incriminating material found in the course of search. Held: In absence of any connection with incriminating material unearthed in search proceedings of assessee, additions/ disallowances/ realignment of income already declared in the regular course in respect of concluded statements, are not permissible in law. In instant case, AO merely attempted to realign the taxability of income from one head to another, i.e., from business income to income from house property. Apparently, the AO sought to revisit the chargeability of income already declared prior to search without any discovery of incriminating material while making assessment post-search under section 153A and the said course adopted by him did not resonate with the judicial interpretations available in that regard. Hence, the action of the AO for realignment of income was bad in law and could not be countenanced.
REFERRED : Pr.CIT v. Dipak Jashvantlal Panchal (2017) 397 ITR 153 (Guj): 2017 TaxPub(DT) 4093 (Guj-HC) Pr. CIT v. Saumya Construction Pvt. Ltd. (2016) 387 ITR 529 (Guj): 2016 TaxPub(DT) 3466 (Guj-HC) CIT v. Kabul Chawla (2016) 380 ITR 573 (Del): 2015 TaxPub(DT) 3486 (Del-HC)
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 14
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