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| The Tax Publishers2020 TaxPub(DT) 1628 (Jp-Trib) : (2020) 184 ITD 0537 INCOME TAX ACT, 1961
Section 153A
Where assessment proceedings were pending at the time of search, there was no legal infirmity in action of AO in assessing income of assessee by making disallowance of expenses under section 37(1) based on enquiries conducted during the course of assessment proceedings even if no incriminating material was found and seized during search.
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Search and seizure - Assessment under section 153A - Assessee pleading no incriminating material found and seized during search - Asesseement pending as on date of search
AO pursuant to search conducted at assessee's premises, AO framed assessment under section 153A and made disallowance of deduction under section 37(1). Assesssee challenged this on the ground of no incriminating material was found and seized during the course of search. Held: It is a settled legal preposition that in case of completed assessment, the scope and jurisdiction of AO to reassess total income of assessee under section 153A is limited only to the extent of the income disclosed by incriminating material found and seized during search and seizure action. However, in respect of pending assessments which would be abated as per proviso to under section 153A(1), AO is free to assess income of assessee as part of regular assessment and there is no requirement that same would be based on incriminating material found and seized during search and seizure action. In the instant case, where assessment proceedings were pending at the time of search, there was no legal infirmity in action of AO in assessing income of assessee by making disallowance of expenses under section 37(1) based on enquiries conducted during the course of assessment proceedings.
REFERRED :
FAVOUR : Against the assesse
A.Y. :
INCOME TAX ACT, 1961
Section 37(1)
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