Case Law Details

Case Name : Y.V. Anjaneyulu Vs. Dy. CIT (ITAT Visakhapatnam)
Appeal Number : ITA Nos. 513, 514 & 524/Vizag/2013
Date of Judgement/Order : 09/06/2017
Related Assessment Year : 2004- 05 & 2005- 06
Courts : All ITAT (7457) ITAT Visakhapatnam (81)

Y.V. Anjaneyulu Vs. Dy. CIT (ITAT Visakhapatnam)

In this case, search was taken place on 24-7-2008. As on the date of search, the assessments for the assessment years 2004-05 and 2005-06 are already concluded and there is no pending proceeding for those assess­ment years. The time limit for issue of notice under section 143(2) of the Act for the assessment years 2004-05 and 2005-06 has been expired. The assessing officer made additions towards deemed dividend under section 2(22) (e) of the Act without any incriminating materials and also based on the books of account and financial statements, which were already part of the regular return of income filed by the assessee under section 139(1) of the Act for those assessment years. Therefore, considering the facts and circumstances of the case and also respectfully following the decision of the co-ordinate Bench of the Income Tax Appellate Tribunal, Visakhapatnam in the case of Sri Hari Prasad Bhararia (supra), we are of the view that the assessing officer has no jurisdiction to make additions in respect of the concluded assessments in the absence of any incriminating materials found during the course of search. In this case, undoubtedly the assessing officer has made additions towards deemed dividend on the basis of the financial statements filed by the assessee along with the regular return of income without any material found during the course of search. Therefore, we direct the assessing officer to delete the additions made towards deemed dividend under section 2(22)(e) of the Act for the assessment years 2004-05 and 2005-06.

Full Text of the ITAT Order is as follows:-

These cross-appeals filed by the assessee as well as the Revenue are directed against separate but iden­tical orders of the Commissioner (Appeals) Guntur dated 28-3-2013 for the assessment years 2004-05 and 2005-06. Since the facts are identical and the issues are common, they are clubbed, heard together and disposed of by way of this common order for the sake of convenience.

2. The learned Authorized Representative for the assessee, at the time of hearing submitted that there is a delay of 1 day in filing these appeals before the Income Tax Appellate Tribunal. The Authorized Representative further submitted that the delay in filing the appeals is due to some trans­port problem and the person could reach the Tribunal only on 3-7-2013. In this regard, the assessee filed a petition for condonation of delay along with affidavit. Therefore, the delay in filing appeal may be condoned. On the other hand, the learned Departmental Representative did not oppose the condonation petition filed by the assessee.

3. Having heard both the sides and considered material on record, we find that there is a marginal delay of 1 day in filing these two appeals. The assessee has explained the reasons for the delay in filing the appeal. We observed that the reasons given by the assessee for not presenting the appeal on or before the due date is beyond his control. Therefore, we are of the considered view that there is a reasonable cause for not presenting the appeal within the due date specified under the Act and hence the delay in filing the appeal has been condoned and admit the appeal for adjudication on issues.

4. The brief facts of the case are that the assessee is an individual deriving income from salary from Chalapati Chit Fund Private Limited, Chalapati Housing and Finance Private Limited, property income, income from busi­ness and income from other sources has filed his regular return of income under section 139(1) of the Income Tax Act, 1961 (hereinafter called as “the Act”). A search and seizure operation was conducted under section 132 of the Act in the group cases of the Chalapati group, Guntur on 24-7-2008. During the course of search and seizure operations, certain incriminating materials relating to the assessee were found and seized. Consequent to the search, the case has been centralized to the Deputy Commissioner, Central Circle, Vijayawada, accordingly, a notice under section 153A of the Act dated 30-11-2009 was issued to the assessee calling for return of income for the assessment years 2004-05 and 2005-06. In response to the notice, the assessee has filed his return of income for the assessment years 2004-05 and 2005-06 on 22-1-2010 declaring a total income of Rs. 34 lakhs besides agricultural income of Rs. 1,04,000 and Rs. 6,08,367 besides agricultural income of Rs.1,92,500 respectively. The cases have been selected for scrutiny and accordingly, notices under section 143(2) and section 142(1) of the Act along with the questionnaire were issued on 15-3-2010 posting the case for hearing on 3-4-2010. In response to the notices, the Authorized Representative of the assessee appeared from time to time and filed the information as called for. The assessment for the assessment years 2004-05 and 2005-06 has been completed under section 143(3) read with section 153A of the Act on 28-12-2010 determining the total income of Rs. 57,79,000 and Rs. 25,20,860 respectively, inter alia making additions towards deemed dividend under section 2(22) (e) of the Act.

5. Aggrieved by the assessment orders, the assessee preferred an appeal before the Commissioner (Appeals). Before the Commissioner (Appeals), the assessee has challenged the additions made by the assessing officer towards deemed dividend under section 2(22) (e) of the Act on the ground that the assessee had substantial share application money, even after allotment of shares in the subsequent year, in the books of account and he had withdrawn money out of share appli­cation money standing to tine credit of his account, therefore, the assessing officer was erred in making additions towards deemed dividend under section 2(22) (e) of the Act. The Commissioner (Appeals) after considering the explanations of the assessee, upheld the action of the assessing officer in bringing to tax amount withdrawn by the assessee under section 2(22) (e) of the Act. However, allowed partial relief and directed the assessing officer to re-compute the additions made towards deemed dividend under section 2(22) (e) of the Act. Aggrieved by the Commissioner (Appeals) order, the assessee as well as the Revenue are in appeal before us.

6. The assessee has filed common grounds for both the assessment years. From these grounds of appeal, the assessee has challenged the additions made by the assessing officer towards deemed dividend under section 2(22)(e) of the Act. The assessee also filed a petition for admission of addi­tional grounds on 10-12-2016 raising a legal ground challenging the additions made by the assessing officer towards deemed dividend iv the concluded assessment for the assessment years 2004-05 and 2005-06. For the sake of convenience, the additional grounds raised by the assessee for the assessment year 2004-05 are reproduced below :–

“1. The appellant filed his return of income for the assessment year 2004-05 originally on 17-10-2005 admitting a total income 01 Rs. 34,00,000. Consequent to the search and seizure operations in the group cases of the Chalapathi group on 24-7-2008 notice under section 153A was issued to the appellant on 30-11-2009. In response, the appellant filed his return of income on 22-1-2010 admitting the same income of Rs. 34,00,000.

2. Assessment under section 143(3) read with section 153A was completed vide order dated 28-12-2010 wherein the assessing officer made an addition of Rs. 21,75,000 towards deemed dividend. This addition was made based on the ledger account of the appellant in the books of Chalapathi Chit found (P) Ltd. and is not based upon any seized document. Further, as on 24-7-2008 i.e., the date of search the time limit for issue of notice under section 143(2’! against the return of income originally filed on 17-10-2005 stood expired.

3. Before the learned Commissioner (Appeals) the appellant contested this addition on the merits and the learned Commissioner (Appeals) granted relief of Rs. 20,00,000 and sustained the balance addition of Rs. 1,75,000 vide his order dated. In the above mentioned appeal the appellant contested this.

4. The Hon’ble Visakhapatnam Bench of the Income Tax Appellate Tribunal has been consistently holding that with regard to such assessment years for which there are no pending proceedings as on the date of search, addition can be made only with reference to incriminating material found during search and seizure operations. Therefore, in view of the facts on record in the case of the appellant as stated above addition could not have been made for Rs. 21,75,000 towards deemed dividend in the absence of any seized material.

5. However, the appellant failed to raise the above ground of appeal before the assessing officer and also the learned Commissioner (Appeals) due to inadvertence. The entire facts relevant for adjudication of the issue are already on record and the issue involved is only a legal issue.

6. In view of the above, the appellant prays that the following addi­tional ground of appeal may kindly be admitted and appropriate orders may kindly be passed in the interest of rendering substantial justice.

‘On the facts and in the circumstances of the case, whether the addition to this extent of Rs. 1,75,000 made by the assessing officer towards deemed dividend and sustained by the learned Commissioner (Appeals) is beyond the scope of additions that can be made in an assessment under section 143(3) read with section 153A of the Income Tax Act, 1961.’

7. During the course of hearing, the learned Authorized Representative for the assessee submitted that all the material facts relevant to the legal issue are already on record and the issue as to the scope of additions that can be made in an assessment under section 143(3) read with section 153A of the Act is purely a legal issue which can be raised at any time before the Tribunal. Therefore, requested to admit the additional ground of appeal and pass such orders as may be appropriate in the interest of rendering substantial justice. The learned Departmental Representative on the other hand strongly opposed admission of additional grounds raised by the assessee.

8. Having heard both the sides and considered material on record, we find that the facts which are necessary for adjudication of legal issue raised by the assessee by way of additional grounds of appeals are already on record and no new material or evidence is relied upon to challenge the legal issue. Therefore, we are of the view that the additional ground raised by the assessee can be admitted for adjudication and accordingly we admit the additional ground raised by the assessee and proceed to dispose of the appeal.

9. The first issue that came up for our consideration by way of additional grounds of appeal is whether on the facts and in the circumstances of the case, the assessing officer is right in making the additions towards deemed dividend under section 2(22)(e) of the Act for the assessment years 2004-05 and 2005-06, where the assessment proceedings has been completed and no proceedings are pending as on the date of search. The learned Authorized Representative for the assessee referring to the decision of the Income Tax Appellate Tribunal, Visakhapatnam Bench in the case of Deputy CIT v. Sri Hari Prasad Bhararia (ITA Nos. 435 to 441/Vizag/ 2014, dt. 9-9-2016) submitted that in the case of concluded assessments, the assessing officer has no jurisdiction to make additions towards addition to the returned income in the absence of any materials. The Authorized Representative further submitted that in the case of abated assessments and assessments which are pending as on the date of search, the assessing officer can assume jurisdiction to assess/reassess the total income, which is found during the course of search. In this case, the assessment for the assessment years 2004-05 and 2005-06 are already concluded and no proceedings are pending as on the date of search and hence, the assessing officer is precluded from making additions to the returned income in the absence of any seized materials.

10. The learned Departmental Representative submitted that once a search is taken place, the assessment for the six assessment years gets reopened and the assessing officer will get jurisdiction to assess/reassess the total income of those six assessment years whether or not any incriminating material was found during the course of search. The Departmental Representative further argued that the provisions of section 153A of the Act shall be attracted upon initiation of search proceedings under section 132 of the Act in which case the concluded assessments will be reopened as per the provisions of section 153A of the Act and such reopening is not depends upon the existence or otherwise of any undisclosed income. In support of his arguments, relied upon the decision of the Hon’ble High Court of Karnataka in the case of Canara Housing Development Company v. Deputy CIT (ITA No. 38 of 2014, dt. 25-7-2014).

11. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The only issue that arises for our consideration is whether on the facts and in the circumstances of the case, the assessing officer is right in making addi­tions without any seized materials in respect of the assessment years for which the assessment proceedings have been concluded as on the date of search. The learned Authorized Representative for the assessee, submitted that the issue has been already considered by the co-ordinate Bench of the Visakhapatnam Income Tax Appellate Tribunal in the case of Deputy CIT v. Sri Hari Prasad Bhararia (ITA Nos. 435 to 441/Vizag/2014) wherein it has been observed that the assessing officer has no jurisdic­tion to make additions in the absence of any seized materials in the assessments made under section 143(3) read with section 153A of the Act, for the assessment years which are concluded and no proceedings are pending as on the date of search. The relevant portion of the order is extracted below :–

“12. We have heard both the parties, perused the materials avail­able on record and gone through the orders of the authorities below. The factual matrix of the case is that there was a search action under section 132 of the Act. Consequent to the search, the assessee’s case was centralized and accordingly, notice under section 153A of the Act was issued requiring the assessee to file the return for six assessment years immediately preceding the assessment year in which search is conducted. The assessee filed returns in response to the notice under section 153A of the Act. The assessing officer completed the assess­ment under section 143(3) read with section 153A of the Act and made additions towards deemed dividend under the provisions of section 2(22) (e) of the Act. The assessing officer was of the opinion that the transactions between the assessee and his company is coming within the definition of deemed dividend under the provi­sions of section 2(22) (e) of the Act. It is the contention of the assessee that the assessment order passed by the assessing officer under section 143(3) read with section 153A of the Act for the assessment years 2005-06 to 2009-10 is null and void as the assessing officer has made additions towards deemed dividend under section 2(22) (e) of the Act without any incriminating materials. The assessee further contended that as per section 153A of the Act de novo assessment can be made only in respect of the assessment year for which the assessment proceedings has been abated and that in respect of the assessment years for which the assessment had already been completed, no additions can be made under section 153A of the Act unless there was incriminating material found during the course of search.

13. The assessing officer has passed assessment orders under section 153A of the Act for all the six assessment years immediately preceding the year in which the search was conducted. According to the assessing officer, as per the provisions of section 153A of the Act, there is no limitation or restriction provided in the new proce­dure of search assessment on the powers of the assessing officer for making assessment/reassessment and the assessing officer is not required to confine his assessments on the materials found during the course of search as was the case in the old procedure of block assessments. It is the contention of the assessee that the assessing officer cannot disturb the completed assessment unless there was a seized material. The assessee further contended that where assess­ments are not pending as on the date of search and the time limit for issue of notice under section 143(2) of the Act has been expired, irre­spective of the fact that those assessments have been completed under section 143(1) or 143(3) of the Act then the assessing officer has no power to reassess the income of those completed assessment years. We find force in the arguments of the assessee, for the reason that the co-ordinate Bench of this Tribunal in ITA Nos. 300 to 305/Vizag/2012, in the case of L. Suryakantham v. Asst. CIT has considered a similar issue and held that the assessing officer had no jurisdiction to make additions under section 153A of the Act for the assessments which are not pending as on the date of search and also the time limit for issue of notice under section 143(2) of the Act has been expired. The relevant portion of the order is extracted below :–

‘19. We have heard both the parries, perused the materials avail­able on record and gone through the orders of the authorities below. The factual matrix of the case is that there was a search action under section 132 of the Act. During the course of search, incriminating documents found reveals that the assessee has inflated labour charges for the assessment years 2008-09 and 2009-10. Based on the docu­ments found during search, the assessee has accepted that he has inflated 10 per cent, labour charges and which is common in this line of business. Consequent to the search action under section 132 of the Act the assessee case has been centralized and accordingly fresh assessment proceedings have been initiated by issuing notice under section 153A/153C of the Act for the six assessment years immedi­ately preceding the assessment year in which search was conducted. The assessee has filed revised returns in response to the notice under section 153A of the Act and admitted the additional income disclosed during the course of search. The case has been selected for scrutiny. During the course of assessment proceedings, the assessee was asked to produce books of account and relevant bills and vouchers in sup­port of expenditure claimed. In response, the assessee filed written submission and stated that the books of account are not available and hence cannot be furnished. Therefore, the assessing officer issued a show-cause notice and asked to explain why the net profit from the business shall not be estimated. In response to the show-cause notice, the assessee has filed a written reply and contended that the income for the assessment years 2004-05, 2005-06 and 2007-08 cannot be tinkered with, as there was no incriminating material found during the course of search for the above assessment years and as such no additions can be made to the returned income. It is further submitted that as per section 153A of the Act de novo assessment can be made only in respect of the assessment year for which the assessment proceedings had been abated and that in respect of the assess­ment years for which the assessment had already been reached a finality, such assessment could not be made under section 153A of the Act unless there was seized materials.

20. The assessing officer has passed reassessment orders under section 153A/153C of the Act for all the six assessment years imme­diately preceding the year in which search was conducted. According to the assessing officer, as per the provisions of section 153A of the Act, there is no limitation or restriction provided in the new proce­dure of search assessments on the powers of the assessing officer for making assessment/reassessment and the assessing officer is not required to confine his assessments on the material found during the course of search as was the case in the old procedure of block assess­ments. The new procedure of block assessment was explained by way of provisions of section 153A of the Act. As per section 153A of the Act, the assessing officer shall assess or reassess the total income of the specified six assessment years irrespective of the fact that the assessment of the said years were completed or pending as on the date of search. Therefore, the assessing officer has reassessed the income of six assessment years and recomputed the profits afresh after considering the relevant facts available on record. It was the contention of the assessee that the assessing officer cannot disturb the completed assessments unless there was a seized material. The assessee further contended that where assessments are not pending as on the date of search and the time limit for issue of notices under section 143(2) of the Act has been expired, irrespective of the fact that those assessments have been completed under section 143(1) or 143(3) of the Act then the assessing officer has no power to reassess the income of those completed assessment years.

21. We find force in the arguments of the assessee for the reason that the issue no longer res integra, as the issue has been already decided by the Income Tax Appellate Tribunal, Special Bench and held that where the assessments are not pending as on the date of search, the assessing officer loses jurisdiction under section 153A of the Act to reassess the income of those completed assessments. Though the provisions of section 153A of the Act does not specify abated and completed assessments, the natural meaning assigned to it should be given to interpret the provisions in such a way that which shall not cause undue hardship to the taxpayers. The provisions of section 153A of the Act explained the procedure of assessments, abated assessments and the manner in which the assessment should be framed, which was further supported by Circular No. 7 of 2003 (see (2003) 263 ITR (St.) 62), issued by the Central Board of Direct Taxes. When the law has explained the position of abated assessments, then the same way the completed assessment should be treated so as to understand that those assessments are reached finality and which cannot be tinkered with unless there was a seized document. There­fore, we are of the considered opinion that where search is initiated, all pending assessments are merge into one and only one assessment for each assessment year shall be made separately on the basis of findings of search and other material existing or brought on record by the assessing officer. In respect of non-abated or completed assess­ments, the assessment will be made on the basis of books of account or other relevant documents found during the course of search but not produced in the course of original assessment.

22. In the present case on hand, on a perusal of the document available on record, we find that the assessment for the assessment years 2004-05 to 2007-08 were not pending as on the date of search. The fact that the assessment has been completed under section 143(1) and 143(3) of the Act are not material. The time limit for issue of notice under section 143(2) of the Act has been expired. On further verification of the documents available on record, we find that there was no incriminating documents found during the course of search in respect of the assessment years 2004-05 to 2007-08. Therefore, we are of the opinion that the assessing officer was not correct in reassess­ing the total income of the assessment years 2004-05 to 2007-08 in the absence of any seized materials. Accordingly, we direct the assessing officer to delete the additions made for the assessment years 2004-05, 2005-06 and 2007-08.

23. It is pertinent to discuss herein the case law relied upon by the assessee. The assessee has relied upon the Income Tax Appellate Tribunal, Special Bench decision in the case of All Cargo Global Logistics Ltd. v. Deputy CIT (2012) 16 ITR (Trib) 380 (Mumbai) (SB). The co-ordinate Bench of this Tribunal, while deciding the issue in favour of the assessee held as under :–

“In assessments that are abated, the assessing officer retains the original jurisdiction as well as jurisdiction conferred on him under section 153A for which assessments shall be made for each of the six assessment years separately. In other cases, in addition to the income that has already been assessed, the assessment under section 153A will be made on the basis of incriminating material, which in the context of the relevant provisions means–(i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search.”

24. The assessee relied upon the Andhra Pradesh High Court decision in the case of CIT v. AMR India Ltd. (ITTA No. 357 of 2014, dt. 12-6-2014). The Hon’ble High Court held that the assessing officer has no jurisdiction to reagitate the assessments which were already completed and subsiding. The relevant portion is extracted below :–

“We have heard Sri J. V. Prasad, the learned counsel for the appellant and gone through the impugned judgment and order of the learned Tribunal.

It appears that the learned Tribunal found on fact that after completion of the assessment proceedings and after reaching finality thereon, the assessing officer tried to re agitate the assessments. According to us, the learned Tribunal has rightly held that the assessing officer has no jurisdiction to re agitate the assessments which were already completed and subsisting. We therefore do not find any element of law to be decided in this appeal.

Hence, the appeal is dismissed. There will be no order as to costs.”

25. The assessee has relied upon the co-ordinate Bench decision of the Income Tax Appellate Tribunal, Visakhapatnam in the case of A.T. Rayudu (ITA Nos. 373 to 379/Vizag/2014). The co-ordinate Bench under similar circumstances held the issue in favour of the assessee. The relevant portion is reproduced here under :–

“22. In this regard, it is also pertinent to refer to the following observations made by the Special Bench in the case of All Cargo Global logistics Ltd. (supra) :–

‘57(f) In the case of Parashuram Pottery Works Co. Ltd. v. ITO (1977) 106 ITR 1 (SC), it has been mentioned in the last paragraph of the judgment that the court has to bear in mind that the policy of law-is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity. Our decision is in consonance with this observation.’

The decision rendered by the Special Bench that the assessing officer can make additions in the case of concluded assessments on the basis of incriminating materials is also based upon the decision rendered by the Hon’ble Supreme Court in the case of Parashuram Pottery works Co. Ltd. (supra).

23. We have earlier noticed that the Hon’ble jurisdictional Andhra Pradesh High Court has also upheld by the orders passed by the Tribunal by following the decision rendered by the Special Bench in the case of All Cargo Global logistics Ltd. (supra) in the following cases :–

(a) Sree Lalitha Constructions (ITA No. 368 of 2014)

(b) Hyderabad House (P) Ltd. (ITTA No. 266 of 2013)

(c) AMR India Ltd. (ITA No. 357 of 2014)

Further we agree with the contentions of the assessee that the decision rendered by the jurisdictional High Court in the case of Gopal Das Bhadruka (supra) have been rendered on the facts prevailing in those cases since the issue relating to the concluded assessments and pending assessments was not before the Hon’ble Andhra Pradesh High Court on the contrary, the abovesaid three decisions of the jurisdictional High Court comes to the support of the assessee’s contentions with regard to the legal proposition agitated before us, besides the decisions rendered by various other High Courts. Accordingly, we are of the view that the scope of inquiry in the case of unabated assessments, i.e., the assessment years in which proceedings are not pending, is that the undisclosed income should be ascertained only on the basis of materials found during the course of search. If no incriminating material showing any undisclosed income was found in the case of concluded proceedings, then the question of making any addition does not arise, in that case, the assessing officer should complete the assessment of those years by determining the very same total income that was assessed in the earlier proceeding.

24. In view of the above, we are unable to agree with the contentions of the learned standing counsel that the assessing officer would get unfettered powers in the case of unabated assessments, once they were reopened under section 153A of the Act. In our view, in the case of unabated assessments, the total income should be determined by the assessing officer by combining the income already assessed/disclosed in the return of income and the undisclosed income, if any, found during the course of search proceeding. Even otherwise, it is settled proposition of law that the assessee is entitled to take support of the decision in his favour, when two contradictory views have been expressed by the High Courts. In the instant case the Hon’ble jurisdictional High Court comes to the support of the assessee in respect of the legal proposition in addition to the decision rendered by the Hon’ble Bombay High Court. Accord­ingly, we find merit in the contentions of the assessee on the legal issue.”

26. Considering the facts and circumstances of the case and also respectfully following the co-ordinate Bench decision in the case of All Cargo Logistics (P) Ltd. (supra), we are of the opinion that the assessing officer has made reassessment under section 153A/153C of the Act on the basis of the information/material available in the return of income, without referring to any seized material. Therefore, following the Special Bench decision (supra) we hold that the assessing officer had no jurisdiction to make additions under section 153A of the Act for the assessments which are not pending as on the date of search. In this case, the search was conducted on 14-7-2009. The assessment for the assessment years 2004-05 to 2007-08, were not pending as on the date of search. The time limit for issue of notice under section 143(2) has been expired. Therefore, the assessing officer has no jurisdiction to reassess the income for the assessment years 2004-05 to 2007-08 in the absence of any incriminating mate­rials. Hence, we delete the additions made by the assessing officer for the assessment years 2004-05, 2005-06 and 2007-08. Accordingly, the ground raised by the assessee is allowed.’

14. In this view of the matter and considering facts and circum­stances of this case and also respectfully following the decision of the co-ordinate Bench of Visakhapatnam, in the case of L. Suryakantham v. Asst. CIT (ITA Nos. 300 to 305/Vizag//2012) we are of the view that the assessing officer has made reassessment under section 153A/153C of the Act on the basis of information/material available in the return of income, without referring to any seized material. There­fore, following the Special Bench decision (supra) we hold that the assessing officer had no jurisdiction to make additions under section 153A of the Act for the assessments which are not pending as on the date of search. The assessment for the assessment years 2005-06 to 2009-10 were not pending as on the date of search. The time limit for issue of notice under section 143(2) has been expired. Therefore, the assessing officer has no jurisdiction to reassess the income for the assessment years 2005-06 to 2009-10 in the absence of any incrimi­nating materials. The Commissioner (Appeals) has rightly deleted the additions. We do not see any reason to interfere with the order of the Commissioner (Appeals). Hence, we inclined to uphold the Commissioner (Appeals) order and direct the assessing officer to delete the additions made towards deemed dividend for the assessment years 2005-06 to 2009-10.”

12. In this case, search was taken place on 24-7-2008. As on the date of search, the assessments for the assessment years 2004-05 and 2005-06 are already concluded and there is no pending proceeding for those assess­ment years. The time limit for issue of notice under section 143(2) of the Act for the assessment years 2004-05 and 2005-06 has been expired. The assessing officer made additions towards deemed dividend under section 2(22) (e) of the Act without any incriminating materials and also based on the books of account and financial statements, which were already part of the regular return of income filed by the assessee under section 139(1) of the Act for those assessment years. Therefore, considering the facts and circumstances of the case and also respectfully following the decision of the co-ordinate Bench of the Income Tax Appellate Tribunal, Visakhapatnam in the case of Sri Hari Prasad Bhararia (supra), we are of the view that the assessing officer has no jurisdiction to make additions in respect of the concluded assessments in the absence of any incriminating materials found during the course of search. In this case, undoubtedly the assessing officer has made additions towards deemed dividend on the basis of the financial statements filed by the assessee along with the regular return of income without any material found during the course of search. Therefore, we direct the assessing officer to delete the additions made towards deemed dividend under section 2(22)(e) of the Act for the assessment years 2004-05 and 2005-06.

13. In the result, the appeal filed by the assessee in ITA Nos. 513 and 514/Vizag/2013 for the assessment years 2004-05 and 2005-06 are allowed and appeal filed by the Revenue in ITA No. 524/Vizag/2013 for the assessment year 2004-05 is dismissed.

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