Assessment U/s. 153A- In absence of Incriminating material no addition can be made in respect of concluded assessments

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.

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