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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
These cross appeals by the assessee and the Revenue were These cross appeals by the assessee and the Revenue were These cross appeals by the assessee and the Revenue were heard and adjudicated and adjudicated earlier by the Tribunal on 31.05.2023, by the Tribunal on 31.05.2023, however, same have been recalled by the Tribunal vide order passed owever, same have been recalled by the Tribunal vide order passed owever, same have been recalled by the Tribunal vide order passed in in in Miscellaneous Miscellaneous Miscellaneous Application Application Application No. No. No. 620 620 620 & & & 621/M/2023 621/M/2023 621/M/2023 for for for assessment year 2010 010-11 on 16.01.2024 , thus before us for , thus before us for adjudication. These appeals are arising from the order of the Ld. . These appeals are arising from the order of the Ld. . These appeals are arising from the order of the Ld. Commissioner of Income Commissioner of Income-tax (Appeals) [in short ‘the Ld. CIT(A)’] tax (Appeals) [in short ‘the Ld. CIT(A)’] dated 26.12.2017.
The grounds raised by the Revenue are reproduced as under: The grounds raised by the Revenue are reproduced as under: The grounds raised by the Revenue are reproduced as under:
1. "On the facts and the circumstances of the case and in law the Ld. "On the facts and the circumstances of the case and in law the Ld. "On the facts and the circumstances of the case and in law the Ld. CIT(A) erred in granting relief to the assessee stating that no CIT(A) erred in granting relief to the assessee stating that no CIT(A) erred in granting relief to the assessee stating that no disallowance u/s 153C of the Act is called for as there are no disallowance u/s 153C of the Act is called for as there are no disallowance u/s 153C of the Act is called for as there are no incriminating materials found during the search and the assess incriminating materials found during the search and the assess incriminating materials found during the search and the assessment has reached its finality and was not abated at the initiation has reached its finality and was not abated at the initiation has reached its finality and was not abated at the initiation proceedings u/s. 132(1) of the Income Tax Act, 1961". proceedings u/s. 132(1) of the Income Tax Act, 1961". 2. "On the facts and in the circumstances of the case and in law, the 2. "On the facts and in the circumstances of the case and in law, the 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred, in holding that no addition can be made us 153C Ld. CIT(A) erred, in holding that no addition can be made us 153C Ld. CIT(A) erred, in holding that no addition can be made us 153C of the Act, once the assessment has reached to finality u/s 143(3) of the Act, once the assessment has reached to finality u/s 143(3) of the Act, once the assessment has reached to finality u/s 143(3) of the Act, and no and no incriminating documents have been found and seized incriminating documents have been found and seized in the case of the assessee during the course of search and seizure in the case of the assessee during the course of search and seizure in the case of the assessee during the course of search and seizure action relying upon the decision of the jurisdicti action relying upon the decision of the jurisdictional Bombay high onal Bombay high Court decision in the case of Continental Warehousing Corpn. and Court decision in the case of Continental Warehousing Corpn. and Court decision in the case of Continental Warehousing Corpn. and M/s Murli Agro Products without appreciating that the revenue has M/s Murli Agro Products without appreciating that the revenue has M/s Murli Agro Products without appreciating that the revenue has not accepted the decision and has filed not accepted the decision and has filed SLP in the Hon'ble Apex SLP in the Hon'ble Apex Court" 3. "On the facts and circumstances of 3. "On the facts and circumstances of the case and in law the Ld. the case and in law the Ld. CIT(A) erred in deleting the disallowance of Rs. 62,28,18,348/ CIT(A) erred in deleting the disallowance of Rs. 62,28,18,348/ CIT(A) erred in deleting the disallowance of Rs. 62,28,18,348/- on account of additional Spill Over Depreciation by treating the account of additional Spill Over Depreciation by treating the account of additional Spill Over Depreciation by treating the assessment as flawed in light of the judgements which are subjudice assessment as flawed in light of the judgements which are subjudice assessment as flawed in light of the judgements which are subjudice before Apex and Bombay High Co before Apex and Bombay High Court. Besides this issue has not Besides this issue has not Grasim Industries Ltd. 3 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 been examined and tested in the assessment and/or the Appellate been examined and tested in the assessment and/or the Appellate been examined and tested in the assessment and/or the Appellate Authorities." 4. "On the facts and circumstances of the case and in law the Ld. 4. "On the facts and circumstances of the case and in law the Ld. 4. "On the facts and circumstances of the case and in law the Ld. CIT(A) erred in allowing the additional Spill Over Depreciation relying CIT(A) erred in allowing the additional Spill Over Depreciation relying CIT(A) erred in allowing the additional Spill Over Depreciation relying upon the judicial pronouncement in the case of CIT vs Continental judicial pronouncement in the case of CIT vs Continental judicial pronouncement in the case of CIT vs Continental Warehousing Corpn. [374 Warehousing Corpn. [374 ITR 645]- Hon'ble Mumbai HC, without Hon'ble Mumbai HC, without appreciating that the revenue has not accepted the aforesaid judicial appreciating that the revenue has not accepted the aforesaid judicial appreciating that the revenue has not accepted the aforesaid judicial pronouncement and SLP is pending before the Hon'ble Supreme pronouncement and SLP is pending before the Hon'ble Supreme pronouncement and SLP is pending before the Hon'ble Supreme Court for adjudication". or adjudication". 2.1 The grounds raised by the assessee are reproduced as under: The grounds raised by the assessee are reproduced as under: The grounds raised by the assessee are reproduced as under:
On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in validating the action of the Assessing Officer learned CIT(A) erred in validating the action of the Assessing Officer learned CIT(A) erred in validating the action of the Assessing Officer ('AO') in issuing an invalid notic ('AO') in issuing an invalid notice u/s 153C of the Act and in passing e u/s 153C of the Act and in passing order dated 29.03.2016 u/s 153C r.w.s. order dated 29.03.2016 u/s 153C r.w.s. 143(3) of the Act.
2. On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in upholding the action of the AO in adopting learned CIT (A) erred in upholding the action of the AO in adopting learned CIT (A) erred in upholding the action of the AO in adopting lower opening written lower opening written down value of the block of assets for allowing down value of the block of assets for allowing depreciation allowance and ought to have directed the AO to re depreciation allowance and ought to have directed the AO to re depreciation allowance and ought to have directed the AO to re- compute depreciation allowance allowable to the Appellant for the compute depreciation allowance allowable to the Appellant for the compute depreciation allowance allowable to the Appellant for the year adopting correct opening written down value consequent to year adopting correct opening written down value consequent to year adopting correct opening written down value consequent to withdrawal of dep withdrawal of depreciation allowance in the earlier years. 3. On the facts and in the circumstances of the case and in law, the 3. On the facts and in the circumstances of the case and in law, the 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the action of the AO in learned CIT(A) has erred in upholding the action of the AO in learned CIT(A) has erred in upholding the action of the AO in disallowing depreciation allowance of Rs.29,56,250/ disallowing depreciation allowance of Rs.29,56,250/- on other buildings. 3. Briefly stated facts of the case are that the assessee company stated facts of the case are that the assessee company stated facts of the case are that the assessee company is engaged in manufacturing of fiber, chemical, cement and sponge, is engaged in manufacturing of fiber, chemical, cement and is engaged in manufacturing of fiber, chemical, cement and iron etc. For the year under consideration, the assessee filed its or the year under consideration, the assessee filed its or the year under consideration, the assessee filed its original return of income on 29.09.2010 which was further revised original return of income on 29.09.2010 which was further revised original return of income on 29.09.2010 which was further revised on 21.03.2012. The assessment u/s 143(3) of the Income-tax Act, on 21.03.2012. The assessment u/s 143(3) of the Income on 21.03.2012. The assessment u/s 143(3) of the Income 1961 (in short ‘the Act’) was completed on 24.02.2014 . Thereafter, 1961 (in short ‘the Act’) was completed on 24.02.2014 1961 (in short ‘the Act’) was completed on 24.02.2014 a search u/s 132 of the Act was carried out at the premises u/s 132 of the Act was carried out at the premises u/s 132 of the Act was carried out at the premises of M/s Aditya Birla Management Corp Aditya Birla Management Corporation Pvt. Ltd. on 16.10.20 oration Pvt. Ltd. on 16.10.2013, wherein material pertaining/belonging to the assessee was seized. wherein material pertaining/belonging to the assessee was seized. wherein material pertaining/belonging to the assessee was seized.
Grasim Industries Ltd. 4 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 The said material containing cash book, along with page No. 28, 32, The said material containing cash book, along with page No. 28, 32, The said material containing cash book, along with page No. 28, 32, 40 of annexure A-1 pertaining to the assessee were 1 pertaining to the assessee were forwarded forwarded to the Assessing Officer of the assessee Assessing Officer of the assessee following due procedure of law rocedure of law. Consequently, notice u/s 153C of the Act r.w.s. 153A was issued Consequently, notice u/s 153C of the Act r.w.s. 153A was issued Consequently, notice u/s 153C of the Act r.w.s. 153A was issued and assessment was completed u/s 153C r.w.s. 143(3) of the Act on and assessment was completed u/s 153C r.w.s. 143(3) of the Act on and assessment was completed u/s 153C r.w.s. 143(3) of the Act on 29.03.2016.
On further appeal before the Ld. CIT(A), the assessee On further appeal before the Ld. CIT(A), the assessee On further appeal before the Ld. CIT(A), the assessee challenged the validity of the reassess challenged the validity of the reassessment as well as merit of the ment as well as merit of the addition.
The Ld. CIT(A) though up The Ld. CIT(A) though upheld the validity of the notice issued held the validity of the notice issued u/s 153C of the Act however, held that under the proceedings of u/s 153C of the Act however, held that under the proceedings of u/s 153C of the Act however, held that under the proceedings of section 153C of the Act in the case of non section 153C of the Act in the case of non-abated assessment year abated assessment year, no addition could b no addition could be made without the aid of incriminating e made without the aid of incriminating material. The Ld. CIT(A) observed that there was no seized material material. The Ld. CIT(A) observed that there was no seized material material. The Ld. CIT(A) observed that there was no seized material qua the additions made by the Assessing Officer and therefore, qua the additions made by the Assessing Officer and therefore, qua the additions made by the Assessing Officer and therefore, accordingly he deleted the addition except the addition of accordingly he deleted the addition except the addition of accordingly he deleted the addition except the addition of disallowance of depreciati disallowance of depreciation of Rs.29,56,250/- on other building on other building which was held to be based on held to be based on incriminating material i.e. incriminating material i.e. the bogus purchase addition to the buildings. purchase addition to the buildings.
Aggrieved with the above finding of the Ld. CIT(A) both the Aggrieved with the above finding of the Ld. CIT(A) both the Aggrieved with the above finding of the Ld. CIT(A) both the Revenue and the assessee are before the Tribunal Revenue and the assessee are before the Tribunal by way of raising by way of raising grounds reproduced above. grounds reproduced above.
Grasim Industries Ltd. 5 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023
In the grounds raised by the Revenue In the grounds raised by the Revenue, a common common legal issue is that ld CIT(A) has erred in that ld CIT(A) has erred in deleting the addition on the ground that the addition on the ground that there was no incriminating incriminating material qua the additions made by the material qua the additions made by the the addition of additional spill over depreciation in AO including the addition of additional spill over depreciation in the addition of additional spill over depreciation in view of the decision of the Hon’ble Supreme Court in the case of CIT view of the decision of the Hon’ble Supreme Court in the case of CIT view of the decision of the Hon’ble Supreme Court in the case of CIT v. Continental Warehousing Corporation v. Continental Warehousing Corporation (supra). In the grounds . In the grounds raised by the Revenue, the only nue, the only contention is that the Department that the Department has not accepted the decision of the Hon’ble Bombay High Court in has not accepted the decision of the Hon’ble Bombay High Court in has not accepted the decision of the Hon’ble Bombay High Court in the case of CIT v. Continental Warehousing Corporation (supra) and the case of CIT v. Continental Warehousing Corporation the case of CIT v. Continental Warehousing Corporation SLP filed was pending before the Hon’ble Supreme Court. We find SLP filed was pending before the Hon’ble Supreme Court. We find SLP filed was pending before the Hon’ble Supreme Court. We find that the Ld. CIT(A) after considering the decision of the Hon’ble . CIT(A) after considering the decision of the Hon’ble . CIT(A) after considering the decision of the Hon’ble Bombay High Court in the case of CIT v. Continen Bombay High Court in the case of CIT v. Continental Warehousing tal Warehousing Corporation and Murli Agro Products Ltd. (supra) has held that no Corporation and Murli Agro Products Ltd. (supra) has held that no Corporation and Murli Agro Products Ltd. (supra) has held that no addition could have been made in proceedings u/s 153C without addition could have been made in proceedings u/s 153C without addition could have been made in proceedings u/s 153C without aid of the incriminating material. The relevant finding of the Ld. e incriminating material. The relevant finding of the Ld. e incriminating material. The relevant finding of the Ld. CIT(A) in reproduced as under: CIT(A) in reproduced as under:
“16.0 I have carefully considered the findings of the AO, the submissions 16.0 I have carefully considered the findings of the AO, the submissions 16.0 I have carefully considered the findings of the AO, the submissions made by the Appellant Company and the other materials on record, on made by the Appellant Company and the other materials on record, on made by the Appellant Company and the other materials on record, on this issue. 16.1 The Appe 16.1 The Appellant's claims is that the proceedings were already llant's claims is that the proceedings were already completed u/s 143(3), before the issuance of notice u/s 153C and hence completed u/s 143(3), before the issuance of notice u/s 153C and hence completed u/s 143(3), before the issuance of notice u/s 153C and hence didn't abate. It is seen from the facts of the case that the regular didn't abate. It is seen from the facts of the case that the regular didn't abate. It is seen from the facts of the case that the regular assessment for the current assessment year under consideration w assessment for the current assessment year under consideration w assessment for the current assessment year under consideration was completed by the A.O. u/s 143(3) on 24.02.2014. The appeal filed by the completed by the A.O. u/s 143(3) on 24.02.2014. The appeal filed by the completed by the A.O. u/s 143(3) on 24.02.2014. The appeal filed by the Appellant against the assessment order was decided by the CIT(A) vide Appellant against the assessment order was decided by the CIT(A) vide Appellant against the assessment order was decided by the CIT(A) vide order dated 11.03.2016. It is evident from the assessment order passed order dated 11.03.2016. It is evident from the assessment order passed order dated 11.03.2016. It is evident from the assessment order passed u/s 153C that the AO computed taxable in u/s 153C that the AO computed taxable income starting from income as come starting from income as assessed in regular assessment order u/s 143(3) and ignored the order assessed in regular assessment order u/s 143(3) and ignored the order assessed in regular assessment order u/s 143(3) and ignored the order passed by the CIT(A). passed by the CIT(A). 16.2 In the assessment order u/s 153C dated 29.03.2016, the AO has 16.2 In the assessment order u/s 153C dated 29.03.2016, the AO has 16.2 In the assessment order u/s 153C dated 29.03.2016, the AO has held that fresh assessment of total income is to be made and repeate held that fresh assessment of total income is to be made and repeate held that fresh assessment of total income is to be made and repeated all Grasim Industries Ltd. 6 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 the disallowances made in the regular assessment on the ground that the the disallowances made in the regular assessment on the ground that the the disallowances made in the regular assessment on the ground that the order of the CIT(A) is not accepted by the Department and appeal has order of the CIT(A) is not accepted by the Department and appeal has order of the CIT(A) is not accepted by the Department and appeal has been filed before ITAT. It is evident from the assessment order passed been filed before ITAT. It is evident from the assessment order passed been filed before ITAT. It is evident from the assessment order passed u/s 153C that the AO computed taxable u/s 153C that the AO computed taxable income starting from the income income starting from the income as assessed in regular assessment order u/s 143(3) and has ignored the as assessed in regular assessment order u/s 143(3) and has ignored the as assessed in regular assessment order u/s 143(3) and has ignored the order passed u/s 250 giving effect to the order of the CIT(A). order passed u/s 250 giving effect to the order of the CIT(A). order passed u/s 250 giving effect to the order of the CIT(A). 16.3 I agree with the contentions of the Appellant that completed 16.3 I agree with the contentions of the Appellant that completed 16.3 I agree with the contentions of the Appellant that completed assessment shall not aba assessment shall not abate, as per the provisions of Section 153C r.w. te, as per the provisions of Section 153C r.w. 153A of the Act and has attained finality, unless the material gathered in 153A of the Act and has attained finality, unless the material gathered in 153A of the Act and has attained finality, unless the material gathered in the course of search establishes that the income computed under the the course of search establishes that the income computed under the the course of search establishes that the income computed under the finalized assessment is contrary to the facts unearthed during the assessment is contrary to the facts unearthed during the course assessment is contrary to the facts unearthed during the of search. It is also is also observed from the impugned assessment order observed from the impugned assessment order passed by the A.O. passed by the A.O. u/s 153C for AY 2010-11 that no addition or 11 that no addition or disallowance has been made by disallowance has been made by the AO based on the seized material. based on the seized material. 16.4 The Section 153(1) starts with a non 16.4 The Section 153(1) starts with a non-obstante clause and disregards lause and disregards the normal provisions of the assessment prescribed under the Act in the the normal provisions of the assessment prescribed under the Act in the the normal provisions of the assessment prescribed under the Act in the case of a search operation carried out u/s 132 of the Act. By virtue of case of a search operation carried out u/s 132 of the Act. By virtue of case of a search operation carried out u/s 132 of the Act. By virtue of clause (a) of section 153(1), the AO is required to issue notice requiring (a) of section 153(1), the AO is required to issue notice requiring (a) of section 153(1), the AO is required to issue notice requiring the assessee to the assessee to file the return of income for the six assessment years file the return of income for the six assessment years prior to date of search. The further consequences of a search carried out prior to date of search. The further consequences of a search carried out prior to date of search. The further consequences of a search carried out u/s 132 are mentioned in clause (b), whereby the A.O. is required to u/s 132 are mentioned in clause (b), whereby the A.O. is required to u/s 132 are mentioned in clause (b), whereby the A.O. is required to assess or reassess the total income of those six years. As assess or reassess the total income of those six years. As such, the AO has no option but to make an assessment in respect of all the concerned has no option but to make an assessment in respect of all the concerned has no option but to make an assessment in respect of all the concerned six years. He has to bring the proceedings to a logical conclusion by six years. He has to bring the proceedings to a logical conclusion by six years. He has to bring the proceedings to a logical conclusion by making an assessment of the returns filed for all the six years. It may be making an assessment of the returns filed for all the six years. It may be making an assessment of the returns filed for all the six years. It may be noted that the provisions noted that the provisions of section 153C of the Act also refers back to the of section 153C of the Act also refers back to the procedure prescribed in Section 153A of the Act. Accordingly, I am of the procedure prescribed in Section 153A of the Act. Accordingly, I am of the procedure prescribed in Section 153A of the Act. Accordingly, I am of the considered opinion that the AO has rightly proceeded with the considered opinion that the AO has rightly proceeded with the considered opinion that the AO has rightly proceeded with the assessment of 6 assessment years u/s 153C of the Act. assessment of 6 assessment years u/s 153C of the Act. 16.5 Having sa 16.5 Having said so, the next question, which needs to be addressed is id so, the next question, which needs to be addressed is - what issues can be taken up for assessment u/s 153C of the Act, in a what issues can be taken up for assessment u/s 153C of the Act, in a what issues can be taken up for assessment u/s 153C of the Act, in a case where at the time of the search operation, the original assessment case where at the time of the search operation, the original assessment case where at the time of the search operation, the original assessment was already completed. was already completed. 16.6 In such a scenario, the seco 16.6 In such a scenario, the second proviso to Section 153(1) specifies nd proviso to Section 153(1) specifies that any assessment or reassessment falling with the period of six that any assessment or reassessment falling with the period of six that any assessment or reassessment falling with the period of six assessment years pending on the date of initiation of search under assessment years pending on the date of initiation of search under assessment years pending on the date of initiation of search under section 132 or requisition of books under section 132A as the case may section 132 or requisition of books under section 132A as the case may section 132 or requisition of books under section 132A as the case may be, shall abate. In this regard, the relevant proviso is reproduced below: ate. In this regard, the relevant proviso is reproduced below: ate. In this regard, the relevant proviso is reproduced below:- S. 153A. "......Provided further that assessment or reassessment, S. 153A. "......Provided further that assessment or reassessment, S. 153A. "......Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of if any, relating to any assessment year falling within the period of if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year six assessment years and for the relevant assessment year six assessment years and for the relevant assessment year or years referred to in this subsection pending on years referred to in this subsection pending on years referred to in this subsection pending on the date of initiation of the initiation of the search under section 132 or making of requisition search under section 132 or making of requisition under section 132A, under section 132A, as the case may be, shall abate". as the case may be, shall abate".
Grasim Industries Ltd. 7 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 16.7 Further, in Para 65.5 of the CBDT Circular No. 7/2003 dated 16.7 Further, in Para 65.5 of the CBDT Circular No. 7/2003 dated 16.7 Further, in Para 65.5 of the CBDT Circular No. 7/2003 dated 05.09.2003 giving explanatory notes on the provisions relating to direct .2003 giving explanatory notes on the provisions relating to direct .2003 giving explanatory notes on the provisions relating to direct taxes in the Finance Act, 2003, the CBDT has clarified as under: taxes in the Finance Act, 2003, the CBDT has clarified as under: taxes in the Finance Act, 2003, the CBDT has clarified as under:- "65.5 The Assessing Officer shall assess or reassess the total "65.5 The Assessing Officer shall assess or reassess the total "65.5 The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or income of each of these six assessment years. Assessment or income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling reassessment, if any, relating to any assessment year falling reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of within the period of six assessment years pending on the date of within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under initiation of the search under section 132 or requisition under initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified t section 132A, as the case may be, shall abate. It is clarified t section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the the appeal, revision or rectification proceedings pending on the the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall date of initiation of search under section 132 or requisition shall date of initiation of search under section 132 or requisition shall not abate. Save as otherwise provided in the proposed section not abate. Save as otherwise provided in the proposed section not abate. Save as otherwise provided in the proposed section 153A, section 153B and section 153C, all other provisions 153A, section 153B and section 153C, all other provisions 153A, section 153B and section 153C, all other provisions of this Act shall apply to the assessment or reassessment made under Act shall apply to the assessment or reassessment made under Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assessment or reassessment section 153A. It is also clarified that assessment or reassessment section 153A. It is also clarified that assessment or reassessment made under section 153A shall be subject to interest, penalty and made under section 153A shall be subject to interest, penalty and made under section 153A shall be subject to interest, penalty and prosecution, if applicable. In the assessment or reas prosecution, if applicable. In the assessment or reas prosecution, if applicable. In the assessment or reassessment made in respect of an assessment year under this section, the tax made in respect of an assessment year under this section, the tax made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such shall be chargeable at the rate or rates as applicable to such shall be chargeable at the rate or rates as applicable to such assessment year." assessment year." 16.8 The word 'abate' means to stop or to put an end. The objective of the 16.8 The word 'abate' means to stop or to put an end. The objective of the 16.8 The word 'abate' means to stop or to put an end. The objective of the above proviso is clearly above proviso is clearly to eliminate the multiplicity of assessment or to eliminate the multiplicity of assessment or reassessment proceedings, which are pending on the date of search or reassessment proceedings, which are pending on the date of search or reassessment proceedings, which are pending on the date of search or requisition of records, as the case may be, and which are now required to requisition of records, as the case may be, and which are now required to requisition of records, as the case may be, and which are now required to be undertaken afresh in view of section 153A / 153C of the Act. be undertaken afresh in view of section 153A / 153C of the Act. be undertaken afresh in view of section 153A / 153C of the Act. 16.9 The word 'pending' occurring in the second proviso to Section 153A .9 The word 'pending' occurring in the second proviso to Section 153A .9 The word 'pending' occurring in the second proviso to Section 153A of the Act, is also significant. It is qualified by the words 'on the date of of the Act, is also significant. It is qualified by the words 'on the date of of the Act, is also significant. It is qualified by the words 'on the date of initiation of the search', which makes it clear that on initiation of the initiation of the search', which makes it clear that on initiation of the initiation of the search', which makes it clear that on initiation of the proceedings u/s. 153A or 153C, as proceedings u/s. 153A or 153C, as the case may be, it is only the the case may be, it is only the assessment/reassessment proceedings that are pending on the date of assessment/reassessment proceedings that are pending on the date of assessment/reassessment proceedings that are pending on the date of conducting search under Section 132 or making requisition under section conducting search under Section 132 or making requisition under section conducting search under Section 132 or making requisition under section 132A of the Act, stand abated. As 132A of the Act, stand abated. As a corollary, the assessments / a corollary, the assessments / reassessments alrea assessments already completed and falling within the six years period dy completed and falling within the six years period referred to in section 153A of the Act are to be considered final and referred to in section 153A of the Act are to be considered final and referred to in section 153A of the Act are to be considered final and cannot be altered. cannot be altered. 16.10 The Special Bench of Hon'ble Mumbai ITAT in the case of All Cargo 16.10 The Special Bench of Hon'ble Mumbai ITAT in the case of All Cargo 16.10 The Special Bench of Hon'ble Mumbai ITAT in the case of All Cargo Global Logistics Ltd vs DCIT(2012) 147 TTJ Global Logistics Ltd vs DCIT(2012) 147 TTJ 0513 (SB) : (2012) 74 DTR 0513 (SB) : (2012) 74 DTR 0089 (SB) : (2012) 137 TD 0287 (SB) : (2012) 18 ITR 0106 (SB) has 0089 (SB) : (2012) 137 TD 0287 (SB) : (2012) 18 ITR 0106 (SB) has 0089 (SB) : (2012) 137 TD 0287 (SB) : (2012) 18 ITR 0106 (SB) has observed as under: observed as under: "52. The provision comes into operation if a search or requisition "52. The provision comes into operation if a search or requisition "52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the is initiated after 31.5.2003. On satisfaction of this condition, the is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him AO is under obligation to issue notice to the person requiring him AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediat to furnish the return of income of six years immediat to furnish the return of income of six years immediately preceding the year of search. The word used is "shall" and, thus, there is no the year of search. The word used is "shall" and, thus, there is no the year of search. The word used is "shall" and, thus, there is no option but to issue such a notice. Thereafter he has to assess or option but to issue such a notice. Thereafter he has to assess or option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the reassess total income of these six years. In this respect also, the reassess total income of these six years. In this respect also, the word used is "shall" and, therefore, the word used is "shall" and, therefore, the AO has no option but to AO has no option but to Grasim Industries Ltd. 8 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 assess or reassess the total income of these six years. The assess or reassess the total income of these six years. The assess or reassess the total income of these six years. The pending proceedings shall abate. This means that out of six pending proceedings shall abate. This means that out of six pending proceedings shall abate. This means that out of six years, if any assessment or reassessment is pending on the date years, if any assessment or reassessment is pending on the date years, if any assessment or reassessment is pending on the date of initiation of the search, it shall abate. In of initiation of the search, it shall abate. In other words pending other words pending proceedings will not be proceeded with thereafter." proceedings will not be proceeded with thereafter." 16.11 It has been categorically observed in the above mentioned 16.11 It has been categorically observed in the above mentioned 16.11 It has been categorically observed in the above mentioned judgment that only the pending proceedings, as on the date of search judgment that only the pending proceedings, as on the date of search judgment that only the pending proceedings, as on the date of search shall abate meaning thereby that the completed pro shall abate meaning thereby that the completed proceedings attains ceedings attains finality. 16.12 Now a question arises, as to what is the scope of assessment/ 16.12 Now a question arises, as to what is the scope of assessment/ 16.12 Now a question arises, as to what is the scope of assessment/ reassessment under the provisions of section 153A/153C of the Act for reassessment under the provisions of section 153A/153C of the Act for reassessment under the provisions of section 153A/153C of the Act for the assessments/reassessments which have abated and those which the assessments/reassessments which have abated and those which the assessments/reassessments which have abated and those which have attained finality. have attained finality. 16.13 The use of the phrase 'so far as may be' in section 153(1)(a) implies 13 The use of the phrase 'so far as may be' in section 153(1)(a) implies 13 The use of the phrase 'so far as may be' in section 153(1)(a) implies that all the provisions of the IT Act as contained under Chapter AV that all the provisions of the IT Act as contained under Chapter AV that all the provisions of the IT Act as contained under Chapter AV prescribing the procedure for assessment or under any other Chapter of prescribing the procedure for assessment or under any other Chapter of prescribing the procedure for assessment or under any other Chapter of the aractea respect to the return of income the aractea respect to the return of income filed Us. 139 shall be filed Us. 139 shall be applicable to the applicable to the returns filed pursuant to notice issued u/s. 153A/153C s. 153A/153C of the Act. The of the Act. The applicability of those provisions which are inconsistent applicability of those provisions which are inconsistent with the provisions of section 153A are restricted by the use of the with the provisions of section 153A are restricted by the use of the with the provisions of section 153A are restricted by the use of the phrase 'so far as phrase 'so far as may be'. 16.14 As such, for the assessments proceedings which are abated, the 16.14 As such, for the assessments proceedings which are abated, the 16.14 As such, for the assessments proceedings which are abated, the AO gets all the powers prescribed under the law, as if the assessment is AO gets all the powers prescribed under the law, as if the assessment is AO gets all the powers prescribed under the law, as if the assessment is being made for the first time. Thus, if the assessment is made for the first being made for the first time. Thus, if the assessment is made for the first being made for the first time. Thus, if the assessment is made for the first time, all the provisions of time, all the provisions of assessment, relevant for making of an assessment, relevant for making of an assessment u/s. 143(3) shall be applicable. In the case of re assessment u/s. 143(3) shall be applicable. In the case of re assessment u/s. 143(3) shall be applicable. In the case of re-assessment, the principles pertaining to assessment u/s 147/148 of the Act shall the principles pertaining to assessment u/s 147/148 of the Act shall the principles pertaining to assessment u/s 147/148 of the Act shall become applicable. become applicable. 16.15 As far as the assessments/reassessments, which do 16.15 As far as the assessments/reassessments, which do 16.15 As far as the assessments/reassessments, which do not abate or which have attained finality, the principle of time barring rule comes into which have attained finality, the principle of time barring rule comes into which have attained finality, the principle of time barring rule comes into play. The assessee acquires a right as to the finality of proceedings. play. The assessee acquires a right as to the finality of proceedings. play. The assessee acquires a right as to the finality of proceedings. Quietus of the completed assessments can be disturbed, only in a case, Quietus of the completed assessments can be disturbed, only in a case, Quietus of the completed assessments can be disturbed, only in a case, where incriminating seize where incriminating seized material is found, during the course of the d material is found, during the course of the search operation u/s 132 of the Act. search operation u/s 132 of the Act. 16.16 Further, as observed above, the objective behind the second 16.16 Further, as observed above, the objective behind the second 16.16 Further, as observed above, the objective behind the second proviso to section 153(1) is to eliminate multiplicity of proceedings. In proviso to section 153(1) is to eliminate multiplicity of proceedings. In proviso to section 153(1) is to eliminate multiplicity of proceedings. In such cases it is only the seized such cases it is only the seized material and undisclosed income material and undisclosed income emanating out of the search proceedings, which is relevant for the emanating out of the search proceedings, which is relevant for the emanating out of the search proceedings, which is relevant for the purpose of assessment. purpose of assessment. 16.17 The Hon'ble Bombay High Court in the case of CIT vs. Continental 16.17 The Hon'ble Bombay High Court in the case of CIT vs. Continental 16.17 The Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation [374 TR 645),has held that when the Warehousing Corporation [374 TR 645),has held that when the Warehousing Corporation [374 TR 645),has held that when the assessment has attained finality, then the A while passing the essment has attained finality, then the A while passing the essment has attained finality, then the A while passing the independent assessment order u/s 153A of the Act can't disturb the independent assessment order u/s 153A of the Act can't disturb the independent assessment order u/s 153A of the Act can't disturb the assessment / reassessment order which has attained finality, unless the assessment / reassessment order which has attained finality, unless the assessment / reassessment order which has attained finality, unless the materials gathered in the course of the proceedings u/s 1 materials gathered in the course of the proceedings u/s 1 materials gathered in the course of the proceedings u/s 132 of the Act Grasim Industries Ltd. 9 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 establish establish establish that that that the the the reliefs reliefs reliefs granted granted granted under under under the the the finalised finalised finalised assessment/reassessment were contrary to the facts unearthed during assessment/reassessment were contrary to the facts unearthed during assessment/reassessment were contrary to the facts unearthed during the course of search operation. the course of search operation. 6.18 In the case referred, supra, the Hon'ble Bombay High Court has In the case referred, supra, the Hon'ble Bombay High Court has In the case referred, supra, the Hon'ble Bombay High Court has upheld of the follo the following observations of Hon'ble ITAT:- "i. On a plain reading of Section 153A of the Income "i. On a plain reading of Section 153A of the Income "i. On a plain reading of Section 153A of the Income-tax Act, it becomes clear that on initiation of the proceedings under Section becomes clear that on initiation of the proceedings under Section becomes clear that on initiation of the proceedings under Section 153A, it is only the assessment / reassessment proceedings that 153A, it is only the assessment / reassessment proceedings that 153A, it is only the assessment / reassessment proceedings that are pending on the date o are pending on the date of conducting search under Section 132 f conducting search under Section 132 or making requisition under Section 132A of the Act stand abated or making requisition under Section 132A of the Act stand abated or making requisition under Section 132A of the Act stand abated and not the assessments/reassessments already finalised for and not the assessments/reassessments already finalised for and not the assessments/reassessments already finalised for those assessment years covered under Section 153A of the Act. those assessment years covered under Section 153A of the Act. those assessment years covered under Section 153A of the Act. ii. By a circular No. 8 of 2003 ii. By a circular No. 8 of 2003 dated 18-9-2003 (See 263 ITR (St) 2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings 61 at 107) the CBDT has clarified that on initiation of proceedings 61 at 107) the CBDT has clarified that on initiation of proceedings under Section 153A, the proceedings pending in appeal, revision under Section 153A, the proceedings pending in appeal, revision under Section 153A, the proceedings pending in appeal, revision or or rectification proceedings or rectification proceedings rectification proceedings against finalised against finalised against finalised assessment/ assessment/ assessment/ reassessment shall not abate. reassessment shall not abate. It is only because, the finalised It is only because, the finalised assessments/reassessments do not abate, the appeal revision or assessments/reassessments do not abate, the appeal revision or assessments/reassessments do not abate, the appeal revision or rectification rectification rectification pending pending pending against against against finalised finalised finalised assessment/reassessments would not abate. assessment/reassessments would not abate. iii. Therefore, the argument of the revenue, that on initiation of iii. Therefore, the argument of the revenue, that on initiation of iii. Therefore, the argument of the revenue, that on initiation of proceeding proceedings s under under Section Section 153A, 153A, the the assessments/reassessments finalised for the assessment years assessments/reassessments finalised for the assessment years assessments/reassessments finalised for the assessment years covered under Section 153A of the Income covered under Section 153A of the Income-tax Act stand abated tax Act stand abated cannot be accepted. Similarly on annulment of assessment made cannot be accepted. Similarly on annulment of assessment made cannot be accepted. Similarly on annulment of assessment made under Section 153(1) what stands revived is t under Section 153(1) what stands revived is t under Section 153(1) what stands revived is the pending assessment/reassessment proceedings which stood abated as assessment/reassessment proceedings which stood abated as assessment/reassessment proceedings which stood abated as per section 153A(1)." per section 153A(1)." 16.19 A similar view has been taken by the Hon'ble Bombay High Court 16.19 A similar view has been taken by the Hon'ble Bombay High Court 16.19 A similar view has been taken by the Hon'ble Bombay High Court (Nagpur Bench) in case of Murli Agro Products Ltd Vs. CIT 49 (Nagpur Bench) in case of Murli Agro Products Ltd Vs. CIT 49 (Nagpur Bench) in case of Murli Agro Products Ltd Vs. CIT 49 Taxman.com 172 172 in of 2009, wherein it has been held that on , wherein it has been held that on initiation of proceedings U/s. 153A, it is only the assessment proceedings initiation of proceedings U/s. 153A, it is only the assessment proceedings initiation of proceedings U/s. 153A, it is only the assessment proceedings that are pending on the date of conducting search U/s. 132 or making that are pending on the date of conducting search U/s. 132 or making that are pending on the date of conducting search U/s. 132 or making requisition U/s. 132A of the Act that stand abated and not the requisition U/s. 132A of the Act that stand abated and not the requisition U/s. 132A of the Act that stand abated and not the assessments al assessments already finalised. The relevant excerpts of the judgment are ready finalised. The relevant excerpts of the judgment are reproduced hereunder: reproduced hereunder:- "9. What Section 153A contemplates is that, notwithstanding the "9. What Section 153A contemplates is that, notwithstanding the "9. What Section 153A contemplates is that, notwithstanding the regular provisions for assessment/ reassessment contained in the regular provisions for assessment/ reassessment contained in the regular provisions for assessment/ reassessment contained in the IT Act, where search is conducted under Secti IT Act, where search is conducted under Section 132 or requisition on 132 or requisition is made under Section 132A on or of is made under Section 132A on or of after 31/5/2003 in the case after 31/5/2003 in the case of any person, the Assessing Officer shall issue notice to such of any person, the Assessing Officer shall issue notice to such of any person, the Assessing Officer shall issue notice to such person requiring him to person requiring him to furnish return of income within the time furnish return of income within the time stipulated therein, in respect of six ass stipulated therein, in respect of six assessment years immediately essment years immediately preceding the assessment year relevant to the previous year in preceding the assessment year relevant to the previous year in preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made and which the search is conducted or requisition is made and which the search is conducted or requisition is made and thereafter assess or reassess the total income for those thereafter assess or reassess the total income for those thereafter assess or reassess the total income for those Grasim Industries Ltd. 10 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 assessment years. The second proviso to Section 153A assessment years. The second proviso to Section 153A assessment years. The second proviso to Section 153A provides for abatement of assessment/reassessment proceedings which for abatement of assessment/reassessment proceedings which for abatement of assessment/reassessment proceedings which are pending on the date of search/requisition. are pending on the date of search/requisition. Section Section 153(2) provides that when the assessment made under Section 153(1) is provides that when the assessment made under Section 153(1) is provides that when the assessment made under Section 153(1) is annulled, the assessment or reassessment that stood abated annulled, the assessment or reassessment that stood abated annulled, the assessment or reassessment that stood abated shall stand revived. l stand revived.
Thus on a plain reading of Section 153A of the Inocme 10. Thus on a plain reading of Section 153A of the Inocme 10. Thus on a plain reading of Section 153A of the Inocme-tax Act, it becomes clear that on initiation of proceedings under Section it becomes clear that on initiation of proceedings under Section it becomes clear that on initiation of proceedings under Section 153A, it is only the assessment/reassessment proceedings that 153A, it is only the assessment/reassessment proceedings that 153A, it is only the assessment/reassessment proceedings that are pending on the date of conducting search are pending on the date of conducting search under Section 132 under Section 132 or making requisition under Section 132A of the Act stand abated or making requisition under Section 132A of the Act stand abated or making requisition under Section 132A of the Act stand abated and not the assessment/reassessments already finalized for and not the assessment/reassessments already finalized for and not the assessment/reassessments already finalized for those assessment years covered under Section 153A of the Act. those assessment years covered under Section 153A of the Act. those assessment years covered under Section 153A of the Act. By a circular No.8 of 2003 dated 18 By a circular No.8 of 2003 dated 18-9-2003 (See 263 2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings at 107) the CBDT has clarified that on initiation of proceedings at 107) the CBDT has clarified that on initiation of proceedings under Section 153A, the proceedings pending in appeal, revision under Section 153A, the proceedings pending in appeal, revision under Section 153A, the proceedings pending in appeal, revision or or or rectification rectification rectification proceedings proceedings proceedings against against against finalized finalized finalized assessment/reassessment shall not abate. It is only because, the assessment/reassessment shall not abate. It is only because, the assessment/reassessment shall not abate. It is only because, the finalized assessments/reassessments do not abate, the appeal, alized assessments/reassessments do not abate, the appeal, alized assessments/reassessments do not abate, the appeal, revision revision revision or or or rectification rectification rectification pending pending pending against against against finalized finalized finalized assessments/reassessments would not abate. assessments/reassessments would not abate. Therefore, the Therefore, the argument of the revenue, that on initiation of proceedings argument of the revenue, that on initiation of proceedings argument of the revenue, that on initiation of proceedings under Section 153A, the assessments/reassessments finalized for the ssments/reassessments finalized for the assessment years covered under Section 153A of the Income assessment years covered under Section 153A of the Income assessment years covered under Section 153A of the Income-tax Act stand abated cannot be accepted. Similarly on annulment of Act stand abated cannot be accepted. Similarly on annulment of Act stand abated cannot be accepted. Similarly on annulment of assessment made under Section 153(1) what stands revived is assessment made under Section 153(1) what stands revived is assessment made under Section 153(1) what stands revived is the pending assessment/reassess the pending assessment/reassessment proceedings which stood ment proceedings which stood abated as per section 153(1). abated as per section 153(1).
In the present case, as contended by Shri Mani, learned 11. In the present case, as contended by Shri Mani, learned 11. In the present case, as contended by Shri Mani, learned counsel for the assessee, the assessment for the assessment year counsel for the assessee, the assessment for the assessment year counsel for the assessee, the assessment for the assessment year 1998-99 was finalized on 29 99 was finalized on 29-12-2000 and search was 2000 and search was conducted thereafter thereafter on 3-12-2003. Therefore, in the facts of the present 2003. Therefore, in the facts of the present case, initiation of proceedings under Section case, initiation of proceedings under Section 153A would not 153A would not affect the assessment finalized on 29 affect the assessment finalized on 29-12-2000.
12. Once it is held that the assessment finalized on 12. Once it is held that the assessment finalized on 12. Once it is held that the assessment finalized on 29.12.2000 has attained finality, then the has attained finality, then the deduction allowed under section deduction allowed under section 80HHC of the Income 80HHC of the Income-tax Act as well as the loss computed under tax Act as well as the loss computed under the assessment dated 29 the assessment dated 29-12-2000 would attain finality. In such a 2000 would attain finality. In such a case, the A.O. while passing the independent assessment order case, the A.O. while passing the independent assessment order case, the A.O. while passing the independent assessment order under Section 153A read with Sect under Section 153A read with Section 143(3) of the IT. Act could ion 143(3) of the IT. Act could not have disturbed the assessment/reassessment order which not have disturbed the assessment/reassessment order which not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course has attained finality, unless the materials gathered in the course has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income of the proceedings under Section 153A of the Income of the proceedings under Section 153A of the Income-tax Act establish establish that that the the reliefs reliefs granted granted under und er the the finalized finalized assessment/reassessment were contrary to the facts unearthed assessment/reassessment were contrary to the facts unearthed assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. during the course of 153A proceedings.
In the present case, there is nothing on record to suggest that 13. In the present case, there is nothing on record to suggest that 13. In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A any material was unearthed during the search or during the 153A any material was unearthed during the search or during the 153A Grasim Industries Ltd. 11 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 proceed proceedings which would show that the relief under Section 80 ings which would show that the relief under Section 80 HHC was erroneous. In such a case, the A.O. while passing the HHC was erroneous. In such a case, the A.O. while passing the HHC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) assessment order under Section 153A read with Section 143(3) assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalised on could not have disturbed the assessment order finalised on could not have disturbed the assessment order finalised on 29.12.2000 29.12.2000 relating relating to Section 80 80 HHC HHC deduction deduction and and consequently the C.I.T. could not have invoked jurisdiction under consequently the C.I.T. could not have invoked jurisdiction under consequently the C.I.T. could not have invoked jurisdiction under Section 263 of the Act." Section 263 of the Act." 16.20 In the above mentioned judgment, the Hon'ble Bombay High Court 16.20 In the above mentioned judgment, the Hon'ble Bombay High Court 16.20 In the above mentioned judgment, the Hon'ble Bombay High Court has held that no addition can be made in respect of assessments has held that no addition can be made in respect of assessments has held that no addition can be made in respect of assessments which have become final, if no incriminating material is found during the course have become final, if no incriminating material is found during the course have become final, if no incriminating material is found during the course of search. It has been held that once the original assessment has of search. It has been held that once the original assessment has of search. It has been held that once the original assessment has attained finality, then the Assessing Officer while passing the attained finality, then the Assessing Officer while passing the attained finality, then the Assessing Officer while passing the assessment order U assessment order U/s. 153A r.w.s. 143(3) cannot disturb the not disturb the assessment/ reassessment order which has attained finality, unless the assessment/ reassessment order which has attained finality, unless the assessment/ reassessment order which has attained finality, unless the material gathered during the course of the search proceedings material gathered during the course of the search proceedings material gathered during the course of the search proceedings establishes something contrary to it. If there is nothing on record to establishes something contrary to it. If there is nothing on record to establishes something contrary to it. If there is nothing on record to suggest that any incriminating mater suggest that any incriminating material was unearthed during ial was unearthed during the search, the AO, while passing order Us. 153C r.w.s.143(3) cannot disturb search, the AO, while passing order Us. 153C r.w.s.143(3) cannot disturb search, the AO, while passing order Us. 153C r.w.s.143(3) cannot disturb the original assessment order passed U/s. 143(3) of the Act. the original assessment order passed U/s. 143(3) of the Act. the original assessment order passed U/s. 143(3) of the Act. 16.21 On this issue the Special Bench of Hon'ble Mumbai ITAT in the 16.21 On this issue the Special Bench of Hon'ble Mumbai ITAT in the 16.21 On this issue the Special Bench of Hon'ble Mumbai ITAT in the case of All Cargo Global case of All Cargo Global Logistics Ltd vs DCIT(2012) 147 TTJ 0513 (SB) : Logistics Ltd vs DCIT(2012) 147 TTJ 0513 (SB) : (2012) 74 DTR 0089 (SB) : (2012) 137 TD 0287 (SB) : (2012) 18 ITR 0106 74 DTR 0089 (SB) : (2012) 137 TD 0287 (SB) : (2012) 18 ITR 0106 74 DTR 0089 (SB) : (2012) 137 TD 0287 (SB) : (2012) 18 ITR 0106 (SB)has also observed as under: (SB)has also observed as under:-- "58. Thus, question No.1 before us is answered as under: "58. Thus, question No.1 before us is answered as under: "58. Thus, question No.1 before us is answered as under: a) In assessments that are abated, the AO reta a) In assessments that are abated, the AO retains the original ins the original jurisdiction as well as jurisdiction conferred on him u/s 153A for jurisdiction as well as jurisdiction conferred on him u/s 153A for jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment which assessments shall be made for each of the six assessment which assessments shall be made for each of the six assessment years separately; years separately; b) In other cases, in addition to the income that has already been b) In other cases, in addition to the income that has already been b) In other cases, in addition to the income that has already been assessed, the assessment assessed, the assessment u/s 153A will be made on the basis of u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions incriminating material, which in the context of relevant provisions incriminating material, which in the context of relevant provisions means - - (i) books of account, other documents, found in the course (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, of search but not produced in the course of original assessment, of search but not produced in the course of original assessment, and (ii) undisclo and (ii) undisclosed income or property discovered in the course of sed income or property discovered in the course of search." search." 16.22 The Hon'ble Mumbai Tribunal in the case of Guruprerana 16.22 The Hon'ble Mumbai Tribunal in the case of Guruprerana 16.22 The Hon'ble Mumbai Tribunal in the case of Guruprerana Enterprises v. ACIT (57 DTR 465), has held that only the assessments v. ACIT (57 DTR 465), has held that only the assessments v. ACIT (57 DTR 465), has held that only the assessments pending before the AO for completion shall abate u/s. 153A and the pending before the AO for completion shall abate u/s. 153A and the pending before the AO for completion shall abate u/s. 153A and the issues decided in the assessment cannot be reconsidered and re issues decided in the assessment cannot be reconsidered and re issues decided in the assessment cannot be reconsidered and re- adjudicated, unless there is some fresh material found during the course adjudicated, unless there is some fresh material found during the course adjudicated, unless there is some fresh material found during the course of search in relation to such points. of search in relation to such points. 16.23 In the case of Viraj Forgings Ltd. vs. DCIT [ITA No. 1948/M/2008] 16.23 In the case of Viraj Forgings Ltd. vs. DCIT [ITA No. 1948/M/2008] 16.23 In the case of Viraj Forgings Ltd. vs. DCIT [ITA No. 1948/M/2008] and Viraj Impoexpo Ltd. vs. DCIT in (ITA No. 1949/M/2008, the Hon'ble Impoexpo Ltd. vs. DCIT in (ITA No. 1949/M/2008, the Hon'ble Impoexpo Ltd. vs. DCIT in (ITA No. 1949/M/2008, the Hon'ble Mumbai ITAT has held as follows: Mumbai ITAT has held as follows:-
Grasim Industries Ltd. 12 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 "4.2 We have perused the records and considered the rival "4.2 We have perused the records and considered the rival
4.2 We have perused the records and considered the rival contentions carefully. The legal dispute raised in this ground is contentions carefully. The legal dispute raised in this ground is contentions carefully. The legal dispute raised in this ground is whether whether issues issues considered considered and and decided decided in in the the regular regular assessment can be re assessment can be re-considered in an assessment proceedings considered in an assessment proceedings initiated under section 153A. In case of search, the AO under initiated under section 153A. In case of search, the AO under initiated under section 153A. In case of search, the AO under section 153A is empowered to issue notices to the searched section 153A is empowered to issue notices to the searched section 153A is empowered to issue notices to the searched person requiring him to furnish the return of income in re person requiring him to furnish the return of income in re person requiring him to furnish the return of income in respect of each assessment year each assessment year »falling within the six assessment years »falling within the six assessment years immediately preceding the immediately preceding the assessment year relevant to the assessment year relevant to the previous year in which search is previous year in which search is conducted or requisition is made. conducted or requisition is made. Further the second proviso to section 153A also provides tha Further the second proviso to section 153A also provides tha Further the second proviso to section 153A also provides that assessment or re assessment or re-assessment relating to any assessment year assessment relating to any assessment year falling within the period of six assessment years referred to above falling within the period of six assessment years referred to above falling within the period of six assessment years referred to above pending on the date of initiation of search under section 132 or pending on the date of initiation of search under section 132 or pending on the date of initiation of search under section 132 or making of requisition under section 132A as the case may be making of requisition under section 132A as the case may be making of requisition under section 132A as the case may be shall abate. Normally, the assessments which are pending in hall abate. Normally, the assessments which are pending in hall abate. Normally, the assessments which are pending in appeal or in revision cannot be said to be complete and therefore appeal or in revision cannot be said to be complete and therefore appeal or in revision cannot be said to be complete and therefore assessment/re assessment/re-assessment pending in appeal/revision could also assessment pending in appeal/revision could also to be considered as pending on the date of search but the CBDT to be considered as pending on the date of search but the CBDT to be considered as pending on the date of search but the CBDT in the circular No.7 of 2003 dated 5.9.2003 has clarified that e circular No.7 of 2003 dated 5.9.2003 has clarified that e circular No.7 of 2003 dated 5.9.2003 has clarified that appeal, revision or rectification proceedings pending on the date appeal, revision or rectification proceedings pending on the date appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 will not abate. In other of initiation of search under section 132 will not abate. In other of initiation of search under section 132 will not abate. In other words, only the assessments pending before the Assessing words, only the assessments pending before the Assessing words, only the assessments pending before the Assessing Officer for completion shall abate. In this case there is no dispute for completion shall abate. In this case there is no dispute for completion shall abate. In this case there is no dispute that on the date of search, the assessment in the case of that on the date of search, the assessment in the case of that on the date of search, the assessment in the case of assessee had already been completed by the AO and in terms of assessee had already been completed by the AO and in terms of assessee had already been completed by the AO and in terms of the circular of the CBDT, the regular assessment made in case of the circular of the CBDT, the regular assessment made in case of the circular of the CBDT, the regular assessment made in case of the assess the assessee will not abate. Therefore in our view the points/ ee will not abate. Therefore in our view the points/ issues decided in the assessment cannot be re issues decided in the assessment cannot be re-considered in the considered in the proceedings under section 153A unless there is some fresh proceedings under section 153A unless there is some fresh proceedings under section 153A unless there is some fresh material found during the course of search in relation to such material found during the course of search in relation to such material found during the course of search in relation to such points/ issues. points/ issues." 16.24 The Hon'ble Delhi High Court in the case of CIT vs. RRJ Securities 6.24 The Hon'ble Delhi High Court in the case of CIT vs. RRJ Securities 6.24 The Hon'ble Delhi High Court in the case of CIT vs. RRJ Securities (2016] 380 ITR 612, has clearly held that in the absence of any (2016] 380 ITR 612, has clearly held that in the absence of any (2016] 380 ITR 612, has clearly held that in the absence of any incriminating material, the concluded assessments could not be incriminating material, the concluded assessments could not be incriminating material, the concluded assessments could not be interfered U/s. 153A of the Act. In the facts of that cas interfered U/s. 153A of the Act. In the facts of that case, it was held that e, it was held that the documents seized has no reference to the income of the assessee for the documents seized has no reference to the income of the assessee for the documents seized has no reference to the income of the assessee for relevant assessment year and, thus, the AO has no jurisdiction to make relevant assessment year and, thus, the AO has no jurisdiction to make relevant assessment year and, thus, the AO has no jurisdiction to make the re-assessment U/s. 153A. assessment U/s. 153A. 16.25 The Hon'ble Delhi High Court in the case of Pr. CIT vs. La 16.25 The Hon'ble Delhi High Court in the case of Pr. CIT vs. La 16.25 The Hon'ble Delhi High Court in the case of Pr. CIT vs. Lata Jain (ITA 274 and 276 of 2016), considering the ratio laid down in the case of 274 and 276 of 2016), considering the ratio laid down in the case of 274 and 276 of 2016), considering the ratio laid down in the case of CIT vs. Kabul Chawla [2016] 380 ITR 573, has held that section 153A Kabul Chawla [2016] 380 ITR 573, has held that section 153A Kabul Chawla [2016] 380 ITR 573, has held that section 153A assessment cannot be made for the assessment years in which assessment cannot be made for the assessment years in which assessment cannot be made for the assessment years in which incriminating material is incriminating material is not recovered even though incriminating material hough incriminating material may be recovered for other years in the block of 6 years. may be recovered for other years in the block of 6 years. 16.26 The Hon'ble Delhi High Court in a recent decision in the case of Pr. 16.26 The Hon'ble Delhi High Court in a recent decision in the case of Pr. 16.26 The Hon'ble Delhi High Court in a recent decision in the case of Pr. CIT vs. Meeta Gutgutia [2017 CIT vs. Meeta Gutgutia [2017-TIOL-1000-HC-DEL-IT], has affirmed the IT], has affirmed the view that no addition can view that no addition can be made for a particular assessment year be made for a particular assessment year Grasim Industries Ltd. 13 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 without there being an incriminating material that relates to the said without there being an incriminating material that relates to the said without there being an incriminating material that relates to the said assessment year which would justify such an addition. assessment year which would justify such an addition. 16.27 The Memorandum explaining the provisions of Finance Bill 2003, 16.27 The Memorandum explaining the provisions of Finance Bill 2003, 16.27 The Memorandum explaining the provisions of Finance Bill 2003, stated that the then stated that the then existing provisions contained in Chapter XIVB existing provisions contained in Chapter XIVB relating relating relating to to to block block block assessment assessment assessment prescribing prescribing prescribing single single single assessment assessment assessment of of of undisclosed income for block period, were introduced for avoidance of undisclosed income for block period, were introduced for avoidance of undisclosed income for block period, were introduced for avoidance of disputes, early finalisation of such assessments and reduction in disputes, early finalisation of such assessments and reduction in disputes, early finalisation of such assessments and reduction in multiplicity of proceedings. However, there were parallel proceedings of proceedings. However, there were parallel proceedings of proceedings. However, there were parallel proceedings carried on namely regular assessment proceedings as well as block carried on namely regular assessment proceedings as well as block carried on namely regular assessment proceedings as well as block assessments for undisclosed income resulting into multiplicity of assessments for undisclosed income resulting into multiplicity of assessments for undisclosed income resulting into multiplicity of proceedings. In order to rectify this anomaly, a scheme of single proceedings. In order to rectify this anomaly, a scheme of single proceedings. In order to rectify this anomaly, a scheme of single assessment was introduced by inserting section 153A to Section 153D in assessment was introduced by inserting section 153A to Section 153D in assessment was introduced by inserting section 153A to Section 153D in the IT Act. 16.28 The purpose behind the introduction of section 153A/153C will get 16.28 The purpose behind the introduction of section 153A/153C will get 16.28 The purpose behind the introduction of section 153A/153C will get defeated, if the AO is allowed to assess/reassess the total income again defeated, if the AO is allowed to assess/reassess the total income again defeated, if the AO is allowed to assess/reassess the total income again in respect of completed asse in respect of completed assessments, in contradiction with the second ssments, in contradiction with the second proviso, except for the undisclosed income on the basis of incriminating proviso, except for the undisclosed income on the basis of incriminating proviso, except for the undisclosed income on the basis of incriminating material. If the view of the A.O. is accepted then the same will not only material. If the view of the A.O. is accepted then the same will not only material. If the view of the A.O. is accepted then the same will not only multiply assessment proceedings, but will also multiply the appella multiply assessment proceedings, but will also multiply the appella multiply assessment proceedings, but will also multiply the appellate proceedings and create fictitious demands. proceedings and create fictitious demands. 16.29 The Revenue's interest is entirely safeguarded in view of the fact 16.29 The Revenue's interest is entirely safeguarded in view of the fact 16.29 The Revenue's interest is entirely safeguarded in view of the fact that all appeal, revision or rectification proceedings in respect of that all appeal, revision or rectification proceedings in respect of that all appeal, revision or rectification proceedings in respect of assessments completed prior to the date of search shall continue in assessments completed prior to the date of search shall continue in assessments completed prior to the date of search shall continue in the normal course. normal course. This indicates that the matters, which are being agitated This indicates that the matters, which are being agitated either by the assessee or the Revenue will continue to hold its ground either by the assessee or the Revenue will continue to hold its ground either by the assessee or the Revenue will continue to hold its ground and can be decided and can be decided course in the usual manner. As such, making same course in the usual manner. As such, making same additions/ disallowances again in the disallowances again in the proceedings under section 153C proceedings under section 153C r.w.. 153A of the IT Act is unwarranted. r.w.. 153A of the IT Act is unwarranted. 16.30 In view of the aforesaid detailed discussion and judicial 16.30 In view of the aforesaid detailed discussion and judicial 16.30 In view of the aforesaid detailed discussion and judicial precedents, 1 am of the view that assessments which are completed Us precedents, 1 am of the view that assessments which are completed Us precedents, 1 am of the view that assessments which are completed Us 143(3) do not abate. Further, proceedings Us. 153C 143(3) do not abate. Further, proceedings Us. 153C r.w.s. 153A do not r.w.s. 153A do not empower the AO to re empower the AO to re-adjudicate the same issues again, unless fresh adjudicate the same issues again, unless fresh material is found in the course of search which has some connection with material is found in the course of search which has some connection with material is found in the course of search which has some connection with the said issues. The assessing authority cannot disturb the assessment the said issues. The assessing authority cannot disturb the assessment the said issues. The assessing authority cannot disturb the assessment order which has attained order which has attained finality, unless the material gathered during the finality, unless the material gathered during the course of search, establishes that the income computed in the finalized course of search, establishes that the income computed in the finalized course of search, establishes that the income computed in the finalized assessment was not in accordance with the facts unearthed during the assessment was not in accordance with the facts unearthed during the assessment was not in accordance with the facts unearthed during the course of search. course of search. 16.31 Respectfully following these binding deci 16.31 Respectfully following these binding decisions, it is held that the sions, it is held that the completed proceedings u/s 143(3) will not abate and the AO is directed to completed proceedings u/s 143(3) will not abate and the AO is directed to completed proceedings u/s 143(3) will not abate and the AO is directed to follow the order of the CIT(A) and consider the same, while computing follow the order of the CIT(A) and consider the same, while computing follow the order of the CIT(A) and consider the same, while computing taxable income u/s 153C. The proceedings u/s 153C are not parallel taxable income u/s 153C. The proceedings u/s 153C are not parallel taxable income u/s 153C. The proceedings u/s 153C are not parallel proceedings and do proceedings and do not give power to the AO to re-adjudicate the issues. adjudicate the issues. Accordingly, this ground of appeal is decided in favour of the Appellant. Accordingly, this ground of appeal is decided in favour of the Appellant. Accordingly, this ground of appeal is decided in favour of the Appellant.”
Grasim Industries Ltd. 14 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 7.1 We find that the ratio in the case of CIT v. Continental We find that the ratio in the case of CIT v. Continental We find that the ratio in the case of CIT v. Continental Warehousing Corporation (supra) has been upheld by the Hon’ble Warehousing Corporation (supra) has been upheld by the Hon’ble Warehousing Corporation (supra) has been upheld by the Hon’ble Supreme Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (149 preme Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (149 preme Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (149 taxmann.com 399) (SC). In view of the decision of the Hon’ble taxmann.com 399) (SC). In view of the decision of the Hon’ble taxmann.com 399) (SC). In view of the decision of the Hon’ble Supreme court (supra) (supra), the contentions of the Revenue are rejected. of the Revenue are rejected. The ground Nos. 1 and 2 of the appeal of the Revenue are . 1 and 2 of the appeal of the Revenue are . 1 and 2 of the appeal of the Revenue are accordingly dismissed. ordingly dismissed.
In ground Nos. 3 and 4 of the . 3 and 4 of the appeal, the Revenue has again the Revenue has again raised the same issue that the spill d the same issue that the spillover depreciation deleted by t over depreciation deleted by the Ld. CIT(A) following the decision of the Hon’ble Bombay High Court the decision of the Hon’ble Bombay High Court the decision of the Hon’ble Bombay High Court in the case of CIT v. Continental Warehousing (supra) is not in the case of CIT v. Continental Warehousing in the case of CIT v. Continental Warehousing justified because the Revenue the Revenue has challenged the said decision has challenged the said decision before the Hon’ble Supreme Court. The finding of the Ld. CIT(A) on before the Hon’ble Supreme Court. The finding of the Ld. CIT(A) on before the Hon’ble Supreme Court. The finding of the Ld. CIT(A) on the issue in dispute as under: te as under:
“24.0 I have carefully considered the contentions of the AO, the 24.0 I have carefully considered the contentions of the AO, the 24.0 I have carefully considered the contentions of the AO, the submissions made by the Appellant Company and other materials on submissions made by the Appellant Company and other materials on submissions made by the Appellant Company and other materials on record, on the issue. record, on the issue. 24.1 I find that the claim of spill over additional depreciation was 24.1 I find that the claim of spill over additional depreciation was 24.1 I find that the claim of spill over additional depreciation was allowed by the allowed by the AO while completing assessment u/s 143(3), which has while completing assessment u/s 143(3), which has been withdrawn, while completing assessment u/s 153C. It is seen that been withdrawn, while completing assessment u/s 153C. It is seen that been withdrawn, while completing assessment u/s 153C. It is seen that the reason given for withdrawal by the AO is not at all related to any the reason given for withdrawal by the AO is not at all related to any the reason given for withdrawal by the AO is not at all related to any seized material found during the course of search operation. seized material found during the course of search operation. seized material found during the course of search operation. 24.2 While deciding the Ground No. 2 of this appeal, following the While deciding the Ground No. 2 of this appeal, following the While deciding the Ground No. 2 of this appeal, following the decision of the jurisdictional High court in the case of CIT Vs Continental decision of the jurisdictional High court in the case of CIT Vs Continental decision of the jurisdictional High court in the case of CIT Vs Continental Warehousing Corporation (374 ITR 645), I have held that while making Warehousing Corporation (374 ITR 645), I have held that while making Warehousing Corporation (374 ITR 645), I have held that while making an assessment u/s 153C, the AO cannot disturb th an assessment u/s 153C, the AO cannot disturb the completed e completed proceedings, unless the material gathered in the course of search proceedings, unless the material gathered in the course of search proceedings, unless the material gathered in the course of search establish that the relief granted under the finalized assessment were establish that the relief granted under the finalized assessment were establish that the relief granted under the finalized assessment were contrary to the facts unearthed during the course of search operation. contrary to the facts unearthed during the course of search operation. contrary to the facts unearthed during the course of search operation. Thus, the action of the AO in withdra Thus, the action of the AO in withdrawing the spillover additional wing the spillover additional depreciation allowance is bad in law. depreciation allowance is bad in law.
Grasim Industries Ltd. 15 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 24.3 I also find that on merits the claim of the Appellant is supported by 24.3 I also find that on merits the claim of the Appellant is supported by 24.3 I also find that on merits the claim of the Appellant is supported by the followings decisions: the followings decisions: a) High Court of Karnataka a) High Court of Karnataka - CIT v. Rittal India Pot Ltd [380 ITR 423] b) Mumbai ITAT b) Mumbai ITAT - Grasim Bhiwani Textiles Limited Vs ACIT (ITA 790 & Grasim Bhiwani Textiles Limited Vs ACIT (ITA 790 & 791/Mum/2014) 791/Mum/2014) c) CIT, Madurai Vs. Shri T.P.Textiles (P.) Ltd. (246 c) CIT, Madurai Vs. Shri T.P.Textiles (P.) Ltd. (246 Taxman324) (Madras Taxman324) (Madras High Court) d) MITC Rolling Mills P. Ltd. us. ACIT (Order dated 13.05.2013 MITC Rolling Mills P. Ltd. us. ACIT (Order dated 13.05.2013 in ITA MITC Rolling Mills P. Ltd. us. ACIT (Order dated 13.05.2013 No. 2789/Mum/2012) (Mumbai ITAT) No. 2789/Mum/2012) (Mumbai ITAT) e) Apollo Tyres Ltd Vs ACTT (64 SOT 203) (Cochin ITAT) Apollo Tyres Ltd Vs ACTT (64 SOT 203) (Cochin ITAT) f) DCIT Vs Cosmos Films Ltd (139 ITD 628)(Delhi ITAT) DCIT Vs Cosmos Films Ltd (139 ITD 628)(Delhi ITAT) g) AMIT Vs SIL Investments Ltd. (148 TTJ 213)(Delhi ITAT) AMIT Vs SIL Investments Ltd. (148 TTJ 213)(Delhi ITAT) h) Century Enka Limited Vs DCIT (154 ITD 426)(Kolkatta Century Enka Limited Vs DCIT (154 ITD 426)(Kolkatta ITAT) ITAT) 24.4 In view of the above discu 24.4 In view of the above discussion and respectfully following the ssion and respectfully following the decision of Jurisdictional High Court in the case of CIT Vs Continental decision of Jurisdictional High Court in the case of CIT Vs Continental decision of Jurisdictional High Court in the case of CIT Vs Continental Warehousing Corporation (374 ITR 645), this ground of appeal is Warehousing Corporation (374 ITR 645), this ground of appeal is Warehousing Corporation (374 ITR 645), this ground of appeal is decided in favour of the Appellant. Thus, the AO is directed not to decided in favour of the Appellant. Thus, the AO is directed not to decided in favour of the Appellant. Thus, the AO is directed not to withdraw the sp withdraw the spillover additional depreciation allowance already illover additional depreciation allowance already allowed in the original assessment u/s 143(3) of the Act. allowed in the original assessment u/s 143(3) of the Act.” 8.1 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. relevant material on record. While adjudicating ground No hile adjudicating ground Nos. 1 and 2 of the appeal of the Revenue, of the Revenue, we have held that the decision of the the decision of the Hon’ble Bombay High Court in the case of CIT v. Continental Hon’ble Bombay High Court in the case of CIT v. Continental Hon’ble Bombay High Court in the case of CIT v. Continental Warehousing Corporation (supra) Warehousing Corporation (supra) has been approved by the Hon’ble approved by the Hon’ble Supreme Court in the case of Abhisar Buildwell P Ltd. (supra) Supreme Court in the case of Abhisar Buildwell P Ltd. (supra) Supreme Court in the case of Abhisar Buildwell P Ltd. (supra) ,therefore, the contention of the Revenue raised e contention of the Revenue raised are rejected. The are rejected. The ground Nos. 3 and 4 of the appeal of the Revenue are dismissed. . 3 and 4 of the appeal of the Revenue are dismissed. . 3 and 4 of the appeal of the Revenue are dismissed.
Now we take up the ground Now we take up the grounds of appeal of the assessee. As far of appeal of the assessee. As far as ground No. 1 of the appeal of the assessee is concerned, we have as ground No. 1 of the appeal of the assessee is concerned, we as ground No. 1 of the appeal of the assessee is concerned, we Grasim Industries Ltd. 16 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 already dismissed the ground of the Revenue challenging the y dismissed the ground of the Revenue challenging the y dismissed the ground of the Revenue challenging the additions made u/s 153C proceedings without aid of incriminating additions made u/s 153C proceedings without aid of incriminating additions made u/s 153C proceedings without aid of incriminating material and therefore, this ground material and therefore, this ground is rendered only rendered only academic, therefore, we are not adjudicating upon. , we are not adjudicating upon.
10. As far as ground No. 2 of the appeal of the As far as ground No. 2 of the appeal of the assessee relates assessee relates to depreciation allowance consequent to withdrawal of depreciation allowance consequent to withdrawal of depreciation allowance consequent to withdrawal of depreciation allowance in earlier years. The finding of ld CIT(A) on the issue in allowance in earlier years. The finding of ld CIT(A) on the issue in allowance in earlier years. The finding of ld CIT(A) on the issue in dispute is reproduced as under: dispute is reproduced as under:
“28.0(sic) I have carefully I have carefully considered the submissions of the Appellant considered the submissions of the Appellant Company and other materials placed on record, on this issue. Company and other materials placed on record, on this issue. Company and other materials placed on record, on this issue. 28.1(sic) The contention of the Appellant is that the AO has withdrawn The contention of the Appellant is that the AO has withdrawn The contention of the Appellant is that the AO has withdrawn spill over additional spill over additional depreciation allowance in AY 2008-09 & AY 2009 09 & AY 2009- 10 and while computing allowable depreciation allowance for AY le computing allowable depreciation allowance for AY le computing allowable depreciation allowance for AY 2010-11 did not give effect of the same"to the opening written down 11 did not give effect of the same"to the opening written down 11 did not give effect of the same"to the opening written down value of the block of assets. The Appellant Company has challenged value of the block of assets. The Appellant Company has challenged value of the block of assets. The Appellant Company has challenged withdrawal of spill over additional depreciation allowance claim in withdrawal of spill over additional depreciation allowance claim in withdrawal of spill over additional depreciation allowance claim in A.Y. 2008-09 in income tax Appeal No. CIT(A) 09 in income tax Appeal No. CIT(A)-47/840/16-17 and the 17 and the same is decided by me in favour of the Appellant Company. Also, the is decided by me in favour of the Appellant Company. Also, the is decided by me in favour of the Appellant Company. Also, the Income Tax Appeal No. CIT(A) Income Tax Appeal No. CIT(A)-47/841/16-17 of the Appellant for AY 17 of the Appellant for AY 2009-10 has been decided in favour of the Appellant on t 10 has been decided in favour of the Appellant on t 10 has been decided in favour of the Appellant on this issue. Thus, the grievance of the Appellant Company on this issue is already Thus, the grievance of the Appellant Company on this issue is already Thus, the grievance of the Appellant Company on this issue is already addressed. 28.2(sic) Accordingly, Ground No. 6 of the present appeal is Accordingly, Ground No. 6 of the present appeal is Accordingly, Ground No. 6 of the present appeal is dismissed.” (The paragraph numbers have been The paragraph numbers have been wrongly mentioned as ‘para wrongly mentioned as ‘para 34, 34.1 & 34.2 , 34.1 & 34.2’ in the impugned order.) 10.1 We find that ld CIT(A) has allowed the issue in favour of the 10.1 We find that ld CIT(A) has allowed the issue in favour of the 10.1 We find that ld CIT(A) has allowed the issue in favour of the assessee and only mistake committed is that in para 28.2 he has assessee and only mistake committed is that in para assessee and only mistake committed is that in para erroneously mentioned as ground of the assessee was dismissed, erroneously mentioned as ground of the assessee was dismissed, erroneously mentioned as ground of the assessee was dismissed, but actually in para but actually in para 28.1 as reproduced above , issue has been , issue has been decided in favour of the assessee , thus this ground of appeal is non decided in favour of the assessee , thus this ground of appeal is non decided in favour of the assessee , thus this ground of appeal is non Grasim Industries Ltd. 17 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023 maintainable and dismissed as infructuous. The ground No.2 of the maintainable and dismissed as infructuous. The ground No. maintainable and dismissed as infructuous. The ground No. appeal is dismissed.
11. The ground no. 3 of the appeal of the assessee relates to 11. The ground no. 3 of the appeal of the assessee relates to 11. The ground no. 3 of the appeal of the assessee relates to depreciation of Rs.29,56,250/ .29,56,250/- disallowed by the AO and sustained disallowed by the AO and sustained by the ld CIT(A). The Ld. CIT(A) he Ld. CIT(A) has adjudicated the issue as under: adjudicated the issue as under:
36.0 I have carefully examined the issue and the submissions made by 36.0 I have carefully examined the issue and the submissions made by 36.0 I have carefully examined the issue and the submissions made by the Appellant Company. the Appellant Company. 36.1 In the appeals of the Appellant Company 36.1 In the appeals of the Appellant Company in Appeal No. CIT(A) in Appeal No. CIT(A)- 47/840/16-17 for the AY 2008 17 for the AY 2008-09 and Appeal No. CIT(A)- -47/841/16- 17 for AY 2009 17 for AY 2009-10, I have decided the substantive grounds against the 10, I have decided the substantive grounds against the Appellant Company and held that the said transactions were just Appellant Company and held that the said transactions were just Appellant Company and held that the said transactions were just accommodation entries. In view of thi accommodation entries. In view of this conclusive finding in the earlier s conclusive finding in the earlier years, the consequential depreciation on such accommodation entries years, the consequential depreciation on such accommodation entries years, the consequential depreciation on such accommodation entries for the current year under consideration, needs to be disallowed. for the current year under consideration, needs to be disallowed. for the current year under consideration, needs to be disallowed. 36.2 Accordingly, the addition of Rs. 29,56,250/ 36.2 Accordingly, the addition of Rs. 29,56,250/- made by the AO made by the AO towards depreciation towards depreciation on other buildings is confirmed. Hence, the on other buildings is confirmed. Hence, the Ground No. 6 of the present appeal is dismissed. Ground No. 6 of the present appeal is dismissed.
11.1 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. This is the issue of consequential effect relevant material on record. This is the issue of consequential effect relevant material on record. This is the issue of consequential effect of the order of the earl of the order of the earlier years 2008-09 and 2009-10. The appeals 10. The appeals for assessment year 2008 for assessment year 2008-09 and 2009-10 have already been 10 have already been adjudicated by the Tribunal in & 1054/M/2019 dated adjudicated by the Tribunal in ITA No. 1053 & 1054/M/2019 dated adjudicated by the Tribunal in ITA No. 1053 & 1054/M/2019 dated 31.05.2023 and therefore, the Ld. Assessing Officer is required to 31.05.2023 and therefore, the Ld. Assessing Officer 31.05.2023 and therefore, the Ld. Assessing Officer give consequent effect consequent effect. If the disallowance made in respect of assets f the disallowance made in respect of assets has been deleted, then no further disallowance of depreciation is then no further disallowance of depreciation is then no further disallowance of depreciation is required in the year under consideration. The ground No. 3 of the required in the year under consideration. The ground No. 3 of the required in the year under consideration. The ground No. 3 of the appeal of the assessee appeal of the assessee is accordingly allowed for statistical accordingly allowed for statistical purposes.
Grasim Industries Ltd. 18 & 1559/Mum/2023 ITA Nos. 1055 & 1559/Mum/2023
In the result, the appeal of the Revenue is dismissed whereas n the result, the appeal of the Revenue is dismissed whereas n the result, the appeal of the Revenue is dismissed whereas appeal of the assessee is partly allowed for statistical purposes. appeal of the assessee is partly allowed for statistical purposes. appeal of the assessee is partly allowed for statistical purposes.