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3.4.3 In this context, the jurisdictional High Court of Karnataka in the case of CIT Vs. Lancy Constructions in ITA No.528 to 531/2014 has held as under :-

ITA Nos.911, 912, 779 to 781, 1106 & 1113/Bang/2015

" 4.2.2 In this regard, the Hon'ble Karnataka High Court in the case of CIT Vs Lancy Constructions in its order in ITA Nos.528 to 531 has held as under :

3.4.4 Further, the Hon'ble Karnataka High Court in the decision rendered in M/s. IBC Knowledge Park Pvt. Ltd., ITA No.403/2009 dt.28.4.2016 has explained the entire scope and principles governing the ITA Nos.911, 912, 779 to 781, 1106 & 1113/Bang/2015 provisions of Sec. 153A and 153C of the Act. In their judgment, the Hon'ble Court has considered several decisions on this issue including Lancy Constructions (supra) cited by the assessee and Canara Housing Development Co. (2015) 274 CTR 122 (Kar) cited by Revenue. In its decision, in the case of IBC Knowledge Park Pvt. Ltd. (ITA No.403/2009 dt.28.4.2016) the Hon'ble Karnataka High Court has held that notice under Section 153A of the Act can be issued only if it is during a valid search when certain incriminating materials are detected. At paras 45 to 49 of its decision, the Hon'ble High Court has held as under :

1) CIT vs Lancy Constructions - ITA 528 to 531/2014 - KAR HC -

2) CIT vs Continental Warehousing Corporation - 374 ITR 645 - Bombay HC

3) Jai Steel (India) vs ACIT - 259 CTR 281 - RAJASTHAN HC

4) PCIT vs Desai Construction Pvt Ltd - 387 ITR 552 - GUJ HC

5) CIT vs Kabul Chawla - 380 ITR 573 - Delhi HC.

Secondly, the AO made an addition of Rs.16,71,82,094 based on certain material seized from Bharat S Ghorpade and Dinesh Kumar Singhi mentioned A/BSG/01 , A/BSG/02 and A/DKS-1. These materials does not belong to the assessee and no proceeding u/s 153C has been held before use of the aforesaid material against the assessee. It has been held in the following case laws that unless 153C proceeding is done no assessment can be made based on seized material seized from third parties.

17.2 In this regard, the Hon'ble Karnataka High Court in the case of CIT Vs Lancy Constructions in its order in ITA Nos.528 to 531 has held as under :

" In our view, if assessment is allowed to be reopened on the basis of search, in which no incriminating material is found, and merely on the basis of further investigating the books of accounts which have been already submitted by the assessee and accepted by the Assessing Officer at the time of regular assessment, the same would amount to the Revenue getting a second opportunity to reopen the concluded assessment, which is not permissible under the law. Merely because a search is conducted in the premises of the assessee, would not entitle the revenue to initiate the process of reassessment, for which there is a separate procedure prescribed in the statute. It is only when the conditions prescribed for reassessment are fulfilled that a concluded assessment can be reopened. The very same accounts which were submitted by the assessee; on the basis of which assessment had been concluded cannot be reappreciated by the Assessing Officer merely because a search had been conducted in the premises of the assessee."