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2015 (12) TMI 1517 - AT - Income TaxDisallowance of deduction u/s u/s.80IA(4) in the asst. framed u/s.153A - Held that - Tribunal in assessee s own case in the preceding assessment following the decision of Hon ble Bombay High Court in the case of CIT Vs. ABG Heavy Industries Ltd. and other 2010 (2) TMI 108 - BOMBAY HIGH COURT and various other decisions allowed the claim of deduction u/s.80IA(4) of the Act. However, as pointed out by the Ld. Counsel for the assessee we find no disallowance has been made u/s.80IA(4) in the assessment order passed u/s.153A of the Act. Therefore, the ground raised by the assessee becomes academic in nature.- Decided in favour of assessee Addition made u/s.69B on account of difference in valuation in the asst. framed u/s.153A - Held that - In the instant case, there is nothing on record to suggest that any material was unearthed during the search or in 153A proceeding which would show that non-addition u/s.69B was erroneous, therefore, we do not find any infirmity in the order of the CIT(A) deleting the addition made by the AO. In view of the above and in view of the detailed reasoning given by the CIT(A) deleting the addition made u/s.69B of the Act we find no infirmity in the same.- Decided in favour of assessee Depreciation on windmill and MEDA charges - Held that - The AO has accepted the rate of depreciation as claimed by the assessee and MEDA charges was allowed as business expenditure. No incriminating material whatsoever was found during the course of search or 153A proceedings. The Hon ble jurisdictional High Court in the case of All Cargo Global Logistics Ltd./ Continental Warehousing Corporation (2015 (5) TMI 656 - BOMBAY HIGH COURT ) has held that completed assessments cannot be disturbed by making additions which is not based on any incriminating material found during the course of search or during 153A proceedings - Decided in favour of assessee Addition on the basis of loose papers found during the course of search - Held that - A perusal of the assessment order shows that the AO has not carried out any verification in support his contention that notings conclusively prove that the entries in the loose papers are infact speed money/bribe paid to various persons whose names are mentioned against each figure. On a pointed query raised by the Bench during the course of hearing the Ld. Departmental Representative also candidly admitted that no such exercise has been done either by the Investigation Wing after the search or by the AO during the course of assessment proceedings. Therefore, it is not correct to hold that the payments noted on the seized papers indicate speed money/bribe paid by the assessee company to various persons. However, considering the presumption laid down in section 132(4A) of the I.T. Act, since these papers are found with the assessee company, therefore, the AO is justified in holding that the assessee company has paid the amount noted on the seized papers and the CIT(A) is justified in upholding the addition - Decided against assessee Addition u/s.41(1) - Held that - CIT(A) is not justified in sustaining the addition made by the AO u/s.41(1) of the I.T. Act as the liabilities do not cease to exists merely by efflux of time. - Decided in favour of assessee Depreciation claim - Held that - No infirmity in the order of the CIT(A) allowing higher depreciation @80% on civil work foundation and related labour cost of windmill. - Decided in favour of assessee Addition of expenses made by cheque - Held that - We find the finding given by the Ld.CIT(A) that the seized documents reveal payment of ₹ 1.5 crores in cheque prior to 14-04-2007 by B.T. Patil and the share of the assessee in the said amount is ₹ 75 lakhs for which the assessee is entitled to a relief of ₹ 75 lakhs on account of payable of expenses made by the cheque is not based on any cogent evidence and proper appreciation of facts. On a pointed query by the Bench during the course of hearing, the Ld. Counsel for the assessee was also unable to clarify as to how this deduction/relief was justified on the basis of notings only on the loose paper. In view of the above, the order of the Ld.CIT(A) on this issue is set aside - Decided against assessee Unaccounted expenditure incurred by the assessee on the basis of paper seized from the residence of Shri. D A Bhat - Held that - Admittedly, the papers containing certain expenditure with dates mentioned therein are not considered by the assessee while working out the unaccounted income. During the hearing before us, the Ld. Counsel for the assessee was also not in a position to clarify the basis of deletion made by the CIT(A) and justify such deletion. In view of the above we reverse the order of the CIT(A) on this issue and the ground raised by the revenue is allowed. - Decided against assessee Addition on account of undervaluation of WIP - Held that - The assessment had not been completed for the A.Y. 2009-10 when the search took place and the same was pending. The Ld. Counsel for the assessee was unable to explain the non consideration of work-in-progress in the final accounts. In view of the above and in view of the detailed reasoning given by the Ld.CIT(A) while confirming the addition on account of undervaluation of work-in-progress we find no infirmity in the same.- Decided against assessee Levy of interest u/s.234A - Held that - A non-obstante clause has been inserted and with a defined intent. In our opinion, once the search takes place on a person and the due date for filing of the return u/s.139(1) has not expired he can file the return only after the issue of notice u/s.153A. He is not required to file the return u/s.139(1). Therefore, the authorities below are not justified in levying interest u/s.234A of the I.T. Act for a period from 31-10-2009 to 20-07-2010 - Decided in favour of assessee
Issues Involved:
1. Deduction under Section 80IA(4). 2. Addition under Section 69B for difference in property valuation. 3. Addition for undervaluation of Work-in-Progress (WIP). 4. Addition under Section 41(1) for cessation of liability. 5. Addition based on seized documents indicating unaccounted expenses. 6. Depreciation on windmill components. 7. Interest under Section 234A. 8. Appropriation of seized cash towards tax liability. Issue-wise Analysis: 1. Deduction under Section 80IA(4): The assessee claimed deductions under Section 80IA(4) for various years, which were initially disallowed by the AO on the grounds that the assessee was a contractor and not a developer. The CIT(A) allowed the deductions, relying on various judicial precedents, including the Bombay High Court's decision in CIT vs. ABG Heavy Industries Ltd., which clarified that even contractors could qualify for such deductions if they fulfilled the necessary conditions. The Tribunal upheld the CIT(A)'s decision, affirming that the assessee was entitled to deductions under Section 80IA(4). 2. Addition under Section 69B for Difference in Property Valuation: The AO made additions based on the difference between the assessee's declared property value and the DVO's valuation. The CIT(A) deleted these additions, noting that the DVO's valuation was based on rates from a different period and lacked corroborative evidence of understatement. The Tribunal upheld the CIT(A)'s decision, emphasizing that additions solely based on DVO reports without evidence of understatement are not valid. 3. Addition for Undervaluation of Work-in-Progress (WIP): The AO added amounts for undervaluation of WIP, which the assessee argued was expensed out as per their accounting method. The CIT(A) upheld the AO's additions for certain years but allowed adjustments for opening WIP in subsequent years. The Tribunal found no incriminating material to justify these additions for completed assessments and deleted the additions for those years, while upholding the additions for pending assessments. 4. Addition under Section 41(1) for Cessation of Liability: The AO added amounts for creditors outstanding for more than three years, deeming them as ceased liabilities. The CIT(A) upheld these additions for certain years, citing the Supreme Court's decision in T.V. Sundaram Iyenger & Sons Ltd. The Tribunal, however, relied on the Supreme Court's decision in Sugauli Sugar Works and other precedents, ruling that mere passage of time does not extinguish liabilities, and deleted the additions. 5. Addition Based on Seized Documents Indicating Unaccounted Expenses: The AO made additions based on seized documents indicating unaccounted expenses. The CIT(A) upheld these additions, finding corroborative evidence in the documents and statements from responsible persons. The Tribunal agreed with the CIT(A), noting the presumption under Section 132(4A) and the lack of evidence to contradict the seized documents. 6. Depreciation on Windmill Components: The AO disallowed higher depreciation rates on certain windmill components, which the CIT(A) partially allowed based on a detailed allocation of costs. The Tribunal upheld the CIT(A)'s allocation, referencing similar decisions in other cases. 7. Interest under Section 234A: The AO levied interest under Section 234A for delayed filing of returns. The CIT(A) upheld this, but the Tribunal ruled that since the search occurred before the due date for filing returns, the assessee was not required to file under Section 139(1), and thus, interest under Section 234A was not justified. 8. Appropriation of Seized Cash Towards Tax Liability: The AO appropriated seized cash towards tax liability from a later date, resulting in interest under Section 234B. The CIT(A) upheld this, but the Tribunal directed that the seized cash should be credited towards advance tax from the date of the assessee's request, as per Section 132B. Conclusion: The Tribunal's detailed analysis resulted in a mix of upheld and overturned decisions from the lower authorities, providing clarity on the application of various sections of the Income Tax Act in the context of search operations and related assessments.
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