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2019 (5) TMI 420 - AT - Income TaxAssessment u/s 153A - Deduction u/s 80IA - second search and seizure action - deduction claimed by the assessee in the return of income filed on 31.03.2007 and the same was fully allowed by the AO originally in the assessment completed u/s 153A r.w.s. 143(3) - HELD THAT - Since the said assessment dated 31.12.2007 had become final before the second date of search conducted on 28.10.2010, the deduction allowed u/s 80IA in the said assessment could have been restricted by the AO only on the basis of any incriminating material found during the course of second search conducted on 28th 29th October, 2010. As submitted by assessee, there was, however, no such incriminating material found during the course of search on the basis of which the claim of the assessee for deduction u/s 80IA as originally allowed was restricted by the AO and this position clearly evident from the assessment order passed by the AO is not disputed even by the ld. D.R. We, therefore, find no infirmity in the impugned order of the CIT(Appeals) deleting the disallowance made by the Assessing Officer on account of assessee s claim for additional deduction u/s 80IA - Decided against revenue Disallowance u/s 40(a)(ia) - proceedings initiated u/s 153A pursuant to the second search and seizure action - payment of the corresponding TDS is found to have been made to the credit of Central Government before the due date of filing of the return - HELD THAT - As original assessment proceedings resulting into disallowance u/s 40(a)(ia) had become final, we are of the view that the ld. CIT(Appeals) was not justified in entertaining and allowing the new claim made by the assessee on this issue and even the assessee has not disputed this position. We accordingly reverse the impugned order of the ld. CIT(Appeals) on this issue and allow Ground of the Revenue s appeal. New claim made by the assessee for deduction u/s 80IA for the first time during the course of proceedings u/s 153A r.w.s. 143(3) - AO denied to entertain the said claim while the CIT(Appeals) not only entertained the said claim but also allowed the same on merit- HELD THAT - As original assessment proceedings not allowing any deduction u/s 80IA had become final, we are of the view that the ld. CIT(Appeals) was not justified in entertaining and allowing the new claim made by the assessee for deduction u/s 80IA for the first time during the course of proceedings under section 153A r.w.s. 143(3) and even the ld. Counsel for the assessee has not disputed this position. We, therefore, reverse the impugned order of the ld. CIT(Appeals) allowing the claim of the assessee for deduction u/s 80IA - Decided in favour of revenue Exemption u/s 86 - HELD THAT - The original assessment for A.Y. 2008-09 thus had become final and in the absence of any incriminating material found during the course of search, the disallowance made by the Assessing Officer in the assessment completed u/s 153A r.w.s 143(3) on account of assessee s claim for exemption u/s 86 was not sustainable
Issues Involved:
1. Deletion of disallowance under section 80IA. 2. Deletion of disallowance under section 40(a)(ia). 3. Deletion of addition on account of exemption under section 86. Issue-wise Detailed Analysis: 1. Deletion of Disallowance under Section 80IA: - A.Y. 2005-06: The assessee, a civil construction company, claimed a deduction of ?6,74,70,537 under section 80IA, which was initially allowed by the Assessing Officer (AO). However, in a subsequent assessment following a second search and seizure, the AO disallowed an additional claim of ?2,07,18,556 under section 80IA, arguing that the claim was made without filing a revised return and that the company was not a developer but a works contractor. The Commissioner of Income Tax (Appeals) [CIT(A)] allowed the assessee's claim, distinguishing between a revised return and a correction of return, and emphasizing the principle of consistency. The Tribunal upheld the CIT(A)'s decision, noting no incriminating material was found in the second search to justify the disallowance. - A.Y. 2007-08: The assessee's claim for an additional deduction of ?5,46,96,237 under section 80IA, disallowed in the original assessment and not claimed in the return filed in response to the notice under section 153A, was allowed by the CIT(A) in the revised computation of income. The Tribunal reversed this, stating that the original assessment had become final and there was no incriminating material found during the search to justify revisiting the issue. - A.Y. 2008-09: The assessee's claim for an additional deduction of ?4,49,85,993 under section 80IA, initially accepted under section 143(1) and not disputed in the return filed in response to section 153A, was allowed by the CIT(A) in the revised computation. The Tribunal upheld the CIT(A)'s decision, emphasizing the finality of the original assessment and the absence of incriminating material. - A.Y. 2009-10: The assessee's claim for a deduction of ?10,20,73,983 under section 80IA, not claimed in the original return or in the return filed in response to section 153A, was allowed by the CIT(A) in the revised computation. The Tribunal reversed this, citing the finality of the original assessment and the lack of incriminating material. 2. Deletion of Disallowance under Section 40(a)(ia): - A.Y. 2005-06: The AO disallowed ?5,86,52,638 under section 40(a)(ia) due to non-compliance with TDS provisions. The CIT(A) directed the AO to delete the disallowance if the TDS payment was made before the due date of filing the return. The Tribunal reversed the CIT(A)'s decision, stating that the original disallowance had become final and there was no new incriminating material to justify revisiting the issue. 3. Deletion of Addition on Account of Exemption under Section 86: - A.Y. 2008-09: The AO disallowed ?42,74,485 claimed as exemption under section 86, which was accepted in the original assessment under section 143(1). The CIT(A) deleted the disallowance, and the Tribunal upheld this decision, emphasizing the finality of the original assessment and the absence of incriminating material. - A.Y. 2009-10: The AO disallowed ?57,75,278 claimed as exemption under section 86. The CIT(A) deleted the disallowance, and the Tribunal upheld this decision, following the reasoning applied for A.Y. 2008-09. Conclusion: The Tribunal's decisions varied across the assessment years, with some appeals being partly allowed, some fully allowed, and others dismissed based on the principles of finality of original assessments and the presence or absence of incriminating material found during searches. The Tribunal emphasized consistency and procedural correctness in allowing or disallowing claims and deductions.
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