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TMI Blog2015 (12) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... oming to the merits of addition in the case of assesseee we find that though the information has been received by the Assessing Officer from the return of income filed by the assessee itself, in the original assessment order passed under section 143(3), the said amount was added as income of the assessee where the said assessment order is still in force as the said assessment has not been abated, no further addition is warranted. Since the addition has already been made in the hands of assessee, there is no merit in making this addition once again while passing the order under section 153C r.w.s. 143(3) of the Act. Accordingly, we delete the said addition and allow the grounds of appeal raised by the assessee on merit - ITA Nos. 2021 to 2023/PN/2013 - - - Dated:- 10-11-2015 - Sushma Chowla, JM And Pradip Kumar Kedia, AM For the Appellant : Shri Dharmesh Shah For the Respondent : Shri Hitendra Ninave ORDER Per Sushma Chowla, JM This bunch of three appeals filed by the assessee are against the consolidated order of CIT(A)-Central, Pune dated 23.09.2013 relating to different assessment years 2007-08, 2008-09 and 2009-10 against respective orders passed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 1,81,180/- on legal professional charges. The assessee had not offered any plausible explanation in the matter, hence, travelling expenses of ₹ 14,80,366/- were disallowed. Further, the Assessing Officer vide para 9 observed that from the return of income, it is seen that the assessee has claimed legal expenses of ₹ 1,81,180/- consisting of ₹ 1,25,000/- paid to Advocate towards legal professional fees. Since the expenditure related to formation of the company, the same was disallowed and an addition of ₹ 1,25,000/- was made. Another addition was made on account of interest paid and disallowed and capitalized to work in progress at ₹ 98,13,699/-. 6. The CIT(A) upheld the disallowance of travelling expenses of ₹ 14,80,366/-. Another issue raised before the CIT(A) was that the Assessing Officer had not recorded necessary satisfaction under section 153C of the Act. The said issue was deliberated upon by the CIT(A) and vide para 9.6, it has been held that the satisfaction had in fact been duly recorded by the Assessing Officer before initiating the proceedings under section 153C of the Act and hence, the grounds of appeal raised by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch on the premises of Shri Ajay Bafna was carried out on 06.02.2010. The learned Authorized Representative for the assessee drew our attention to the assessment order passed under section 153C r.w.s 143(3) of the Act in t he case of assessee. The learned Authorized Representative for the assessee stressed that during the course of search and seizure proceedings, no incriminating data was found and where the assessment in the case of the assessee had already been completed, for applying the provisions of section 153C r.w.s. 143(3) of the Act, certain incriminating documents should have been found. In the absence of the same, no addition could be made in the hands of the assessee. The learned AR for the assessee in this regard placed reliance on the ratio of the decisions laid down by the Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation in Income Tax Appeal No.523 of 2013 and CIT vs. All Cargo Global Logistics Ltd. in Income Tax Appeal No.1969/2013, judgment dated 21.04.2015 and CIT vs. Murli Agro Products Ltd. in Income Tax Appeal No.36 of 2009 judgment dated 29.10.2010. The case of the learned AR for the assessee before us was that where or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is its admission. We find that even before the Special Bench of the Mumbai in the case of M/s. All Cargo Global Logistics Ltd. in ITA No. 5018 to 5022 and 5059/Mum/2010 relating to A.Ys 2004-05 to 2009-2010 , the issue of assessment completed under section 153A r.w.s. 143(3) of the Act was raised by way of additional grounds of appeal. The perusal of the order of Special Bench of Tribunal in M/s. All Cargo Global Logistics Ltd. (supra) vide para 7.2, the Special Bench considered whether the issue raised by the assessee as an additional ground could be admitted, where no such ground was taken before the CIT(A) or the Assessing Officer. The said ground was admitted as additional ground of appeal in turn relying on the ratio laid down by Hon'ble Apex Court in National Thermal Power Co. Ltd. (supra). The relevant finding of the Special Bench are in para 7.3 of the order and it was held that where question of law arises for which facts are on record, such question should be allowed to be raised, if it is necessary to do so to assess the correct tax liability. 12. We find merit in the reliance placed upon by the learned AR for the assessee. The Tribunal has the jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uant to the search proceedings could be made in the hands of the assessee u/s. 153A of the Act only on the basis of incriminating material found during the course of search. The perusal of the orders of the authorities below reflect that information with regard to the professional fees of ₹ 1,25,000/- was from the return of income. However, during the course of search, documents relating to expenses of ₹ 6,50,000/- were found, against which, the assessee in the return of income has shown expenditure of ₹ 14,80,366/- on travelling. Since the assessee had not furnished any plausible explanation in this regard, addition of ₹ 14,80,366/- was made by the Assessing Officer while passing the order under section 153C r.w.s. 143(3) of the Act. The said addition has been upheld in the hands of the assessee by the CIT(A) vide paras 7 to 7.3 at pages 4 to 6 of the appellate order. The perusal of grounds of appeal originally filed by the assessee shows that no grounds of appeal against the aforesaid addition upheld by the CIT(A), has been raised by the assessee. Only ground of appeal raised by the assessee originally was against the disallowance of expenses on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminating documents relating to travelling expenses were found and the addition on that basis has been made in the hands of assessee, which has been upheld by the CIT(A), against which assessee is not in appeal. Hence, in cases where incriminating documents are found, the provisions of section153C r.w.s. 143(3) of the Act are attracted. It is not the case of assessee that the jurisdiction invoked under section 153C of the Act by the Assessing Officer is not correctly invoked. The assessee has not challenged the addition made in its hands for the captioned assessment year on the basis of incriminating documents found from his possession. In view thereof, the assessment order passed under section 153C r.w.s. 143(3) of the Act has been correctly passed. The objection of the assessee before us was that in respect of second addition of ₹ 1,25,000/- since no incriminating documents were found, since assessment has not abated, no proceedings can be completed under section 153C r.w.s. 143(3) of the Act. We find no merit in the said stand of the assessee, in view of incriminating documents found from the possession of the assessee in respect of travelling expenses and addition having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of ₹ 8,43,798/- was made on account of various administrative expenses since the assessee had not carried out any business activity. Another disallowance made in the hands of assessee was on account of selling and distribution expenses of ₹ 6,48,397/-. 18. In appeal, the CIT(A) vide consolidated order for assessment years 2007-08 to 2010-11 decided the issues raised. The preliminary issue raised in all the appeals relating to recording of satisfaction and thereafter, invoking of jurisdiction under section 153C of the Act and initiation of assessment proceedings after search action, were decided against the assessee. The next issue considered by the CIT(A) was whether the assessee was carrying on any business activity. After considering elaborate submissions of the assessee on this account, the CIT(A) vide para 10 held that the assessee was engaged in business activity during the assessment year 2007-08, in view of income from service charges declared by the assessee. Thereafter, the addition made on account of interest expenses was deleted vide para 11 in assessment year 2007-08. While considering the grounds of appeal raised by the assessee in assessment year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue arising before us is whether processing under section 143(1) of the Act is to be held as an order of assessment in the case of assessee. We find no merit in the said stand of the learned Authorized Representative for the assessee, in view of the ratio laid down by the Hon'ble Supreme Court in ACIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra). The Hon'ble Supreme Court considered the provisions of section 143(1)(a) of the Act and held that by the use of word 'intimation' substituted for assessment, the Legislative intent was clear that there were two different concepts. While making an assessment, the Assessing Officer was free to make any addition after grant of an opportunity to the assessee. However, by making an adjustment under first proviso to section 143(1)(a) of the Act, no addition was possible since no opportunity was granted to the assessee. The said provisions of section 143(1)(a) of the Act have been substituted by the Finance Act, 2008 w.e.f. 01.04.2008. Under the said substituted section 143(1) of the Act, it is provided that where the return of income has been filed by the assessee under section 139 of the Act or in response to notice und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, we are of the view that the additional evidence filed by the assessee may be admitted and sent back to the file of Assessing Officer to adjudicate the issue after considering the nature of additional evidence filed by the assessee and to decide the issue in accordance with law. Reasonable opportunity of being heard to the assessee shall be provided before adjudicating the issue. Consequently, the issue on merits is set-aside to the file of Assessing Officer. The grounds of appeal on merits are thus, allowed for statistical purposes. ITA No. 2023/PN/2013 24. During the course of hearing, the assessee furnished an application for admission of additional evidence as in assessment year 2008-09 and following the same parity of reasoning, we remit this issue also back to the file of Assessing Officer to decide the same in line with our directions. 25. The learned Authorized Representative for the assessee pointed out that though no additional grounds of appeal in respect of non-abatement of the assessment proceedings, has been filed, but the ground of appeal No.1 raised by the assessee may be treated for the said purpose. We find no merit in the stand of assessee in this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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