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TMI Blog2016 (10) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee or department, the assessee is entitled to claim deduction of interest expenditure, particularly when the facts are already on record. Section 147 of the Act, should not be imported into the proceedings under section 153A of the Act, more particularly when the claim of the assessee is not a fresh claim un-connected to the income declared but the claim was linked with the income declared. Having regard to the circumstances of the case, we are of the view that the Assessing Officer as well as the Ld. CIT(A) were not justified in disallowing the claim of deduction of ₹ 24,57,965. We direct the Assessing Officer to allow the claim of deduction and re-compute the income accordingly. - Decided in favour of assessee - ITA.No.975/Hyd/2015 - - - Dated:- 19-8-2016 - SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Assessee : Mr. V. Raghavendra Rao For The Revenue : Mr. B. Kurmi Naidu ORDER PER D. MANMOHAN, V.P. This appeal filed by the assessee pertains to the A.Y. 2010-2011. The only issue urged before us pertains to the denial of the benefit of deduction of sum of ₹ 24,57,965. 2. Facts necessary for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n but against which the said deduction had not been claimed. The question that arises for consideration is whether such deduction which had not been claimed in the original return can be allowed in the return furnished in response to the notice under section 153A of the I.T. Act. 4.1. However, she was of the opinion that the Assessing Officer has issued notice under section 153A of the Act to bring to tax additional income and therefore, it is not for the benefit of the assessee. Reliance was placed upon the decision of the Hon ble Supreme Court in the case of CIT vs. Sun Engineering Works P. Ltd., 198 ITR 297 which concerns the re-assessment proceedings under section 147 of the Act and according to the Learned Commissioner the same logic applies even to the proceedings under section 153A of the Act. She thus concluded as under : 6.3. The addition of ₹ 24,57,965 made by the Assessing Officer on the basis of the alleged non-inclusion of the sum as part of the additional income in the return was not justified. As already discussed the difference had arisen due to the claim of interest paid against interest income earned. The reason why the claim cannot be allowed has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ACIT vs. VN Devadoss (2013) 57 SOT 67 (Chennai) (URO), ITAT, Pune Bench in the case of M/s. Malpani Estates vs. ACIT (2014) 64 SOT 105 (Pune) (URO) to submit that the decision of the Hon ble Supreme Court in the case of Sun Engineering Works P. Ltd., (cited supra) is not applicable to the proceedings under section 153A of the Act inasmuch as the language of Section 153A makes it clear that once the return of income is filed under section 153A, it has to be deemed to be the return of income filed under section 139 of the Act and as a natural consequence, all other provisions would apply. In otherwords, a regular and fresh assessment has to be made as though the return was filed under section 139 of the Act. Learned Counsel for the assessee also relied upon an un-reported decision of the ITAT, Mumbai Bench in the case of Mr. Faisal Abbas vs. DCIT, Central Circle-2, Mumbai in ITA.No.3485 3487/Mum/2010 dated 25.10.2011 wherein the Bench dealt with an identical issue and in this regard observed as under : 4. The other grounds in this appeal are against the disallowance of set off of brought forward business loss. The facts apropos these grounds are that the assessee in his retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly as if such return were a return required to be furnished under section 139 . From the prescription of sec. 153A, it is apparent that the return filed in response to notice u/s.153A is treated as the return filed u/s.139. If that is the position, we are unable to appreciate as to how the loss determined for the immediately preceding year will not be available to the assessee for the set off against the current year s income declared in the return filed u/s.153A. 7. The Pune Bench of this Tribunal in the case of M/s. Malpani Estates (cited supra) was concerned with declaring of additional income consequent to search proceedings and thereupon claiming deduction under section 80IB(10) of the Act. The Assessing Officer has not allowed the claim of the assessee for deduction under section 80IB with respect to aforecited component of on-money on sale of flats received by the assessee and in fact, he did not treat it as Business Income of the assessee and therefore, did not allow deduction under section 80IB. The income originally declared by the assessee was ₹ 2,10,86,083 which was enhanced as ₹ 2,46,89,494. According to the Assessing Officer, enhancement of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled in pursuance to the notice u/s 153A(1)(a) of the Act, the claim u/s 80IB(10) of the Act is only enhanced and therefore, it is not a fresh claim. 8. The Chennai Bench also addressed the issue as to whether a search under section 132 is conducted for the benefit of the assessee or department. It also took note of the fact that returns are not voluntarily filed by the assessee within the due date prescribed under section 139(1) but they are filed after the search operation was conducted but before the issuance of notice under section 153A of the Act. In para-28 of its order, the Bench has observed as under : 28. Next we have to examine the decision of the Commissioner of Income-tax(Appeals) rendered on the alternate ground raised by the assessees before him. The alternate ground was whether the returns filed in response to notices issued under section 153A can be taken as returns filed within the time limit stipulated under section 139(1). The Commissioner of Income-tax (Appeals) has decided in favour of the assessees holding that the returns filed under section 153A are to be treated as returns filed under section 139(1) within the time allowed under the statute. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re pending on the date of search stand abated. Ld. D.R. strongly relied upon the order of the CIT(A) and contended that the provisions of section 153A are not meant for assessee to make a fresh claim and therefore, the CIT(A) was justified in applying the ratio of the decision of the Hon ble Supreme Court in the case of Sun Engineering Works P. Ltd., (cited supra). 11. We have carefully considered the rival submissions and perused the record. As could be noticed from the grounds of appeal and the arguments advanced by the Learned Counsel for the assessee, the main contention is not with regard to abatement of proceedings under section 153A of the Act. The limited issue is with regard to claim of deduction in response to notice issued under section 153A of the Act even if such claim was not made in the original return. In fact, the Ld. CIT(A) has not disputed that evidence is already on record but refused the claim of deduction on the limited ground that provisions of section 153A are meant for the benefit of the Revenue and not for the assessee. As we have pointed out in the preceding paragraphs, the ITAT Chennai Bench, Pune Bench and the Bombay Bench have considered identical i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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