9911796707
TMI Blog2017 (8) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the CIT(A) is liable to be affirmed. - Decided against revenue - ITA NOS. 2031, 2032 And 2033/MUM/2016 - - - Dated:- 31-7-2017 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER For The Appellant : Shri R.P. Meena (CIT-DR) For The Respondent : None ORDER PER G.S. PANNU, AM : The captioned three appeals preferred by the Revenue relate to the same assessee and involve a common issue, therefore, they have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 2. At the time of hearing, it was noticed that none appeared on behalf of the respondent-assessee inspite of service of notice by RPAD. On the other hand, the ld. CIT-DR appeared on behalf of the Revenue. 3. Accordingly, in view of Rule 25 of the Income Tax (Appellate Tribunal) Rules, 1963, the appeals of the Revenue are being disposed off ex-parte the respondent-assessee after hearing the appellant-Revenue on merits. 4. The captioned appeals are filed by the Revenue against the common order of CIT(A)-49 dated 01.01.2016 which in turn has arisen from the separate orders passed by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g fact-situation. The respondent-assessee is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of off-shore shipping and allied activities including charter of rigs, etc. A search and seizure action u/s 132(1) of the Act was conducted in Bharti Shipyard Group of cases and assessee being an entity connected to the aforesaid group, was covered by the search and seizure action on 24.11.2011. Subsequently, notice u/s 153A(1)(a) of the Act was issued and served on 7.11.2012 requiring it to furnish returns of income for the various assessment years including the three captioned assessment years before us. In response, assessee furnished a return of income on 4.3.2013 declaring a total income of ₹ 11,22,72,762/-, which was the same as declared originally in the return of income filed u/s 139(1) of the Act on 30.11.2006. Notably, with respect to the original return of income, an assessment u/s 143(3) of the Act was completed on 24.12.2008 accepting the total income declared by the assessee at ₹ 11,22,72,762/-. As a consequence of the return filed on 4.3.2013, the Assessing Officer completed the assessment u/s 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me on the basis of the actual revenues of the two divisions, and made an addition of ₹ 2,73,99,267/- to the returned income. 8. Similarly, for Assessment Year 2008-09, notice u/s 153A(1)(a) of the Act was issued and served on 7.11.2012. In response, assessee furnished a return of income on 4.3.2013 declaring a total income of ₹ 52,37,09,187/-, which was the same as declared originally in the return of income filed u/s 139(1) of the Act on 29.9.2008. Notably, with respect to the original return of income, an assessment u/s 143(3) of the Act was completed on 15.12.2010 determining the total income at ₹ 58,72,74,460/-. As a consequence of the return filed on 4.3.2013, the Assessing Officer completed the assessment u/s 153A r.w.s. 143(3), wherein the total income has been determined at ₹ 62,20,81,144/-. In the impugned assessment finalised u/s 153A r.w.s. 143(3) of the Act, one of the addition made was on account of allocation of expenses between tonnage and non-tonnage businesses. The Assessing Officer disagreed with the allocation of common expenses in the ratio of 67 : 33 and instead, he apportioned the same on the basis of the actual revenues of the two d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned on the basis of actual revenue in the ratio of 78:22. In view of above, I find that no assessment was pending as on date of search i.e. 24.11.2011 and therefore the assessment for AY.2006-07 did not abate. It is evident from the assessment order that the addition of ₹ 385,52,386/- is not based on any incriminating material found in the course of search. Thus, in view, of the decision of the jurisdictional High court in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva Ltd) (374 ITR 645), the addition is found to be without justification. Further even on merits of the case this issue relating to reallocation of common administrative expenses is covered in the favour of the appellant by the order dated 30.9.2015 of the ITAT, Mumbai Bench 'G' Mumbai for AY.2007-08 in appellant's own case ( ITA No.2191/Mum/2011) in which the issue has been decided by making following observation The CIT(A) decided the issue against the assessee on the ground that the AO is not bound by the system adopted and followed by the assessee and further observing that section 115VJ also empowers the AO to apportion on reasonable basis which is in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issue is found to be without justification and is deleted. ( iii) A.Y.2008-09 I find that assessment u/s.143(3) was completed on 15.12.2010 in which addition of ₹ 671,11,494/- was made after reapportionment of expenses. This addition was confirmed by the first appellate authority vide order dated 29.7.2011 and the matter was pending in appeal before the ITAT when the assessment u/s.153A has been finalized. In the assessment order u/s.153A dated 29.3.2014 the AO has made addition of ₹ 989,74,034/- on this issue and the difference is on account of the apportionment of common operating expenses, interest and finance charges and depreciation, in addition to the administrative and other expenses considered in the first assessment order u/s.143(3). The common expenses have been allocated to non tonnage activity at the rate of 21.59% as against 33% considered by the appellant. Since this is a case which had not abated, further addition on this issue could have been made only in light of the incriminating material emanating from the search and not otherwise. From the assessment order, it is evident that no such incriminating material was found as a result of the ..... 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