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TMI Blog2018 (7) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... xcess payment - whether there is any income from this activity, and if it has income, then expenditure of this nature has any nexus with this gross receipt? - Held that:- AO nowhere considered whether the activity undertaken by the assessee gives rise to income of more than ₹ 4.51 crores in the assessment year 2007-08 and ₹ 4.88 crores in the assessment year 2008-09 would require expenditure. AO has made disallowance without any application of mind in sweeping manner. He has not made reference to any seized material found during the course of search and also not made any analysis of business needs and the expenditure debited by the assessee. He has simply disbelieved claim of the assessee on the ground that the expenditure were debited on the last date. To our mind, this approach of the AO is unacceptable.CIT(A) has considered the issue in right perspective and rightly deleted the addition - assessee appeal allowed - IT(SS)A No. 122, 123 and 124/Ahd/2016 WITH CO No.95, 96 and 97/Ahd/2016 - - - Dated:- 11-7-2018 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER Revenue by : Shri V.K. Singh, Sr.DR Assessee by : Shri K.C. Thaker, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone through the record carefully. A perusal of the assessment order would indicate that the assessee has pleaded that it has sufficient interest free funds out of which it could easily advance these interest free loans to the sister concerns. It is pertinent to observe that in the assessment year 2006-07, the assessee firm was having interest free funds of ₹ 1,59,23,2625/- whereas at the close of the account, advance outstanding against the name of Antai Balaji Ltd was of ₹ 24,22,185/-. Similarly in the assessment year 2007-08, the assessee was having interest free funds of more than ₹ 4.63 crores against the outstanding of ₹ 24,22,185/-. Similar is the position with regard to the assessment year 2008-09. The assessee was having sufficient interest free funds out of which it could give interest free funds to associate concerns. The ld.CIT(A) has rightly deleted the addition and no interference is called for. There is no other ground in the assessment year 2006-07. This appeal of the Revenue is dismissed. 5. Next common grounds relates to deletion of disallowance out of equipment hire charges and warehouse rent payment. The conclusion of the AO in these t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and also as further made available to me in the context of disallowance made by the AO. The AR vehemently pleaded that the AO was duty bound to consider, deal with and follow SB and other decisions cited before him in view of SC mandate in Union of India v. Kamalakshi Finance Corporation Limited (1991) 53 ELT 433. The DR present for the department has not pointed out any incriminating material found in the course of the search having any connection with or forming the basis of aforesaid disallowances/additions which emanate exclusively from the report of the Special Auditor and which are based on the regular and audited books of account. The DR has made general arguments to the effect that the language used in section 153A does not in any way suggest that the total income to be computed u/s. 153A should be on the basis of incriminating seized material only, as the plain language grants plenary powers to AO to assess or reassess the total income . Any information coming to the notice of the AO subsequent to the date of search can be used for determination of total income u/s. 153A. The DR has also vaguely submitted that till the time these decisions remain subject matter of fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed to pick up holes, gaps or some infirmities or is of the view that different line of thinking is possible, then there will be judicial chaos and there will not be any finality to litigation. This process, if permitted, will lead to unnecessary harassment to the tax payer which is not envisaged by the statute nor permitted by law. The CIT(A) is duty bound to follow the decision of the Tribunal It is well settled that the decision of the higher authorities is binding on a lower-Authority in the judicial hierarchy. Therefore, the decision of the Tribunal is binding on the Revenue Authority which they should scrupulously follow. Agrawal Warehousing Leasing Ltd. 12002] 124 TAXMAN 440 (MP) ......Needless to say that the orders passed by the Tribunal are binding on all the revenue authorities functioning under the jurisdiction of the Tribunal. Obviously, the Commissioner (Appeals) not only committed judicial impropriety but also erred in law in refusing to follow the order of the Tribunal. Even where he might have some reservations about the correctness of the decision of the Tribunal, he had to follow the order. Bank of Baroda v. H. C. Shrivatsava [2002] 122 TAXMAN 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) with regard to scope of additions u/s 153A/153C. The Ld. AR has further pointed out that the Latest decision of Delhi HC in Kabul Chawala, relied upon by him, (and reproduced supra), has, after thoroughly reviewing the existing Authorities, reiterated All Cargo Global (supra), which, now in turn, is also being consistently followed by Ahmedabad Tribunal. It was therefore submitted to hold the additions made by the AO as unsustainable in law and thus delete the same. Having gone through the decisions, while fully agreeing with the submissions made on behalf of the appellant, I would only quote from Kabul Chawala 61 taxmann.com 412 (Del) and Desai Consruction (And Trib) and Saumya Construction (Ahd Trib) the copies of which have been furnished: Kabul Chawala 61 taxmann.com 412 (Del) Summary of the legal position 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i......... ii ............ iii ............ vii. Completed assessments can be interfered with by the AO while making the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the assessment u/s 153A but is confined to making of any additions or disallowances other than on the basis of incriminating material found during search operations. In effect thus, additions cannot be made other than on the basis of incriminating material found during search operations. That plea stands approved by a coordinate bench of the tribunal, in the case of Sanjay Aggarwal Vs. DOT [(2014) 47 taxmann.com 210 (Del)], by observing as follows: 13. The above extracted observations of the Hon. High Court, which are though obiter dicta, make the point clear that where an assessment order has already been passed for a year (s) within the relevant six assessment years, then also the AO is duty bound to reopen those proceedings and reassess the total income but by 'taking note of the undisclosed income if any 'unearthed during the search . The expression 'unearthed during the search' is quite significant to denote that in respect of completed or nonpending assessments, the Assessing Officer is albeit duty bound to assess or reassess the total income but there is a cap on the scope of additions in such assessment, being the Items of income 'unearthed d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited on the last day i.e. at the end of the March. It gave rise to a doubt about the genuineness of this payment, and thus, the AO has rightly made disallowance. On the other hand, the ld.counsel for the assessee took us through page no.66 of the paper book wherein details in tabular form showing year-wise gross receipts from container freight station has been placed on record. According to the ld.counsel for the assessee, in the assessment year 2007- 08, gross receipt from this division was of ₹ 15,87,27,161/-. There is net profit at ₹ 4,51,76,919/-. The assessee is not having crane and other equipments. Thus, it has to pay crane hire charges as well as warehouse rent. Similarly, he pointed out that in the assessment year 2008-09, net profit of ₹ 4.88 crores. 8. We have duly considered rival contentions and gone through the record carefully. A perusal of the finding of the AO on this issue would indicate that the ld.AO failed to bring any material on record demonstrating as to how this expenditure are not genuine, or whether the assessee has made payment in excess of market rate. Though, the ld.CIT(A) has examined the issue with the angle, whether in absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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