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TMI Blog2019 (7) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition made in the original assessment order. Thus, not only the addition made is not on the basis of any incriminating material found during the search, but, it was also subject matter of dispute in the original assessment order. That being the case, the AO could not have made the addition in the impugned assessment order. Disallowance of interest expenditure by applying the provisions of section 40A(2)(b) - HELD THAT:- It is a fact, in the impugned assessment order, the AO has repeated the same addition as was made in the original assessment order. If the addition made in the original order does not survive by virtue of the order passed by CIT(A) against the original assessment order, the same cannot survive in the assessment order passed u/s 143(3) r/w section 153C - the addition deserves to be deleted. Notably CIT(A) in the impugned order following the orders of the Tribunal for the preceding assessment years has held that interest rate of 19,5% per annum is reasonable. In any case of the matter, since the disputed addition is not on the basis of any incriminating material, it has to be deleted - decided in favour of assessee - ITA no.2713, 2714, 2715, 2716 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was carried out in case of Lilawati Kirtilal Mehta Medical Trust on 11th April 2011. On the basis of certain information found in the course of search and seizure operation, proceedings under section 153C of the Act was initiated against the assessee for the assessment year under dispute. Ultimately, the Assessing Officer completed the assessment for the aforesaid assessment year under section 143(3) r/w section 154C of the Act by making some additions to the income of the assessee. 6. Being aggrieved with the assessment order so passed, assessee preferred appeal before the first appellate authority, inter alia, on the ground that initiation of proceedings under section 153C of the Act is invalid. Learned Commissioner (Appeals), however, upheld the validity of the proceeding initiated under section 153C of the Act. 7. We have heard the learned Departmental Representative and perused the material on record. As it appears from the grounds, the main plank on which the assessee has challenged the initiation of proceeding under section 153C of the Act is due to lack of satisfaction recorded by concerned authorities for issuance of notice under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directions of the Tribunal. 10. Having heard the learned Departmental Representative, we find that the addition made by the Assessing Officer is not on the basis of any incriminating material found as a result of search and seizure operation. In fact, the Assessing Officer has simply repeated the addition made in the original assessment order. Thus, not only the addition made is not on the basis of any incriminating material found during the search, but, it was also subject matter of dispute in the original assessment order. That being the case, the Assessing Officer could not have made the addition in the impugned assessment order. Accordingly, we delete the addition. These grounds are allowed. 11. In the result, appeal is partly allowed. ITA no.2714/Mum./2017 Assessee s Appeal A.Y. 2008 09 12. Grounds no.1 and 2, are similar to grounds no.1 and 2, raised by the assessee in its appeal being ITA no.2713/Mum./2017. Following our decision given therein, these grounds are also dismissed. 13. Grounds no.3 and 4, are more or less identical to grounds no.3 and 4, raised by the assessee in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciding the issue, the learned Commissioner (Appeals) held that interest paid @ 19.5% is to be allowed. 19. We have heard the learned Departmental Representative and perused the materials available on record. Undisputedly, the addition made on account of interest disallowance by invoking the provisions of section 40A(2)(b) of the Act was a subject matter of dispute arising in the original assessment order and while deciding such issue in the appeal arising out of the original assessment order, the learned Commissioner (Appeals), vide order dated 1st January 2016, has deleted the addition. It is a fact, in the impugned assessment order, the Assessing Officer has repeated the same addition as was made in the original assessment order. If the addition made in the original order does not survive by virtue of the order passed by the learned Commissioner (Appeals) against the original assessment order, the same cannot survive in the assessment order passed under section 143(3) r/w section 153C of the Act. That being the case, the addition deserves to be deleted. Notably, learned Commissioner (Appeals) in the impugned order following the orders of the Tribunal for the prece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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