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TMI Blog2019 (2) TMI 1812X X X X Extracts X X X X X X X X Extracts X X X X ..... respective orders of the ld.CIT(A) passed for the assessment years from Asst.Years 2007-08 to 2012-13. 2. In the first of appeals, assessee, viz. Shri Jivraj V. Desai is in appeals against orders of the ld.CIT(A) of even dated i.e. 31.1.2017 passed for the Asstt.Years 2007-08, 2008-09, 2009-10, 2010-11 and 2012-13. 3. In the second set of appeals, Revenue is in appeals against the orders of the ld.CIT(A) of even dated i.e. 27.1.2017 for the Asstt.Years 2007-08, 2008-09, 2009-10 and 2010-11 and the assessee, viz. Shri Rajnibhai Jivraj Desai is in cross-appeal against the order of the ld.CIT(A) for the Asstt.Year 2009-10. 4. In the third set of appeals, the assessee i.e. Shri Rameshbhai J. Desai and Revenue are in cross appeal against the order of the ld.CIT(A) dated 26.12.2016 for the Asstt.Year 2007-08. While remaining one appeal is by Smt.Alkaben R. Desai against the order of the ld.CIT(A) dated 28.11.2016 for the Asstt.Year 2009-10. 5. Since all these appeals are inter-related and raise more or less common issue, we proceed to dispose all of them by this common order for the sake of convenience. 6. To begin with, we take first set of assessee s appeals in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial has been furnished to substantiate the claim of the assessee. The AO also made addition under section 14A r.w.s Rule 8D on the ground that assessee has investment which formed part of exempt income. Though the assessee has claimed that it has not incurred any expenditure for earning exempt income, the AO made addition by applying Rule 8D of the Income Tax Rules. Aggrieved by the above additions, the assessee went in appear before the ld.CIT(A), who after considering the issue in details and considering the judgment of Hon ble jurisdictional High Court in the case of CIT Vs. Saumya Construction, Tax Appeal No.24 of 2016 dated 14.3.2016 deleted the impugned additions. Aggrieved Revenue is now in appeal before the Tribunal. 13. Assessee in the cross-objection in IT(SS)A.No.105/Ahd/2017 for the Asstt.Year 2009-10 also challenged validity of proceedings under section 153A of the Act and addition of ₹ 46,49,277/- made towards bad debts/business loss which was confirmed by the ld.CIT(A). 14. Briefly stated facts are that during the assessment proceedings the AO noticed that the assessee has claimed bad debts amounting to ₹ 46,49,227/- which have been written off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal are worth to note, which reads as under: 6. The question before us is, whether any incriminating material was found showing that the assessee has wrongly claimed exemption under section 10(38) of the Act during the course of search. The AO has not made reference to any documents or information which came to his possession during the course of search. This is the assessment year 2008-09. According to the AO, original return was filed under section 139 at NIL amount. Notice under section 143(2) appears to have not been issued upon the assessee on the original return. In this background, let us first take up proposition laid down by Hon ble Courts on scope of section 153A of the Income Tax Act,1961. The Hon ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra) have examined scope of section 153A. After a detailed analysis Hon ble Court has summarized legal proposition emerging out for application of section 153A. Such proposition reads as under: 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. Once a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made known in the course of original assessment. 7. It is also pertinent to note that in the case of CIT Vs. Kabul Chawla (supra) Hon ble Court has observed that return for Asstt.Years 2002-03, 2005-06 and 2006-07 were accepted under section 143(1) of the Act. Thus, Hon ble Court has considered this acceptance of return as an assessment made under section 143(1). In concluding paragraph, the Hon ble Court has held that on the date of search, assessments for A.Ys. 2002-03, 2005-06 and 2006-07 already stood completed and no incriminating material was unearthed during the search, therefore, no addition should have been made to the income of the assessee. 8. It is pertinent to take note the finding recorded by the Hon ble jurisdictional High Court in the case of Saumaya Construction Ltd. (supra) in para 18 and 19 of the judgments. It reads as under: 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 9. As observed earlier, a perusal of the assessment order would indicate that the ld.AO has not made reference to any seized material found during the course of search while considering this issue. Therefore, disallowance under section 10(38) of the Act is beyond the scope of section 153A and not sustainable. We allow this ground and delete impugned disallowance. 18. Considering the above decisions of the ITAT, Ahmedabad Bench and the judicial findings, we do not find any infirmity in this finding of the ld.CIT(A), and therefore, we confirm his orders on these issues and reject all the grounds of appeals of the Revenue. 19. So far as appeal of the assessee is concerned qua addition of bad debts/business loss, we allow this ground for the reasons recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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