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TMI Blog2014 (10) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... ided in favour of assessee. Assessment u/s 153A - HELD THAT:- there is no seized incriminating materials found during the course of search in this case, and without any evidence the AO has made addition of deemed dividend. The issue is squarely covered in favour of assessee and against the Revenue by the decision of Special Bench in the case of All Cargo Global Logistics Ltd., v. DCIT [ 2012 (7) TMI 222 - ITAT MUMBAI(SB)] as well as by the decision of Jai Steel (India) [ 2013 (6) TMI 161 - RAJASTHAN HIGH COURT] . As the issue is covered in favour of assessee, we confirm the order of CIT(A) deleting the addition. This common issue of Revenue s appeals is dismissed. Disallowance of loss incurred on account of expenses - HELD THAT:- As the issue is exactly identical and no incriminating materials were found during the course of search as noted by CIT(A), we confirm the order of CIT(A) in deleting the addition. This common issue of Revenue s appeals is dismissed. - IT(SS)A No.54-56/Kol/2011, IT(SS)A No.66-69/Kol/2011 - - - Dated:- 17-10-2014 - Shri Mahavir Singh, Judicial Member AND Shri Shamim Yahya, Accountant Member For the Assessee : Shri S.K.Tulsiyan, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before CIT(A), who confirmed on same reasoning. 4. We have heard rival contentions and gone through the facts and circumstances of the case. We find that AO has made disallowance on ad hoc basis @ 5% and there is no basis for making disallowance. We also observe that CIT(A) has simply confirmed the disallowance. Whether the disallowance by restricting @ 5% on account of business expenditure can be made or not in the absence of any reasoning? The disallowance purely by resorting to ad hoc method cannot be made. These are business expenditure, and in the absence of cogent reason, the disallowance should not have been made. We hold that disallowance made by AO is without any basis and hence deserves to be deleted. Accordingly, we delete the disallowance. This issue of assessee s appeal is allowed. 5. The next common issue in these three appeals of assessee in IT(SS)A No. 54- 56/Kol/2011 is as regards to the order of CIT(A) confirming the disallowance of employees contribution to ESI P.F. For this, assessee has raised identical worded grounds except the amount. The relevant ground as raised in IT(SS)A No.54/Kol/2011 for AY 2006-07 reads as under:- 3. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal 119 TTJ(Kol) 214. 4) That the Ld. CIT(A), Central-I, Kolkata is erred in deleting the addition on account of deemed dividend of ₹ 16,48,980/- relying on the case law of M/s LMJ International 119 TTJ (Kol) 214. IT(SS)A No.67/Kol/2011 3) That the Ld. CIT(A), Central-I, Kolkata is erred in deleting the addition on account of deemed dividend of ₹ 6,02,944/- relying on the case law of M/s. LMJ International 119 TTJ (Kol) 214. 8. Briefly stated facts are that there was a search and seizure operation carried out on the business and residential premises of the assessee on 04-10-2007 along with the Memani Group of cases. Accordingly, notice u/s 153A of the Act was issued and in response to the same, assessee filed return of income. The AO while framing the assessment made addition of deem dividend of ₹ 16,48,950/- and ₹ 8,44,353/- in AY 2002-03 and ₹ 6,02,944/- in AY 2003-04. The contention of the assessee was that this has already been considered in the original assessment framed u/s 143(3) of the Act and no new facts came to the knowledge of the revenue or any incriminating material was found during the course of search which suggests t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections 153A to 153C cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 139 (return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in the case of K.P. Varghese (supra). Consequently, it is held that it is not open for the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made. In view of the above discussion, the answer to the substantial question of law (iv) above is in the positive and against the appellant assessee, the other three questions consequently do not arise, and, as such, the appeal fails and is, therefore, dismissed. No costs. Registry is directed to place a copy of this judgment on record in each connected file. Admittedly, there is no seized incriminating materials found during the course of search in this case, and without any evidence the AO has made addition of deemed dividend. The issue is squarely covered in favour of assessee and against the Revenue by the decision of Special Bench in the case of All Cargo Global Logistics Ltd., v. DCIT(2012) 181 ITR (Trib) 106 (Mum) (SB) as well as by the decision of Hon ble Rajasthan High Court in the case of Jai Steel (India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal assessment framed u/s 143(3) of the Act and no new facts came to the knowledge of the revenue or any incriminating material was found during the course of search which suggests that assessee has not disclosed the income. The CIT(A) deleted the addition by holding that since there is no incriminating materials were found during the course of search, the addition cannot be subject-matter under the proceedings initiated u/s. 153A of the Act. Aggrieved, now revenue came in appeals before Tribunal on the above issues. 12. Admittedly, there is no seized incriminating materials found during the course of search in this case, and without any evidence the AO has made additions of the above expenses. The issue is squarely covered in favour of assessee and against the Revenue by the decision of Special Bench in the case of All Cargo Global Logistics Ltd., v. DCIT(2012) 181 ITR (Trib) 106 (Mum) (SB) as well as by the decision of Hon ble Rajasthan High Court in the case of Jai Steel (India) supra. As the issue is covered in favour of assessee, we confirm the order of CIT(A) deleting the addition. This common issue of Revenue s appeals is dismissed. 13. The next issue in IT(SS)A No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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