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TMI Blog2018 (4) TMI 1822X X X X Extracts X X X X X X X X Extracts X X X X ..... ny and, therefore, the expenditure incurred on feasibility study was to be allowed as revenue expenditure. As nothing new has been brought on record by the Department subsequent to the earlier order of the ITAT and nothing new or incriminating was found during the course of search, we hold that the expenditure incurred on feasibility study is to be allowed as revenue expenditure and accordingly we allow the grounds raised by the assessee in this regard. Disallowance u/s 14A - Admittedly, the assessee had not earned any dividend income during the year under consideration and, therefore, no disallowance under section 14A could be made. It is seen that with respect to this disallowance also nothing incriminating was found during the course of search and, therefore, in absence of any evidence to the contrary being demonstrated by the Department, since the assessee has not earned any dividend income during the year under consideration, we find no reason to interfere with the findings of CIT (Appeals) in this regard and we deem it fit dismiss the grounds raised by the Department. Ad hoc disallowance to the extent of 5% of the total foreign travelling expenses - as per AO disallowance sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143 (3) of the Income Tax Act. It has been submitted by the Ld. authorised representative that this issue had earlier been decided in favour of the assessee in ITA No. 4006/DEL/13 by following the earlier order of the ITAT in assessee s own case for assessment years 2007 08 and 2008-09 as well as assessment year 2009 10. It has also been submitted that this additions is identical to the one which had been made by the assessing officer in the earlier assessment order passed under section 143 (3) of the Income Tax Act, 1961 (hereinafter called the Act ) and which had been examined and adjudicated upon by the ITAT in an earlier appeal filed by the assessee against the original assessment order prior to search in ITA No. 3260/DEL/13. It has been submitted that the addition made under section 153A was identical and the same as was made in the original assessment order which was passed at an earlier date for this assessment year. It was submitted that the issue in dispute is fully covered in favour of the assessee by virtue of the earlier order of the ITAT. It was also submitted that no incriminating material was found during the course of search with respect to this addition. 2.1 With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in the assessee s own case as aforementioned we allow these grounds raised by the assessee. 6.1 As far as the issue of disallowance of professional charges paid for feasibility study is concerned, it is seen that no new fact or incriminating material was unearthed during the course of search with respect to this issue and no new material fact has been brought on record even during the course of proceedings before us. We find that this issue has been earlier settled in favour of the assessee in assessee s appeal for assessment year 2009 10 in the original assessment proceedings wherein it had been held that the expenditure on feasibility study pertained to expansion of business by way of acquisition. The Tribunal had noted that no new asset had come into existence nor any benefit of enduring nature had resulted for the assessee company and, therefore, the expenditure incurred on feasibility study was to be allowed as revenue expenditure. As nothing new has been brought on record by the Department subsequent to the earlier order of the ITAT and nothing new or incriminating was found during the course of search, we hold that the expenditure incurred on feasibility stud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g ITAT s earlier orders in assessee s own case for assessment years 2007 08 and 2008-2009, had decided the issue in favour of the assessee. The Ld. authorised representative submitted that no new fact or any incriminating material was found with respect to foreign travelling expenses during the course of search and, therefore, this addition did not have any feet stand on. 10. In response, the Ld. CIT DR submitted that the Ld. CIT (Appeals) had erred in restricting the disallowance to 5% and it was vehemently argued that the disallowance should be restored to 10% of the total expenditure on foreign travelling. 11. Coming to ground No. 2 raised by the Department, the Ld. authorised representative submitted that this ground challenges the deletion of ₹ 45,89,679/- out of the total addition of ₹ 66,62,690/- made by the AO for the first time in the order passed under section 153A of the Act. The Ld. authorised representative submitted that during the course of search, certain documents pertaining to scrap sale were seized. These documents indicated that the assessee was billing the scrap at rates lower than the rates at which the scrap was actually being sold. The AO made ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Department in this regard. It is settled law that there is no scope for extrapolation in assessment framed under section 153A of the Act and the additions can be made only with reference to incriminating material found during the course of search. This view supported by another judgment of the Hon ble Delhi High Court in the case of Principal CIT versus Smt. Anita Rani reported in 392 ITR 501 (Delhi). Another judgment of the jurisdictional High Court to the point is Principal CIT versus Kurele Paper Mills (Private) Limited reported in 380 ITR 571 (Delhi). Therefore, in view of the finding of fact by the Ld. CIT (Appeals) that incriminating material found in respect of the scrap sales amounted to ₹ 20,73,211/- only and further in view of the judgments of the Hon ble Delhi High Court as aforementioned, we find no reason to interfere with the findings of the Ld. CIT (Appeals) on this issue and we, accordingly, dismiss ground No. 2 of the Department s appeal. 15. In the result assessee s appeal bearing ITA No. 4298/DEL/2015 is allowed whereas Department s appeal bearing ITA No. 4456/DEL/ 2015 is dismissed. 16. Assessment Years 2011-12 and 2012-13 : In both these years, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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