Indian Kanoon - Search engine for Indian Law

IT(SS)A No. 378/Ahd/2018 (A.Y. 2010-11):-

2. The appellant has challenged the disallowance of interest paid of Rs. 3,17,664/-

in a search proceeding where no incriminating material found. Under the circumstances the disallowance so made is invalid, without sanction of law and the same is liable to be deleted as the case made out by the appellant before us.

                                 -2-                          IT(SS)A Nos.378&379/Ahd/2018
                                                       M/s. New India Angadia Service vs. ITO
                                                                    A.Ys. 2010-11 & 2011-12

3. The assessee firm engaged in the business of Angadia Services filed its return of income for A.Y. 2010-11 on 28.06.2010 declaring total income at Rs. 1,74,480/- which was duly processed under Section 143(1) of the Act. Subsequently, a search under Section 132 of the Act was carried out at the branch office of the assessee at Kalaburagi on 30.03.2015 relevant to Assessment Year 2015-16. Notice under Section 153A of the Act was issued requesting the assessee to file its return of income for A.Y. 2010-11. In response to the same on 25.11.2006 the return of income declaring income of Rs. 1,74,480/- was filed by the assessee. Notice under Section 143(2) r.w.s. 153A and under Section 142(1) of the Act dated 28.11.2016 was issued.

                                      -3-                               IT(SS)A Nos.378&379/Ahd/2018
                                                                 M/s. New India Angadia Service vs. ITO
                                                                              A.Ys. 2010-11 & 2011-12

It was further submitted by the Ld. AR that the issue is squarely covered by the judgment passed by the Hon'ble Jurisdictional High Court in the matter of PCIT vs. Saumya Construction Pvt. Ltd., reported in (2016) 387 ITR 0529 which was followed by the Ld. CIT(A) in subsequent Assessment Years 2012-13 and 2013-14 a copy of each of the said orders have been duly filed before us.

                                      -4-                               IT(SS)A Nos.378&379/Ahd/2018
                                                                 M/s. New India Angadia Service vs. ITO
                                                                              A.Ys. 2010-11 & 2011-12

12/219,221/DCIT -CC-2(3)/14-15 dated 2.11.2016 in which also, following the judgment of jurisdictional high Court, it is held that in the finally concluded assessments framed u/s 153A/153C, the AO is not authorized to "interfere" except on the basis of and except having been prompted by incriminating seized documents relatable to that assessment year and that additions made dehors any incriminating seized material in case of unabated assessments are without requisite authority and are deleted. Certain orders issued by present incumbent in CIT(A)-12, Ahmedabad handling Assessments completed by the Central Charge were brought to my notice wherein a similar view is being taken even in year 2018. In view of this factual position and considering the legal position emerging from the judgments of Hon'ble Gujarat High Court and the High Court of Delhi as mentioned above as also, from the judgments of other Hon'ble High Courts and Hon'ble ITAT relied on in the said judgments, I am inclined to agree with the appellant that additions made by the AO in the instant case of unabated assessment is not permissible since they are not made on the basis of any incriminating material found during the course of search . This legal ground no.1 is thus allowed.