CAPACITE ENGINEERING PVT LTD,MUMBAI vs. CIT-A-47, MUMBAI

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ITA 2358/MUM/2022Status: DisposedITAT Mumbai30 May 2023AY 2016-20173 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The tribunal held that since the additions were made dehors incriminating material found during the search and the assessment was unabated, the additions were unsustainable. Consequently, the disallowance of professional fees was deleted.

What were the facts?

The assessee's income was assessed under section 143(3) and later under section 153A after a search operation. Additions were made for late deposit of employee's PF contribution and professional fees. The CIT(A) deleted the PF addition but upheld the professional fees disallowance.

What were the issues?

Whether additions made under section 153A are sustainable when no incriminating material was found during the search and the assessment is unabated. The validity of disallowance of professional fees under section 40A(2)(a) in such circumstances.

Which sections of the Income-tax Act were involved?

Section 153A,Section 40A(2)(a),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI OM PRAKASH KANT, AM & SHRI N. K. CHOUDHRY, JM

For Appellant: Shri Vijay Mehta, Ld. AR
For Respondent: Shri Ram Prakash Rastogi
Hearing: 18.05.2023Pronounced: 30.05.2023

Heard together (2 matters)

I.T.A. No. 2358/Mum/2022
I.T.A. No. 2359/Mum/2022

Read from the judgment's own cause title. This page is filed under one of them.

Capacite Engineering Pvt. Ltd. CIT(A) – 47, 7th floor, Prathistha Bhavan, New B-5 & B-7, Wadala Shri Ram Vs. Industrial Estate, Sewri Wadala Marine Lines, Estate, G. D. Ambedkar Marg, Mumbai-400 020 Wadala West, Mumbai-400 031. PAN No. AAECC7224P Respondent) : Appellant) Appellant by : Shri Vijay Mehta, Ld. AR Respondent by : Shri Ram Prakash Rastogi, Ld. DR Date of Hearing : 18.05.2023 Date of Pronouncement : 30.05.2023 O R D E R

Per N. K. Choudhry, Judicial Member:

1.

The assessee/appellant herein has preferred these appeals against the orders even dated 22.12.2022 impugned passed by Ld. Commissioner of Income Tax (Appeals)-47, Mumbai {in short ‘Ld. Commissioner ’} u/s 250 of the Income Tax Act 1961 (in short ‘the Act’) for AY 2015-16 and 2016-17.

2.

In the instant appeal i.e. for AY 2015-16, the appellant declared its total income of Rs. 1,40,67,880/- by filing its return of income dated 29.09.15 for the year under consideration, which was subsequently selected for scrutiny u/s CASS and resulted into passing of the Assessment order

Lateron on dated 20.08.2019, search and seizure operation was conducted in the case of the assessee and consequently, notice u/s 153A was issued on 13.08.2020, in response to which, the assessee by filing its return of income declared the same income as declared in the original return of income. By considering the same, assessment order dated 26.07.2021 was passed u/s 143(3) r.w.s. 153A of the Act by which certain additions have been made in the income of the assessee by making disallowances of Rs. 4,87,674/- and Rs. 12,22,198/- respectively on account of deposit of employee’s contribution to PF funds after the due date as prescribed under the relevant statute and on account of professional fees paid to Mr. Vishyamitra Katiyal as per the provisions of section 40A(2)(a) of the Act.

3.

The assessee being aggrieved challenged the said additions before the Ld. Commissioner in the first appeal. The Ld. Commissioner though deleted the disallowance of Rs. 4,87,674/- qua late deposit of employee’s contribution to PF account, however, affirmed the disallowance of Rs. 1,22,198/- made as per the provisions of section 40A(2)(a) on account of professional fees paid to Mr. Vishyamitra Katiyal. Against the affirmation of addition, the assessee is in appeal before us.

4.

Having heard both the parties and perused the material placed on record. Admittedly the addition in hand which has been made by the AO and affirmed by the Ld. Commissioner, dehors the incriminating material found during the course of search u/s 132 or section 132A of the Act and the assessment of the assessee is unabated assessment, therefore as per the dictum laid down by the Hon’ble Apex Court in the case of PCIT vs. Abhisar Writer Pvt. Ltd. (supra), the addition in hand is un-sustainable, consequently, the same is deleted. this appeal, the facts and issue involved in the instant case are exactly similar, as involved in above appeal for AY 2015-16, therefore in view of our Judgment in ITA no. 2358/Mum.2022 , this appeal is also allowed.

7.

In the result, both the appeals filed by the assessee are allowed. Orders pronounced in the open court on 30 May, 2023. Sd/- Sd/- (Om Prakash Kant) (N. K. Choudhry) Accountant Member Judicial Member मुंबई Mumbai;िदनांक Dated : 30/05/2023 Sr.PS. Dhananjay आदेशकी�ितिलिपअ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/ The Appellant ��थ�/ The Respondent 2. 3. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 4. गाड�फाईल / Guard File आदेशानुसार/ BY ORDER,

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