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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SH. H. S. SIDHU & SH. R. K. PANDA
PER R.K. PANDA, AM:
This appeal filed by the assessee is directed against the order dated 24.11.2014 of the CIT(A)-30, New Delhi relating to A. Y. 2006-07.
The grounds raised
by the assessee are read as under :-
1. That the order passed by the Assessing Officer and Commissioner of Income Tax (Appeals)-XXX, New Delhi are bad in law and void ab-initio
2. That on the facts and circumstances of the case and in law the CIT(A) erred in sustaining the disallowance of Rs.13,45,626/- u/s 40A(3) of the IT Act despite the fact that no deduction in respect of said sum was claimed in the computation of income from business. 3. The appellant craves permission to add, amend, alter or vary all or any grounds of appeal on or before the date of hearing of the appeal.
3. Facts of the case, in brief, are that the assessee is a company. The original assessment in this case was completed u/s. 143 (3) on 03.12.2009 at an income of Rs.2,16,33,051/- after making various additions including the addition of Rs.13,45,626/- on account of disallowance u/s.40A(3). Subsequently a search and seizure operation was carried out at various premises of M/s. BPTP Limited and its group concerns and associated persons on 07.12.2010 which was finally concluded on 05.02.2011. The case of the assessee was also covered. In response to notice u/s. 153 A the assessee filed its return of income on 30.01.2012 declaring total income of Rs.Nil. Since the disallowance of Rs.13,45,626/- made by the Assessing Officer in the original assessment order was upheld by the CIT(A), the Assessing Officer in the order passed on 28.03.2013 u/s. 153A of the IT Act, 1961 made the addition of Rs.13,45,626/- u/s.40A(3). He also made another addition of Rs.16,85,489/- u/s 2 (22) (e) which was deleted by the CIT(A) for which the revenue is not in appeal and therefore, we are not concerned with the same.
4. So far as the addition of Rs. 13,45,626/- made by the Assessing Officer u/s. 40A (3) is concerned the Ld. CIT(A) upheld the action of the Assessing Officer.
5. Aggrieved with the order of the CIT(A), the assessee is in appeal before the Tribunal. Page | 2
The Ld. Counsel for the assessee submitted that the Tribunal vide order dated 13.06.2015 has decided the issue of addition made u/s. 40A(3) and deleted the addition. Therefore, since the amount has already been delete by the Tribunal in assessee’s own case, therefore, the same cannot be added again by the Assessing Officer. Even otherwise also since no incriminating material was found during the search, therefore, in view of the decision of Hon’ble Delhi High Court in the case of Kabul Chawla reported in 380 ITR 573 the addition is not sustainable.
The Ld. DR on the other hand tried to distinguishing the decision of the Tribunal in assessee’s own case wherein the addition was deleted on merit. 8. Relying on various decisions he submitted that decision of the Tribunal deleting the addition on merit which was made by the Assessing Officer u/s. 40A(3) is not correct and the same is to be upheld. He accordingly submitted that the order of the CIT(A) sustaining the addition made by the Assessing Officer should be upheld. 9. We have considered the rival arguments made by both the sides and perused the orders of the lower authorities. We find the only issue to be decided in the impugned appeal is regarding the addition of Rs.13,45,626/- made by the Assessing Officer u/s. 40A(3). We find, the Assessing Officer while making the addition at para 6 of the order has stated as under :- 6. As far as addition of Rs.13,45,626/- made on account of disallowance u/s. 40A93) is concerned, the same has been confirmed by the CIT(A), hence this addition on this account is again made to the income of the assessee for reason discussed in detail in the previous assessment order as well as in the order of the CIT(A).
We find the Ld. CIT(A) upheld the addition made by the Assessing Officer. In our opinion the addition so upheld by the CIT(A) cannot be sustained for two reasons. Firstly, the Tribunal in assessee’s own case vide order dated 16.06.2015 has deleted the addition. Since the order of the Tribunal was subsequent to the order of the CIT(A), therefore, the Ld. CIT(A) did not have the benefit of this order. Therefore, once the issue has been decided by the Tribunal in assessee’s own case for the same assessment year in an issue, the same cannot be made again in the order passed u/s. 153A. The various decisions relied by the Ld. DR cannot be applied to the facts of the present case since the Tribunal has taken a conscious decision on the very issue and after elaborately discussing has deleted the addition made by the Assessing Officer u/s. 40A(3) which was upheld by the CIT(A). Therefore, the addition made by the Assessing Officer and upheld by the CIT(A) cannot be sustained.
Even otherwise also it is an admitted fact that no incriminating material was found during the course of search which is evident from the assessment order. The very basis of the addition made by the Assessing Officer as reproduced in the preceding paragraphs shows that the addition is made on the basis of the original assessment order which was upheld by the CIT(A). Since the addition is not based on any incriminating material found during the course of search, therefore, relying on the decision of Hon’ble Delhi High Court in the case of Kabul Chawla (supra) we are of the considered opinion that the addition cannot be sustained. We accordingly set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. The grounds raised
by the assessee are accordingly allowed.
12. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 20.06.2019.