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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI GEORGE MATHAN & SHRI VIKRAM SINGH YADAV
आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:
These are three appeals filed by the Revenue against the consolidated Order of the Commissioner of Income Tax (Appeals)-18, Chennai, in 491 & 492/16-17 dated 27.09.2017 for the AYs 2009-10 to 2011-12 respectively.
Mr. M.Srinivasa Rao, CIT, represented on behalf of the Revenue and Mr. T.Banusekar, CA, represented on behalf of the assessee. -3188/Chny/2017 :- 2 -:
It was submitted by the Ld.DR that the assessee is a company which is doing the business of dealing in jewellery. It was a submission that there was a search on the premises of the assessee on 02.09.2014. As a consequence of search, notice u/s.153A was issued on 09.01.2015. The returns of income were filed by the assessee in response to the said notice on 16.06.2015. It was a submission that the assessments came to be completed u/s.143(3) r.w.s.153A on 30.12.2016, wherein, substantially two additions had been made. One on account of the disallowance by invoking the provisions of Sec.40A(2)(b) of the Act in respect of the lease rent paid by the assessee company to the Managing Director of the assessee company, Shri M.Kiran Kumar, in respect of the property at Door No.122, Usman Road, T.Nagar, Chennai, in respect of 4023 sq.ft. The second issue was disallowance made by applying the provisions of Sec.36(1)(iii) in respect of the interest on the excess lease rental advance paid by the assessee company to Shri M.Kiran Kumar, MD, in respect of the said property. It was a submission that on appeal, the Ld.CIT(A) had deleted the additions by holding that no incriminating material was found on account of the search. It was a submission that the order of the Ld.CIT(A) was liable to be reversed and that of the AO restored.
In reply, the Ld.AR vehemently supported the order of the Ld.CIT(A).
We have considered the rival submissions. -3188/Chny/2017 :- 3 -:
The Ld.AR drew our attention to the decision of the Hon’ble Supreme Court in the case of Principal CIT vs. Meeta Gutgutia reported in [2018] 96 taxmann.com 468 (SC), wherein, it has been categorically held that the provisions of Sec.153A cannot be invoked to re-open the concluded assessments of the assessment years earlier to year of search in the absence of incriminating material found during the search qua each such earlier assessment years. It was a submission that the Ld.CIT(A) has deleted the addition as no incriminating material had been found in each of the said assessment years. It was a submission that the order of the Ld.CIT(A) was liable to be upheld. A perusal of the order of the Ld.CIT(A) clearly shows that the Ld.CIT(A) has followed the decision of the Hon’ble Special Bench of the ITAT in the case of M/s.All Cargo Global Logistics Ltd., vs. DCIT reported in [2012] 137 ITD 0287 (SB), wherein, also it has been held that when the assessments are completed and no assessment is pending at the time of assessment u/s.153A, re-assessment can be made only if incriminating material are collected in the course of search. A perusal of the decision of the Hon’ble Supreme Court in the case of Principal CIT vs. Meeta Gutgutia also lays down the same principles. In these circumstances, respectfully following the principles laid down by the Hon’ble Supreme Court in the case of Principal CIT vs. Meeta Gutgutia as no incriminating material has been found in the course of search in the case of the assessee for the assessment years under appeal, the addition as made by the AO is unsustainable. Consequently, the findings of the Ld.CIT(A) on this issue stands confirmed. -3188/Chny/2017 :- 4 -:
In the result, the appeals filed by the Revenue are dismissed.