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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The Revenue filed all these appeals against the orders of the Commissioner of Income Tax (Appeals)-19 (Incharge), Chennai in 113 to 115/2017-18 dated 02.04.2018 for assessment years 2009-10 to 2012-13, respectively.
:-2-: to 2088/Chny/2018
2. M/s. Mailam Subramaniya Swamy Educational Trust, the assessee, is engaged in the field of imparting Engineering Education and part of “Shri Manakula Vinayagar Education Trust”, Puducherry. A search and seizure operation was conducted in the case of Shri Manakula Vinayagar Education Trust on 17.07.2014. Thereafter, the Assessing Officer has framed assessments u/s. 143(3) r.w. 153A for assessment years 2009-10 to 2012-13. While doing so, the AO disallowed the cost of fixed assets purchased out of borrowed funds holding that it was not acquired out of the donations received by the assessee. Further, in respect of the depreciation claimed on the assets which were acquired from the income allowed as application of income in the earlier years, he refused to allow depreciation stating that it is double deduction. Aggrieved against all these assessment orders, the assessee filed appeals before the CIT(A). The CIT(A) passed the consolidated orders in which relying on the following orders, he allowed the appeal holding, inter alia, that the AO has not roped in any seized material while making the impugned additions. In view of that the impugned additions cannot be sustained and accordingly, he allowed the appeals.
“a. Special bench of the ITAT in the case of All Cargo Global Logistics - to 5022 & 5059/M/2010 b. Commissioner of Income-tax-20 v. Deepak Kumar Agarwal - [2017] 86 taxmann.com 3 (Bombay) - High Court of Bombay
:-3-: to 2088/Chny/2018 c. Commissioner of Income Tax, Central III Vs. Kabul Chawla - [2015] 61 taxmann.com 412 (Delhi) - High Court of Delhi d. Principal CIT, Central -2, New Delhi v.MeetaGutgutia - [2017] 86 taxmann.com 3 (Bombay) - High Court of Delhi e. Principal Commissioner of Income-tax-4 v. Saumya Construction (P.) Ltd. -[2017] 81 taxmann.com 292 (Gujarat) - High Court of Gujarat f. ACIT, Centre Circle Vs. Kurele Packaging (P) Ltd - 2010 - ITAT Delhi g. ACIT, Centre Circle Vs. Limelight Towers Pvt. Ltd - ITA No.2673/DEL! 2010 — ITAT Delhi h. ACIT, Centre Circle Vs. Manidevi Agarwal - ITA No.4531, 4566, 876, 877 ,878 /Mum/2011 - ITAT Mumbai.”
Aggrieved against those orders, the Revenue filed similar grounds in respect of each of the assessment year and hence one of the grounds of appeal is extracted as under:
“1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
The Ld. CIT(A) erred in deleting the disallowance of Rs.19,25,213/- made by the Assessing officer on account of assets procured through borrowed funds in the assessment for AY 2009-10 passed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961, in the assessee’s case.
3. The Ld. CIT(A) erred in deleting the disallowance of Rs.1,23,81,327/- made by the Assessing Officer towards depreciation of assets in the assessment for AY 2009-10 passed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1951, n tie assessee’s case. 3.1 The Ld. CIT(A) erred in holding that additions in assessment u/s 153A of the IT Act can be made only based on incriminating documents seized, when as per section 153A of the IT Act, the AO is required to assess the total income of the assessee for each assessment year falling within the six assessment years immediately preceding the previous year in which search was conducted.
:-4-: to 2088/Chny/2018
3.2 The Ld. CIT(A) ought to have appreciated that the decision of the ITAT, Mumbai bench in the case of All Cargo Global Logistics Ltd. is being contested by the revenue and is pending before the Hon’ble Supreme Court. 3.3 The Ld. CIT(A) erred in not following the ratio of the decision of the Hon’ble Kerala High Court in the cases of CIT Vs. St. Francis Clay Decor Tiles (385 ITR 624)(2016), CIT Vs. Promy Kuriakose (386 ITR 597) as well as EN. Gopakumar Vs. CIT, Central(2016)[75 taxmann.com 215(390 ITR 131), wherein The Hon’ble High Court has held that it is not necessary that the search on which an assessment was founded, should have necessarily yielded any incriminating material against the assessee or a person to whom notice u/s 153A was issued 4. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored.”
The Ld DR presented the cases on the lines of the grounds of appeals and supported the orders of the Ld. AO. None was present for the assessee.
We heard the Ld. DR, gone through the relevant material. The Revenue filed these appeals on the basis of judgement of Kerala High Court in CIT vs M/s. Francis Clay Decor Tiles (2016) 385 ITR 624 etc.
The Hon’ble Delhi High Court has taken a contrary view as that of the Hon’ble Kerala High Court. The Special Leave Petition filed by the Revenue against the judgement of Delhi High Court was dismissed by the Apex Court in Principal CIT vs Meeta Gutgutia (2018) 96
:-5-: to 2088/Chny/2018 Taxmann.com 468. Though, the order of the Special Leave Petition may not lay down any law, however, prima facie, the Apex Court approved the judgement of Delhi High Court. Thus, there are two High Court judgements, one is in favour of Revenue and another one is in favour of assessee. When there are two conflicting views, this tribunal is of the considered opinion that the view in favour of the assessee has to be followed. Therefore, in the absence of incriminating material found in the course of search & seizure operations, we hold that there cannot be any addition u/s. 153A.
Therefore, this tribunal find no reason to interfere with the impugned orders of the Ld. CIT(A) and accordingly we confirm them.
Consequently, all the above Revenue’s appeals are dismissed.
In the result, the Revenue’s appeals are dismissed.
Order pronounced on Thursday, the 06th day of December, 2018 at Chennai.