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Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: This appeal by the Revenue under section 253 of the Income Tax Act is directed against the order of Ld. Commissioner of Income Tax [ld. CIT(A)] (Appeals)-37, Mumbai dated 25.06.2014 for Assessment Year (AY) 2007-08.
The Revenue has raised the following grounds of appeal:
(i) “Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) was right in deleting addition of Rs. 2,37,68,669/- made u/s. 14A by placing reliance on the decision of the Hon’ble ITAT Mumbai Special Bench in the case of Al Cargo Logistics Limited (2010) 23 Taxman.com 103 (Mum) (SB), without appreciating the facts that the revenue has not accepted the said decision and it has filed appeal against the same before the Hon’ble Bombay High Court, which is still pending.
Brief facts of the case are that a search and seizure action was carried out in case of ‘Rustomjee-Evershine’ Group on 21.10.2010. The case of assessee was also covered in the search action. Notice under section 153A dated 27.09.2011 was issued to the assessee. In response to the notice under section 153A, the assessee filed return of income declaring total income of Rs. 1,519,44,849/-. The assessment was completed under section 143(3) r.w.s. 153A on 31.03.2013. The Assessing Officer (AO) while passing the assessment order besides other addition and disallowance disallowed Rs. 2,37,68,669/- under section 14A. On appeal before the ld. CIT(A), the disallowance under section 14A was deleted. The ld. CIT(A) deleted the disallowance under section 14A holding that is was not based on incriminating material found during the course of search conducted on 21.10.2010. Thus, aggrieved by the order of ld. CIT(A), the Revenue has filed the present appeal before us.
We have heard the ld. Departmental Representative (DR) for the Revenue and ld. Authorized Representative (AR) of the assessee and perused the material available on record. At the outset of hearing, the ld. AR of the assessee argued that the grounds of appeal
raised by Revenue is covered against the Revenue and in favour of assessee by the decision of Special Bench in All Cargo Logistic Ltd (2010)
23. Taxman.com 103(Mum)(SB) which has been affirmed by Hon’ble Bombay High Court in of 2013 dated 21.04.2015 along with case of Continental Warehousing Ltd. in ITA No. 523 of 2013, as the disallowance was not based on incriminating material seized during the search action. The ld. CIT(A) granted the relief on the basis of decision of Special Bench of Tribunal in case of All Cargo Logistics Ltd.(supra). The ld. CIT(A) after hearing the submission of ld. DR for the Revenue fairly conceded that the addition/disallowance made by AO under section 40A was not based on incriminating material.
4. We have considered the rival submission of the parties and have gone through the orders of authorities below. We have noted that the assessment under section 143(3) was completed on 30.11.2009. Search action in case of ‘Rustomjee-Evershine’ Group was made on 21.10.2010. The case of assessee was also covered in the said search. The AO while making the disallowance under section 14A, nowhere recorded that disallowance under section 14A is based on incriminating material found during the search action carried on 21.10.2010. The ld. CIT(A) while considering the contention of assessee relied upon the decision of Al Cargo Global Logistics Ltd. (2010) 23 taxmann.com 103 (Mum) (SB) dated 06.07.2012 and the decision of Hon’ble Delhi High Court in case of CIT vs. Anil Kumar Bhatia (2012) (82 CCH 113) (DHC) and deleted the disallowance under section 14A of the Act. Considering the fact that no addition could be made in unabated assessment in absence of incriminating material, we do not find any illegality or infirmity in the order passed by ld. CIT(A).