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Income Tax Appellate Tribunal, BENCH “C” MUMBAI
Before: HON’BLE S/SHRI JOGINDER SINGH (JM), & RAJESH KUMAR,(AM)
PAN : AAACK2499Q सुनवाई की तारीख /Date of Hearing : 24.10.2017 घोषणा की तारीख /Date of Pronouncement : 31.10.2017 आदेश / O R D E R PER RAJESH KUMAR, A. M: This is an appeal filed by the revenue challenging the order of the ld.CIT(A), Mumbai, dated 25.6.2014 for the assessment year 2005-06 wherein the Revenue has challenged the deletion of addition of Rs.5970/- by the FAA by placing reliance on the decision of Special Bench of the Tribunal in the case of Al Cargo Logistics Ltd (2010) 23 Taxman 103(Mum) as made by the AO u/s 14A of the Income Tax Act, 1961.
At the outset, we find that the revenue had filed this appeal on 5.9.2014 and Tribunal vide consolidated order dated 30.12.2015 decided the 2 /M um /20 1 4 appeals against the revenue being tax effect less than the monitory limit as prescribed by the CBDT in its circular No.21/2015 dated 10.12.2015. The Revenue by filing Miscellaneous Application No.399/Mum/2016 pointed out that the ld.CIT(A) has passed a consolidated order for AYs 2005-06 to 2011- 12, as in all the years issues relating to disallowance made u/s 14A was agitated before the ld.CIT(A). The Revenue during the course of hearing of MA No.399/Mum/2016 placed reliance on para 5 of the Circular of CBDT submitting that the appeal filed by the Revenue is not liable to be dismissed on the issue of monitory limit of Rs.10 lakhs as the total tax involved is more than Rs.10 lakhs in all the appeals. Accepting the contentions of the Revenue the Tribunal has recalled the Tribunal order vide order dated 18.8.2017 passed in MA No.399/Mum/2016 considering the prayer though the tax effect in all the cases is less than Rs.10 lakhs but the order passed by FAA has been passed for the assessment years 2005-06 to 2011-12, wherein consolidated tax effect is more than Rs.10 lakhs in all the appeals for the years under consideration filed by the Revenue. Hence, this is a recalled matter and is being decided by this order again.
Brief facts of the case are that a search and seizure action was under taken u/s 132(1) of the Income Tax Act, 1961 by the Addl. DIT (Inv.) Unit-II, Mumbai in the case of Rustomjee-Evershine Group on 21.10.2010. The case of the assessee was also covered in the search and as a result the case of 3 /M um /20 1 4 the assessee got centralized u/s 127(2) of the Act and hence notice u/s 153A of the Act was issued on 27.9.2011 requiring the assessee to file correct return of income for the assessment year 2005-06. During the assessment proceedings, the AO noticed that the assessee has dividend income of Rs.6,55,488/- which was claimed as exempt income by the assessee. The AO called upon the assessee to file details of expenses relating to earning of the said exempt income and also show cause as to why the disallowance u/s 14A should not be made. The AO, not convinced with the submissions of the assessee, worked out the disallowance at Rs.5970/- being 1% of the average amount of investments and added the same to the total income of the assessee. Aggrieved by the order of the AO, the matter carried before the ld.CIT(A) who deleted the addition made by the AO by observing and holding as under : “4.8. Ground 1 : Disallowance of Rs.5,9701- u/s. 14A of Income Tax Act. As regards the first ground of appeal
relating to disallowance u/s. 14A of the LT. Act., it is seen that the same is not based on any incriminating material found during the course of search. Furthermore, the assessment was earlier completed u/s. 143(3) for this assessment year. The Hon'ble IT AT Mumbai Special Bench in their order in the case of AI Cargo Global Logistics Ltd reported in (2010)
23. Taxman.com 103 (MUM)(SB) dated 06/07/12, after recording various case laws cited by the department and the appellants, in paragraph 58 held that "
Thus, question no. 1 before us is answered as under:
4 /M um /20 1 4 (c) any assessments that are abated the AO retains the original jurisdiction as well as the jurisdiction conferred on him u/s. 153A for which assessment shall be made for each of 6 assessment years separately. (d) In other cases, any addition to the income that has already been assessed, assessment u/s. 153A will be made on the basis of incriminating material, which in the context of relevant provision means: iii. Books of account, other documents found in the course of search but not produced in the course of original assessment ·and iv. Undisclosed income or property discovered in the course of search. In view of the above, the disallowance u/s 14A made by the AO is not tenable. Ground no.1 is therefore, allowed.”
We have heard the rival submissions and perused the material placed before us including the impugned orders. We are fully in agreement with the conclusion drawn by the ld.CIT(A) that no incriminating documents were found during the course of search and the addition of Rs.5970/- is not based on any incriminating documents found during the course of search. In our opinion, the ld.CIT(A) has correctly deleted the addition by relying on the ratio laid down by the Special Bench of the Tribunal in Al Cargo Logistics Ltd (2010) 23 Taxman 103(Mum). We are, therefore, inclined to uphold the same by dismissing the appeal of the revenue.