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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI PAWAN SINGH, JM
सुनवाई क� तार�ख / : 04.10.2017 Date of Hearing घोषणा क� तार�ख / : 11.10.2017 Date of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: This appeal by the assessee is directed against order of learned CIT-A dated 08.07.2016 and pertains to assessment year 2007-08. The grounds of appeal read as under:
1. On facts & circumstances of the case and in law the learned CIT(A) has erred in upholding the addition made by the AO of Rs,4,62,909/- under the head income from house property in respect of the flat at Sagar Villa, which was estimated by the AO. The CIT(A) further erred in rejecting the appellant's argument that since the property was co-owned and the co-owner having
(A.Y. 2007-08) Mr. Bhavesh P. Gandhi vs. ACIT occupied the same, the ALV of the property was Rs.NIL. Without prejudice to the above, the ALV estimated by the AO in respect of the appellant's share in Sagar Villa is excessive.
2. On facts & circumstances of the case and in law the learned CIT(A) has erred in rejecting the appellant's plea that the addition made of Rs.4.62 Lakhs as stated in the above ground is bad in law.
The assessee has also raised an additional ground of appeal
which reads as under:
1. On facts and circumstances of the case and in law the learned CIT(A) has erred in confirming the addition of Rs.4,62,909/- in the assessment u/s. 153A of the Income Tax Act, as no relevant or incriminating material or evidence was found or seized during the course of the search reflecting the income of Rs.4,62,909/-.
3. For admission of this additional ground, the assessee has made following prayer : Ground Nos. 1 & 2 are additional legal Grounds, which go to the root of the appeal and it is humbly prayed that by following the decisions in Jute Corporation of India v. CIT – 187 ITR 688 (Supreme Court), Ahmedabad Electricity Co. Ltd. v. CIT – 199 ITR 351 (Bom.) & CIT v. Prithvi Brokers & Shareholders Pvt. Ltd. – 349 ITR 336 (Bom.), the same be admitted.
At the outset it is noted that there is a delay of nine days in filing the appeal. The reasonable cause for the delay has been attributed to the illness of the ld. Counsel.
Upon hearing both the counsels and perusing the records, we condone the delay.
At the outset we deal with the additional ground. This ground is a legal ground and goes to the root of the matter. The case laws relied upon by the ld. Counsel of the assessee for admission of additional ground and germane. Accordingly, we admit the additional ground. Since the additional ground goes to the root of the matter, we deal with the same at the outset.
(A.Y. 2007-08) Mr. Bhavesh P. Gandhi vs. ACIT 7. In the additional ground, it has been urged that no relevant incriminating material or evidence was found and seized during the course of search reflecting the income of Rs.4,62,909/-, which has been added by the Assessing Officer (A.O.). Hence, it has been pleaded that no such addition is permissible, since it is an assessment u/s. 153A and original assessment in this case was duly completed u/s. 143(3). Thus it is the assessee's plea that because no incriminating material found during search, this addition is not sustainable. In this regard, the ld. Counsel of the assessee has placed reliance upon several case laws including that from the Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78 (Bom), order dated 21.04.2015.
Per Contra, the ld. Departmental Representative (DR) could not point out that any incriminating material for the addition made was found during search.
We find that Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra) has expounded that in case of an unabated assessment which has became final, no addition can be made when no incriminating material is found. Thus, we find when the assessment had been duly completed u/s. 143(3), addition in assessment u/s. 153A cannot be made dehors any incriminating material found in search. It is an admitted position in this case that no incriminating material qua the addition made in this case was found. Hence, respectfully following the precedent as above, we hold that the addition in this case is not sustainable.
Since we have already allowed the appeal on the addition ground that the addition is not sustainable dehors any seized material, we are not engaging into the adjudication on the merits of the case, as the same is now only of academy interest.