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2022 (8) TMI 134 - AT - Income TaxValidity of assessment u/s 153C - Presumption - Scope of documents belongs to assessee - absence of the Satisfaction Note required to be prepared by the A.O. of the searched person - plea of the assessee that the books of account / documents seized during the course of search do not belong to the assessee and, therefore, the proceedings initiated under section 153C of the Act are bad–in–law - HELD THAT:- As in the present case, the documents which were found in possession of the Lexcorp Advisory Services Pvt. Ltd. (searched entity) were the draft financials provided by the assessee to the said entity for the purpose of finalisation of its accounts after perusing the same. It is not the case of the assessee that like the aforesaid two decisions, the original documents were in possession of the assessee, whereas, the photocopy was found in possession of the searched entity. We also don’t find any merit in assessee’s submission that draft financials were working papers of the searched entity, as the same were claimed to have been provided by the assessee. It has also not been denied that the draft financials were of the assessee company only. In the present case, even if the draft financials were provided by the assessee to the searched entity, the said documents continued to be ‘belonged to’ the assessee, as the services of the searched entity were sought only for the purpose of finalising the accounts and if at all anything can be said to be belonging to the searched entity, it can only be the final outcome of such exercise, for which searched entity’s services were availed. Analogically can be drawn with the situation where books / vouchers / bills etc. are provided to a consultant for preparation of accounts. In such a situation, the documents / books as provided and available with the consultant will always belong to the taxpayer. No infirmity in the impugned order passed by the learned CIT(A) on this issue. Accordingly, grounds raised in assessee’s appeal are dismissed. Disallowance u/s 14A - Appellant prays that the disallowance be restricted to the exempt income earned by it - assessee suo–moto made a disallowance under section 14A of the Act over and above the exempt income earned by the assessee - HELD THAT:- Recently, it has been held by various Hon’ble Courts that disallowance under section 14A has to be restricted to the dividend income earned. Accordingly, the assessee has made a fresh claim before us. We find that Hon'ble Supreme Court in Goetz India Ltd. [2006 (3) TMI 75 - SUPREME COURT] and Pruthvi Brokers and Shareholders Pvt. Ltd.[2012 (7) TMI 158 - BOMBAY HIGH COURT] has held that the appellate authority can entertain a fresh claim made by the assessee, even if such a claim was not made in return of income or by way of revised return of income. Further, as the issue raised by the assessee by way of additional ground of appeal is a legal issue, which can be decided on the basis of material available on record, we are of the view that the same can be admitted for consideration and adjudication in view of the ratio laid down by the Hon'ble Supreme Court in NTPC Ltd. [1996 (12) TMI 7 - SUPREME COURT] This issue, now raised by the assessee by way of additional ground, was not examined by any of the lower authorities, therefore, we deem it fit and proper to restore the same to the file of the Assessing Officer. We further direct the Assessing Officer to examine the claim of the assessee and decide the same in accordance with law. As a result, additional ground is allowed for statistical purpose.
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