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2019 (9) TMI 656 - AT - Income TaxBlock assessment proceeding u/s 158BC(c) - Disallowance u/s 40A(3) - HELD THAT:- Answer to the question whether any disallowance can be made u/s 40A(3) while passing the block assessment order ? is no. The addition which needs to be made u/s 158BC (c) of the Act is the addition on the basis of the documents found during the course of search. Where this was the position as far as Section 158BC(c) assessment was considered and the provisions of Section 40A(3) of the Act are outside the ambit of block assessment, which is the proposition laid down by Pune Bench of the Tribunal in the case of ACIT Vs. Rushiraj Builders [2012 (2) TMI 686 - ITAT PUNE] . Applying the said proposition to the facts of the case, we hold that there is no merit in making the aforesaid disallowance u/s 40A(3) - decided in favour of assessee Unexplained investment during block period - as per assessee once the addition has been made in one of the hands, then there is no question of making same addition in the hands of the partnership firm - HELD THAT:- In facts and circumstances, when both the partners of the partnership firm were of 20 years of age and were still studying, then and also where the investment has been admitted to have been made by Shri Subash G. Pingale, there is no question of rejecting the plea of the assessee in this regard. Accordingly, we reverse the orders of the authorities below and hold that once the addition has been made in the hands of Shri Subash G. Pingale, may be, the block assessment was not upheld on technical grounds, but where the partners were minors and were studying and had no source of income, then no addition is warranted in the hands of the partnership firm. Charge of interest u/s 158 BFA(1) - whether the said interest levied for filing the return late for the block period is to be upheld or not ? - HELD THAT:- As plea of the assessee before us is that the delay was on the ground that Assessing Officer had not provided the photo copies of the documents. The learned Authorised Representative has pointed out that the issue stands covered by the order of the Pune Bench of the Tribunal in the case of ACIT Vs. Mr. Amod Subhash Pingale [2016 (7) TMI 1542 - ITAT PUNE] . The said paras are being referred to but are not being reproduced for the sake of brevity. In its order the Tribunal has already decided the said issue and remitted the matter back to the file of AO. In view of the same and following the same parity of reasoning, we direct the AO to follow our directions in this regard and re-compute the interest, if any, leviable. Charging of surcharge - HELD THAT:- Search was for the period prior to 01.06.2002 and no surcharge is to be levied in such cases. Such is the proposition laid down by Tribunal in the case of Mr. Amod Subhash Pingale [2016 (7) TMI 1542 - ITAT PUNE] and following the same, we hold that no surcharge is leviable.
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