TMI Blog2012 (10) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... ere invested in the company with which the assessee had no business - disallowance of interest is confirmed - Decided against the assessee - ITA No. 39/Mum/2010, ITA No. 40/Mum/2010, ITA No. 41/Mum/2010 - - - Dated:- 12-10-2012 - SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER Appellant by : Shri V.G. Ginde Respondent by : Shri K.C.P. Patnaik ORDER PER RAJENDRA SINGH, AM: These appeals of the assessee are directed against the common order dated 23.10.2009 of CIT(A) for the assessment years 2004-05 to 2006-07. The disputes raised in these appeals relate to disallowance of interest. The assessee has also raised additional grounds challenging the jurisdiction to make assessment unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO had no jurisdiction to make any addition under section 153A of the Act. It was also submitted that the same issue had already been considered and decided by the Special Bench of the Tribunal in the case of M/s. All Cargo Global Logistics Ltd. vs. DCIT in ITA No.5108 to 5022 and 5059/M/2010 order dated 6.7.2010 in which the Tribunal has held that in the case where assessment had got abated, AO retains original jurisdiction as well as jurisdiction conferred on him under section 153A to assess/re-assess total income and in other cases assessment under section 153A had to be made on the basis of only incriminating material. It was also submitted that this issue was covered by the decision of the Tribunal in the case of Shri Atithi N. Patel ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no question of abatement of any proceedings. Therefore, in view of decision of Special Bench (supra), in assessment year 2004-05, addition can be made only on the basis of incriminating material found in the course of search. In this case the disallowance of interest was not based on seized material and therefore, AO had no jurisdiction to make in assessment under section 153(3) of the Act. The same view has been taken by the Tribunal in case of brother of the assessee Shri Atithi N. Patel in which on identical facts the Tribunal has deleted addition made by AO. No distinguishing features have been brought to our notice by the ld. Departmental Representative. Therefore, following the said decision no addition can be made in case of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept being the director. The assessee submitted before AO that the assessee had utilized loans in the company so as to sustain the earning capacity of the assessee. It was also submitted that it was not necessary to earn income in the year in which expenditure was incurred. The AO however, observed that the assessee had not earned any income from the use of borrowed funds and, therefore, same could not be for sustaining earning capacity of the assessee. The assessee could earn only dividend from share capital investment which was exempt from tax and therefore, expenditure was not allowable under section 14A. The AO therefore disallowed the claim. CIT(A) confirmed the disallowance made by AO aggrieved by which assessee is in appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in case of Shri Atithi N. Patel (supra), we confirm the disallowance of interest made by AO and order of CIT(A) is accordingly upheld. In assessment year 1996-97 in addition to disallowance of interest, there is disallowance of car hire charges of ₹ 96,000/-. The ld. AR has placed no material on record to show that the car hire charges were incurred for the purpose of any business. No worthwhile arguments were advanced in support of the claim. Therefore, disallowance of car hire charges is also upheld. 5. In the result, appeal of the assessee for the assessment year 2004-05 is allowed and those for assessment years 2005-06 and 2006-07 are dismissed. Order pronounced in the open court on 12.10.2012. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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