TMI Blog2016 (12) TMI 1572X X X X Extracts X X X X X X X X Extracts X X X X ..... h the additions can only be made based on the search materials. We accordingly, find merit in the contention of the ld. AR and hold that the order of the ld.CIT(A) is wrong and cannot be sustained qua upholding the additions made in the assessment year by the AO without seized material. We accordingly, set aside the order of ld.CIT(A) and hold that the addition is without jurisdiction under section 153C - Decided in favour of assessee. - I.T.A. Nos. 1287 to 1290/Mum/2015 - - - Dated:- 21-12-2016 - Mahavir Singh (Judicial Member) And Rajesh Kumar (Accountant Member) For the Appellant : Santanu KR.Saikia For the Respondent : Vijay Mehta ORDER Rajesh Kumar (Accountant Member) These are four appeals filed by the revenue and directed against the orders dated 12.12.2014 for the assessment year 2006-07 and order dated 02.12.2014 for the assessment years 2007-08 to 2009-10 respectively passed by the ld.CIT(A), Mumbai. Since these appeals are filed against the same assessee and the issues involved therein are common and therefore for the sake of convenience and brevity, these appeals were clubbed together, heard together and are being decided by this consolida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 254(1) of the Act wherein it has to pass orders on the subject matter of the issue before it and the tribunal cannot go beyond it or pass orders or give directions which do not fall within the subject matter of the appeal for which the ld DR relied upon the decision of Hon ble Bombay High Court in the case of New India Insurance Company Ltd Vs CIT (1957) 31 ITR 844 (Bom) wherein it has been held as under : 3. Before we look at the authorities and before we look at the section and the relevant rules, it is desirable to consider on general principles what are the powers of an appellate Court. When an appellant comes before a Court of appeal, he comes there because he is dissatisfied with the decision of the trial Court and he challenges that decision; and he challenges that decision on certain grounds which are set out in the grounds of appeal or in the memo of appeal. The respondent, if he has not appealed or has not cross-objected, is satisfied with the decision of the trial Court and he is before the Court of appeal to support the judgment of the trial Court. The appellant may challenge the decision of the trial Court even on grounds not contained in the grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee before CIT(A) and he adjudicated the same d against the assessee. However, the CIT(A) allowed the appeal of the assessee on merits, hence, assessee was not aggrieved by the order of the CIT(A). Here first of all, we have to refer to Rule 27 of the Rules, which reads as under:- 27. Respondent may support order on grounds decided against him.- The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him. 6. We find from this rule that respondent may support an order on the ground decided against him even though he has not appealed against an order deciding one of the grounds against him. We further find that Hon'ble Supreme Court in the case of CIT vs. Manick Sons, 74 ITR 1(SC) has interpreted the provisions of section 254(1) of the Act and not that the rule 27 of Appellate Tribunal, wherein respondent has been allowed to support the order appealed against on any other ground decided against him even tthough he may not have appealed against. It was explained by the Hon'ble Supreme Court that the powers conferred by this sub-section is wide but still it is a judicial power which may be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2007-08 on 30.10.2006 along with the computation of total income and balance-sheet, profit and loss account declaring an income of ₹ 2,67,840/-. The AO ultimately completed the assessment under section 143(3) read with section 153C of the Act vide order dated 30.3.2013 by assessing the income of ₹ 67,20,840/- by making addition of ₹ 64 lakhs on account of various unsecured loans raised by the assessee from various parties as detailed in para 6.2 of the assessment order. Aggrieved by the order of the AO, the assessee filed appeal before the ld.CIT(A) challenging the order of the AO by raising specific ground that the assessment in the current year was not pending on the date of search and therefore not abated and consequently the additions made by the AO without reference in seized material were legally unlawful and without jurisdiction. However, the ld. CIT(A) dismissed the appeal after considering the submissions of the assessee by giving detailed finding and holding as under: 6. After carefully examining the facts of the case and the above contentions of the appellant in the appellate proceedings and referring to the case laws relied upon by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material gathered during the course of proceedings u/s 153C, the AO has gathered certain material/information which has lead him to make additions to the returned income and thus, the assessment done u/s 153C r.w. 143(3) is valid and the contentions of the appellant regarding the objection to the conclusion of the assessment u/s 153C needs to be dismissed 9. The ld. AR vehemently argued before us that the addition made by the AO was without any jurisdiction as the same was not based upon any incriminating documents/material found during the course of search. While drawing our attention the provisions of section 153A/153C of the Act , the ld counsel argued that in respect of those assessments which were not pending on the date of search, the AO could make addition only on the basis of or with reference to the seized material and not otherwise. The ld AR stated that during the course of search, no incriminating material was found and seized and therefore the upholding the jurisdiction of the AO to make additions without reference to seized materials was against the provisions of section 153C of the Act. The ld. AR in defence of his argument heavily relied on the decision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention of the ld. AR and hold that the order of the ld.CIT(A) is wrong and cannot be sustained qua upholding the additions made in the assessment year by the AO without seized material. We accordingly, set aside the order of ld.CIT(A) and hold that the addition of ₹ 64 lakhs by the AO t is without jurisdiction under section 153C of the Act. Accordingly, the ground raised by the assessee under rule 27 of the ITAT Rules, 1963 is allowed. ITA No 1288/Mum/2015 to 1290/Mum/2015 12. For assessment year 2007-08,2008-09 and 2009-10 , the returns were filed on 26.11.2007 , 14.11.2008 and 31.10.2009 whereas the search was conducted on 6.10.2010. It is clear from the above dates of filing return and date of search that the assessments for three years had attained finality on the date of search and therefore any additions can only be based upon the seized materials and not otherwise. In all these years the assessee has raised same ground under rule 27 of ITAT Rules as has been decided by us hereinabove. Since we have already decided the identical issue as raised by the assessee under rule 27 in these three appeals in ITA No 1287/Mum/2015 in favour of the assessee, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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