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TMI Blog2017 (8) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... .01.2016 which in turn has arisen from the separate orders passed by the Assessing Officer all dated 29.3.2014 u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961 (in short 'the Act'). 5. Before proceeding further, we may reproduce the Grounds of appeal raised by the Revenue in the three assessment years, which read as under :- A.Y 2006-07 :- "1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 385,52,286/- for A.Y.2006-07 on account of apportionment of expenses between tonnage and non tonnage activities relying on the decision of the Bombay High Court in the case of All Cargo Global Logistics Ltd. Without appreciating the facts that the above said decision of the High Court has not been accepted by the department and SLP has been filed in the High Court and the same is pending? The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored." A.Y 2007-08 :- "1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 273,99,267/- for A.Y.2007-08 on account of apportionment of expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment u/s 153A r.w.s. 143(3), wherein the total income has been determined at Rs. 15,16,98,800/-. The point of discussion in the appeal of the Revenue relates to an addition of Rs. 3,85,52,286/- with respect to apportionment of expenses and, therefore, our further discussion is confined to the said addition. In this context, the relevant facts are that the respondent-assessee has two divisions, namely Marine Logistics Department (in short referred to as 'tonnage business'), income from which is eligible for the beneficial provisions of Tonnage Tax Regime contained in Chapter XII-G of the Act. The second division is the Oil & Gas Department (in short referred to as 'non-tonnage business'), income from which is taxable under the regular provisions of the Act. The incomes & expenditures which are directly related to either the tonnage or non-tonnage businesses are accounted for separately. So however, the common expenses were allocated by the assessee in the ratio of 67 (tonnage) : 33 (non-tonnage). In the impugned assessment finalised u/s 153A r.w.s. 143(3) of the Act, the Assessing Officer disagreed with the allocation of common expenses in the ratio of 67 : 33 and instead, he ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he made an addition of Rs. 9,89,74,034/- to the returned income. 9. In appeal before the CIT(A), assessee contested the said additions on the basis of the proposition of law laid down by the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd., which has been later approved by the Hon'ble High Court in the case of All Cargo Global Logistics Ltd., 374 ITR 645 (Bom). The plea set-up by the assessee on this basis was that on the date of initiation of search, i.e. 24.11.2011, the assessment for any of the three assessment years was not pending and, therefore, in terms of the second proviso to Sec. 153A(1)(a) of the Act the original assessments did not abate. Therefore, it was canvassed, following the ratio of the decision of the Hon'ble High Court in the case of All Cargo Global Logistics Ltd., (supra), that no addition can be made in the impugned assessments on issues which have become final in the original assessments in the absence of any incriminating material found in the course of search. Before the CIT(A), assessee made factual assertions that the impugned addition was not based on any incriminating material found during the course of search and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 2,43,58,093/-. In our opinion, the approach of the AO and CIT(A) is not correct especially when the system of allocation adopted by the assessee is accepted for three heads of expenses namely total operating expenses, interest and finance charges and depreciation and only rejected apportionment qua administrative and other expenses and more so when the revenue had accepted system of apportionment of common overheads, followed by the assessee in the earlier year. In view of our observation and the decisions cited by the Ld AR, we are of the considered view that the order of CIT(A) deserves to be reversed." In view of the above discussion, the addition on account of apportionment of expenses between tonnage and non tonnage activities of Rs. 385,52,286/- is found to be without justification and is deleted. (ii) A.Y 2007-08 I find that assessment u/s.143(3) was completed on 30.11.2009 in which addition of Rs. 243,58,093/- was made after reapportionment of expenses. This addition was confirmed by the first appellate authority vide order dated 28.12.2010 and the matter was pending in appeal before the ITAT when the assessment u/s.153A has been finalized. In the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first assessment u/s. 143(3) vide order dated 30.11.2009 has been deleted by the order of the ITAT, Mumbai 'G' Bench vide common order dated 30.9.2015 for A.Y. 2006-07, 2007-08 & 2008-09. In view of above discussion, the entire addition of Rs. 989,74,034/- on this issue is found to be without justification and is deleted." 11. In the above background, Revenue is in appeal before us on the abovestated Grounds of appeal. As the Grounds of appeal reveal, the only point raised by the Revenue is that the decision of the Hon'ble Bombay High Court in the case of All Cargo Global Logistics Ltd., (supra), which has been applied by the CIT(A) to delete the addition, has not been accepted by the Department and an SLP has been filed in the Hon'ble Supreme Court, which is pending. Notably, the Grounds of appeal itself suggest that the Revenue does not dispute the factual finding arrived at by the CIT(A) as the impugned addition made in the three years is not based on any incriminating material found during the course of search. In the absence of any challenge to such factual findings of the CIT(A), we find that the CIT(A) has made no mistake in applying the ratio of the j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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