TMI Blog2017 (12) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. The CIT(A) by following the decision of the jurisdictional High Court confirmed the additions made by the A.O. We do not find any error in the order of the CIT(A), hence we are inclined to upheld the finding of the CIT(A) and reject the ground raised by the assessee. - ITA No. 78, 79, 80, 81/Coch/2016 - - - Dated:- 11-12-2017 - Shri George George K, JM And Shri Manjunatha G, AM Appellant by : Sri. G.Surendranatha Rao Respondent by : Sri. A.Dhanaraj, Sr.DR ORDER Per Manjunatha G, AM This four appeals by the assessee are directed against common order passed by the CIT(A)-IV, Cochin, dated 04.12.2015 for the assessment years 2006-2007, 2007-2008, 2008-2009 and 2010-2011. Since facts are identical and issues are common, for the sake of convenience, these appeals were heard together and disposed off by this common order. 2. The assessee has raised common grounds of appeal for all the four years. Through these grounds of appeals, the assessee has challenged additions made by the Assessing Officer towards disallowance of expenditure u/s 40(a)(ia) for failure to deduct tax at source u/s 194C and additional made by the A.O. towards unexplained cash credits in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the lower authorities. The assessee has not brought out any fresh evidence to support the additions made. Therefore, the additional ground raised may be admitted and adjudicated on merits. On the other hand, the learned Departmental Representative strongly opposed the admission of additional ground raised by the assessee. 5. We have heard the rival submission and considered the material on record. The assessee has raised additional ground challenging the additions made by the A.O. towards disallowance of expenditure u/s 40(a)(ia) for failure to deduct tax at source and unexplained capital introduced in partners capital account in the assessments framed u/s 143(3) r.w.s. 153C on the ground that the A.O. has made additions to the concluded assessments / unabated without there being any seized material. The assessee further contended that on going through the additions made by the A.O., prima facie it appears that there is no support of any seized materials found as a result of search and all additions are based on regular financial statement filed along with the return of income u/s 139(1). We find that the additional ground raised by the assessee challenging the validit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rala High Court in the case of Thomas George Muthoot v. CIT [ITA No.278 of 2014]. The CIT(A) confirmed the addition made by the A.O. towards unexplained credits in capital accounts as the assessee has not pressed the ground challenging the addition made by the A.O. towards unexplained credits. However, the CIT(A) deleted the additions made by the A.O. towards disallowance of remuneration paid to partners on the ground that book profit for the purpose of section 40(b) is net profit of the firm after making all adjustment as provided by section 28 to 44 DB that are required to convert the net profit and loss account into taxable business income. Aggrieved by the CIT(A) s order, the assessee is in appeal before us. 7. The first issue came up for our consideration in assessee s appeal is the additional ground raised by the assessee challenging the validity of assessment framed u/s 143(3) r.w.s. 153C on the ground that the additions made by the A.O. is not supported by any incriminating material found as a result of search. Therefore, the A.O. was erred in making additions towards disallowance of expenditure u/s 40(a)(ia) and unexplained credits in capital account. The learned AR sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years has been expired before the date of search. Therefore, we are of the view that the assessments for the assessment year 2006-2007 to 2008-2009 have been concluded / unabated as on the date of search. Once the assessments are concluded and become final as on the date of search and the time limit for issue of notice u/s 143(2) has been expired, then the determination of total income in respect of assessment years for which the assessments have been already completed on the date of search, shall not be influenced by the items of income other than those based on the material unearthed during the course of search. This legal proposition is supported by the decision of the Hon ble Supreme Court in the case of Sinhgad Technical Education Society v. CIT [(2017) 397 ITR 344 (SC)], wherein it was observed that as per the provisions of section 153C, incriminating material which was seized had to pertain to the assessment years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four assessment years. Since this requirement u/s 153C is essential for assessment under that provision, it becomes a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g is not applicable for the assessment year 2010-2011 as the assessment for the assessment year 2010-2011 has been abated as on the date of search. Therefore, the A.O. is free to assess or re-assess the total income on the basis of the books of account and incriminating material found as a result of search. Having said so, let us examine the issue raised by the assessee on merits. The assessee has challenged additions made by the A.O. towards disallowance of expenditure u/s 40(a)(ia) for failure to deduct tax at source. We find that the issue is squarely covered in favour of the Revenue by the decision of the jurisdictional High Court in the case of Thomas George Muthoot v. CIT [ITA No.278 of 2014], wherein it was observed that whether disallowance u/s 40(a)(ia) can be made only in respect of payments outstanding at the end of the year has held that the language of section 40(a)(ia) does not warrant any interference that it gets attracted only where the amount remains payable on the last date of the financial year. The Hon ble Supreme Court in the case of Palam Gas Services v. CIT [(2017) 394 ITR 300 (SC)] held that word payable occuring in section 40(a)(ia) not only covers cases w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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