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2018 (2) TMI 965

Assessment proceedings u/s. 153C - disallowance of the claims of expenditure u/s. 37 (1) - principles of res judicata OR consistency - Held that:- We find that the documents do not disclose any undisclosed income on part of the assessee for any of the above AY's . The AO had disallowed business losses and that clearly prove that seized documents were of no relevance for the AO to make the disallowance. We allow the additional grounds raised by the assessee for all the three AY. s and decide the .....

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d in favour of assessee. - I.T.A./1366/Mum/2016, I.T.A./3486/Mum/2016 And I.T.A./3487/Mum/2016 - Dated:- 7-2-2018 - Sh.Rajendra,Accountant Member And C. N. Prasad,Judicial Member For The Revenue : Shri Y.K. Bhaskar-DR For The Assessee : Shri K. Gopal/Ms.Neha Paranjpe ORDER PER Rajendra A. M. - Challenging the order dated 28/4/2016 of the CIT(A)- 47,Mumbai,the assessee has filed present appeals for the above mentioned AY. s (AY. s) . The assessee is engaged in the business of construction of resi .....

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atter. In the additional ground the assessee had challenged the action taken by the AO u/s. 153C C of the Act. Therefore, we admit the additional grounds raised by the assessee for all the three years. The additional grounds read as under: 1. The notice dated 22. 10. 2012 issued under section 153C and the subsequent assessment order passed under section 143(3) r. w. s 153C are bad in law as the material seized during the course of search does not reveal any undisclosed income of the Appellant. T .....

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oceedings u/s. 153C were initiated. The Assessing Officers (AO. s)completed the scrutiny assessments, as stated in the first paragraph of our order. They disallowed the expenses under the heads personnel expenses, office expenses, depreciation, bank charges and interest etc. , comprising business loss. 4. During the appellate proceedings for the AY. 2011-12, the First Appellate Authority (FAA) observed that the assessee had shown other income at ₹ 1. 19 crores, that it had claimed expenses .....

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id further advances relatable to the said projects that the development business of the assessee had commenced during the year under appeal, that it had not returned any income, that the AO was justified in holding that the expenses debited to the P&L account should have been capitalised. Referring to the case of Vardhaman Developers Ltd. (55 taxmann. com 370), relied upon by the assessee, the FAA held that the business of the assessee had commenced, that it had incurred similar expenses to .....

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me extracts of Ledger accounts which pertain to the AY. 2012-13 and not for any of the AY. s, that the other materials seized during the search proceedings were of general nature, that the seized material was not incriminating in nature as it did not reveal any disclosed income of the assessee, that in absence of any incriminating material relevant to the abovementioned three AY. s there was no valid satisfaction to the effect that undisclosed income belonged to the assessee, that the AO had mad .....

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th regard to AY. s 2010-11 and 2011-12, he stated that returns were filed on 20/09/2010 and 27/09/2011 respectively, that the same were processed and accepted u/s. 143 (1) of the Act. It was further argued that the FAA, while deciding the appeal for the AY. 2009-10 did not confirm the additions made by the AO under the same heads. The Departmental Representa - tive(DR)supported the order of the AO and stated that documents belonged to the assessee, that the AO had rightly made the disallowace. 4 .....

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ection 153C of the Act and same reads as under: (1)Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153C, where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to ; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person re .....

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assets represent the undisclosed income of the other person then the incriminating material, including the assets are transferred to the AO having jurisdic -tion over that other person. But the basic and foremost thing is the documents/ asset should be incriminating. If the documents/assets do not represent the undisclosed income of the other person, then there would be no justification for passing order u/s. 153C. Here, would like to refer to the case of the Hon ble Apex Court. The facts of the .....

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ancelled u/s. 12AA(3) of the Act, the assessee was treated as an association of persons, a special audit u/s. 142(2A) of the Act was conducted and on the basis of the special audit report, taxable incomes for the AY. s 1999-2000 to 2006-07 were worked out by a common order. The FAA upheld the order of the AO, holding that the assessee was not eligible for exemption u/s. 11 of the Act and, that therefore, donations received were rightly treated as income. In the appeal before the Appellate Tribun .....

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r thereafter. The Tribunal rightly permitted this additional ground to be raised and correctly dealt with the ground on the merits as well. The High Court was right in affirming this view of the Tribunal. We have gone through the documents seized by the Department authorities during the search proceedings. We find that the documents do not disclose any undisclosed income on part of the assessee for any of the above AY. s . The AO had disallowed business losses and that clearly prove that seized .....

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ithdrawn unless the circumstances have changed. In the matter of Zazsons export Ltd. ( 397 ITR 400), the Allahabad High Court has held as follows: In order to maintain consistency, a view, which had been accepted in an earlier order ought not to be disturbed unless there was any material to justify the Department to take a different view of the matter. In respect of the earlier assessment year, 2005-06, the Department had accepted the decision of the Appellate Tribunal that the trade amount due .....

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