TMI Blog2018 (5) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Special Bench in the case of ITAT(Special Bench) in the case of M/s. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI]. - ITA No. 522, 523, 524, 525, 527/Mum/2015, ITA No. 777, 778, 779/Mum/2015 - - - Dated:- 25-4-2018 - Shri R. C. Sharma, AM And Shri Ram Lal Negi, JM Revenue by : Shri M. C. Omi Ningshen Assessee by : Shri Rakesh Joshi ORDER Per R. C. Sharma ( A. M ) These are the cross appeals filed by the assessee and revenue against the order of CIT(A)-36, Mumbai dated 12/11/2014 for A.Y.2005- 06,2006-07,2008-09,2009-10,2010-11 2011-12 in the matter of order passed u/s.143(3) r.w.s.153C of the IT Act. 2. Grounds taken by Revenue in the A.Y.2005-06 reads as under:- 1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the additions made on issues not based on any incriminating material found during the course of search ignoring the decision of the Kamataka High Court in the case of M/s. Canara Housing Development Company in ITA No. 38/2014 dated 25.07.2014. 2. Whether in the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in allowing the ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 29.12.2010 determining total income of ₹ 18,27,37,269/- by disallowing loss on sale of investment and write off of interest on OCD. In assessee's appeal Ld. CTT(A)-38, Mumbai vide order dated 28.2.2014 while holding that AO wrongly assumed jurisdiction u/s 147 in the matter also deleted both the additions on merit. In the meantime in response to notice u/s 153C assessee filed return of income on 3.04.2012 declaring Total Income of ₹ 75,37,745/- In the assessment order passed u/s 153C rws 143(3), while the Assessing Officer has repeated the additions made in earlier assessments, he increased disallowance out of travelling expenses and also added the amount of the disallowance U/S.14A in the computation of the Book Profits u/s. 115JB of the Act . 5. Before the CIT(A), assessee has alleged that AO was not justified in making fresh addition or recomputing book profit for the purpose of MAT u/s.115 JB of the Act, as the same does not arise out of the seized material and findings of search. The finding and observation of CIT(A) on this issue was as under:- 7.3. The appellant's submission is that AO was not justified in making fresh additions or recomputing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised on 29.12.2000 relating to Section 80 HHC deduction and consequently the C.I.T. could not have invoked jurisdiction under Section 263 of the Act. The Hon'ble jurisdictional High Court has held that the AO, while passing the independent assessment order u/s 153A rws 143(3) of the Act cannot disturb the assessment/ reassessment order which has attained finality, unless the materials gathered in the course of the proceedings u/s 153A of the Act establish that the reliefs granted under the finalised assessment/ reassessment were contrary to the facts unearthed during the course of 153A proceedings. The Special Bench decision of ITAT, Mumbai in the case of All Cargo Global Logistics Ltd. vs. DC1T (2012) 137 ITD 287 while considering the question as to whether the scope of assessment u/s 153A encompasses additions, not based on any incriminating material found during the course of search, held as follows: a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s l53Afor which assessments shall be made for each of the six assessment years separately; b) In other cases, in addition to the income that ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce not eligible for set off against the other business-incomes. 4) In the facts and circumstances of the case and in law, the Learned Assessing Officer has erred in not appreciating the fact that the losses and gains on the sale of shares was consistently being treated as Business Loss or income by the appellant as per revenue's stand and that the same had been accepted by revenue in all past assessments. 10. By the impugned order, CIT(A) allowed assessee s claim of business income on sale of shares after observing as under:- 9.1 This ground of appeal pertains to disallowance of ₹ 7,30/31,5997- being loss on sale of investments claimed as business loss. The AO has made the disallowance as per stand taken in earlier assessment order u/s 147 rws 143(3) dated 29.12.2010.1 find that the issue has been decided by Ld. CTT(A)-38/ Mumbai in favour of assessee in appellate order dated 28.2.2014. Respectfully following the same, AO is directed to delete the addition. This ground of appeal is allowed. 11. Against the above order of CIT(A), Revenue is in further appeal before us. 12. We have considered rival contentions and carefully gone through the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition made on account of bad debts written off of ₹ 10,97,05,670/- was rightly deleted by CIT(A). This reasoned factual finding of CIT(A) needs no interference from our side. We uphold the same. 5. As a result, appeal filed by Revenue is dismissed. 14. Respectfully following the decision of the Tribunal in assessee s own case as reproduced above, we do not find any infirmity in the order of CIT(A) for deleting the disallowance of interest. 15. Next grievance of Revenue relates to CIT(A) s action in allowing the loss on sale of shares amounting to ₹ 7,30,31,599/- held as investment by the assessee company a Business Loss and allowing the loss to be set off against the business income. 16. We found that this issue is also covered by the decision of ITAT in assessee s own case for the A.Y.2005-06, ITA No.4077/Mum/2014 dated 24/06/2016, relevant finding on page 5 para 3 reads as under:- 3. Next issue is with regard to business loss of ₹ 7,30,31,599/- on sale of shares treated as capital loss, which is disallowed by Assessing Officer. 3.1 In appeal, various contentions were raised on behalf of assessee and in response to same, remand re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the issue at page 5 para 8, CIT(A) has given finding in appellate order in para 9 and para 10. The CIT(A) has held that no addition beyond amount disallowed in original proceedings, hence no further addition in 153A proceeding without any incriminating document. CIT(A) has reached to this conclusion after following the order of the Mumbai Tribunal in case of Allcargo (374 ITR 645). Since no incriminating material was found during course of search with regard to travelling expenses incurred for the purpose of business, there is no infirmity in the order of CIT(A) for holding that AO was not justified in making disallowance of travelling expenses. 20. Last grievance of Revenue relates to deleting addition in respect of 14A while computing book profit u/s.115JB. AO has dealt with the issue at page 7 para 9 whereas CIT(A) has dealt with the issue in his appellate order at page 11 para 11 wherein he has held that no addition in original proceedings, hence no addition in 153A proceeding without any incriminating document. We do not find infirmity in the order of CIT(A) for allowing the assessee s claim by following the order of Allcargo reported at 374 ITR 645. Furthermore, the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustified in deleting the additions made on issues other than those based on any incriminating material found during the course of search ignoring the decision the decision of the Karnataka High Court in the case of M/s. Canara Housing Development Company in ITA No. 38/2014 dated 25.07.2014. 26. Similarly, the CIT (A) is justified in allowing the Foreign Travel Expenses ignoring the decision of the Karnataka High Court of M/s. Canara Housing Development Company in ITA No.38/2014 dated 25.07.2014. Similarly, the CIT(A) was justified in deleting the disallowance u/s. 14A of the Act while computing the book profits u/s. 115JB of the Act. 27. The issue of adding the disallowance u/s.14A while computing book profit u/s.115JB is covered in favour of assessee by the decision of the Special Bench in the case of ITAT(Special Bench) in the case of M/s. Vireet Investment Pvt. Ltd., order dated 22/06/2017. 28. In the result, appeal of the Revenue for A.Y.2008-09 is dismissed. A.Y.2009-10: 29. All the grounds taken by the Revenue are similar to the grounds taken in the A.Y.2008-09. Accordingly following reasoning given by us hereinabove in the A.Y. 2008-09, appeal of the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er:- 7.2 The facts of case and submission have been considered. Dining the year total travelling expenses of Ks 55,9,/824/- have been debited to P L account which include ₹ 55,85,590/- on foreign travelling expenses of Mrs Sangita Jindal, Managing Director of the company. As per AO, such expense is not justified as the investment business is restricted to India only and there is specific detail to mention that entire expenditure has been incurred wholly and exclusively for the purposes of business. Per contra appellant claims that entire expense is on account of travel of Managing Director for business activities of the company in context of its NBFC business and exploring possible financial tie ups and business opportunities in consultancy business, I find that similar issue prose in AY 2005-06, wherein 25% of the total travelling expenses of the company were disallowed in the assessment order for want of verification and justification! of foreign 'travelling expenses being incurred wholly and exclusively for the purposes of business which was also confirmed by CIT(A). Respectfully, following the view of the CIT(A)/ in my opinion/ justice will be met if stand consist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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