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2019 (5) TMI 420

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..... cer on account of assessee’s claim for additional deduction u/s 80IA - Decided against revenue Disallowance u/s 40(a)(ia) - proceedings initiated u/s 153A pursuant to the second search and seizure action - payment of the corresponding TDS is found to have been made to the credit of Central Government before the due date of filing of the return - HELD THAT:- As original assessment proceedings resulting into disallowance u/s 40(a)(ia) had become final, we are of the view that the ld. CIT(Appeals) was not justified in entertaining and allowing the new claim made by the assessee on this issue and even the assessee has not disputed this position. We accordingly reverse the impugned order of the ld. CIT(Appeals) on this issue and allow Ground of the Revenue’s appeal. New claim made by the assessee for deduction u/s 80IA for the first time during the course of proceedings u/s 153A r.w.s. 143(3) - AO denied to entertain the said claim while the CIT(Appeals) not only entertained the said claim but also allowed the same on merit- HELD THAT:- As original assessment proceedings not allowing any deduction u/s 80IA had become final, we are of the view that the ld. CIT(Appeals) .....

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..... r section 80IA was fully allowed by the Assessing Officer. He, however, made two additions to the total income of the assessee in the said assessment amounting to ₹ 6,99,35,632/- and ₹ 5,69,72,772/- on account of disallowance under section 40(a)(ia) and undisclosed income respectively. On appeal, the ld. CIT(Appeals) deleted the entire addition made by the Assessing Officer on account of undisclosed income while disallowance of ₹ 6,99,35,632/- made by the Assessing Officer under section 40(a)(ia) was restricted by him to ₹ 5,86,52,638/- thereby giving a relief of ₹ 1,12,82,994/- to the assessee on this issue. Thereafter second search and seizure action was conducted in the assessee s case on 28th & 29th October, 2010. Pursuant to the said action, a notice under section 153A was issued by the Assessing Officer, in response to which the return of income for the year under consideration was filed by the assessee declaring a total income of ₹ 7,18,45,130/- on 30.09.2011. In the said return, deduction under section 80IA was claimed by the assessee to the extent of ₹ 4,67,51,981/- while the disallowance under section 40(a)(ia) was considered .....

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..... he scrutiny assessments made under section 143(3) and there was no material change in the relevant facts of the case. He held that the claim of the assessee thus was allowable even on merit keeping in view the principle of consistency. 5. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the deduction of ₹ 6,74,70,537/- was claimed by the assessee under section 80IA in the return of income filed on 31.03.2007 and the same was fully allowed by the Assessing Officer originally in the assessment completed under section 153A read with section 143(3) vide an order dated 31.12.2007. Since the said assessment dated 31.12.2007 had become final before the second date of search conducted on 28.10.2010, the deduction allowed under section 80IA in the said assessment could have been restricted by the Assessing Officer only on the basis of any incriminating material found during the course of second search conducted on 28th & 29th October, 2010. As submitted by the ld. Counsel for the assessee, there was, however, no such incriminating material found during the course of search on the basis of which the claim .....

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..... seizure action, especially when there was no incriminating material found during the course of search relating to this issue. As a matter of fact, the assessee-company in the return of income filed in response to the notice under section 153A issued in pursuance of the second search and seizure action had declared its income after considering the disallowance under section 40(a)(ia) to the extent of ₹ 5,86,52,638/- as sustained originally by the ld. CIT(Appeals) and this issue was not raised by it even before the Assessing Officer during the course of assessment proceedings. This new claim was made by the assessee only during the course of appellate proceedings before the ld. CIT(Appeals), who entertained and allowed the same. Keeping in view all the facts of the case, as discussed above including especially the fact that the original assessment proceedings resulting into disallowance of ₹ 5,86,52,638/- under section 40(a)(ia) had become final, we are of the view that the ld. CIT(Appeals) was not justified in entertaining and allowing the new claim made by the assessee on this issue and even the ld. Counsel for the assessee has not disputed this position. We accordingl .....

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..... ave heard the arguments of both the sides on this issue and also perused the relevant material available on record. It is observed that the claim of the assessee for deduction under section 80IA to the extent of ₹ 5,46,96,237/- was disallowed in the original assessment proceedings and since the said assessment had become final before the search and seizure operation conducted on 28.10.2010, there was no reason or occasion to raise this issue in the proceedings under section 153A read with section 143(3), especially when there was no incriminating material found during the course of search relating to this issue. As a matter of fact, in the return of income filed on 30.09.2011 in response to the notice issued under section 153A pursuant to the search and seizure action, deduction under section 80IA was claimed by the assessee only to the extent of ₹ 3,36,24,913/- as allowed in the original assessment and the additional claim of ₹ 5,46,96,237/- for deduction under section 80IA was made by the assessee by way of revised computation of total income filed during the course of assessment proceedings under section 153A read with section 143(3). The Assessing Officer decl .....

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..... was disallowed by him for the same reasons as given for A.Y. 2005-06. On appeal, the ld. CIT(Appeals) allowed the claim of the assessee for additional deduction under section 80IA as made in the revised computation of total income on the same grounds as given in A.Y. 2005-06. 14. We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. It is observed that the return of income originally filed by the assessee on 30.09.2008 claiming deduction of ₹ 5,77,16,153/- under section 80IA was accepted by the Assessing Officer under section 143(1) and since no notice under section 143(2) was issued by him till the expiry of the statutory time limit, which ended on 30.09.2009, the original assessment for the year under consideration, i.e. A.Y. 2008-09 had become final before the search and seizure operation conducted on 28.10.2010. As rightly contended by the ld. Counsel for the assessee, there was thus no reason or occasion to raise this issue in the proceedings under section 153A read with section 143(3) and the disallowance made by the Assessing Officer to the extent of ₹ 4,49,85,993/- on account of assessee s claim f .....

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..... relates to the deletion by the ld. CIT(Appeals) of the disallowance of ₹ 10,20,73,983/- made by the Assessing Officer on account of the assessee s claim for deduction under section 80IA. 17. In the return of income originally filed under section 139(1) for the year under consideration, i.e. A.Y. 2009-10 on 30.09.2009 declaring total income of ₹ 25,50,99,890/-, no deduction under section 80IA was claimed by the assessee. The said return was accepted by the Assessing Officer under section 143(1) and no notice under section 143(2) was issued by him till the expiry of statutory time limit, which ended on 30.09.2010. Thereafter a search and seizure action was conducted in the case of the assessee on 28.10.2010 and in the return of income filed in response to the notice issued under section 153A in pursuant to the said action, no deduction was claimed by the assessee under section 80IA. During the course of assessment proceedings under section 153A read with section 143(3), the assessee, however, filed a revised computation of total income claiming deduction of ₹ 10,20,73,983/- under section 80IA. In the assessment completed under section 153A read with section 143(3) .....

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..... ) allowing the claim of the assessee for deduction under section 80IA amounting to ₹ 10,20,73,983/- and allow Grounds No. 1 & 2 of the revenue s appeal. 19. As regards Ground No. 3 of the revenue s appeal for A.Y. 2009-10, it is observed that the issue involved therein relating to the deletion by the ld. CIT(Appeals) of the disallowance of ₹ 57,75,278/- made by the Assessing Officer on account of assessee s claim for exemption under section 86 is similar to the one involved in Ground No. 3 of the revenue s appeal for A.Y. 2008-09, which has already been decided by us in the foregoing portion of this order. Since all the material facts relevant thereto as well as the arguments advanced by the ld. Representatives of both the sides for A.Y. 2009-10 are similar to A.Y. 2008-09, we follow our conclusion drawn for A.Y. 2008-09 and uphold the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue. Ground No. 3 of the revenue s appeal for A.Y. 2009-10 is accordingly dismissed. 20. In the result, the Revenue s appeals for A.Y. 2005-06 & 2009-10 being IT(SS)A Nos. 65 & 76/KOL/2016 are partly allowed, for A.Y. 2007-08 being IT(SS)A No. 66/KO .....

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