TMI Blog2018 (12) TMI 1663X X X X Extracts X X X X X X X X Extracts X X X X ..... ed material, then also, otherwise on merit this addition could not be made. Ld. first appellate authority has rightly appreciated the facts and circumstances and no interference is called for in the order of the Ld.CIT(A). - Decided in favour of assessee - I.T(ss).A. No.171/Ahd/2017 (Assessment Year : 2011-12) - - - Dated:- 3-12-2018 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member Appellant by: Shri O.P. Vaishnav, CIT-DR Respondent by: Shri S.N. Divatia, AR ORDER Shri Rajpal Yadav, The present appeal is directed at the instance of the Revenue against the order of the Commissioner of Income Tax(Appeals)-7, Ahmedabad [ CIT(A) in shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied the matter in appeal before the CIT(A). It raised two fold of contentions. In the first fold of contention, on the strength of Hon ble Gujarat High Court decision in the case of Principal Commissioner of Income Tax vs. Saumya Construction P.Ltd. reported in 387 ITR 529, it was contended that income u/s.153A of the Act is to be determined on the basis of material found during the course of search or a requisition was made u/s.132A of the Act. In the present case, no material was found during the course of search on the basis of which disallowance u/s.40A(3) of the Act could be made. In the second fold of contention, it was submitted that sub-section(3) to section 40A of the Act contemplates that where the assessee incurs any expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant shows that it has been clearly held by various courts, including the jurisdictional High Court in the case of Saumya Construction cited supra, that additions can be made u/s 153A only in those cases where during the course of search, incriminating documents or books of accounts have been found and seized and has to be based on such evidences and documents. It is seen from the impugned order that though a loose paper file was seized from the appellant's premises during the search proceedings, the addition has been made on the basis of books of accounts called for and examined during the assessment proceedings and no reference has been made by the A.O to seized documents or material while making the impugned addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. A perusal of the above clause would indicate that disallowance out of expenditure could be made if payment or aggregate of payments made to a person in a day exceeds twenty thousand rupees. Ld. first appellate authority has examined this aspect and recorded a categorical finding of fact that payments made by the assessee on a single day did not exceed twenty thousand rupees to a person, if that be so, then how disallowance u/s.40A(3) of the Act could be made. Thus, for the time being, if we do not take cognizance of the first fold of submission that addition ought to be made on the basis of seized material, then also, otherwise on merit this addition could not be made. Ld. first appellate authority has rightly appreciated the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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