TMI Blog2021 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] The addition in the appeal in hand indeed has been made on the basis of the books of accounts and the details furnished to the Ld. AO and not on the basis of any incriminating material found during the course of search. Hence, respectively relying upon the judgment passed by the different judicial forums we delete the addition made under Section 143(3) r.w.s 153A of the Act. The appeal preferred by the assessee is, thus, allowed. - IT(SS)A Nos.378 & 379/Ahd/2018 - - - Dated:- 29-7-2021 - Shri Amarjit Singh, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri K. C. Thaker, AR For the Respondent : Shri O. P. Sharma, CIT-DR ORDER PER Ms. MADH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of ₹ 1,74,480/- was filed by the assessee. Notice under Section 143(2) r.w.s. 153A and under Section 142(1) of the Act dated 28.11.2016 was issued. 4. The facts pertain to the issue is this that the assessee paid interest of ₹ 3,17,664/- on unsecured loans at 12%. The Ld. AO though accepted the unsecured loans as genuine but disallowed interest paid thereon on assumption basis although to independent and corroborative evidence was relied upon for such disallowance. Ultimately the same was confirmed by the First Appellate Authority. Hence, the instant appeal before us. 5. At the time of hearing of the instant appeal, the Ld. Advocate appearing for the assessee submitted before us that the assessment of the year unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portion of the same is reproduced hereinbelow:- 5. I have carefully considered the submissions made on behalf of the appellant and perused the assessment record so far it relates to addition on account of interest I find that there cannot be any dispute about the fact that the disallowance of interest has been made on appreciation of the accounts like balance sheet filed with the return of income. The Assessing Officer has not referred to or indicated that there was anything found during the search which provided the basis for the disallowance of interest of ₹ 3,63,800/-. The return of income was filed on 25-7-2012, followed by intimation u/s 143(1) and no notice u/s 143(2) was issued till the date of search i.e. 30-3-2015 meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searcj. This is evident from the assessment order in which the AO has considered the various issues from the details submitted by the assessee including Balance Sheet . Thus the interest on loans which are recorded in the books of account and items of cash credit cannot form the basis of addition in the year for which assessment is not pending and has not been abated since these are items of normal income tax assessment and cannot be subject matter of assessment u/s 153A or 153C. Similar issue has also been dealt with in the case of Jayesh Stee! Pvt Ltd by CIT(Appeal)-12 Ahmedabad vide his order in Appeal No: CIT(A)- 12/219,221/DCIT -CC-2(3)/14-15 dated 2.11.2016 in which also, following the judgment of jurisdictional high Court, it is he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, the ground no. 2 pertaining to addition do not require adjudication. Ground no. 1 2, 2A 2B are allowed. 8. It appears that the Ld. CIT(A) in the earlier year on the identical facts and deleted the additions made by the Ld. AO in the unabated assessment since the same were not made on the basis of any incriminating material found during the course of search relying upon the principle laid down by the Jurisdictional High Court in the case of PCIT -Vs- Saumya Construction Pvt. Ltd., reported in (2016) 387 ITR 529, the judgments passed in the matter of CIT -vs- Kabul Chawla, reported in (2015) 380 ITR 573 (Delhi) and CIT -vs- Continental Warehousing Corporation Ltd (2015) 374 ITR 645 (Bom.). The Jurisdictional High Court in the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y AY, no incriminating material was found, no addition or disallowance could be made in relation to that AY in exercise of powers u/s. 153A and earlier assessment should have to be reiterated-In this regard, this court was in complete agreement with view adopted by Rajasthan HC in case of Jai Steel (India), Jodhpur v. Assistant CIT (supra)-Besides, as rightly pointed out by assessee, controversy involved stands concluded by decision of this court in case of CIT-1 v. Jayaben Ratilal Sorathia (supra) wherein it had been held that while it could not be disputed that considering section 153A, AO could reopen and/or assess return with respect to six preceding years; however, there must be some incriminating material available with AO with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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