Tribunal allows assessee's appeals for multiple assessment years, dismisses Revenue's appeals.

The Tribunal allowed the appeals filed by the assessee for assessment years 2004-05, 2005-06, and 2006-07, and partly allowed the appeal for 2007-08. The appeals filed by the Revenue were dismissed.

---

---

Issues Involved:
1. Condonation of delay in filing appeals.
2. Legality of additions made under section 143(3) read with section 153A without incriminating material.
3. Validity of disallowances and additions made by the Assessing Officer (AO).
4. Appeals filed by the Revenue regarding deletions by CIT(A).

Detailed Analysis:

1. Condonation of Delay:
The appeals for assessment years 2004-05 and 2005-06 were barred by a delay of 114 days. The assessee filed an application for condonation of delay, which was supported by an affidavit. After reviewing the submissions, the Tribunal noted that the delay was due to sufficient cause and condoned the delay.

2. Legality of Additions under Section 143(3) read with Section 153A:
The common legal ground raised by the assessee was that the Commissioner of Income Tax (Appeals) [CIT(A)] erred in confirming the AO's additions in the absence of any incriminating material found during the search. The Tribunal noted that the assessments for the years 2004-05 to 2007-08 were completed before the search and were thus not pending at the time of the search. According to the proviso to section 153A, these assessments remain unabated. The Tribunal referred to the Special Bench decision in All Cargo Global Logistics Ltd. vs. DCIT and the Jurisdictional High Court decision in CIT vs. Continental Warehousing Corporation Ltd., which held that additions in non-abated assessments could only be made based on incriminating material found during the search.

3. Validity of Disallowances and Additions:
The Tribunal examined the specific disallowances and additions made by the AO:
- Assessment Year 2004-05: Additions for ESIC and 5% of expenses disallowed.
- Assessment Year 2005-06: Additions for PF & ESIC and 5% of expenses disallowed.
- Assessment Year 2006-07: Additions for PF & ESIC, disallowances under sections 35D and 35DD, 5% of expenses disallowed, and depreciation on goodwill and brand value.
- Assessment Year 2007-08: Additions for PF & ESIC, disallowances under sections 35D and 35DD, 5% of expenses disallowed, depreciation on goodwill and brand value, and commissions on purchases and sales.

The Tribunal found that these disallowances were made without any incriminating material found during the search, except for the commissions on purchases and sales in 2007-08, which were based on a statement recorded under section 132(4). The Tribunal upheld the additions for commissions based on the Kerala High Court decision in CIT vs. St. Francis Clay Decor Tiles, which considered such statements as valuable evidence.

4. Appeals by the Revenue:
The Revenue challenged the deletions by CIT(A) regarding depreciation on brand value and goodwill and the restriction of disallowance to 2% of expenses instead of 5%. The Tribunal held that these additions were not based on any material found during the search and thus could not be made in non-abated assessments, following the Jurisdictional High Court decision.

Conclusion:
The Tribunal allowed the appeals filed by the assessee for assessment years 2004-05, 2005-06, and 2006-07, and partly allowed the appeal for 2007-08. The appeals filed by the Revenue were dismissed. The order was pronounced on 10th October 2017.

---