2012 (10) TMI 1054

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.... of the Income tax Act, 1961 (the Act) and the legal validity of disallowance of interest under the said section. 2. We first take up the additional ground taken by the assessee for all assessment years as this is the basic ground having bearing on legal validity of assessment itself. The additional grounds being legal which could be adjudicated on the basis of facts available on record were admitted after hearing both the parties. The facts in brief are that a search and seizure operation had been conducted in case of the assessee on 4.10.2006 subsequent to which notices under section 153A had been issued to the assessee on 16.3.2007 for all the assessment years. Under the provisions of section 153A, the AO is empowered to assess or re-as....

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....the brother of the assessee in which facts were identical. The ld. Departmental Representative fairly conceded that the issue was covered. 2.2 We have perused the records and considered the mater carefully. The dispute is regarding jurisdiction of AO under section 153A and legal validity of addition made in the assessment under section 153A. We find that this legal issue had been considered by the Special bench of the Tribunal in the case of M/s. All Cargo Global Logistics Ltd. vs. DCIT (supra), in which the Tribunal held that in case where assessment got abated, the AO retains original jurisdiction as well as jurisdiction conferred under section 153A and assessment had to be made accordingly. It has also been held that in other cases in w....

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....ear 2004-05. We, therefore, set aside the order of CIT(A) and delete the addition made by AO in assessment year 2004-05. 3. As regards, the assessment years 2005-06 and 2006-07, the position is entirely different as none of the assessments had attained finality. The time period for issue of notice for these assessment orders were up to 31.3.2007 and 31.3.2008 respectively and therefore, the proceedings at the time of search had not attained finality and in view of the decision of the Special Bench(supra), the AO retained the original jurisdiction as well as jurisdiction conferred on him u/s. 153A. The legal ground raised by the assessee that the AO had no jurisdiction and no power to disallow interest has therefore no merit and is therefor....

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.... the ld. AR for the assessee fairly conceded that identical issue has already been decided by the Tribunal in case of Shri Atithi N. Patel the brother of assessee in which the Tribunal had confirmed the disallowance. It was pointed out that the facts were identical and only figures were different. The ld. DR placed reliance on the ordered of authorities below. 4.2 We have perused the records and considered the matter carefully. The dispute is regarding disallowance of interest on borrowed funds utilized in the company Shri Atithi Builders and Constructors Pvt. Ltd. in which assessee was a director. We find that identical issued had been considered by the Tribunal in the case of Shri Atithi N. Patel in ITA Nos.44 & 45/M/10 for assessment ye....