2017 (9) TMI 39

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e has raised the following grounds of appeal in ITA No. 4554/Del/2013 for Assessment Year 2005-06:- "1. Whether the Ld. CIT(A) was justified in disallowing Rs. 1,08,000/- on account of low drawings. 2. Whether the Ld. CIT(A) was justified in disallowing Rs. 3,58,765/- on account of Capital Loss claimed. 3. Ld. CIT (A) was not justified in disallowing Rs. 1,16,000/- on account expense disallowed in P&L a/c. 4. Ld. Assessing officer is not justified in disallowing Rs. 50,000/- on account of personal expenses. 5. Ld. Assessing officer is not justified in disallowing Rs. 4,168/- on account of 80D. 6. Ld. Assessing officer is not justified in disallowing 4,168/- on account of House tax paid." 4. The assessee has raised the following grounds of appeal in ITA No. 4555/Del/2013 for Assessment Year 2006-07:- "1. Whether the Ld. CIT(A) was justified in disallowing Rs. 1,20,000/- on account of low drawings. 2. Whether the Ld. CIT(A) was justified in disallowing Rs. 15,00,000/-on account of unverified Advance/loan received from party under section 68. 3. Ld. CIT (A) was not justified in disallowing Rs. 3,70,100....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ses. 4. Whether the CIT(A) was justified in disallowing Rs. 248966/- on account of TDS deducted by the other party whereas no TDS has been claimed by the assessee." 9. During the course of hearing before us the ld AR has filed an application for requesting admission of additional ground of appeal for AY 2004-05 to AY 2008-09 vide application dated 01.09.2016. The claim of the assessee is that he wishes to raise an additional legal ground of appeal which goes to the root of the assessment as it relates to assumption of jurisdiction by the ld Assessing Officer. For raising the additional grounds of appeal the ld AR has relied upon the decision of the Hon'ble Supreme Court in case of National Thermal Power Co. Ltd. Vs. CIT 229 ITR 383. The assessee has framed the additional ground raised as under:- "That the ld AO has erred in law in interfering the completed assessment while making disallowances u/s 153C read with section 143(3) of the Income Tax Act, 1961 as no incriminating material was uneartehed during the course of search. Hence, the disallowance so made deserved to be deleted." 10. The ld AR reiterated the same argument which are stated in the prayer for....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or AY 2005-06 to 2008-09. 16. We have carefully perused the orders of the Assessing Officer and noted that there was no reference to any incriminating material for making the addition or disallowance. The ld DR also could not point out any incriminating material with respect to the various additions made. Hon'ble Delhi High Court in case of CIT Vs. Kabul Chawla (supra) vide para No. 37 has held as under:- "37. On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under : (i) Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. (iii) The Assessing Officer will exercise norma....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ing material unearthed during the course of search the addition/ disallowances deserve to be cancelled. In view of this, additional ground raised by the assessee succeeds and reversing the order of the ld CIT(A), we direct the ld Assessing Officer to delete all the additions disputed before us for AY 2004-05 to AY 2008-09. In the result additional ground raised by the assessee succeeds. 18. In view of our decision on the additional ground, the other grounds raised in the original appeal memo do not survive, hence, they are dismissed without adjudicating upon them on merits. 19. In view of this appeals of the assessee for AY 2004-05 to 2008-09 are allowed. 20. Coming to the appeal of the assessee for AY 2009-10 and 2010-11 where, assessments were open as on the date of search i.e. 19.06.2009, the grounds are required to be adjudicated independently. 21. For AY 2009-10 assessee has contested the confirmation of addition of Rs. 180000/- on account of low drawings and disallowance of Rs. 45000/- on account of personal expenses. 22. We have carefully considered the rival contentions. With respect to the disallowance of Rs. 45000/- the above disallowance was not contested ....