TaxTMI 
TaxTMI 
2017 (10) TMI 592
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....e, condone the delay. 3. In all the appeals filed by the assessee the assessee has taken a common legal ground that the CIT(A) has erred in confirming the action of the AO in making additions in the assessment made under section 143(3) r.w.s. 153A in the absence of any incriminating material being seized/ found during the course of search and, therefore, all these additions are bad in law. Since the ground taken by the assessee is a legal ground we, therefore, decided to dispose off this grounds of the assessee by this common order. 4. The brief facts of the case are that there has been a search and seizure action under section 132 of the Income Tax Act at the premises of the assessee on 12.08.2009. The assessee has filed the return of income for each of the assessment years as detailed below for which assessment has been completed either processing the return under section 143(1) or completed the assessment under section 143(3): - A.Y. Date of Return Returned Income u/s. 115JB 2004-05 25.10.2004 Rs. 14,14,250/- - 2005-06 31.10.2005 Rs. 46,07,491/- Rs. 3,13,23,636/- 2006-07 30.11.2006 Rs. 1,33,25,450/- Rs. 1,43,58,760/- 2007-....
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....pecial Bench of this Tribunal in the case of All Cargo Global Logistics Ltd. vs. DCIT 137 ITD 287 (SB) (Mum). On the basis of this decision it was contended that since the assessments for assessment years 2004-05 to 2007-08 were completed and were not pending when the search was taken place, therefore, the assessments remain unabated. When an assessment has not been abated in view of the decision of the Hon'ble Jurisdictional High Court addition for disallowance can be made by the AO only on the basis of the material found/seized during the course of the search not otherwise. In the case of the assessee in each of the assessment year none of the addition has been made on the basis of the material found/seized during the course of search. Thus, it was contended that the addition so made are invalid and the assessment completed without any incriminating material being brought on record is bad in law. 6. The learned D.R., on the other hand, supported the order of the tax authorities below and drawn our attention towards the assessment order of A.Y. 2007-08 and on that basis it was contended that so far the addition made for the commission on bogus purchases and sales are concer....
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.... the years for which incriminating material is found during the search. Ultimately, in respect of question referred to the Special Bench, the Special Bench in para 58 of its order held as under: "8. Thus, question No. 1 before us is answered as under: a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately. b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means - (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and; (ii) undisclosed income or property discovered in the course of search". 33. In view of the decision of Special Bench in the case of All Cargo Global Logistics Ltd. (supra), no doubt the addition in the case of the assessee can be made by the A.O. only on the basis of incriminating material found during the course of search. The decision of the Special Bench has duly been approved by the....
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.... carried out on its premises and a notice under section 153A was issued to the assessee. The assessee declared a total income of Rs. 5,54,63,220 while claiming the deduction under section 80-IA(4) of Rs. 1,25,77,637. The Assessing Officer held that the assessee was not entitled to the deduction under section 80-IA. The Commissioner (Appeals) upheld the order of the Assessing Officer. The Special Bench of the Tribunal held that by the clear language of section 153A together with its provisos, pending assessments abated and that the Assessing Officer was required to make one assessment for each of the six years on the basis of the search and any other material existing or brought on record by the Assessing Officer, that in other cases assessments would be made on the basis of the books of account and other documents found during the search and not produced during assessment and also on any other undisclosed income or property found during the search. On the issue of deduction under section 80-IA(4) the Tribunal held that the container freight station was an inland port and its income was entitled to deduction under section 80-IA(4). On appeals: Held, dismissing the appeals, (i) th....
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....sallowance u/s. 35D Rs. 1,62,43,558/- Disallowance u/s. 35DD Rs. 39,512/- Disallowance @5% of Expenses Rs. 59,60,470/- Depreciation on Goodwill & Brand Value Rs. 1,58,95,519/- Commission on Purchases Rs. 9,57,372/- Commission on Sales Rs. 9,57,372/- Rs. 4,23,77,020/- 8. So far the additions in respect disallowance of PF, ESIC, 5% of the expenses disallowed under section 35D and disallowance for depreciation on actual brand value we noted that the disallowances have been made by the AO in the respective assessment years without bringing out any seized material during the course of assessment proceedings. In view of the dictum of the Hon'ble Jurisdictional High Court which we are bound to follow we hold that these additions in each of the assessment years are made by the AO beyond his jurisdiction. We, therefore, delete all these additions in each of the assessment years. 9. Now there remains the additions in respect of disallowances on account of commission on purchases and sales amounting to Rs. 9,57,372/- each in A.Y. 2007-08. In this regard we noted that these disallowances were made by the AO on the basis of the s....
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.... incurred by way of commission on sales. In view of the aforesaid finding we allow the appeal of the assessee for assessment years 2004-05, 2005-06 and 2006-07 while the appeal for A.Y. 2007-08 is partly allowed. 10. Now coming to the appeals filed by the Revenue we noted that in each of the assessment year except the change in the figures Revenue has taken the following two effective grounds of appeal: - "(1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of depreciation of Rs. 1,37,50,0007- (A.Y. 2006-07) Rs. 1,58,95,519/- (for A.Y. 2007-08) on brand value & goodwill while goodwill and brand value has arisen as a result of amalgamation, the difference between consideration for amalgamation and net value of assets of amalgamating company has been regarded as goodwill and brand value and depreciation claimed thereon. It is a fact that in such instances no amount is actually paid for acquisition of the goodwill and brand value. (2) Whether on the facts and circumstances of the case, the Ld.CIT(A) erred in restricted disallowance to 2% of such expenditure as against 5% disallowed by the AO. While th....