TaxTMI 
TaxTMI 
2019 (9) TMI 976
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....ard both the parties. Case file(s) perused. 2. It transpires at the outset that the Revenue's two appeal(s) IT(SS)A No.25/Kol/2017 & ITA No.1314/Kol/2017 for assessment year(s) 2010-11 and 2012-13 involve tax effect less than Rs.50 lakhs prescribed in revised threshold limit in CBDT's latest Circular No17/2019 dated 08.08.2019. 3. On perusal of the Circular No. 17/2019 dated 08.08.2019 and the materials available on record, we do not see these case(s) falling under any of the exceptions contemplated therein. We also find that this circular makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals as well. Hon'ble apex court in Commissioner of Customs vs Indian Oil Corporation Ltd reported in 267 ITR 272 (SC) has settled the law that CBDT's circulars are very much binding on revenue authorities. We therefore decline the Revenue's instant two appeal(s) as involving lower than the prescribed tax effect. Learned authorized representative is equally fair in not pressing for assessee's cross objection CO Nos. 80 & 82/Kol/2017. These assessee's cross objections are dismissed as not pressed therefore. 4. We now come to the common issue of legali....
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....e disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances." The Hon'ble Kolkata High Court in the above cases relied on the following judgments. CIT vs. Kabul Chawla (2016) 380 ITR 0573 (Del) Search and seizure-New scheme of assessment in search cases- Search was carried out u/s. 132 on a leading real estate developer operating all over India and some of its group companies-Search was also carried out in the premises of the assessee-Pursuant to the search a notice u/s 153A(1) was issued to assessee and thereafter he filed returns - As on the date of the search, no assessment proceedings were pending for relevant AYs and for said AYs, assessments was already made u/s 143(1), assessee filed an application u/s 154 seeking rectification of the assessments on the ground that the accumulated profits of the companies paying the dividend were less than the amount of loan or advance given by them to the recipient companies- AO declined to rectify the assessments-CIT also held that addition need not be restricted only to the seized material-ITAT on appeal however deleted addition on grounds that the additions made f....
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....ld be a new or incriminating document. The assessment which is already completed u/s 143(3)/143(1) should not be reopened. Therefore, considering the scheme of section 132 and section 153A, we are of the view that there should be some new document/incriminating document to invoke the provisions of section 153A. Ld. DR for the revenue had pointed out that there is a direct nexus among the companies} which has been established by the statement of Mr. Naresh Kumar Chhapperia, which cannot be relied on} as he was a double speaking person. Therefore, considering the factual position and the judgments cited by Id. AR} we are of the view that the additions made by the AD u/ s 153A and confirmed by the Id. CIT(A) needs to be deleted. Therefore} we delete the addition." Furthermore, the decision of the jurisdictional tribunal in the case of M/s Tanuj Holdings Pvt Ltd Vs. DCIT CC-l(2), Kolkata vide ITAT No. 360 to 363/Kol/2015 dated 20.01.2016 is important. The relevant portion of the order is reproduced as under: We also find that no incriminating materials were found during the search in the respect of the issue of deemed dividend. Hence it cannot be the subject matter of addition in 1....
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....his regard for the assessment years 2007-08 and 2008-09 are dismissed." Since the decisions are rendered by us on legal grounds, we refrain to give our decision on the merits of the issues." Budhiya Marketing Pvt. Ltd. & Ors. Vs. ACIT in ITA Nos-1545-1546/Kol./2012 [reported in (2015) 44 CCH 03441 dt. 10.07.2015 (ITAT Kolkata) "The issue whether the addition in an assessment framed under section 153A can be made on the basis of the incriminating material found during the course of the search where the assessment has not been abated, has not been considered or decided by this Tribunal. Therefore, this decision, in our opinion will not assist the revenue while disposing of the plea of the assessee that since no incriminating material is found during the course of the search relating to the share capital and the share premium, therefore, no addition can be made while making an assessment under section 153A of the Income Tax Act. No contrary decision was brought to our knowledge by the ld. D.R. In view of the aforesaid discussion and the decision of the Hon'ble Special Bench, Bombay High Court, as well as Hon'ble Delhi High Court, we confirm the order of the CIT(Appeals) ....
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....this case was completed under section 143(3) in which deduct ion was allowed in entirety under sect ion 80IB of the Act inter alia on the amount of interest income. It is also undisputed that no incriminating material was found during the course of search casting doubt about the allowability or otherwise of such deduction under sect ion 80IB. This fact has been fairly admitted by Id. D.R. during the course of proceedings before us as well. The Mumbai Bench of the Tribunal in the case of ACIT vs. Pratibha Industries (2013) 141 ITD 151 (Mum.) has held, inter alia, that having done original assessment u/s 143(3), if no incriminating material is found during the course of search, then it is permissible to make any addition in the assessment under section 153A pursuant to search action. The Special Bench of the Tribunal in the case of All Cargo Global Logistics Limited vs. DCIT (2012) 137 ITD 217 (SB)(Mum.) has also held to the same extent . In view of the foregoing discussion, we are of the considered opinion that no exception can be found to the view taken by CIT(Appeals} for deciding this issue in assessee's favour. Before parting with this matter, we want to make it clear th....
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....ith the views of the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances." The Hon'ble Kolkata High Court in the above cases relied on the following judgments. CIT Vs Kabul Chawla (2016) 380 ITR 0573(Del) Search and seizure-New scheme of assessment in search cases- Search was carried out u/s 132 on a leading real estate developer operating all over India and some of its group companies-Search was also carried out in the premises of the assessee-Pursuant to the search a notice u/s153A(1) was issued to assessee and thereafter he filed returns-As on the date of the search, no assessment proceedings were pending for relevant AYs and for said AYs, assessments was already made u/s 143(1),assesse....
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....ent case laws brought on record and appeal orders passed by my predecessors on this legal issue. I find that it seems that during the search and seizure operations conducted u/s 132 of the I T Act, 1961, in the case of Sri Balaji Log Products Pvt Ltd (SBLP) no incriminating documents/papers related/pertaining to the assessee were seized. At least, additions made by the AO in the assessment order passed u/s 153C/143(3) are not based on any incriminating documents/papers seized during the search operation under identification mark SBLP-4. There was neither any search nor survey in this case. It would also not be out of context to mention here that in this case, on the date of search, no assessment for this year was pending. Therefore, keeping in view the ratio decided by the Jurisdictional bench of Kolkata Tribunal in cases referred above and the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd (supra) in the light of CBDT's decision of not filing SLP in this case in the Supreme Court and keeping in view the Apex Court's decision to dismiss SLP on similar issue in the case of Pr CIT vs Kurele Paper Mills Pvt Ltd : SLP (C) No.34554 ....
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....fect deserve to be upheld. We order accordingly. The Revenue's appeal(s) IT(SS)A No.24/Kol/2017 and ITA No.1313/Kol/2017 for assessment year(s) 2009-10 and 2011-12 fail accordingly. The assessee's cross objection(s) CO No.79 & 81/Kol/2017 are dismissed as not pressed in view of the learned counsel fair statement made at the bar during the course of hearing. 8. We now come to the taxpayer's appeal IT(SS)A No.07/Kol/2017 raising the latter issue of disallowance of sec. 35(1)(ii) deduction on account of its contribution made to the "School of Human Genatics and Population Health". Both the lower authorities hold the above recipient organisation to be engaged in accommodation entry providing business than carrying out any scientific research and development. Learned CIT-DR refers to the lower authorities respective findings in seeking to confirm the impugned disallowance. We find no substance in Revenue's instant plea since this tribunal's co-ordinate bench decision in ITA No.s 341-342/Kol/2019 M/s Shyam Sunder Co. Jewellers vs. ACIT, Circle-2(2), Kolkata decided on 26.04.2016 deletes the very disallowance in case of the above stated recipient itself in assessment years 2013-14 and 2....
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....ture to such Notified .Institution which has as its object the undertaking of scientific research is eligible for weighted deduction equal one and three fourth times of any sum paid. However, the Ministry of Finance (Department of Revenue ) (Central Board of Direct Taxes) Vide Notification No. 82/2016/F.No. 203/64/2009/IT A.I1 dated 15.09.2016 in The Gazette of India: Extra Ordinary had rescinded the Notification granting approval by the Central Government to the appellant for the purpose of clause (ii) of sub section (1) of section 35 of the I.T. Act, 1961, read with Rule 5C and 5E of the Income tax Rule, 1962. The Notification reads as follows: "'Ministry of Finance, (Department of Revenue) (Central Board of Direct Taxes) Notification New Delhi, the 15th September, 2016, S.O. 2961(E)-In exercise of the powers conferred under clause (ii) of subsection (1) of section 35 of the Income-tax Act, 1961 read with Rule 5e and 5E of the Income-tax Rules, 1962, the Central Government hereby rescinds the notification of the Government of India, Ministry of Finance, Department of Revenue number 4/2010 dated 28.01.2010 published in Gazette of India , Part 11, Section 3, Sub-section (ii....
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....a Polymers vide ITA No.333/Kol/2017 order dated 08.11.2017 at page 7 has held as follows:- "5.6. We find that the ld CITA had made an observation which has been heavily relied upon by the ld DR that the assessee's line of business has got nothing to do even remotely with the healthcare or herbal healthcare industry much less in the area of research thereon and accordingly there was no need for the assessee to give donation of Rs. 14,00,000/- to HHBRF . We find that this aspect has been duly addressed by the assessee by stating that one Cardiologist Doctor had introduced the assessee to HHBRF and donations were given after due satisfaction of the assessee based on personal visits to the two research centres of HHBRF and activities carried on by them. Moreover, it is well settled that it is always the prerogative of the assessee to give or not to give any donation to a particular institution, which wisdom cannot be questioned by the revenue. The question of business expediency of an expenditure had to be viewed from the point of view of the businessman and not from the view point of the revenue. The businessman knows his interest best. However, it cannot be denied that this donat....
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....ng grounds:- "1. For that the Ld. CIT(Appeals) was wrong and unjustified in confirming the disallowance of deduction u/s 35(1)(ii) of Rs. 3,50,000/- on the donation of Rs. 2,00,000/- made to School of Human Genetics & Pollution Health without properly appreciating the submission of the appellant. The court decisions cited by the Ld. CIT(Appeals) are not applicable in the facts of the appellant's case. 2. For that the appellant craves leave to alter, amend, modify any of the grounds and/or take additional ground before or at the time of hearing of this appeal." 2. Heard both the parties. The ld. Counsel for the assessee submits that from the statement recorded and relied upon by the Assessing Officer of Shri Avijit Sinha Roy, it is clear that he stated that after February, 2011, he left this activity of providing bogus donations for commission. He drew the attention of the Bench to page 3 para 6.6. of the assessment order and submitted that the donation in question was made on 03/06/2014. Thus, he submits that reliance placed on this statement of Shri Avijit Sinhar Roy, for making this addition, is wrong. He further submits that no opportunity was provided to the assessee fo....
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....he list. There is a contradiction in these two. In such circumstances, it has to be seen as to which is correct. No opportunity of cross-examining Shri Avijit Sinha Roy has been provided to the assessee. Hence the declaration as well as the statement cannot be the basis of addition. Similarly, the statement of the key persons of the trust cannot be the basis of addition as no cross-examination of witness was provided. No proof of money being returned is available with the revenue. 3.2. Similar view was taken by the 'B' Bench of the Tribunal in the case of DCIT vs. M/s. Maco Corporation (India) Pvt. Ltd. in ITA No. 16/Kol/2017; Assessment Year 2013-14, order dt. 14/03/2018. 4. Consistent with the view taken therein, we allow this appeal of the assessee and direct the Assessing Officer to grant the necessary deductions. 5. In the result, appeal of the assessee is allowed. 7.3 We also find that similar issue came up before the co-ordinate bench of this tribunal in the case of Saimed Innovation vs ITO in ITA No. 2231/Kol/2016 for Asst Year 2013-14 dated 13.9.2017, wherein it was held as under:- "9. We note that the sole basis for making the addition is on the basis of the s....
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....lan and Baral they were satisfied with the scientific research work and for question no. 17 the partners replied that they had seen the certificate issued by Govt. of India and also have gone through the research paper of the people working there. For question no. 20 they have given the name of the doctor who was a Cardiologist who introduced them to M/s. Herbicure. We note that the AO enquired about Dr. Bhuban Chakraborty's address for which the partner replied that the doctor resides at Kshudiram Sarani, Rathtala, Kolkata. For question no. 21 as to whether they knew about the Directorate of Investigation, Kolkata carried out survey u/s. 133A and that its investigation is found that the activities were not genuine, the partners replied that they were not aware of the survey, however, they added that after their visit of the two centers they were on a bonafide belief that M/s. Herbicure was a competent institute and based on the recommendation of the Cardiologist Dr. Bhuban Chakrabrty they made donation to the said concern. We also note that the AO issued summons to Shri Swapan Ranjan Dasgupta who did not appear for cross examination due to ill health but the said Shri Dasgupta....