IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `F', NEW DELHI
BEFORE SH. H. S. SIDHU, JUDICIAL MEMBER
AND
SH. R. K. PANDA, ACCOUNTANT MEMBER
ITA No.1355/Del/2015
Assessment Year: 2006-07
Poonam Promoters and Dy. Commissioner of Income
Developers Pvt. Ltd, M-11, Vs Tax, Central Circle 32
Middle Circle, Connaught New Delhi-1100055
Circus, New Delhi-110001
PAN AAACP6882G
(APPELLANT) (RESPONDENT)
Appellant by Sh. Ajay Bhagwani, CA
Respondent by Sh. Surender Pal, Sr. DR
Date of hearing: 28/05/2019
Date of Pronouncement: 20/06/2019
ORDER
PER R.K. PANDA, AM:
This appeal filed by the assessee is directed against the
order dated 24.11.2014 of the CIT(A)-30, New Delhi relating to A.
Y. 2006-07.
2. The grounds raised by the assessee are read as under :-
1. That the order passed by the Assessing Officer and
Commissioner of Income Tax (Appeals)-XXX, New Delhi are bad in
law and void ab-initio
2. That on the facts and circumstances of the case and in
law the CIT(A) erred in sustaining the disallowance of
Rs.13,45,626/- u/s 40A(3) of the IT Act despite the fact that no
deduction in respect of said sum was claimed in the computation of
income from business.
3. The appellant craves permission to add, amend, alter or
vary all or any grounds of appeal on or before the date of hearing of
the appeal.
3. Facts of the case, in brief, are that the assessee is a
company. The original assessment in this case was completed
u/s. 143 (3) on 03.12.2009 at an income of Rs.2,16,33,051/-
after making various additions including the addition of
Rs.13,45,626/- on account of disallowance u/s.40A(3).
Subsequently a search and seizure operation was carried out at
various premises of M/s. BPTP Limited and its group concerns
and associated persons on 07.12.2010 which was finally
concluded on 05.02.2011. The case of the assessee was also
covered. In response to notice u/s. 153 A the assessee filed its
return of income on 30.01.2012 declaring total income of Rs.Nil.
Since the disallowance of Rs.13,45,626/- made by the Assessing
Officer in the original assessment order was upheld by the CIT(A),
the Assessing Officer in the order passed on 28.03.2013 u/s.
153A of the IT Act, 1961 made the addition of Rs.13,45,626/-
u/s.40A(3). He also made another addition of Rs.16,85,489/- u/s
2 (22) (e) which was deleted by the CIT(A) for which the revenue is
not in appeal and therefore, we are not concerned with the same.
4. So far as the addition of Rs. 13,45,626/- made by the
Assessing Officer u/s. 40A (3) is concerned the Ld. CIT(A) upheld
the action of the Assessing Officer.
5. Aggrieved with the order of the CIT(A), the assessee is in
appeal before the Tribunal.
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6. The Ld. Counsel for the assessee submitted that the
Tribunal vide ITA No.4082/Del/2013 order dated 13.06.2015 has
decided the issue of addition made u/s. 40A(3) and deleted the
addition. Therefore, since the amount has already been delete by
the Tribunal in assessee's own case, therefore, the same cannot
be added again by the Assessing Officer. Even otherwise also
since no incriminating material was found during the search,
therefore, in view of the decision of Hon'ble Delhi High Court in
the case of Kabul Chawla reported in 380 ITR 573 the addition is
not sustainable.
7. The Ld. DR on the other hand tried to distinguishing the
decision of the Tribunal in assessee's own case wherein the
addition was deleted on merit.
8. Relying on various decisions he submitted that decision of
the Tribunal deleting the addition on merit which was made by
the Assessing Officer u/s. 40A(3) is not correct and the same is to
be upheld. He accordingly submitted that the order of the CIT(A)
sustaining the addition made by the Assessing Officer should be
upheld.
9. We have considered the rival arguments made by both the
sides and perused the orders of the lower authorities. We find
the only issue to be decided in the impugned appeal is regarding
the addition of Rs.13,45,626/- made by the Assessing Officer
u/s. 40A(3). We find, the Assessing Officer while making the
addition at para 6 of the order has stated as under :-
6. As far as addition of Rs.13,45,626/- made on account
of disallowance u/s. 40A93) is concerned, the same has been
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confirmed by the CIT(A), hence this addition on this account is again
made to the income of the assessee for reason discussed in detail in
the previous assessment order as well as in the order of the CIT(A).
10. We find the Ld. CIT(A) upheld the addition made by the
Assessing Officer. In our opinion the addition so upheld by the
CIT(A) cannot be sustained for two reasons. Firstly, the Tribunal
in assessee's own case vide ITA No.4082/Del/2013 order dated
16.06.2015 has deleted the addition. Since the order of the
Tribunal was subsequent to the order of the CIT(A), therefore, the
Ld. CIT(A) did not have the benefit of this order. Therefore, once
the issue has been decided by the Tribunal in assessee's own
case for the same assessment year in an issue, the same cannot
be made again in the order passed u/s. 153A. The various
decisions relied by the Ld. DR cannot be applied to the facts of
the present case since the Tribunal has taken a conscious
decision on the very issue and after elaborately discussing has
deleted the addition made by the Assessing Officer u/s. 40A(3)
which was upheld by the CIT(A). Therefore, the addition made by
the Assessing Officer and upheld by the CIT(A) cannot be
sustained.
11. Even otherwise also it is an admitted fact that no
incriminating material was found during the course of search
which is evident from the assessment order. The very basis of the
addition made by the Assessing Officer as reproduced in the
preceding paragraphs shows that the addition is made on the
basis of the original assessment order which was upheld by the
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CIT(A). Since the addition is not based on any incriminating
material found during the course of search, therefore, relying on
the decision of Hon'ble Delhi High Court in the case of Kabul
Chawla (supra) we are of the considered opinion that the addition
cannot be sustained. We accordingly set aside the order of the
CIT(A) and direct the Assessing Officer to delete the addition. The
grounds raised by the assessee are accordingly allowed.
12. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 20.06.2019.
Sd/- Sd/-
(H.S. SIDHU) (R.K PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
*Neha*
Date:- 20.06.2019
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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