The impugned additions of Rs. 1107 Lacs as made by Ld. AO u/s 68 and interest disallowance of Rs. 104.95 Lacs and partly confirmed by Ld. CIT(A), could not be sustained under law. By deleting the partial additions as confirmed by Ld. CIT(A), we allow legal grounds raised by the assessee. Though we are convinced with other arguments on merits also as enumerated by us in preceding paragraphs, however, delving into the same would become merely academic exercise keeping in view the fact that the assessee’scase, on legal grounds, is covered by the binding decision of Hon’ble Bombay High Court. Therefore, we refrain from entering into the merits of thecase.
Resultantly, the assessee’s appeal stand allowed in terms of our above order whereas the revenue’s appeal stands dismissed.
Assessee’s Appeal, ITA No. 6674/Mum/2019, AY 2014-15
The assessment for this year was similarly framed u/s 143(3) r.w.s. 153A on 29/12/2016. Since the unsecured loans were treated as unexplained cash credit in AY 2013-14, the interest paid against the same during AY 2014-15 amounting to Rs. 24.61 Lacs was disallowed by Ld.AO. The Ld. CIT(A), as per adjudication in AY 2013-14, confirmed disallowance to the extent of Rs. 16.86 Lacs and deleted the balance disallowance. Since, we have deleted addition u/s 68 for AY 2013-14, the interest disallowance in this AY, being consequential, could also not be sustained. Therefore, by deleting the balance interest disallowance as sustained by Ld. CIT(A), we allow the appeal.
Sec. 153A of Income Tax Act, 1961— Assessment - The provision under section 153A is applicable where a search or requisition is initiated after 31.5.2003. In such a case the AO is obliged to issue notice u/s 153A in respect of 6 preceding years, preceding the year in which search etc. has been initiated. Thereafter he has to assess or reassess the total income of these six years. It is obligatory on the part of the AO to assess or reassess total income of the six years as provided in section 153A(1)(b) and reiterated in the 1st proviso to this section. The second proviso states that the assessment or reassessment pending on the date of initiation of the search or requisition shall abate. Once assessment has attained finality, then the AO while passing independent assessment order u/s. 153A/143(3) of the Act could not disturb the assessment order which has attained finality unless the material gathered in the course of search u/s. 132/153A of the Act established that the finality attained in the assessment were contrary to the facts unearthed during the course of search. Appeal of the assessee allowed and the assessment framed under section 153A of the Act is quashed. - B & M BUILDCON V/s DEPUTY CIT - [2020] 23 ITCD Online 114 (ITAT-MUMBAI)
The impugned additions of Rs. 1107 Lacs as made by Ld. AO u/s 68 and interest disallowance of Rs. 104.95 Lacs and partly confirmed by Ld. CIT(A), could not be sustained under law. By deleting the partial additions as confirmed by Ld. CIT(A), we allow legal grounds raised by the assessee. Though we are convinced with other arguments on merits also as enumerated by us in preceding paragraphs, however, delving into the same would become merely academic exercise keeping in view the fact that the assessee’scase, on legal grounds, is covered by the binding decision of Hon’ble Bombay High Court. Therefore, we refrain from entering into the merits of thecase.
Resultantly, the assessee’s appeal stand allowed in terms of our above order whereas the revenue’s appeal stands dismissed.
Assessee’s Appeal, ITA No. 6674/Mum/2019, AY 2014-15
The assessment for this year was similarly framed u/s 143(3) r.w.s. 153A on 29/12/2016. Since the unsecured loans were treated as unexplained cash credit in AY 2013-14, the interest paid against the same during AY 2014-15 amounting to Rs. 24.61 Lacs was disallowed by Ld.AO. The Ld. CIT(A), as per adjudication in AY 2013-14, confirmed disallowance to the extent of Rs. 16.86 Lacs and deleted the balance disallowance. Since, we have deleted addition u/s 68 for AY 2013-14, the interest disallowance in this AY, being consequential, could also not be sustained. Therefore, by deleting the balance interest disallowance as sustained by Ld. CIT(A), we allow the appeal.
Sec. 153A of Income Tax Act, 1961— Assessment - The provision under section 153A is applicable where a search or requisition is initiated after 31.5.2003. In such a case the AO is obliged to issue notice u/s 153A in respect of 6 preceding years, preceding the year in which search etc. has been initiated. Thereafter he has to assess or reassess the total income of these six years. It is obligatory on the part of the AO to assess or reassess total income of the six years as provided in section 153A(1)(b) and reiterated in the 1st proviso to this section. The second proviso states that the assessment or reassessment pending on the date of initiation of the search or requisition shall abate. Once assessment has attained finality, then the AO while passing independent assessment order u/s. 153A/143(3) of the Act could not disturb the assessment order which has attained finality unless the material gathered in the course of search u/s. 132/153A of the Act established that the finality attained in the assessment were contrary to the facts unearthed during the course of search. Appeal of the assessee allowed and the assessment framed under section 153A of the Act is quashed. - B & M BUILDCON V/s DEPUTY CIT - [2020] 23 ITCD Online 114 (ITAT-MUMBAI)