Inland Automate Pvt. Ltd. , Kolkata V. ACIT, CC-1(2), Kolkata

ITSSA 41/KOL/2023

AI Insights

The case involves Inland Automate Pvt. Ltd., which appealed against an addition of Rs. 2,28,160/- made by the Assistant Commissioner of Income Tax under sections 153C and 143(3) of the Income Tax Act, 1961. The addition was related to an ad-hoc disallowance of expenses categorized under business promotion, transportation, and traveling. The primary contention of the appellant was that no incriminating material was found during the search, and the assessment for AY 2012-13 was completed prior to the search, thus the additions were not warranted. The Tribunal, after reviewing the submissions and previous orders, decided in favor of the appellant, leading to the deletion of the disputed addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124750 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 12-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 132; 143(3); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA डॉ. मनीष बोरड, लेखा सद᭭य एवं ŵी संजय सरमा, Ɋाियक सद˟ के समᭃ Before Dr. Manish Borad, Accountant Member & Shri Sonjoy Sarma, Judicial Member I.T.(SS).A. No.41/KOL/2023 Assessment Year: 2012-13 Inland Automate Pvt. Ltd. .......... Appellant (PAN: AABCI4066J) Vs. Assistant Commissioner of Income ................. Respondent Tax, Central Circle-1(2), Kolkata. Appearances by: Shri Rakesh Jain, AR. Appeared for the Appellant Shri Subhrajyoti Bhattacharjee, CIT (DR) appeared for Respondent. Date of concluding the hearing : 18.05.2023 Date of pronouncing the order : 01.06.2023 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2012-13 is directed against the order passed u/s 250 of the Income Tax Act, 1961 in short the “Act”) by ld. Commissioner of Income-tax (Appeal), Kolkata-20 [in short ld. “CIT(A)”] dated 08.02.2023 arising out of the assessment order framed u/s 153C/143(3) of the Act dated 31.12.2016 by ACIT, Central circle-1(2), Kolkata. 2. The assessee has raised as many as six grounds of appeal but the sole grievance is in respect of addition of Rs. 2,28,160/- made by I.T.(SS)A. No. 41/Kol/2023 A Y: 2012-13, Inland Automate Pvt Ltd. Page 2 of 4 the AO in the assessment order completed u/s. 153C read with section 143(3) of the Act. Grievance of the assessee is that no incriminating material was found in the course of search and the assessment year under appeal i.e. AY 2012-13 being a completed assessment, therefore, no addition is called for. 3. On the other hand, Ld. CIT, DR heavily relied on the orders of the lower authorities. 4. We have heard rival contentions and perused the material available on record. We note that the assessee is a Private Limited Company engaged in trading of automotive lubricant, bearings and steel chains. Nil income was declared in the return for AY 2012-13 filed on 29.05.2012. The case was selected for scrutiny and the assessment u/s. 143(3) of the Act was completed on 24.03.2015 assessing the income at Rs.2,28,157/-. Assessment proceeding u/s. 143(3) of the Act was completed on 24.03.2015. However, search was conducted u/s. 132 of the Act on 07.03.2015. 5. The contentions of the assessee is that the AY 2012-13 that since the assessment for AY 2012-13 was not completed at the time of search, the same was abated and the assessment proceedings u/s. 153C read with section 143(3) of the Act should be treated as the final assessment proceedings. It is further contended that originally the return of income was filed declaring ‘nil’ income and during the course of search, there was no incriminating material found in the possession of assessee and, therefore, no addition was called for. 6. An alternative submission made by the Ld. Counsel is that the addition made by the AO in the assessment order dated 24.03.2015 u/s. 143(3) of the Act already stands deleted by the Ld. CIT(A) in its earlier order dated 18.04.2019 and, therefore, impugned addition deserves to be deleted. I.T.(SS)A. No. 41/Kol/2023 A Y: 2012-13, Inland Automate Pvt Ltd. Page 3 of 4 7. After going through the contentions of the Ld. Counsel, we find merit in the alternative plea that the additions which were made in the assessment order u/s. 143(3) of the Act dated 24.03.2015 have already been deleted by Ld. CIT(A) vide order dated 18.04.2019 [a copy of the decision is placed at pages 31 to 36 of the paper book]. We note that the addition of Rs.2,28,160/- was under challenge and the same was made towards ad-hoc disallowance of expenses @ 25% in respect of business promotion, transportation expenses and travelling expenses. The Ld. CIT(A) after examining the issue in detail has thus rightly deleted the disallowance. Therefore, since on merits of the case itself the impugned addition deserves to be deleted being an ad-hoc disallowance, the grievance of the assessee is allowed and the addition of Rs.2,28,160/- is deleted. So far as the other grievances of the assessee, since we have already deleted the impugned addition, the same are not adjudicated being academic in nature. 8. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 01.06. 2023. Sd/- Sd/- [Sonjoy Sarma] Judicial Member Dated: 01 st June, 2023 Sd/-[Manish Borad] Accountant Member J.D. Sr. PS. I.T.(SS)A. No. 41/Kol/2023 A Y: 2012-13, Inland Automate Pvt Ltd. Page 4 of 4 Copy of the order forwarded to: 1. Appellant – Inland Automate Pvt. Ltd., P-221/2, Strand Bank Road, Kolkata-700001. 2. Asst. Commissioner of Income Tax, Central Circle-1(2), Kolkata. 3. CIT(A), Kolkata-20, Kolkata 4. CIT- 5. Departmental Representative 6. Guard File. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata