Is interest paid to be treated as undisclosed income when the date of PDCs are extended?

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘A’ BENCH,
NEW DELHI [THROUGH VIDEO CONFERENCE]
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND
SHRI K.N. CHARY, JUDICIAL MEMBER
ITA No. 769/DEL/2015
[A.Y 2006-07]

M/s BPTP Resort Pvt Ltd

[Formerly known as M/s Real Value

Overseas Pvt Ltd, M-11,

Middle Circle, Connaught Circus
New Delhi

PAN: AAACR 5360 H

[Appellant]

vs

The A.C.I.T

Central Circle - 23

New Delhi

[Respondent]

Assessee by : Shri Ajay Bhagwani, CA
Revenue by : Shri Satpal Gulati, CIT-DR
Date of Hearing : 27.07.2021
Date of Pronouncement : 27.07.2021

ORDER

This appeal by the assessee is preferred against the order of the CIT(A) - XXXIII, New Delhi dated 31.10.2014 pertaining to A.Y 2006-07.

2. In addition to the aforementioned grievances, the ld. counsel for the assessee also vehemently stated that the material seized during the course of search on BPTP group of cases on 15.11.2007 did not belong to the assessee.

3. The present appeal relates to the addition on account of interest on PDC Rs. 1,68,750/- and disallowance u/s 40A(3) of the Act 7,24,112/-.

4. The ld. counsel for the assessee further stated that as no incriminating material was found and seized belonging to the assessee during the course of search on 07.12.2010, no addition should have been made in the assessment completed u/s 153A of the Act.

5. As no distinguishing decision has been brought to our notice in favour of the Revenue, respectfully following the findings of the coordinate bench, we hold that the entire assessment is void ab initio and, therefore, we do not find any reason to dwell into the merits of the addition.

6. In the result the appeal of the assessee in ITA No. 769/DEL/2015 is allowed.

The order is pronounced in the open court in the presence of both the rival representative on 27.07.2021.

Please find attached the enclosed file for the full judgement