Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 585 - HC - Income TaxRevision u/s 153C - no incriminating material found during the course of search - Held that - In the present case, the two seized documents referred to in the Satisfaction Note in the case of each Assessee are the trial balance and balance sheet for a period of five months in 2010. In the first place, they do not relate to the AYs for which the assessments were reopened in the case of both assessee s. Secondly, they cannot be said to be incriminating. Even for the AY to which they related, i.e. AY 2011-12, the AO finalised the assessment at the returned income qua each Assessee without making any additions on the basis of those documents. Consequently even the second essential requirement for assumption of jurisdiction under Section 153 C of the Act was not met in the case of the two Assessee. This Court does not consider it necessary to examine the merits of the case as far as the deletions by the CIT (A) of the additions made by the AO under Section 153C of the Act are concerned. In any event, a detailed analysis has been undertaken by the CIT (A) of the materials produced by the Assessee which justified the deletion of such additions. Even on this score, no interference is warranted with the impugned order of the CIT (A).
Issues Involved:
1. Validity of assumption of jurisdiction under Section 153C of the Income Tax Act, 1961. 2. Whether the seized documents belonged to the assessee. 3. Whether the seized documents constituted incriminating material for the assessment years in question. 4. The merits of the additions made by the Assessing Officer (AO) under Section 153C of the Act. Detailed Analysis: 1. Validity of Assumption of Jurisdiction under Section 153C: The appeals by the Revenue challenged the orders of the Income Tax Appellate Tribunal (ITAT) which confirmed the orders of the Commissioner of Income Tax (Appeals) [CIT (A)] that no proceedings under Section 153C could be initiated against the Assessees as no incriminating documents belonging to the Assessees and relating to the assessment years (AYs) in question were found during the search. 2. Whether the Seized Documents Belonged to the Assessee: For ISRPL, the documents seized were the Trial Balance and Balance Sheet for the period 1st April 2010 to 13th September 2010, recovered from the premises of Jagat Agro Commodities Pvt. Ltd. The CIT (A) held that these documents did not belong to ISRPL as they were found at the premises of another entity. Similarly, for VSIPL, the seized documents were the Trial Balance and Balance Sheet for the period 1st April 2010 to 4th September 2010, also recovered from the premises of Jagat Agro Commodities Pvt. Ltd. The CIT (A) concluded that these documents did not belong to VSIPL. 3. Whether the Seized Documents Constituted Incriminating Material for the AYs in Question: The CIT (A) observed that the seized documents were not incriminating as they were already disclosed and accepted by the AO in subsequent assessment years. For ISRPL, the documents were relevant for AY 2011-12, and no addition was made based on these documents even for that AY. Similarly, for VSIPL, the documents were relevant for AY 2011-12, and no addition was made based on these documents for that AY. The ITAT concurred with the CIT (A), holding that the seized documents did not relate to the AYs for which assessments were reopened and were not incriminating. 4. Merits of the Additions Made by the AO: For ISRPL, the AO made significant additions for AYs 2007-08, 2008-09, and 2010-11 based on share application money and unsecured loans. However, the CIT (A) found that the Assessee had provided sufficient documentation to prove the identity, creditworthiness, and genuineness of the investors, and the AO failed to disprove these documents. The ITAT did not examine the merits further as it agreed with the CIT (A) on the jurisdictional issue. For VSIPL, the AO made substantial additions for AYs 2007-08, 2008-09, and 2009-10 based on share application money. The CIT (A) found that the Assessee had provided ample documentation to prove the identity, creditworthiness, and genuineness of the investors, and the AO failed to bring any material to disprove these documents. The ITAT concurred with the CIT (A) on the jurisdictional issue and did not delve into the merits further. Conclusion: The Court found that the essential jurisdictional requirements for assumption of jurisdiction under Section 153C were not met in the case of both Assessees. The seized documents did not belong to the Assessees and were not incriminating for the AYs in question. Consequently, the appeals were dismissed, and the orders of the ITAT were upheld. The Court did not find it necessary to examine the merits of the case further.
|