2017 (12) TMI 44 - ITAT DELHI

Validity of proceedings u/s 153C - proof of any incriminating material found in search - Held that:- Hon’ble Apex Court in the case of CIT v. Sinhagad Technical Education Society [2017 (8) TMI 1298 - SUPREME COURT OF INDIA] has held that section 153C can be invoked only when incriminating materials assessment year-wise are recorded in satisfaction note which is missing here. Therefore, the proceedings drawn u/s 143(3) as against 153C are invalid for want of any incriminating material found for the impugned assessment year.

In view of the above, the additional grounds raised by the assessee in the case of M/s Pavitra Realcon Pvt. Ltd. and M/s Delicate Real Estate Pvt. Ltd. are accepted. Since the assessee succeeds on this legal ground, we refrain ourselves from adjudicating the issue on merit as far as these two cases are concerned.

Coming to Design Infracon (P) Ltd., we find from the material available on record that there is brazen violation of principles of natural justice inasmuch as neither the statement of Mr. Jain recorded at the time of search nor his cross-examination was provided to the assessee by both the lower authorities despite specific and repeated requests made by the assessee in this regard. We find in the present case both the Assessing Officer and the CIT (A) are looking for proof beyond doubt which is not possible and they are basing their decision on an element of suspicion. It has been held in various decisions that presumptions and surmises, however strong may be, cannot be the basis for any addition. In view of our above discussion, we are of the considered opinion the ld. CIT (A) was not justified in confirming the addition made by the Assessing Officer. Therefore, the order of the CIT (A) is set-aside and the Assessing Officer is directed to delete the addition made in the hands of Design Infrcon Pvt. Ltd. The grounds raised by the assessee are accordingly allowed. - Appeal of assessee allowed.