2015 (7) TMI 1100 - HC - Income Tax

Scope of assessment u/s 153C - Held that - The Court is of the view that the essential principle of law that has been settled by this Court in Pepsico 2014 (8) TMI 898 - DELHI HIGH COURT in regard to the interpretation of the words belongs to in Section 153 C of the Income Tax Act, 1961 would apply on all fours to the facts of the present case irrespective of whether the document recovered (viz., the accounts) is in the form of a hard copy or a hard disk. Consequently, the Court does not find any error in the impugned order of the ITAT which gives rise to a substantial question of law.

Summary

Issues: Interpretation of Section 153 C of the Income Tax Act, 1961

In this judgment, the High Court of Delhi addressed the interpretation of Section 153 C of the Income Tax Act, 1961 in relation to a series of appeals concerning Assessment Years 2005-06 to 2008-09. The Income Tax Appellate Tribunal (ITAT) relied on the judgment in Pepsico India Holdings (P) Ltd. v. ACIT, which is pending consideration in the Supreme Court. The Revenue argued that the ITAT also considered decisions in other cases, such as V.K. Fiscal Services Pvt. Ltd. v. DCIT and DSL Properties Pvt. Ltd. v. DCIT. The Court noted that the principle established in Pepsico regarding the interpretation of the term "belongs to" in Section 153 C applies to the present case, regardless of the form of the recovered document. The Court found no error in the ITAT's decision, leading to the dismissal of the appeals.

This judgment primarily revolves around the application and interpretation of Section 153 C of the Income Tax Act, 1961. The Court considered the relevance of the judgment in Pepsico India Holdings (P) Ltd. v. ACIT, which is under special leave petition in the Supreme Court. The Court also addressed the arguments made by the Revenue regarding the ITAT's reliance on decisions in V.K. Fiscal Services Pvt. Ltd. v. DCIT and DSL Properties Pvt. Ltd. v. DCIT. The Court emphasized that the principle established in Pepsico is crucial for determining the interpretation of the term "belongs to" in Section 153 C, irrespective of the form of the recovered document.

The key issue in this judgment was the application of the interpretation of the term "belongs to" in Section 153 C of the Income Tax Act, 1961. The Court analyzed the ITAT's decision based on the principles established in the Pepsico case. The Court concluded that the interpretation provided in Pepsico is applicable to the present case, regardless of whether the document in question is in hard copy or hard disk format. Consequently, the Court found no substantial question of law arising from the ITAT's decision and dismissed the appeals.