2021 (12) TMI 996 - HC - Income Tax

Assessment u/s 153A/153C - jurisdictional benchmark of belong to under Section 153C - Whether Tribunal has failed to appreciate that seized material indicated that certain portion of the transaction was conducted out of book? - HELD THAT - This Court finds that the very same document seized from the residence of Mr.Lalit Modi, had been considered by the learned predecessor Division Bench in the case of Principal Commissioner of Income Tax (Central -2) v. Vinita Chaurasia 2017 (5) TMI 992 - DELHI HIGH COURT . After considering the same, the learned predecessor Division Bench had concluded that the Assessing Officer appears to have proceeded purely on conjecture as regards what the document states without noticing the internal contradiction and inconsistencies. Since the learned predecessor Division Bench has, on merits, found that there was no error committed by the Tribunal in deleting the addition made by the Assessing Officer on the basis of the same seized material/ document, this Court is of the view that in the present facts of the case, no substantial question of law arises for consideration

Summary

Issues:
Challenge to ITAT order for Assessment Year 2010-11 based on reliance on a previous court decision and distinction in facts, assessment under Section 143(3) of the Act, seized material indicating off-book transactions, resemblance of cheque amounts, lease to Pantaloon Retail, consideration of seized document by predecessor Division Bench, conclusions on document contents, internal contradictions and inconsistencies, burden of proof on the Assessee, lack of further investigation by the AO, deletion of additions by ITAT, no substantial question of law arising.

Analysis:

1. The appellant challenged the ITAT order for the Assessment Year 2010-11, arguing that the Tribunal erred in relying on a previous court decision without appreciating the distinction in facts. The appellant contended that the assessment was framed under Section 143(3) of the Act, making the previous court's findings inapplicable. The seized material indicated off-book transactions, with a significant amount recorded. The appellant highlighted the resemblance of cheque amounts in the seized material to those actually received, emphasizing that the shop in question was leased to Pantaloon Retail for a Big Bazaar.

2. The Court noted that the same document seized from Mr. Lalit Modi's residence was considered by a predecessor Division Bench in a previous case. The Division Bench concluded that the Assessing Officer had proceeded on conjecture without addressing internal contradictions and inconsistencies in the document. The Court highlighted that the burden of proof was on the Assessee, but the AO failed to conduct further investigation into crucial aspects, such as the source of the document and market value validation. The ITAT had deleted the additions based on this document, and the Court found no error in their decision.

3. Considering the predecessor Division Bench's findings that there was no error in deleting the additions, the Court concluded that no substantial question of law arose in the present case. The Court dismissed the writ petition, leaving the question of law open for future consideration in an appropriate case. The judgment upheld the ITAT's decision to delete the additions based on the seized document, emphasizing the importance of thorough investigation and proper burden of proof in such matters.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Court's reasoning in addressing each point raised by the appellant.