2023 (10) TMI 278 - HC - Income Tax

Assessment u/s 153A - Addition u/s 68 - whether any incriminating material found so as to justify reopening of assessment of unabated/completed assessments u/s 153A? - HELD THAT - As in view the law as laid down in the case of Abhisar Buildwell Private Limited 2023 (4) TMI 1056 - SUPREME COURT followed by this Court in a recent judgment in Fortune Vanijya Private Limited 2023 (10) TMI 204 - GAUHATI HIGH COURT we have no hesitation in holding that the Hard Drive GCL HD 1 collected by the jurisdictional authority during the search carried out in the premises of the assessee in the year 2017 does not constitute incriminating material so as to justify reopening of assessment of unabated/completed assessments under Sections 153A of the Income Tax Act and addition to the income of the assessee under Section 68. The concurrent findings of fact recorded by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal in the 3(three) appeals of the revenue and the cross- objections of the assessee 2021 (12) TMI 1459 - ITAT GAUHATI cannot be termed to be perverse illegal or unjustified in any manner. Hence we are of the unhesitant opinion that the appeals herein do not involve any substantial question of law warranting admission.

Issues Involved:
1. Validity of notice under Section 153A.
2. Nature of seized document GCL-HD-1 as incriminating material.
3. Discharge of burden of substantiation by the assessee.
4. Deletion of additions under Section 68 of the Income Tax Act.

Summary:

1. Validity of Notice under Section 153A:
The appeals questioned whether the notice under Section 153A was issued by the Assessing Officer without authority of law and without satisfying the essential jurisdictional fact. The High Court upheld the ITAT's decision that the Assessing Officer did not have the jurisdiction to issue the notice under Section 153A, as no undisclosed asset valued at Rs. 50 Lakhs or more was unearthed during the search.

2. Nature of Seized Document GCL-HD-1 as Incriminating Material:
The core issue was whether the seized document GCL-HD-1 constituted "incriminating material." The High Court agreed with the ITAT and CIT(A) that the document, which contained the shareholding pattern of the assessee, was not incriminating as it was verifiable from the books of accounts and secretarial records filed with the ROC prior to the search. The court emphasized that the document did not lead to unearthing of unexplained cash credit and thus could not justify reassessment under Sections 153A and 153C.

3. Discharge of Burden of Substantiation by the Assessee:
The appeals also questioned whether the assessee had discharged its burden of substantiation of the identity, creditworthiness, and genuineness of the transactions involving receipt of share application monies. The High Court upheld the ITAT's findings that the assessee had indeed discharged this burden, and the additions made by the Assessing Officer under Section 68 were unsustainable.

4. Deletion of Additions under Section 68:
The appeals contested the deletion of additions under Section 68 of share application money received from various entities. The High Court found no reason to interfere with the ITAT's decision to delete these additions, as the document GCL-HD-1 did not constitute incriminating material, and the assessee had substantiated the transactions.

Conclusion:
The High Court dismissed the appeals, holding that the seized document GCL-HD-1 did not constitute incriminating material, and thus, the reassessment under Sections 153A and 153C was unjustified. The court also held that the assessee had discharged its burden of substantiation, and the additions under Section 68 were rightly deleted by the ITAT. The appeals did not involve any substantial question of law warranting admission.

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