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TMI Blog2017 (8) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the profit of the eligible undertakings; or that the eligible undertakings are not carrying out manufacturing activities or that the material transferred to the eligible undertakings is less than the market value and that "none of the material relates to the purchases from sister concerns." All of this is de hors the fact that the material pertains only to FY 2010-11. If, even for FY 2010-11, what was seized did not constitute incriminating material, then the essential jurisdictional fact for justifying the assumption of jurisdiction under Section 153A of the Act did not exist. In the present case there was no incriminating material seized qua each of the AYs the assessments for which were sought to be reopened. - Decided in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an income of ₹ 5,70,32,680/-. This was the income which was declared when the return was filed in the first place. 4. The Assessee was claiming deduction under Section 80-IB and 80-IC of the Act in respect of its units located at Himachal Pradesh and Agartala. As for the Noida unit of the Assessee, which was not eligible for deduction under Section 80-IB and 80-IC of the Act, it is stated that it was transferring silver flakes to the various eligible units. 5. During the course of the assessment proceedings under Section 143(3) of the Act, the Assessee submitted the certificate of the Auditor in Form 10CCB claiming deduction in respect of the profits of the eligible units. The case of the Revenue is that, in the Form 10CCB subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has not referred these seized documents in the assessment order but these explanations were present before the Assessing Officer to arrive at the conclusion that goods/raw material is purchased at head office and goods are transferred to eligible unit claiming deduction u/s 80IB/80IC. According to the CIT (A), since at the time of passing of the assessment order under Section 153A of the Act, the above facts came to the knowledge of the AO due to the seized documents, the disallowance of the deduction under Section 80IB/80IC was justified. The CIT (A) concluded that presence of seized documents and its extracts has definitely played a role to arrive at the decision for disallowing deduction. 8. In the further appeal filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out manufacturing activity, which is stated by assessee. f. None of the material shows that there is inflation of the profit by assessee of eligible undertakings. g. None of the material suggest that appropriation of profit made by the assessee to drive the income of eligible undertaking is incorrect. h. None of the material suggest that eligible units earn 'more than Ordinary profits'. 10. Mr. Zoheb Hossain, learned Senior Standing Counsel for the Revenue, placed considerable reliance on the decision of the Division Bench of this Court in Smt. Dayawanti Gupta v. CIT [2017] 390 ITR 496 (Del) where it was held that material seized which is relevant to one particular AY is sufficient to infer a certain modus operan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 153A of the Act qua each of the AYs for which assessment is sought to be reopened. Mr Aggarwal submitted that, in the present case, even de hors this question, the ITAT has analysed the material seized and in fact found it to be not incriminating even for FY 2010-11. That being the position, the further question as to whether such material could constitute incriminating material with respect to other AYs simply did not arise. 12. Indeed, the Court finds that de hors the question whether the material seized, which admittedly pertains to FY 2010-11, can constitute sufficient material to reopen the assessments for the other AYs in question, it is seen that, even for FY 2010-11, the ITAT, after undertaking a detailed analysis, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... op. M/s Ferns n Petals (supra), the decision of this Court in Smt. Dayawanti Gupta v. CIT (supra) is not contrary to the ratio of the decision of this Court in Commissioner of Income Tax v. Kabul Chawla (supra). This Court has, in Principal Commissioner of Income Tax v. Meeta Gutgutia Prop. M/s Ferns n Petals (supra), explained the factual background and circumstances under which the decision in Smt. Dayawanti Gupta v. CIT (supra) was rendered and how in the peculiar facts of that case that it was held that the material seized for one particular AY could lead to an inference regarding the modus operandi of the Assessee for the other AYs. Further, as pointed out in Principal Commissioner of Income Tax v. Meeta Gutgutia Prop. M/s Ferns n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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