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2016 (3) TMI 276 - ITAT DELHI

2016 (3) TMI 276 - ITAT DELHI - TMI - Validity of assumption of jurisdiction under section 153C - additions made u/s 153C for want of any corresponding material/incriminating material unearthed during search operations - disallowance of cash purchases - Held that:- In the absence of any incriminating material, the concluded assessments could not be interfered under Section 153A of the Act and further held that the documents seized has no reference to the income of the assessee for relevant asses .....

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it of the case also. - Decided in favour of assessee - ITA No. 3059/Del/2012 - Dated:- 29-1-2016 - SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Appellant : Sh. Kapil Goel, Adv. For The Respondent : Sh. T. Vasanthan, Sr. DR ORDER PER O.P. KANT, A.M.: The present appeal by the assessee is directed against the order dated 20.04.2012 of learned Commissioner of Income Tax(Appeals)-XXXIII, New Delhi, passed for the assessment year 2007-08. The assessee raised the follow .....

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; b. There is no valid satisfaction recorded in writing for validity proceeding u/s 153C of the Act; c. There is no undisclosed income emanating from subject papers relied by learned Assessing Officer vis-à-vis present assessee, subject period etc. Legal ground on validity of additions made u/s 153C for want of any corresponding material/incriminating material unearthed during search operations. 2. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in u .....

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sue (Rs. 3,71,614/-) 4. That on the facts and in the circumstances of the case and in law, learned Commissioner of Income Tax-A erred in upholding the addition made by the learned Assessing Officer on account of unverifiable purchases where learned Assessing Officer further assumed the same to be cover up for suppressed sales resulting in lower GP (Rs. 3,71,614). That the appellant craves leave to add, to amend or modify, rescind, supplement or alter any of the grounds stated herein above, eithe .....

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under Section 132 of the Income-tax Act, 1961 (for short the Act ) at the premises of M/s. Omni Infoword Pvt. Ltd. and its Directors on 23.08.2008 and certain documents were found and seized which were claimed by the Assessing Officer as belonging to the assessee. The documents contained certain cash transactions relation to assessment years 2003-04 and 2004-05. In view of the documents found and seized, the learned Assessing Officer issued notice under Section 153C r.w.s. 153A of the Act on 10. .....

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Act were issued and the assessment proceedings were commenced. In the course of the assessment proceedings, the assessee revised its computation of income declaring net taxable income of ₹ 1,95,560/-. However, in the revised computation of income the assessee firm reduced its business turnover to ₹ 26,12,064/- as against the turnover of ₹ 30,30,755/- shown in the original return of income. The assessee explained that in original return of income, the income was declared on esti .....

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ation of the parties, etc. In view of the observations, the Assessing Officer concluded that the purchases to the extent of ₹ 3,71,614/- was bogus and thus made addition to the total income of the assessee. Aggrieved, the assessee challenged the assessments made by the Assessing Officer on legal grounds as well as on the merit of the addition, but the assessee could not succeed before the learned Commissioner of Income Tax (Appeals) either on the legal ground challenging the jurisdiction o .....

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nating material in respect of the assessment year. The learned Authorized Representative submitted that the documents referred in satisfaction note pertains to the period corresponding to assessment years 2003-04 and 2004-05 and no documents or any other evidence was found or seized in respect to the assessment years and, therefore, the addition made was without any corresponding/incriminating material and thus, the addition was contrary to the law laid down by the Jurisdictional High Court in t .....

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ms of Section 44AF of the Act. 5. On the other hand, the learned Sr. Departmental Representative relied on the findings of the lower authorities and also submitted that as per the provisions of the Act, once the Assessing Officer acquires jurisdiction under Section 153C of the Act, it is open for him to assessee all the incomes whether based on incriminating materials or not for all assessment years involved. 6. We have heard the rival submissions and perused the material available on record. In .....

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es where the seized documents/assets could possibly reflect any undisclosed income of the Assessee for the relevant assessment years, that further enquiry would be warranted in respect of those years. Whilst, it is not necessary for the AO to be satisfied that the assets/documents seized during search of another person reflect undisclosed income of an Assessee before commencing an enquiry under Section 153C of the Act, it would be impermissible for him to commence such enquiry if it is apparent .....

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ndicated above, in the present case, the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years and could not possibly reflect any undisclosed income. This being the undisputed position, no investigation was necessary. Thus, the provisions of section 153C, which are to enable an investigation in respect of the seized asset, could not be resorted to; the AO had no jurisdiction to make the reassessment under Section 153Cof the Act. 39. In view .....

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