TMI Blog2019 (1) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... tended to rely but had also given opportunity to the assessee to explain those passages and to adduce evidence against the truth of recitals contained therein. We hold that the Revenue grossly failed in discharging the onus u/s 69C of the Act without bringing any cogent direct material evidence on record. The additions so made cannot be sustained and accordingly directed to be deleted. - Decided against revenue Computation of claim of deduction u/s 80HHC as originally filed and claimed in its return of income - Held that:- The findings of the CIT(A) are based upon the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works [1992 (9) TMI 1 - SUPREME COURT] and Chettinad Corporation Pvt. Ltd [1993 (1) TMI 72 - SUPREME COURT] and the direction for computing the claim of deduction u/s 80HHC as per original return filed calls for no interference. - Decided against revenue - ITA Nos. 1126, 1127 And 1128/DEL/2013 And ITA No. 2502/DEL/2013 - - - Dated:- 14-1-2019 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Assessee : Shri M.P. Rastogi And Shri Rajiv Kumar, CA For The Revenue : Ms. Nidhi Srivastava, CIT-DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusal of the aforementioned seized document shows that what was seized in the search proceedings were only books of account of the assessee. 7. The Assessing Officer has made addition on the basis of Volker Committee Report which was constituted by the United Nations to examine the Oil for Food Programme. 8. As mentioned elsewhere, no incriminating material was found at the time of search and the additions have been made on account of kickbacks solely on the presumption that the assessee must have paid some money to Iraq for participating in the Oil for Food Programme. Additions have been made only on the basis of presumption without there being any direct concrete evidence found at the time of search proceedings. 9. The Hon'ble High Court of Delhi in the case of Kabul Chawla 380 ITR 573 held as under: 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Meeta Gutgutia reported in 395 ITR 526. 13. The Hon'ble Supreme Court has also taken a similar view in the case of Singhad Educational Society 297 CTR 441. 14. Respectfully following the direct judgments of the Hon'ble Jurisdictional High Court of Delhi [supra] and the Hon'ble Supreme Court, we have no hesitation to hold that assessments framed u/s 153A of the Act are without jurisdiction and the order deserves to be quashed. 15. In the result, ITA Nos. 1126 1127/DEL/2013 are allowed. ITA No. 1128/DEL/2013 16. While framing assessment order, the Assessing Officer observed that when Iraq was authorised to sell its crude oil under the Oil for Food Programme, it realised that it could generate illicit income outside of the United Nations oversight. The Assessing Officer observed that Iraq earned $ 228.8 million of income from these surcharges by requiring its oil buyers to pay surcharges of generally between 10 to 30% per barrel of oil. The Assessing Officer observed that Iraq s other major source of illicit income from the programme came from kickbacks paid by companies that it selected to receive contracts for humanitarian goods under the progra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Volkar Committee. In our understanding of the provisions of section 69C of the Act, first of all, the assessee must have incurred some expenditure but there is nothing to show that the expenditure was, in fact, incurred by the assessee. The assessee had denied having incurred the expenditure and it was on the Revenue to prove that the assessee had paid kickbacks by participating in the oil for food programme. No such evidence has been brought on record except Volkar Committee Report. 23. The Volkar Committee was constituted by the United Nations for a special purpose. 24. The Hon'ble Jammu and Kashmir High Court in the case of International Forest Company [supra] has held that even if it is to be taken that the Income tax authorities are not bound by strict rules of evidence, report of Iyengar Commission could not be referred to and relied upon by the Appellate Tribunal unless it had not only invited the attention of the assessee to the passages which it intended to rely but had also given opportunity to the assessee to explain those passages and to adduce evidence against the truth of recitals contained therein. 25. Considering the facts of the case in totality, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income from business resulting in Nil business income in return furnish u/s 153A. Noticeably. the assessee too has not claimed deduction u/s kOF HC in computation of taxable income as per normal provisions of Act in the revised return furnished subsequently. As the total business profit of the assessee during the instant assessment year as per normal computation after setting off unabsorbed losses/depreciation brought forward from earlier assessment years is Nil. therefore, the assessee is not eligible for any deduction u/s 80HHC. Thus, since deduction u/s 80HHC while computing book profit u/s 115JB is also to be computed on the basis of business profit computed according to normal provisions of the Act as discussed above in the preceding paragraphs, no deduction u/s 8OHF1C is allowable while computing book profit u/s 115JB too. Therefore, the total taxable income of the assessee during the year under consideration is taken at ₹ 6,73,45,435/-. The assessee is liable to proceedings u/s 271 (1 )(c) on account of concealment and furnishing of inaccurate particulars of his income as discussed above. 30. The assessee carried the matter before the CIT(A) and reiterated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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