INCOME TAX ACT, 1961

Section 153C

Search and seizure - Assessment under section 153C - No incriminating documents found during search -

During the search operation in M/s. C Group, certain documents were retrieved by AO which related to assessee. The documents were in the nature of MOUs between promoters of assessee-company, namely, Y, P and R along with some working pertaining to Realtech Group. During the course of search proceedings, summons were issued to three promoter directors of assessee-company, out of which only Mr. Y appeared before the investigation Wing. It was observed by the Investigation wing that books of account were not produced to corroborate the various entries. Accordingly, a proceeding under section 153C was initiated in the case of the assessee company and notice was issued. Thereafter, survey operation was carried out in the case of Y by the Investigation Wing wherein various incriminating documents pertaining to assessee-company for the assessment year 2011-12 was seized. The said impounded document contained details of payment received by M/s. M Pvt. Ltd. from assessee as on 31-3-2010. Assessee submitted that, these documents did not belong to the assessee-company. However, AO held that in view of the provision of section 292C(1), the presumption was against the assessee. Accordingly, he made the addition. Held: From a bare perusal of the 'satisfaction' note, it could be seen that the seized documents were mainly MOUs between promoters of Realtech group, namely, Y, P and R along with the some working of the Realtech Group. There was no reference in the assessment order or in the seized documents that these were in the nature of incriminating documents from where inference could be drawn that there was any undisclosed income or any other income which had escaped assessment. To acquire jurisdiction under section 153C, the seized documents must be incriminating and must relate to the assessment year whose assessment were sought to be reopened. Apart from that, assessee had disclosed a sum of Rs. 24.50 crores as additional income during survey owing to such real estate business of the assessee, and therefore, if at all there was any element of cash payment or cash income and the source of income of the business was the same and no further evidence had been found or investigated during the assessment proceedings, then no addition could be made again in this assessment year. Thus, the entire addition was held to be beyond the scope of section 153C and the same was to be deleted.

REFERRED : CIT v. Sinhgad Technical Education Society (2017) 84 taxmann.com 290 : 2017 TaxPub(DT) 3941 (SC); Pr. CIT v. M/s. Dreamcity Buildwell (P) Ltd. 2019 TaxPub(DT) 5248 (Del-HC); Pr. CIT v. Index Securities (P) Ltd. (2017) 86 taxmann.com 84 (Del) : 2017 TaxPub(DT) 4496 (Del-HC); Pr. CIT v. Sheetal International (P) Ltd. 2019 TaxPub(DT) 0362 (Del-HC); Pr. CIT v. Instronics Ltd. (2017) 82 taxmann.com 357 (Delhi) : 2017 TaxPub(DT) 1787 (Del-HC); Ganpati Fincap Services (P) Ltd. v. CIT (2017) 82 taxmann.com 408 (Delhi) : 2017 TaxPub(DT) 1801 (Del-HC); CIT v. RRJ Securities Ltd. (2015) 66 Taxman.com 69 (Del) : 2015 TaxPub(DT) 4278 (Del-HC); Pepsi Foods (P) Ltd. v. Asstt. CIT (2014) 270 CTR (Del) 459 : (2014) 108 DTR (Del) 297 : (2014) 367 ITR 112 (Del) : 2014 TaxPub(DT) 3687 (Del-HC; M/s. Canara Housing Development Company v. Dy. CIT (2014) 274 CTR 122 (Karn) : 2014 TaxPub(DT) 3347 (Karn-HC); CIT v. Sonal Constructions & Ors. (2013) 359 ITR 532 (Del) : 2013 TaxPub(DT) 1761 (Del-HC); CIT v. Anil Kumar Bhatia (2013) 211 Taxman 453 (Del) : 2013 TaxPub(DT) 0245 (Del-HC); SSP Aviation Ltd. v. Dy. CIT (2012) 346 ITR 177 (Del) : 2012 TaxPub(DT) 2131 (Del-HC); Green Range Farms (P) Ltd. v. DCIT 2018 TaxPub(DT) 5185 (Del-Trib) ; ACIT v. Realtech Construction (P) Ltd. [ITA No. 3624/Del/2012, dt. 16-10-2017]

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