SRS IT Solutions Private Limited Vs DCIT (ITAT Delhi)
The Delhi Bench “F” of the ITAT allowed the appeal of SRS IT Solutions Pvt. Ltd. for AY 2008-09 and quashed the assessment framed under section 153A r.w.s. 143(3), holding it to be without jurisdiction in the absence of any incriminating material. The Tribunal noted that the search on the SRS Group was conducted on 09.05.2012, whereas the assessment year in question was an unabated year, since the return had been filed earlier and no notice under section 143(2) was issued within the prescribed time.
On facts, although the Assessing Officer made an addition of ₹1.27 crore towards alleged bogus share capital on the premise of accommodation entries routed through Kolkata-based entities, the Tribunal found that no incriminating material relating to the assessee was seized during the search. The Revenue’s reliance on statements and alleged blank share application forms was rejected, as no such seized material was produced to establish a nexus with the assessee.
Applying the binding ratio of the Delhi High Court in CIT v. Kabul Chawla (380 ITR 573), the Tribunal reiterated that for unabated assessment years, additions under section 153A can be made only on the basis of incriminating material unearthed during the search. In the absence of such material, the assumption of jurisdiction itself fails.
Accordingly, the assessment was quashed in limine, the jurisdictional ground was allowed, and all other grounds on merits were left open. The assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
