Case Law Details
Micro Ankur Developers Vs DCIT (ITAT Mumbai)
The issue which now requires consideration is whether the additions/disallowances which the AO made in the order impugned in this appeal was based on or made with reference to any incriminating material/document found in the course of search. The only material now being referred to by the lower authorities in their submissions dated 21-06-2022 was the regular books of accounts maintained in the Tally Accounting Software. We find merit in the submissions of the Ld. AR that the regular books of accounts cannot be treated as ‘incriminating material’ unless the Revenue makes out a case with corroborative evidence that the transaction reflected in the books of accounts did not represent the true state of affairs. Otherwise, going by the logic propounded by the Revenue, each and every seized material would be said to be incriminating in nature, which according to us, is not tenable in the eyes of law. This view of ours find support from the judgment of the Hon’ble Delhi High Court in the case of Pr.CIT Vs Param Dairy Ltd in ITA No. 37/2021 dated 15-02-2021 on somewhat similar facts, had held as follows:
5. We have considered the aforesaid contentions and are of the view that no substantial question of law arises, as the matter is squarely covered by Kabul Chawla supra, which has been correctly applied to the facts of the case by the ITAT. The ITAT, in the impugned order has held that in the audited report filed by the assessee along with the report, cash book, ledger, bank book etc. were mentioned; that the respondent assessee was maintaining books on TALLY Accounting Software which was seized during the search and was being treated as incriminating material; however, regular books of account of the assessee, by no stretch of imagination, could be treated as incriminating material to form basis of framing assessment under Section 153A read with Section 143(3) of the Act.” (emphasis supplied by us)
16. In view of the above, we are of the considered view that the regular books of accounts maintained by the assessee in tally software, now being referred by the Revenue, to justify the impugned addition did not constitute incriminating material unearthed during the search.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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