DCIT Vs Wismore Equity Pvt. Ltd. (ITAT Delhi)
ITAT Delhi held that it is well settled principle of law that no addition can be made in unabated years in assessment u/s 153C of the Income Tax Act without any incriminating material. Accordingly, appeal filed by the revenue dismissed.
Facts- On 23/07/2015 and subsequent dates, a search & seizure operation u/s 132 of the Income Tax Act, 1961 was conducted in different business and residential premises of Sh. Deepak Aggarwal, Mukesh Kumar & Ors at Delhi. During search and seizure operation, it was found to be a group of entry operators providing accommodation entries to beneficiaries. During the course of search and seizure operation, many incriminating documents relating to assessee company were found.
After recording satisfaction note, notice u/s 153C of the Act was issued on 08/01/2018. A questionnaire alongwith notice dated 12/11/2018 u/s 142(1) of the Act was issued to the assessee. Notice u/s 142(1) of the Act was issued on 22/11/2018. On completion of proceedings, AO vide Assessment Order dated 28/12/2018, assessed income at Rs.20,72,36,950/- u/s 153C r.w.s. 143(3) of the Act.
CIT(A) allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that CIT(A) allowed appeal and quashed the assessment order on issue of total lack of valid/requisite incriminating material emanating from foundational satisfaction note recorded u/s 153C. As per ratio of judgment in case of CIT vs. Abhisar Buildwell Pvt. Ltd. 459 ITR 212 it is well settled that no addition can be made in unabated years in assessment u/s 153A/153C of the Act without any incriminating material. In view of the above material facts and as well settled principle of law, the findings of Ld. CIT(A) are sustainable. The arguments on behalf of Department of Revenue are untenable.
