Exel Rubber (P) Ltd Vs ACIT (ITAT Hyderabad)
Laptop Data of Accountant Cannot Justify Reopening u/s 148- Seized Excel Sheets Not ‘Books’ or ‘Assets’ -ITAT Hyderabad Quashes Reopenings -Only Net of Receipts & Payments Can Be Undisclosed Income, Not Gross Figures
These five appeals by Exel Rubber (P) Ltd challenged the reopening of assessments u/s 147/148 pursuant to a search & seizure operation on the Exel Group on 04.01.2023. AO issued notices u/s 148 for AYs 2015-16 to 2019-20 relying on data allegedly extracted from the laptop of the Group’s Sr. Accounts Manager, Shri Ramesh Kumar Sanaka. Assessee contended that the notices were time-barred, the sanction u/s 151 was mechanical, & that the seized data did not qualify as “asset” or “entries in books” as required u/s 149(1)(b).
Tribunal observed that the alleged incriminating material consisted of Excel sheets generated from a third-party’s laptop & contained consolidated cash receipts & payments of the group. These were not books of account, nor did they represent assets. AO, however, considered only the receipts side, ignored payments, & apportioned figures arbitrarily across companies by turnover ratio. Tribunal noted that the AO recorded reasons mechanically on the basis of ADIT(Inv.)’s quantification without applying independent mind, & the sanctioning authority also granted approval in a routine manner.
