DCIT Vs Jupiter International Limited (ITAT Kolkata)
₹6.70 Cr share application addition deleted as AY 2009-10 was an unabated year no incriminating material was found; third-party statement cannot be incriminating material u/s 153A
A search u/s 132 was conducted on Jupiter Group on 24.03.2015. For AY 2009-10, the assessment had already been completed earlier & the time limit to issue notice u/s 143(2) had expired. Hence, AY 2009-10 was an “unabated year” on the date of search.
In the original 153A/143(3) assessment, AO made an addition of ₹6,70,00,000 treating share application money as unexplained. CIT(A) deleted the addition holding that no incriminating material was found during search. Revenue appealed to Tribunal, which restored the matter to AO for fresh enquiry with specific directions.
In the fresh assessment u/s 254/153A/143(3), AO again made the same addition of ₹6.70 Cr, mainly because the directors did not appear personally. Assessee filed all documents & confirmations. CIT(A) once again deleted the addition relying on the Supreme Court decision in PCIT v. Abhisar Buildwell Pvt. Ltd. (454 ITR 212) that in an unabated year, AO has NO jurisdiction to make any addition unless it is based on incriminating material found during search.
Revenue again came in appeal to Tribunal arguing that statement of one Shri Alok Garodia was incriminating. Tribunal rejected this. It held that:
- AY 2009-10 is unabated – regular assessment already completed & time to issue 143(2) expired before search.
- As per Abhisar Buildwell (SC), in such unabated years, only incriminating material found during search can justify addition.
- A statement of a third party is NOT “incriminating material”, as incriminating material must be seized during search & must pertain to the assessee.
- No seized document or evidence was found showing the share application money was bogus.
- Therefore, AO had no jurisdiction to make the addition u/s 153A.
Tribunal praised the CIT(A) order as “reasoned & speaking” and upheld the deletion of ₹6.70 Cr.
