Hiteshi Leasing And Housing Pvt. Ltd Vs DCIT (ITAT Delhi)
A search was conducted on Bestech Group & some share capital documents of the assessee were found. Assessee itself was not searched, but the AO invoked Section 153C & completed assessment u/s 153A, adding ₹31.80 crore as bogus share capital u/s 68.
Assessee argued that AY 2011-12 was an unabated year (original assessment already complete), so additions could be made only if the seized documents were “incriminating.” It showed that the seized documents were normal statutory/share capital records, already recorded in the audited books & balance sheet, & contained nothing to show undisclosed income or cash trail.
Tribunal noted that AO’s satisfaction note was vague, only stating “source/genuineness needs to be examined,” which is not enough. There was no direct evidence in the documents to prove any sham or accommodation entry. AO proceeded only on presumptions, investigation wing reports, & suspicion, not on actual incriminating material.
Relying heavily on its own earlier decision in DMG Finance Investment Pvt. Ltd. (identical facts) & applying Kabul Chawla & Abhisar Buildwell, the Tribunal held:
– For unabated years, 153C requires clear incriminating material.
-Regular share capital documents are not incriminating.
– Jurisdiction under 153C was invalid.
Therefore, the 153C assessment was quashed at threshold, & other grounds were left unexamined.
Result: Appeal partly allowed – assessment annulled due to lack of incriminating material.
FULL TEXT OF THE ORDER OF ITAT DELHI
