Saurabh Agrotech Pvt. Ltd. Vs DCIT (ITAT Jaipur)
Conclusion: Since the assessments were completed in the case of assesee and there was no incriminating material found during the search in the case of the assessee, the additions made under Section 153A were unsustainable.
Held: Assessee was engaged in the business of oil manufacturing and trading, filed its return for Assessment Years 2010-11 and 2012-13, declaring income that was assessed under scrutiny proceedings. A search was later conducted on the Data Group, of which assessee was a part. Following the search, assessments were reopened under Section 153A and additions were made, including Rs. 6.52 lakh in AY 2010–11, treating Dharmada collections as part of the assessee’s taxable income. AO concluded that Dharmada amounts collected on sales invoices were not spent on charitable purposes, remained under assessee’s control, and earned interest income. AO further noted that assessee was neither a registered trust nor a society eligible for exemption, and treated the charity collection as part of business receipts. These findings were upheld by CIT(A), who also relied on the Supreme Court’s decision in Amritsar Transport Co. Pvt. Ltd. to support the addition. On appeal before Tribunal, assessee argued that the original assessments for both years were already completed before the search, and the additions made under Section 153A were not based on any incriminating material found during the search. Assessee’s argued that the statement recorded from a group entity director, Mr. Vijay Data, during the search did not mention the assessee company, nor was there any seized document on it. The Dharmada receipts were reflected in the regular books of account and invoices, and therefore were not hidden or undisclosed. It was held that there was no reason to sustain the addition of Rs.6,52,391.00 on account of Dharmada/charity recorded in the regular books of account as the same hasdbeen added without referring to any incriminating material. Since the assessments were completed and there was no incriminating material found during the search in the case of the assessee, the additions made under Section 153A were unsustainable.
