DCIT Vs Kalkar Seetharam Rai (ITAT Bangalore)
Search Evidence Has an Assessment-Year Address: Material for AY 2016-17 Cannot Travel Backwards u/s 153C; 15.15% Liquor Profit Cut to 5.5%-Bangalore ITAT
Summary: The Bangalore ITAT held that material discovered for AY 2016-17 could not be extrapolated to earlier unabated AYs 2012-13 to 2015-16 for making additions u/s 153C. A general admission during search, unsupported by year-specific incriminating material, was also insufficient. For AYs 2016-17 & 2017-18, the Tribunal accepted 5.5% net profit from the liquor business instead of the AO’s excessive estimate of 15.15%.
Delay of 612 Days Condoned
The assessee, aged about 77 years, resided in a village nearly 70 kilometres from his tax consultant’s office. He suffered from high blood pressure, leg pain & had undergone permanent pacemaker implantation. Due to old age, health problems, restricted movement after Covid & memory-related issues, he failed to hand over the CIT(A)’s order to his consultant.
Relying upon Collector, Land Acquisition v. Mst. Katiji, the Tribunal observed that substantial justice should prevail over technical considerations. The explanation was supported by an affidavit & was not disproved by the Revenue. Accordingly, the delay of 612 days was condoned.
Search of Premises Does Not Automatically Make One a “Searched Person”
