PCIT Vs Suncity Project Pvt. Ltd. (Delhi High Court)
The appeal was filed challenging the order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2010–11. The Revenue contended that the Tribunal erred in relying on an earlier High Court decision without considering factual differences, particularly since that earlier case involved Section 153C, whereas the present case involved assessment under Section 143(3). The Revenue further argued that seized material, specifically a computer-generated document recovered from a broker, indicated that part of the transaction was conducted outside the books, with total consideration recorded at ₹32.85 crore.
The High Court noted that the same seized document had already been examined in an earlier decision. In that case, it was found that the Assessing Officer had relied on the document without proper investigation and had proceeded on conjecture. The document contained internal inconsistencies, including references to rental periods predating the actual purchase of the property. Further, no effort was made to verify the source of the document, identify its author, or assess whether the values mentioned were realistic. The burden was shifted to the assessee without conducting basic inquiries.
Relying on this earlier finding, the Court held that the additions made solely on the basis of such a document, without further investigation, were unsustainable in law. It observed that the Tribunal had committed no error in deleting the additions made by the Assessing Officer.
