Crystal Hatcheries Pvt. Ltd. Vs ACIT (ITAT Bangalore)
No Incriminating Material, No Disallowance – ITAT Bangalore gives major relief on Farm Expenses- ITAT applies Abhisar Buildwell – Deletes disallowances in unabated years u/s 153C
In a batch of appeals Bangalore ITAT has given major relief to Assessee by deleting disallowances of farm maintenance expenses for six out of seven years, holding that in unabated assessments u/s 153C, additions can be made only on the basis of incriminating material found during search, in line with the Supreme Court ruling in PCIT v. Abhisar Buildwell.
AO had disallowed expenses citing lack of bills & reliance on blank cash vouchers found in a third party’s premises, but the Tribunal found no direct incriminating evidence against the assessee & accepted additional evidence of bills/vouchers.
However, for AY 2019–20, Tribunal upheld an addition of ₹45 lakh u/s 69, based on a seized Google Drive document showing cash investment in a villa project, corroborated by statements recorded during search. Assessee’s acceptance of RTGS entries in the same document, while disputing cash entries, weakened its defence that the document was a mere “dumb document.”
ITAT allowed the appeals for AYs 2014–15 to 2018–19 & 2020–21 in full, while partly allowing the appeal for AY 2019–20 by sustaining the unexplained investment addition.
