Amico Textiles Vs DCIT (ITAT Chandigarh)
Income Tax Appellate Tribunal (ITAT) Chandigarh has quashed an addition of ₹46.87 Lakhs made against Amico Textiles for Assessment Year 2013-14, ruling that the Assessing Officer (AO) bypassed the mandatory procedure under Section 153C of the Income-tax Act, 1961. The addition was based on documents seized from a partner of the firm during a search operation, but the assessment was incorrectly framed under Section 147 read with Section 153A.
Background of the Dispute:
The case originated from a search and seizure operation conducted on September 4, 2014, against the M/s Longowalla Group, which also included partners of Amico Textiles. During this search, certain notebooks were found and seized from Shri Sumit Mohan, one of Amico Textiles’ partners. These notebooks appeared to contain an unaccounted cash book related to the assessee-firm. Shri Sumit Mohan reportedly admitted that the transactions in the notebooks pertained to Amico Textiles.
Based on this information and the apparent matching of entries with the firm’s regular books, the AO initiated reassessment proceedings against Amico Textiles by issuing a notice under Section 148 on May 17, 2017. Subsequently, the AO added ₹46.87 Lakhs under Section 68 (cash credits), framing the assessment under Section 147 read with Section 153A. Amico Textiles, however, denied any connection with these notebooks, asserting they belonged solely to the partner and could not be used against the firm.
