Case Law Details
Brief of the Case
Delhi High Court held In the case of CIT vs. M/s Refam Management Services (P) Ltd. that under Section 153C the assessment or reassessment of income of a person other than a searched person would proceed in accordance with the provisions of Section 153A. The concluded assessments cannot be interfered with under Section 153A unless the incriminating material belonging to the Assessee has been seized. In the present case, the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years and could not possibly reflect any undisclosed income. This being the undisputed position, no investigation was necessary. Hence proceedings u/s 153C is not valid.
Facts of the Case
Search and seizure operations were undertaken under Section 132 in the case of Sh. B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd. on 20th October, 2008. Certain documents belonging to the Assessee Company were seized during the search. The AO of the Assessee recorded a ‘Satisfaction Note’ on 5th July, 2010 to the effect that the documents seized belonged to the Assessee and, hence, Section 153C was invokeable. On the aforesaid basis, proceedings were initiated under Section 153C and a notice dated 6th July, 2010 for the AY 2003-04 was issued to the Assessee. The Assessee, in compliance with the notice issued under Section 153C , filed its returns of income under protest.
Subsequently, notices under Section 142(1)/143(2) were also issued for the purpose of assessing the income of the Assessee with respect to AY 2003-04. During the assessment proceedings, it was observed that the Assessee had purchased and sold textile goods and fabrics and it was called upon to provide evidence of purchases and was further directed to provide the details of payments (by cash or cheque). Finaly the AO concluded that the Assessee was unable to substantiate any purchase of stocks and, therefore, made addition of the amounts reflected as purchases under Section 69C. The AO also disallowed 100% of the expenses claimed by the Assessee in its P & L Account concluding that they were unverifiable.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
