Case Law Details
ACIT Vs Ashrita Construction Pvt. Ltd (ITAT Ahmedabad)
ITAT Ahmedabad held that AO failed to prove that material seized, during the course of search in case of third party, belong to the assessee. Hence, invocation of proceedings u/s. 153C of the Income tax Act is against the provisions of law.
Facts- The assessee is a private limited company engaged in the business of construction activity. The assessee maintained regular books of accounts which are duly audited and original returns of income were filed. A search action u/s. 132 of the Act was conducted in the case of Venus Group of Ahmedabad on 10.03.2015, various premises were covered u/s. 132/133A of the Act, during the search and various incriminating documents, were seized. On the terrace of Crystal Arcade, C.G. Road, Ahmedabad documents related to unaccounted cash transactions of Venus Group were seized. On analysis of the documents seized and their co-relation, it was found that unaccounted cash transactions were first recorded on cash vouchers. On the basis of recordings made on these cash vouchers, the entries were recorded on the day cash book.
The accommodation entries of Rs. 5 Crores were alleged and treated as unexplained income as per provisions of section 68 of the Act and added as the income of the assessee.
During the appellate proceedings, the assessee raised an additional ground challenging the proceedings initiated u/s. 153C of the Act on the ground that no seized materials “pertains” to the assessee found during the course of the search conducted in the case of Venus Group persons, hence no addition can be made in the case of the assessee and 153C notice itself is bad in law.
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