PCIT Vs Arunkumar Ramniklal Mehta (Bombay High Court)
Section 153A Additions Rejected for Absence of Search Incriminating Material; Section 69A Deletion Upheld: Bombay HC
The Bombay High Court considered two Revenue appeals arising from a common order of the Income Tax Appellate Tribunal dated 24.05.2019 for Assessment Year 2006-07. One appeal related to issues arising from the Revenue’s appeal before the Tribunal, while the other related to issues arising from the assessee’s appeal.
The assessee, a promoter and director of various entities in the Rosy Blue Group, had filed his return of income for AY 2006-07, which was processed under Section 143(1). Since no notice under Section 143(2) was issued within the prescribed period, the assessment attained finality. Subsequently, the Government of India received a Base Note from the French Government indicating that the assessee was a beneficiary of the Oak Trust, which held investments in White Cedar Investments Ltd., and was also referred to in relation to Ruby Enterprises Inc. Both entities maintained accounts with HSBC Bank, Geneva. Based on this information, a search was conducted on the Rosy Blue Group on 25 and 26 August 2011. It was an admitted position that no assessment proceedings for AY 2006-07 were pending on the date of search and no incriminating material relating to that year was found during the search. During the investigation, statements and letters from Dilip Mehta, Karl French, HSBC Bank, Geneva, Hassanali and others explained the investments and stated that the assessee had neither opened nor operated the relevant bank accounts.
