Case Law Details
Sree Lakshmi Vs DCIT (ITAT Bangalore)
We have already examined the legal position with regard to validity of initiation of proceedings u/s. 153C of the Act de hors incriminating material found in the course of search which belong or relate to the assessee. Admittedly, no such incriminating material was found in respect of any of the additions made by the AO which has nexus to the assessee. The Assessment for AY 2008-09 to 2010-11 were already completed in the case of the Assessee prior to the date of search. Therefore the scope of making assessment of total income u/s.153C of the Act is limited and can be only of assessing income that is not disclosed which is detected or which emanates from material found in the course of search of some other person and which relate to the Assessee. Since the impugned addition of disallowance of expenses are not based on any incriminating material found during the course of search, the additions are liable to be deleted. As far as the addition made on protective basis for AY 2008-09 to 2010-11 are concerned, the said addition was made not on the basis of any incriminating material found in the search of K.Mahesh Kumar which relate to the Assessee and therefore the said addition can also not be sustained as it is contrary to the provisions of Sec.153C of the Act.
In these circumstances, we are of the view that the additions made by the AO in the proceedings u/s. 153C also cannot be sustained.
FULL TEXT OF THE ITAT JUDGEMENT
ITA Nos.1816 to 1818/Bang/2017 are appeals filed by the assessee relating to assessment years 2008-09 to 2010-11, while ITA Nos. 1789 & 1790/Bang/2017 are cross appeals filed by the revenue relating to assessment years 2009-10 & 2010-11. All these appeals are directed against the 3 orders, all dated 27.6.2017 of the CIT(Appeals)-XI, Bengaluru for AYs 2008-09 to 2010-11. These appeals relate to the Assessee M/S.Sree Lakshmi Venkateswara Minerals. We shall collectively refer to these appeals as the first set of Appeals.
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