DEPUTY COMMISSIONER OF INCOME TAX, DELHI vs. SOLSTAR ENTERPRISES PRIVATE LIMITED, DELHI

We note at the outset that there arises the first and foremost issue of validity of the Assessing Officer’s section 143(3) r.w.s. 153A assessment itself dated 31st March, 2022 as the same has been held as a none-est one by learned CIT(A) in his impugned lower appellate discussion.

We now advert to the basic relevant facts. There is no dispute between the parties that the assessee, a private limited company had filed its original return on 30th September, 2018 declaring income of Rs.7,98,76,540/- which stood processed under section 143(1) of the Act on 23rd March, 2019. And that the learned departmental authorities thereafter carried out the search in question on 06.01.2021 inter alia covering M/s. Larsen and Toubro Ltd., the assessee as well as on Sh. Dilip Kumar Gupta etc. It appears to have seized Sh. Dilip Kumar Gupta’s mobile as well as some alleged incriminating material indicating him to be a facilitator of various accommodation entries arranged between the assessee and M/s. Larsen and Toubro Ltd.; totaling to Rs.8 crores

2 | P a g e already declared as a professional receipts by the former; which stood added by the learned Assessing Officer as unexplained cash credits u/s 68 r.w.s. 115BBE of the Act since representing sham transactions. The assessee preferred its appeal before the CIT(A) wherein the above impugned assessment itself stands quashed for the precise reason that once the search in question had not found/seized any incriminating from the assessee’s possession or premises; as the case may be, section 153A could not be invoked going by PCIT Vs. Anand Kumar Jain, (2021) 432 ITR 384 (Del.).

It is in this factual backdrop that we now proceed to decide the above first and foremost issue of validity of the impugned assessment itself wherein the department could hardly dispute that even the learned Assessing Officer’s assessment discussion in para 5.2 makes it clear that the relevant incriminating material had been found/seized from Sh. Gupta and as per his search statement recorded under section 132(4) of the Act than from the assessee’s possession or premises; as the case may be.

Learned CIT(DR) at this stage vehemently argues that once the assessee is covered under the common search herein, there is 3 | P a g e no provision in the Act not to proceed under section 153C of the Act being the searched person itself.

We are unable to accept the Revenues foregoing vehement contentions once the instant issue is found to be squarely covered in assessee’s favour going by hon’ble jurisdictional high court’s decision. We thus uphold the learned CIT(A)’s action quashing the impugned section 153A assessment itself in very terms. Ordered accordingly. All other remaining pleadings between the parties in their respective instant cross appeals stand rendered academic.

To sum up, the assessee’s appeal herein is accepted and Revenue’s cross appeal