DCIT, INCOME TAX DEPARTMENT vs. SEVEN SEAS HOSPITALITY PVT LTD, DELHI
Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman
Per Bench:
These assessee’s and the Revenue’s twin appeals each i.e.
ITA
Nos.
402
&
403/Del/2024
and ITA
Nos.
949
&
950/Del/2024, for assessment years 2013-14 and 2014-15, arise against CIT(A)-30, New Delhi’s separate orders; both
ITA Nos. 402, 403, 949 & 950/Del/2024
Seven Seas Hospitality Pvt. Ltd.
2
dated 08.12.2023 and 12.12.2023, assessment year wise, respectively, in proceedings u/s 153A of the Act.
Heard both the parties at length. Case files perused.
It emerges at the outset during the course of hearing that there arises the first and foremost issue of validity of both these impugned section 153A r.w.s. 143(3) assessments framed in the assessee’s hands by the learned Assessing Officer on 15.07.2021 in furtherance to the search in question carried out on 03.05.2018. This is for the precise reason that despite the fact that hon’ble apex court landmark decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) has settled the issue that no addition except that based on incriminating/seized material could be made in the concerned taxpayer’s hands in an “unabated” assessment year, we note that there is not even a clear cut adjudication of the corresponding legal grounds raised in the assessee’s lower appeals, adjudicated as under:
“Ground
No.
4:
In this ground the appellant has challenged the addition made b the AO on the ground that these additions are not based on any incriminating material found during the search proceeding. In support of this the appellant has cited various case laws. The citations made by the appellant have been perused. The ratios of all these cases were referred and considered by Hon'ble Supreme Court in the case of PCIT vs. Abhisar
Buildwell Pvt. Ltd. dated 24.04.2023 (para 14(iii) and para 15.1) and it was held that in case any incriminating material is found/unearthed during the search, in the years of unabated/ completed assessments, the AO would
ITA Nos. 402, 403, 949 & 950/Del/2024
Seven Seas Hospitality Pvt. Ltd.
3
assume the juri iction to assess or reassess the total income'
taking into consideration the incriminating material unearthed during the search and the other material available with the A0 including the income declared in the returns.
In the present case the incriminating material with regard to unaccounted sales has been found which has been referred and discussed in the assessment order, therefore, the AO would lawfully have the juri iction to make the addition on the basis of material found during the search or gathered from other sources including from declared income in the ITR. It is further pertinent to mention here that additions made by the AO is based on the findings which are supported by incriminating materials/ evidences collected during the process of search action. These evidences establish the modus operandi of the appellant therefore they are relevant and equally valid and incriminating for the year under consideration. Support is taken from the judgment dated 24th April 2023 of Hon'ble Supreme Court in the CA No 1561/2017, 10267/2017, 10266/2017 in the case of Dayawanti affirming the decision of Hon'ble High Court of Delhi. Thus, this ground of appeal of the appellant is rejected.”
Learned CIT-DR could hardly rebut the above factual position that there is not even an iota of clarity in the CIT(A)’s above extracted findings as to whether the impugned addition(s) made in the assessee’s hands are based on the corresponding seized material or not. We thus deem it appropriate to restore the assessee’s instant first and foremost legal argument back to the CIT(A) for his afresh appropriate adjudication as per law preferably within three effective opportunities of hearing. Ordered accordingly.
All other issues on legality or on merits; as the case may be, are kept open at this stage.
ITA Nos. 402, 403, 949 & 950/Del/2024
Seven Seas Hospitality Pvt. Ltd.
4
6. To sum up, these assessee’s and the Revenue’s twin cross appeals each ITA Nos. 402, 403, 949 & 950/Del/2024 are hereby allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files.
Order Pronounced in the Open Court on 08/07/2025. (S. Rifaur Rahman) (Satbeer Singh Godara)
Accountant Member Judicial Member
Dated: 08/07/2025
*Subodh Kumar, Sr. PS*