DCIT, INCOME TAX DEPARTMENT vs. SEVEN SEAS HOSPITALITY PVT LTD, DELHI

ORDER Per Bench: These assessee’s and the Revenue’s twin appeals each i.e.

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 403, 949 & 950/Del/2024 Seven Seas Hospitality Pvt. Ltd. assume the jurisdiction 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 jurisdiction 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.

4. 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.