ABHISHEK PICTURES,HYDERABAD vs. DCIT, CENTRAL CIRCLE-1(3), HYDERABAD

ITA 200/HYD/2026Status: DisposedITAT Hyderabad23 September 2026AY 2019-2017 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO failed to validly assume jurisdiction under Section 153C of the Act for Assessment Year 2019-20. The satisfaction note dated 27.06.2022 did not demonstrate the requisite application of mind by the AO specifically concerning AY 2019-20. The Tribunal noted that while the seized material might contain transactions relatable to FY 2018-19 (relevant for AY 2019-20), the foundational defect lay in the satisfaction note itself, which primarily related to Financial Year 2015-16. The Tribunal emphasized that the requisite satisfaction must emanate from the AO and cannot be inferred or reconstructed later. Citing the Karnataka High Court judgment in DCIT vs. Sunil Kumar Sharma and the Delhi High Court judgment in Saksham Commodities Ltd. vs. ITO, the Tribunal concluded that a general observation about the seized documents pertaining to a range of assessment years is insufficient. Therefore, the assessment order passed under Section 153C was quashed for want of valid jurisdiction, and consequently, the order of the CIT(Appeals) was also set aside. Other grounds were rendered academic and left undecided.

What were the facts?

The assessee, Abhishek Pictures, a partnership firm engaged in film production, distribution, and exhibition, filed its return for Assessment Year 2019-20. A search under Section 132 was conducted on M/s Usha Bala Group, which included the proprietor of M/s Usha Pictures and Financiers. Incriminating material related to financial transactions with the assessee was seized. The Assessing Officer (AO) recorded a satisfaction note and issued a notice under Section 153C. The assessee filed a return under Section 153C, declaring the same income. During assessment, the AO referred to seized documents, alleging cash receipts and adjustments with M/s Usha Pictures and Financiers. The assessee denied these transactions. The AO added Rs. 1,40,00,000/-. The CIT(A) vacated most additions but upheld Rs. 8,19,000/- and enhanced income by Rs. 10 lakhs, reducing the total addition to Rs. 18,19,000/-. The assessee appealed to the ITAT.

What were the issues?

1. Whether the Assessing Officer (AO) validly assumed jurisdiction under Section 153C of the Income-tax Act, 1961, for Assessment Year 2019-20, considering the satisfaction note recorded. - Assessee's contention: The mandatory satisfaction note required under Section 153C was not properly recorded by the AO, making the assumption of jurisdiction invalid. A single, combined satisfaction note for multiple assessment years (2015-16 to 2021-22) by the ACIT was not a valid satisfaction for AY 2019-20. The AO erred in invoking Section 153C without incriminating material and in making additions without proper evidence. - Revenue's contention: Not recorded in the judgment. 2. Whether the addition of Rs. 8,19,000/- upheld by the CIT(A) was justified, considering the nature of the seized material and the assessee's denial of cash transactions. - Assessee's contention: The AO erred in upholding the addition of Rs. 8,19,000/- without considering the facts, as the assessee had not entered into cash transactions and the seized papers were unauthenticated. The addition was made without proper evidence that the appellant received cash from M/s Usha Pictures & Financiers. - Revenue's contention: Not recorded in the judgment. 3. Whether the enhancement of Rs. 10,00,000/- by the CIT(A) was justified, and whether the amount of Rs. 10,00,000/- was a refundable advance and not income. - Assessee's contention: The CIT(A) erred in enhancing the amount without considering evidence and in treating Rs. 10,00,000/- as income when it was a refundable advance. The enhancement was made without issuing a statutory notice under Section 251(2). - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 153C,Section 132,Section 143(2),Section 142(1),Section 250,Section 251(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: SHRI MANJUNATHA G, HON’BLE & SHRI RAVISH SOOD, HON’BLE

For Respondent: Shri K Prasad, Sr-AR

PER RAVISH SOOD, JM:

The present appeal is filed by the assessee firm is directed against the order passed by the CIT(A)-12, Hyderabad, dated 12.11.2025, which in turn arises from the assessment order passed by the Assessing Officer (for short, “AO”) under Section 153C of the Income-tax Act, 1961 (“the Act”) dated 29.03.2023 for Assessment Year 2019-20. The assessee firm has assailed the impugned order on the following grounds of appeal before us:

ITA 200/HYD/2026 ABHISHEK PICTURES

“1. The

The order continues below.

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