JALARAM LAND INFRASTRUCTURE P LTD.,,NAVI MUMBAI vs. ITO., WARD 3, PANVEL

PDF · subscribers
ITSSA 1/PUN/2021Status: DisposedITAT Pune16 January 2023AY 2008-094 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the provisions of Section 153C of the Income-tax Act, 1961, were wrongly invoked in the case of the assessee. This decision was based on the precedent set by the Tribunal in the cases of 52 other companies from the same group, where it was held that the authorities were not justified in invoking Section 153C as no incriminating material pertaining to those assessees was found during the search. The Tribunal noted that the Hon'ble High Court had upheld the Tribunal's finding on this legal issue. Since the assessee in the present appeal is part of the same group and has similar facts and circumstances, the Tribunal respectfully followed the precedent. Consequently, no addition could be made based on the incorrect invocation of Section 153C. The issue on merits was left open in view of the finding on the preliminary legal issue. The impugned order of the CIT(A) was overturned.

What were the facts?

The assessee, Jalaram Land Infrastructure Private Limited, is engaged in the purchase and sale of lands. A search and seizure action was conducted against Mr. Dilip Dherai, which revealed that he had floated 62 land companies for land purchases. Incriminating material indicated a total expenditure/investment of Rs. 38.4518 crore across these companies. The Assessing Officer (AO) treated the assessee's proportionate share of this amount as unexplained expenditure and made an addition of Rs. 26,55,000/- under Section 153C of the Income-tax Act, 1961. The Commissioner of Income Tax (Appeals) - Thane sustained this addition. The assessment year in question is 2008-09. The appeal is before the Income Tax Appellate Tribunal (ITAT), Pune Bench.

What were the issues?

1. Whether the provisions of Section 153C of the Income-tax Act, 1961, were rightly invoked by the Assessing Officer in the case of the assessee for assessment year 2008-09? Assessee's Contention: The assessee argued that the invocation of Section 153C was not justified as no incriminating material pertaining to the assessee was found during the search conducted against Mr. Dilip Dherai. The assessee relied on the precedent set by the Tribunal in the cases of 52 other companies from the same group. Revenue's Contention: The revenue, through the learned Departmental Representative (DR), fairly admitted that the assessee is part of the overall 62 companies and that the facts and circumstances are similar to the 52 companies whose appeals were previously disposed of by the Tribunal. The revenue did not present any contrary arguments on the applicability of Section 153C.

Which sections of the Income-tax Act were involved?

Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH, ‘A’ PUNE

Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Nimesh Vora
For Respondent: Shri Keyur Patel

आदेश / ORDER

PER R.S. SYAL, VP :

This appeal by the assessee is directed against the order

passed by the CIT(A)-2, Thane on 25-03-2015 in relation to the

assessment year 2008-09.

2.

The only issue raised through various grounds is against the

confirmation of addition of Rs.26,55,000/- made by the Assessing

Officer (AO) u/s.153C of the Income-tax Act, 1961 (hereinafter

also called ‘the Act’).

2 IT(SS)A No.01/PUN/2021 Jalaram Land Infrastructure Private Limited

3.

Briefly stated, the facts of the case are that the assessee is

engaged in the purchase and sale of lands. A search and seizure

action was taken against one Mr. Dilip Dherai. Certain

incriminating material found from him transpired that he had

floated 62 land companies for purchase of lands. The AO noticed

that a total sum of Rs.38.4518 crore was mentioned on certain

pages found during the course of search indicating unexplained

expenditure/investment in the hands of such 62 companies. By

treating assessee’s proportionate share in such payment as

unexplained expenditure, the AO made an addition of

Rs.26,55,000/-. The ld. CIT(A) sustained the addition, against

which the assessee has approached the Tribunal.

4.

After considering the rival submissions and perusing the

relevant material on record, we find that the assessee is one of

such 62 companies. Case of other 52 companies from this group

came up for consideration before the Tribunal. Vide its order

dated 22-03-2013, the Tribunal has held that the authorities below

were not justified in invoking the provisions of section 153C as

no incriminating material pertaining to the assessee was found

during the course of search. Though the addition was deleted by

3 IT(SS)A No.01/PUN/2021 Jalaram Land Infrastructure Private Limited

the Tribunal on merits as well, but the Hon’ble High Court

upheld the finding of the Tribunal on the legal issue of non-

applicability of section 153C and did not go into the merits.

Thus, it is seen that the case of 52 companies out of 62 have been

disposed of by the Tribunal in assessees’ favour by holding that

the provisions of section 153C cannot be applied to them. The ld.

DR fairly admitted that the assessee in question is a part of such

overall 62 companies and the facts and circumstances of the

assessee are similar to such 52 companies whose appeals have

since been disposed off. Respectfully following the precedent, we

overturn the impugned order and hold that the provisions of

section 153C were wrongly invoked in the case of the assessee, as

a consequence of which no addition can be made. The issue on

merits is left open in view of the finding on the preliminary legal

issue.

5.

In the result, the appeal is allowed. Order pronounced in the Open Court on 16th January, 2023.

Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 16th January, 2023 सतीश

IT(SS)A No.01/PUN/2021 Jalaram Land Infrastructure Private Limited

आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The Respondent 2. 3. The CIT(A) concerned 4. The Pr. CIT concerned 5. DR, ITAT, ‘A’ Bench, Pune गाड� फाईल / Guard file. 6.

आदेशानुसार/ BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 16-01-2023 Sr.PS 2. Draft placed before author 16-01-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

More judgments on Section 153C

All 9,619 judgments and leading authorities on Section 153C →

Recent GST High Court judgments

Search GST case law →