PRINCIPAL COMMISSIONER OF INCOME TAX - 4 vs. WEST WING INFRASTRUCTURE PVT LTD.

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TAXAP/103/2018HC GujaratGJHC24008448201827 February 2018Bench: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT had relied on its own judgment in the case of Principal Commissioner of Income-tax vs. Saumya Construction Pvt. Limited ([2016] 387 ITR 529 [Guj.]). This precedent established that when no incriminating material is available from a search, additions made by the Assessing Officer are not justified. Consequently, the High Court found the Tax Appeals to be without merit in light of this settled legal position. The operative direction was to dismiss the appeals. The judgment does not expressly leave any issue undecided.

What were the facts?

The Revenue has filed these appeals against the judgment of the Income Tax Appellate Tribunal (ITAT) dated September 30, 2017. The appeals concern assessment year(s) not specified in the judgment. The ITAT's decision upheld the deletion of an addition of Rs. 10,89,39,900 made by the Assessing Officer (AO) on account of 'on-money'. The Commissioner of Income Tax (Appeals) [CIT(A)] had initially noted the assessee's contention that additions were not based on incriminating material found during a search. While the CIT(A) did not accept this legal contention, they proceeded to examine the evidence and held that the additions were not justified on merits. The Revenue appealed the CIT(A)'s order allowing the assessee's appeal, and the assessee filed cross-objections. The ITAT disposed of both appeals, leading to the present appeals by the Revenue.

What were the issues?

The Tribunal had to decide the following questions: 1. Whether the Appellate Tribunal is correct in law and on facts in upholding the decision of CIT(A) in deleting the addition of Rs. 10,89,39,900 on account of 'On-money'? (Question of law and fact, concerning the validity of additions made by the AO). 2. Whether the Appellate Tribunal is correct in law and on facts in quashing the assessment proceedings under Section 153A of the Act? (Question of law, concerning the applicability of Section 153A). Assessee's contentions: The assessee contended that the additions were not made on the basis of any incriminating material found during the search, and therefore, no additions could be made. (This legal contention was not accepted by the CIT(A) but formed the basis of the assessee's cross-objection). Revenue's contentions: The Revenue's contentions are not explicitly detailed in the provided text, other than their appeal against the ITAT's decision to uphold the deletion of additions and quash assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 153A

AI-generated summary — verify with the full judgment below

C/TAXAP/102/2018 ORDER DATED: 27/02/2018 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL No. 102 of 2018 With R/TAX APPEAL No. 103 of 2018 ============================================================== PRINCIPAL COMMISSIONER OF INCOME TAX - 4 Versus WEST WING INFRASTRUCTURE PVT LTD. ============================================================== Appearance : Mr. M R BHATT, Sr Advocate with Mrs MAUNA M BHATT for the Appellant ============================================================== CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI

and

HONOURABLE Mr. JUSTICE B.N. KARIA

27th February 2018 ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI) Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad dated 30th September 2017 raising the following questions for our consideration : [A] “Whether the Appellate Tribunal is correct in law and on facts in upholding the decision of CIT [A] in deleting the addition of Rs. 10,89,39,900/= made on account of On- money ?” [B] “Whether the Appellate Tribunal is correct in law and on facts in quashing the assessment proceedings under Section 153A of the Act ?” Page 1 of 3

C/TAXAP/102/2018 ORDER DATED: 27/02/2018 Issue pertains to deletion of Rs. 10.89 Crores [rounded off] made by the Assessing Officer pursuant to search carried out in case of the respondent-assessee. CIT [A] noted the assessee’s contention that the additions are not made on the basis of any incriminating material found during the search and that therefore, no additions could be made. CIT [A], however, proceeded to process the evidence taken into account by the Assessing Officer and held on merits that the additions were not justified. In other words, CIT [A] did not accept assessee’s legal contentions. This order of CIT [A] gave rise to two appeals. Revenue was aggrieved by the action of CIT [A] in allowing the assessee’s appeal. Assessee filed cross objection in view of the fact that CIT [A] had not accepted assessee’s legal contentions. The Tribunal, by the impugned judgment disposed of both the appeals upon which the Revenue has filed the present Appeals. Having heard learned counsel for the Revenue, we noticed that the Tribunal has relied on the judgment of this Court in case of Principal Commissioner of Income-tax vs. Saumya Construction Pvt. Limited, reported in [2016] 387 ITR 529 [Guj.] holding that when no incriminating material is available in the search with the aid of which additions can be made, the additions made by the Assessing officer Page 2 of 3

C/TAXAP/102/2018 ORDER DATED: 27/02/2018 were not justified. In view of the settled legal position by virtue of the judgment of this Court, Tax Appeals are dismissed. Sd/- [Akil Kureshi, J.] Sd/= [B.N Karia, J.] Prakash Page 3 of 3

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