PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-2 vs. MKR CONSTRUCTION (P) LTD.

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ITA/126/2018HC DelhiDLHC01499294201705 February 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no question of law arises from the ITAT's order. The Court noted that the ITAT had directed that the additions made in search assessments under Section 153A could not be sustained because they were not based on incriminating material seized or discovered during the search. The ITAT had followed the ruling of the High Court in Commissioner of Income Tax vs. Kabul Chawla, 380 ITR 573. Consequently, the High Court found no substantial question of law to be decided and dismissed the appeals filed by the Revenue. The operative direction was the dismissal of the appeals.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax (Central)-2, filed appeals before the High Court of Delhi against orders passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had directed that certain amounts brought to tax by the Revenue Authorities in search assessments completed under Section 153A of the Income Tax Act, 1961, could not be sustained. The ITAT's reasoning was that the additions made were not based on any incriminating material seized or discovered during the search operations. The ITAT had followed a previous ruling of the High Court in the case of Commissioner of Income Tax vs. Kabul Chawla.

What were the issues?

1. Whether the High Court should entertain the Revenue's appeals when the ITAT has concluded that no question of law arises from its order. This issue turns on the interpretation of Section 260A of the Income Tax Act, 1961, concerning appeals to the High Court. The Revenue argued that the ITAT erred in law by not considering the merits of the additions made. The Revenue contended that the ITAT's reliance on the Kabul Chawla decision was misplaced as the facts of the present case were distinguishable. The Revenue further argued that the ITAT failed to appreciate that the assessments under Section 153A were based on material that was available, even if not directly seized during the search. The Respondent (assessee) did not record any arguments in the judgment.

Which sections of the Income-tax Act were involved?

Section 153A,Section 260A

AI-generated summary — verify with the full judgment below

$~36 & 37 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 125/2018

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-2 ..... Appellant

Through: Mr. Sanjay Kumar and Mr. Rahul Chaudhary, Standing Counsels.

versus

MKR CONSTRUCTION (P) LTD.

..... Respondent

Through:

AND

ITA 126/2018 and CM APPL. 4345/2018

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-2 ..... Appellant

Through: Mr. Sanjay Kumar and Mr. Rahul Chaudhary, Standing Counsels.

versus

MKR CONSTRUCTION (P) LTD.

..... Respondent

Through:

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

05.02.2018

CM APPL. 4345/2018 in ITA 126/2018

Allowed subject to just exceptions. ITA 125/2018 and ITA 126/2018

In these appeals by the Revenue, the Income Tax Appellate

Tribunal (‘ITAT’) had directed that the amounts brought to tax by the Revenue Authorities, in search assessments completed under Section 153A of the Income Tax Act, 1961, could not be sustained because the additions were not based upon any incriminating material seized or discovered during the search. In so concluding, the ITAT followed the ruling of this Court in the case of Commissioner of Income Tax vs. Kabul Chawla, 380 ITR 573. Hence, no question of law arises.

The appeals are therefore dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J FEBRUARY 05, 2018 nn

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