PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-1 vs. SAMEER GUPTA

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ITA/169/2018HC DelhiDLHC01014501201812 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 dismissed the Revenue's appeal. The Court noted that for a previous assessment year (A.Y. 2011-12) covered by the same search assessment, the ITAT's decision had been upheld by the Court in Principal Commissioner of Income Tax v. Sameer Gupta (ITA 118/2018 decided on 02.02.2018). The Court applied the rule laid down in Commissioner of Income Tax v. Kabul Chawla, 380 ITR 573. Since the impugned order for the present appeal was part of the same search assessment but for a later year, the appeal was considered unmerited. The Court reasoned that additions were made in the absence of any fresh incriminating material seized by virtue of the ruling in Kabul Chawla. Therefore, the appeal was dismissed.

What were the facts?

The Revenue is aggrieved by an order that set aside a search assessment. The Assessing Officer (AO) had brought to tax a sum of ₹5,62,61,726/- under Section 68 of the Income Tax Act, 1961. Both the Commissioner of Income Tax (Appeals) [CIT(A)] and the Income Tax Appellate Tribunal (ITAT) found that no incriminating materials were discovered during the search that would justify the addition made in the search assessment. The High Court noted that for a previous assessment year (A.Y. 2011-12) also covered by the same search assessment, the ITAT's decision had been upheld by the Court in Principal Commissioner of Income Tax v. Sameer Gupta (ITA 118/2018 decided on 02.02.2018). The present appeal pertains to a later year under the same search assessment.

What were the issues?

1. Whether the additions made under Section 68 of the Income Tax Act, 1961, in a search assessment are valid in the absence of incriminating materials found during the search. Assessee's Contention: The assessee argued, and the lower authorities found, that no incriminating materials were discovered during the search that justified the addition. The ITAT's decision for a previous year, which was upheld by the High Court, is relevant. Revenue's Contention: The Revenue is aggrieved by the setting aside of the search assessment by the AO, which brought to tax a sum of ₹5,62,61,726/-. The Revenue's appeal challenges the concurrent findings of the CIT(A) and the ITAT that no incriminating materials were found during the search that resulted in a valid addition.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

$~27 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 169/2018 & CM APPL.5356/2018

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)- 1

..... Appellant Through: Mr. Sanjay Kumar & Mr. Rahul Chaudhary, Standing Counsels for Revenue.

versus

SAMEER GUPTA

..... Respondent

Through: Mr. Pranjal Srivastava, Adv.

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

O R D E R %

12.02.2018

The Revenue is aggrieved by the setting aside of the search assessment – by the AO who brought to tax a sum of `5,62,61,726/- under Section 68 of the Income Tax Act, 1961 (hereafter referred to as “the Act”). The concurrent findings of the CIT(A) and the ITAT are that no incriminating materials were found during the course of the search that have resulted in a valid addition, in the search assessment. The Court notices that for a previous year A.Y. 2011-12, which too was covered by the same search assessment, the ITAT’s decision has been upheld in Principal Commissioner of Income Tax v. Sameer Gupta (ITA ITA No.169/2018

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118/2018 decided on 02.02.2018). The Court notices that the Court had applied the rule in Commissioner of Income Tax v. Kabul Chawla 380 ITR 573. Since the present impugned order is part of the same search assessment but for a later year, the appeal is unmerited as the additions were made in the absence of any fresh incriminating material seized by virtue of Kabul Chawla (supra). The appeal is dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J FEBRUARY 12, 2018 kks

ITA No.169/2018

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