PR. COMMISSIONER OFLNCOME TAX (CENTRAL)- 3 vs. DMA INVESTMENT PVT. LTD.

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ITA/763/2016HC DelhiDLHC01272250201621 November 2016Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Revenue's appeals. The Court relied on its previous decisions in appeals for assessment years 2006-2007 and 2009-2010, which involved identical facts. In those prior appeals, the Court had rejected the Revenue's contentions, holding that additions made without any incriminating material discovered during a search under Section 132 of the Income Tax Act are suspect and illegal. Since the assessment years 2007-2008 and 2008-2009, subject to the present appeals, were part of the same block years and involved identical facts, the Court found that these appeals must also fail. The ratio decidendi is that additions made solely on the basis of presumption or inference, without any corroborating evidence or incriminating material found during a search, are unsustainable in law. The operative direction was the dismissal of the appeals.

What were the facts?

The appeals before the High Court of Delhi concerned the Principal Commissioner of Income Tax (Central)-3 (the Revenue) against DMA Investment Pvt. Ltd. (the Assessee) for assessment years 2007-2008 and 2008-2009. The appeals challenged orders related to additions made to the assessee's income. The Revenue's appeals for previous block years, 2006-2007 and 2009-2010, on identical facts, had already been decided by the High Court. The present appeals were filed by the Revenue.

What were the issues?

1. Whether the additions made to the assessee's income are valid in the absence of any incriminating material found during a search under Section 132 of the Income Tax Act, 1961 (mixed question of law and fact). The Assessee's contention, as inferred from the Court's decision, is that the additions are illegal and suspect due to the lack of incriminating material found during the search. The Revenue's specific arguments are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 132

AI-generated summary — verify with the full judgment below

I $-6&7 ' . - . * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 763/2016, CM APPL. 40572/2016 . PR. COMMISSIONER OFLNCOME TAX (CENTRAL)- 3 ...;i Appellant Through: Mr. Prashant Meharchandani, Adv. on behalf of Mr. Zoheb Hossain, Sr. Standing Counsel. versus DMA INVESTMENT PVT. LTD. Respondent Through: Mr. Rohit Kumar Gupta, Adv. + ITA764/2016, CM APPL. 40573/2016 \ - PR. COMMISSIONER OFLNCOME " TAX (CENTRAL)-3 .....Appellant Throiigh: Mr. Prashant Meharchandani, Adv. on behalf, of Mr. Zoheb Hossain, Sr. Standing Counsel. . ^ versus , DMA INVESTMENT PVT. LTD .....Respondent Through: Mr. Rohit Kumar Gupta, Adv. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI OR DER % 21.11.2016 At the outset, it is mentioned that the learned Senior Standing Counsel Mr. Zoheb Hossain is not present today on account of bereavement in the family. ' The Revenue's appeals for the previous years, i.e., for the AYs Digitally Signed By:AMULYA Signature Not Verified

2006-07 and 2009-2010 on identical facts were the subject matter of appeals in ITA No. 767/2016 and 768/2016. This Court had rejected those appeals on the ground that the absence of any incriminating material during the course of search under Section 132 of the Income Tax Act renders the additions suspect and illegal. Since these two years which are subject matter of the present appeals are part of the same block years i.e. 2007-2008 and 2008-2009, the present appeals too have to fail and are accordingly dismissed. S. RAVINDRA BHAT, J NOVEMBER 21, 2016/acm NAJMI WAZIRI, J

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