PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) - 1 vs. M/S NIKUNJ JEWELLERS PVT. LTD.,

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ITA/894/2017HC DelhiDLHC01378936201727 October 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE SANJEEV SACHDEVA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose from the ITAT's order. The Court found that the ITAT had merely applied the law as declared by the High Court itself in the case of Commissioner of Income Tax vs. Kabul Chawla (2016) 380 ITR 573 (Del). The ITAT's decision to cancel additions made under Section 153C, particularly those beyond the directly found material, was consistent with the precedent set in Kabul Chawla's case. Therefore, the High Court concluded that the ITAT's order was not erroneous and did not warrant interference under Section 260A. The appeal was dismissed on the grounds that no question of law was presented.

What were the facts?

The Revenue (Principal Commissioner of Income Tax) appealed against an order of the Income Tax Appellate Tribunal (ITAT). The appeal concerned additions made to the income of the assessee, M/s Nikunj Jewellers Pvt. Ltd., under Section 153C of the Income Tax Act. These additions were based on documents and two Fixed Deposit Receipts (FDRs) belonging to the assessee found during a search at the premises of Brijwasi Impex Pvt. Ltd. The Assessing Officer made additions, but the Commissioner of Income Tax (CIT) deleted the additions related to the FDRs. The ITAT upheld the deletion, relying on a High Court ruling.

What were the issues?

1. Whether the additions made under Section 153C of the Income Tax Act were unjustifiably cancelled by the ITAT? (Question of law) The Revenue contended that the ITAT's cancellation of additions made under Section 153C was erroneous. The Revenue argued that the ITAT had incorrectly applied the ruling in Commissioner of Income Tax vs. Kabul Chawla (2016) 380 ITR 573 (Del) to delete additions made over and above the material found. The Revenue believed the ITAT's decision was without jurisdiction. The Respondent (assessee) did not record any specific arguments in the judgment provided. However, their position was implicitly supported by the ITAT's decision to delete the additions.

Which sections of the Income-tax Act were involved?

Section 153C,Section 260A

AI-generated summary — verify with the full judgment below

ITA 894/2017 Page 1

$~11 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 894/2017

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) - 1 ..... Appellant Through: Mr. Rahul Chaudhary, Sr. Standing Counsel with Mr. Sanjay Kumar, Advocate

versus

M/S NIKUNJ JEWELLERS PVT. LTD.

..... Respondent Through: Mr. Sunil Aggarwal & Mr. Ravi Pratap Mall, Advocate

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE SANJEEV SACHDEVA

O R D E R %

27.10.2017

1.

This Court has noticed that the question of law urged by the Revenue in this appeal under Section 260A of the Income Tax Act is that the additions made under Section 153C of the Act were unjustifiably cancelled. 2. The premises of one Brijwasi Impex Pvt. Ltd. were searched; after some jurisdictional hitches, notice under Section 153C was issued to the assessee on the ground that the documents and other

ITA 894/2017 Page 2

materials, including two FDRs belonging to it were found in the premises of the searched party. 3. The assessing officer (AO) proceeded to add the amount in the FDR besides others. The CIT, in the appellate order, deleted the additions made towards the FDRs. On an application of ruling in Commissioner of Income Tax vs. Kabul Chawla (2016) 380 ITR 573 (Del), the ITAT held that any addition made over and above a material found, were without jurisdiction. 4. This Court is of the opinion that no question of law arises because the ITAT merely applied the law declared by this Court in Kabul Chawla’s case. 5. Consequently, the appeal is dismissed.

S. RAVINDRA BHAT, J

SANJEEV SACHDEVA, J OCTOBER 27, 2017 rd

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