Income Tax Department vs. M/S Great Galleon Ventures Ltd.

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ITA/227/2022HC Madhya Pradesh02 July 2024Bench: HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI2 pages
For Petitioner: Veena Mandlik
AI SummaryDismissed

What did the High Court hold?

The High Court held that in the given facts, as no incriminating documents were found during the course of the search, the order under appeal could not be considered to suffer from any illegality that would give rise to the substantial question of law raised. The Court relied on a previous decision by a Division Bench of the same High Court at Gwalior Bench in Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd. (ITA No. 21/2019, ITA No. 31/2019 and ITA No. 32/2019) dated 12.07.2019, which dealt with an identical substantial question of law. In that case, the Court had dismissed the appeals, holding that the orders did not suffer from illegality when no incriminating documents were found during the search. Consequently, the present appeal was also dismissed for failing to raise a substantial question of law.

What were the facts?

This Indian ITAT judgment concerns Income Tax Appeal No. 227 of 2022, filed by the Pr. Commissioner of Income Tax (Central) against M/s Great Galleon Ventures Ltd. The appeal is directed against an order dated 23.12.2021 passed by the Income Tax Appellate Tribunal (ITAT), Bench Indore, concerning Assessment Year 2017-18. The ITAT had dismissed the Revenue's appeal and allowed the Assessee's cross-appeal. The Assessing Officer had made additions to the assessee's income on a presumptive basis, working out an estimated income. A crucial fact not disputed is that these additions were not based on any incriminating material found during a search.

What were the issues?

1. Whether, in the absence of any incriminating documents seized during a search, the Assessing Officer is justified in making additions in non-abated assessment orders under Section 153A read with Section 143(3) of the Income Tax Act, 1961? (Question of law) The Assessee's contention, as understood from the Tribunal's decision and the appeal's context, is that additions cannot be made in the absence of incriminating material found during a search, particularly in the context of Section 153A proceedings. The Revenue's contention, implied by their appeal, is that the Assessing Officer was justified in making the additions even without incriminating material, likely arguing for the validity of the presumptive income calculation under the relevant assessment provisions.

Which sections of the Income-tax Act were involved?

Section 260A,Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SHRI JUSTICE GAJENDRA SINGH ON THE 2nd OF JULY, 2024 INCOME TAX APPEAL No. 227 of 2022 (PR. COMMISSIONER OF INCOME TAX (CENTRAL) Vs M/S GREAT GALLEON VENTURES LTD.) Appearance: (MS VEENA MANDLIK, COUNSEL FOR THE APPELLANT). (SHRI V.N.DUBEY, COUNSEL FOR THE RESPONDENT). ORDER Per: Sushrut Arvind Dharmadhikari, J. This appeal under Section 260A of the Income Tax Act 1961 (for short, the Act of 1961 hereinafter) is directed against the order dated 23.12.2021 passed by the Income Tax Appellate Tribunal, Bench Indore in ITA No. 69/Ind/2021(Revenue's Appeal) and ITA No. 115/Ind/2020 (Assessee's Appeal) for the Assessment Year 2017-18. 2. The substantial question of law which has been raised by the appellant in this appeal is "whether in absence of any incriminating documents seized during the course of search, the Assessing Officer is justified in making the addition in non-abated assessment orders under Section 153-A read with Section 143(3) of the Act of 1961." 3. The assessment is under Section 153A read with Section 143(3) of the Act of 1961 for the assessment year 2017-18. 4. Learned Tribunal dismissed the appeals filed by the appellant (Revenue) and allowed cross appeals arising from respective orders passed by the Commissioner Income Tax (Appeals). The appeal before the CIT 1 ITA-227-2022 Signed by: SREEVIDYA Signing time: 02-07- 2024 17:51:44 Signature Not Verified (S. A. DHARMADHIKARI) JUDGE (GAJENDRA SINGH) JUDGE (Appeals) was directed against the addition of income by the Assessing Officer taking production on presumptive basis and working out estimated income. 5. The factum of addition not being based on any incriminating material found during the search is not disputed. 6. Identical issue in respect of similar substantial question of law came up for consideration before the Division Bench of this Court at Gwalior Bench in ITA No. 21/2019, ITA No. 31/2019 and ITA No. 32/2019 (Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd). Vide order dated 12.07.2019, these appeals were disposed of holding that in the given facts of the present case, as no incriminating documents during the course of search were found, the order in appeal cannot be said to have suffered any illegality as would give rise to proposed substantial question of law. Consequently, the appeals were dismissed. 7. In view of the fact that the aforesaid question of law was dealt with by the Division Bench of this Court in the aforesaid cases, no different view can be taken in this appeal. 8. Accordingly, finding no substantial question of law, this appeal fails and is hereby dismissed. vidya

2 ITA-227-2022 Signed by: SREEVIDYA Signing time: 02-07- 2024 17:51:44 Signature Not Verified

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