DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), HYDERABAD, HYDERABAD vs. SHIVA SHANKAR MINERALS PRIVATE LIMITED, HYDERABAD

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ITA 749/HYD/2020Status: DisposedITAT Hyderabad17 March 2022AY 2016-177 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that a search assessment can only be framed on incriminating material found during the search, not on new material discovered later. The Revenue's arguments were found to be without merit.

What were the facts?

The Revenue appealed against the CIT(A)'s order which deleted additions made towards sub-contract expenses and allowed mining stock written off. The CIT(A) had quashed the assessment itself as it was not based on incriminating material found during the search.

What were the issues?

Whether an assessment under Section 153A can be framed on material not found during the search. Whether sub-contract expenses and mining stock written off were substantiated.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri S.S. Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri M.V. Anil Kumar, CA
For Respondent: Shri Rajendra Kumar, CIT-DR
Hearing: 15.03.2022Pronounced: 17.03.2022

Assessment Year: 2016-17 The Deputy Commissioner Vs. M/s. Shiva Shankar of Income Tax, Minerals Private Limited, Central Circle – 1(3), Hyderabad. Hyderabad. PAN : AACCS5388N. (Appellant) (Respondent) Assessee by: Shri M.V. Anil Kumar, CA Revenue by: Shri Rajendra Kumar, CIT-DR Date of hearing: 15.03.2022 Date of pronouncement: 17.03.2022 O R D E R Per S. S. Godara, J.M. This Revenue’s appeal for A.Y. 2016-17 arises from the Commissioner of Income Tax (Appeals) – 11, Hyderabad’s, order dated 07.08.2020 in case No.10259/2019-20 involving proceedings u/s. 143(3) r.w.s 153A of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

The Revenue raises the following substantive grounds in the instant appeal:

“1. The Ld. CIT(A) erred in deleting the addition made towards sub- contract expenses on the ground that the addition can only be made on the basis of material seized during Search.

2. The CIT(A) ought to have appreciated the fact that the Assessing Officer has brought out in the Assessment Order that some of the sub- contractors who were examined have stated that they have not done, any sub-contract work for the assessee company.

3. The Ld. CIT(A) erred in allowing the expenses as mining stock written off. without appreciating the fact that the assessee company has not discharged the onus of substantiating such claim as revenue expenses.”

3.

We next note with the able assistance of both the parties that the CIT(A) has quashed the impugned assessment itself as not based on any incriminating material found or seized during the course of the search as under :

4.

Learned CIT-DIR vehemently contended during the course of hearing that hon’ble jurisdictional high court’s decision in Gopal Lal Bhadruka Vs. (2012) DCIT 346 ITR 106 supports the Revenue’s case that a search assessment could very well be framed on altogether a new material which sees light of the day in the corresponding proceedings. We find no merit in the Revenue’s arguments as their lordships’ decision is only applicable in a case wherein the department indeed comes across incriminating material at the time of search than in absence of any such material. We thus place our reliance on the case law considered in the CIT(A)’s order (supra) to affirm the lower appellate findings under challenge.

5.

This Revenue’s appeal is dismissed in above terms.

Order pronounced in the Open Court on 17th March, 2022.

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