GMR ENTERPRISES PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, BANGALORE

In course of hearing, learned AR of the assessee submitted that Grounds No. 1 to 4 are in respect of technical issues and as per these grounds, this is the grievance of the assessee that the assessment orders passed by the AO u/s 143 (3) r.w.s. 153A are not valid for various reasons stated in these four grounds. He submitted that Ground No. 1, 2 and 4 are not pressed in any of these three years and only Ground No. 3 is pressed in all these years out of first four grounds raised. Accordingly, we reject Ground No. 1, 2 and 4 as not pressed in each of these three years. Ground No. 3 reads as under:-

In course of hearing, this was the first query of the bench as to whether this issue was raised before CIT (A) and if raised, what is his decision on this issue. In reply, it was submitted by the learned AR of the assessee that this issue was raised by the assessee before CIT (A) as per Ground No. 3 in all these years and it is decided by CIT (A) on pages 9 and 10 of his order by following various judgments but the main judgment followed by CIT (A) is of Hon’ble Karnataka High Court rendered in the case of Canara Housing Development Co. as reported in 274 CTR 122. At this juncture, this was the next query of the bench that in that case, this was the finding of Hon’ble Karnataka High Court that incriminating material was found and seized in that case and therefore, to examine the applicability of this judgment in the present case, we have to see the factual finding of the learned CIT (A) as to whether incriminating material was found and seized in the present case or not. In reply, it was submitted by the learned AR of the assessee that there is no finding of CIT (A) on this factual aspect. Learned DR of the revenue also could not show any finding of CIT (A) on this factual aspect. Then this was the observation of the bench that to examine and decide the applicability of this judgment in the present case, we have to see the factual finding of the learned CIT (A) as to whether incriminating material was found and seized in the present case or not and in the absence of factual finding of CIT (A) on this aspect, we have to remand the matter to CIT (A) for a fresh decision after recording the finding on this factual aspect. In reply, both sides agreed to this proposition put forward by the bench.

In view of the above discussion, we set aside the order of CIT (A) on this issue and remand the matter back to his file for a fresh decision on this technical aspect after recording a finding on this factual aspect as to whether any incriminating material was found and seized in course of search in the present case or not. The CIT (A) is directed to decide this legal issue raised by the assessee as per Ground No. 3 after recording a finding on this factual aspect as to whether any incriminating material was found and seized in course of search in the present case or not. If the assessee succeeds on this issue then no decision on merit is called for because in that situation, the assessment will not survive but if the assessee fails on this issue, then he should decide the issue on merit afresh because the decision on merit should be after deciding the technical issue. Hence, we hold that no adjudication is called for at present on merit in respect of various disallowances in these three years.

In the result, these appeals of the assessee are partly allowed for statistical purposes.