NISHAN INBUILD LIMITED,DELHI vs. PR,CIT CENTRAL KNP, MEERUT

This assessee’s appeal for assessment year 2013-14, arises against the Principal Commissioner of Income Tax (Central) [in short, the “PCIT”], KNP at Meerut’s DIN and order no. ITBA/COM/F/17/2023-24/1052872521(1), dated 16.05.2023, involving proceedings under section 263 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

It emerges during the course of hearing that the assessee/appellant is aggrieved against the learned PCIT’s section 263 revision direction terming the Assessing Officer’s section 153C r.w.s. 143(3) assessment as an erroneous one and prejudicial to the interest of the Revenue.

We next notice with the able assistance coming from both the parties that the learned departmental authorities had carried out the search in question on 11.10.2018 in M/s. PMC group of cases (including the assessee) wherein they allegedly came across the corresponding incriminating material triggering initiation of section 153C proceedings. All this finally culminated in the impugned assessment wherein the Assessing Officer added the corresponding section 68 unexplained cash credits and commission income @ 4% in the assessee’s hands on “protective” basis as a matter of abundant caution.

Learned CIT(DR) at this stage refers to the PCIT’s impugned revision directions that the Assessing Officer ought to have made the foregoing additions in the assessee’s hands on “substantive” basis and his “protective” action to the very effect was an erroneous

The assessee, on the other hand, has placed before us section 153A r.w.s. 143(3) assessment order dated 29.09.2021 passed in case of the key person Sh. Raj Kumar Modi wherein he already stand assessed qua its unsecured loans and other current liabilities along with commission @ 4% as well. This clinching “substantive” assessment of Sh. Raj Kumar Modi qua the assessee’s for both unsecured loans and liabilities etc. has gone unrebutted from the Revenue side. That being the case, we are of the considered view that once Sh. Raj Kumar Modi has been assessed on “substantive” basis and the Assessing Officer taxed the assessee on “protective” basis in his assessment order in question, the same could not be termed as either erroneous or prejudicial to the interest of the Revenue which forms mandatory condition going by the Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) We accordingly reverse the learned PCIT’s impugned section 263 revision directions in very terms. No other ground or argument has been pressed before us.