FOCUS HEIGHTS PVT. LTD.,DELHI vs. ACIT, NEW DELHI

A combined perusal of the assessee’s instant eight appeals indicates at the outset that there arises the first and foremost issue of validity of section 153A r.w.s. 143(3) assessments itself, all framed by the Assessing Officer i.e. learned DCIT, Central Circle, Karnal on 29.12.2018. This is for the precise reason that the learned senior counsel has invited our attention to the relevant panchnama herein dated 22.06.2016 (page 5 of the paper book) wherein the corresponding incriminating evidence inventorized is “original copy of Hard Disc” whose transcriptions; as deciphered by the departmental authorities under the provisions of Right to Information Act, 2005, reveals that they had come across the corresponding material involving the four parties/ suppliers, namely, M/s Fibertech Enterprises; M/s Zenith Enterprises; M/s Malik International; and M/s Supreme International. That being the case, the assessee’s again takes us to pages 14 to 17 in the paper book compiling the alleged incriminating material which is found as nothing but blank letter heads of all the preceding four entities.

Faced with this situation, learned CIT(DR) vehemently argues that once the departmental authorities had found/ seized the said incriminating material/ blank to 2131 of 2022 & 1172 to 1175/Del/2023 - M/s RG Home Furnishing P. Ltd. letter heads from the assessee’s hard disk and the post search inquiries specifically indicated them to be non-existent entities, the only inference could be drawn is that these are accommodation entry providers of various fixed assets whose depreciation as well as cost of acquisition and interest etc. has been rightly disallowed, forming subject matter of our adjudication on merits.

We have given our thoughtful consideration to the assessee’s and the Revenue’s foregoing vehement rival submissions. There is hardly any dispute between the parties that hon’ble apex court’s recently landmark decision in Abhisar Buildwell (2023) 149 taxmann.com 399 (SC) has already settled the law that any addition in furtherance to a search action involving an “unabated” assessment is to be based on specific incriminating/ seized material. The impugned assessment years herein A.Yrs. 2011-12 to 2014-15 are admittedly “unabated” ones only as on the date of search on 22.06.2016. There is further no dispute that all what the department alleges herein is that the above blank letter heads of the assessee’s suppliers in fact amount to incriminating material only. We are of the considered opinion that such mere blank letter heads would hardly constitute any incriminating material, being in the nature of “dumb” document so as to lead to any addition based upon the contents thereof. We thus reject the Revenue’s vehement contentions and quash all the impugned assessments forming subject matter of adjudication in these four assessment years going by their lordships’ landmark hereinabove. Ordered accordingly. The assessee succeeds in its first and foremost legal ground in very terms.

Same order to follow in assessee’s consequential penalty appeals to 1175/Del/2023 being consequential in nature going by fundamento cadit to 2131 of 2022 & 1172 to 1175/Del/2023 - M/s RG Home Furnishing P. Ltd. non opus i.e. if the foundation itself does not exist, any superstructure raised thereupon falls automatically. Ordered accordingly.