ACIT vs Anmol Tradex Pvt Ltd.

The instant batch of 39 cases involves the three assessees herein i.e., M/s Anmol Tradex Pvt. Ltd, M/s Bal Gopal Importers and Exporters Pvt. Ltd. & M/s Pratyaksh Apparels Pvt. Ltd. All other remaining details thereof stand tabulated (taxpayer-wise) as under:

Heard the assessee as well as the department through their respective learned representatives. Case files perused.

It transpires during the course of hearing that all the instant thirty nine cases have emanated from the learned departmental authorities from search action dated 06.02.2019 carried out in M/s Avtar Singh Kochar & Shri Sudhir Singh Gulati group of cases. And that the learned Assessing Officer of the said searched party(ies) appears to have recorded his former round of section 153C satisfaction in these three assessees’ cases and the seized material therein stood forwarded to their jurisdictional Assessing Officer(s); who, in turn, arrived at his latter round of satisfaction under the very provision followed by issuance of the corresponding notices finally culminating in the impugned assessments forming subject matter of the tribunal’s apt adjudication herein.

It is at this stage that we are informed that the learned CIT(A) records a categoric finding of fact for the “unabated” years that the addition(s) made herein are not based on any specific seized material going by PCIT vs Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC). Learned counsel takes us to the CIT(A) impugned identical/common lower appellate order (in the first assessee’s case) to the very effect; reading as under:

It is in this identical factual backdrop that the assessees as well as the department have come in their respective appeals or cross-objections; as the case may be, before the tribunal.

Learned CIT(DR) vehemently submits that the Assessing Officer’s various assessments framed in all these cases had duly discussed the relevant incriminating material. We find no merit in the Revenue’s case herein in all these “unabated” assessment years since the learned CIT(A) has settled the issue that this is a clearcut instance of lack of any incriminating material forming the very basis for making the impugned additions in these three assessee’s hands; whatsoever.

Learned counsel at this stage further seeks to buttress the point that the relevant assessments herein framed in all these three assessee’s cases happen to be u/s 153C of the Act. He takes us to pages 313 to 318 in case of M/s Anmol Traders Pvt. Ltd. that the Assessing Officer of the searched person had recorded his former round of section 153C satisfaction on 19.02.2021 that the corresponding seized material in fact “belongs to” the assessee in assessment years 2013-14 to 2019-20. That being the case, the Revenue could hardly dispute that section 153C(1) read with clauses “a to b” thereto stipulates as to what could he held as belonging to a third party i.e., “any money, bullion, jewellery or other valuable articles or things, seized or requisitioned” ; or “any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to.”, as the case may be. Meaning thereby that these twin categories of the satisfied material could not be held as interchangeable since the legislature has not incorporated the clinching statutory expression “and/or” but used “or” only. We thus invoke stricter interpretation in light of Commissioner of Customs v. Dilip Kumar (2018) 9 SCC 1 (FB)(SC) to hold that the impugned section identical 153C satisfactions had not been properly recorded in facts of the instant cases herein.

There is one more equally important legal aspect of the matter which could not be covered at the assessees’ cost. Learned counsel takes us to the assessee’s jurisdictional Assessing Officer’s section 153C latter satisfaction wherein he had not made it clear that the relevant seized material had “a bearing” on determination of the total income as well. The Revenue on the other hand, pleads that such a mistake could not be held as fatal to validity of the impugned assessment as we ought to appreciate the entire facts in totality than adopting a hyper-technical approach. We are of the considered view that the Revenue’s stand hardly carries any merit once hon’ble jurisdictional high court in Saksham Commodities Ltd. Vs. ITO (2024) 464 ITR 1 (Delhi)(HC) has settled the same in the assessee’s favour that the Assessing Officer’s section 153C satisfaction must explicitly state that the seized material carries “a bearing” on determination of the total income of the third party concerned. We thus conclude in this factual backdrop that all these section 153C assessments based on the learned Assessing Officer’s improper satisfaction(s) are not sustainable in law even in both “abated” as well as “unabated” set of assessment years. The same stand quashed in very terms therefore.

All other remaining pleadings between the parties on merits as well as in law; as the case may be, stand rendered academic.

In the result, the assessees’ appeals and cross-objections as tabulated below are allowed in above terms.

The department’s appeals as tabulated below are dismissed in above terms.

A copy of this common order be placed in all the respective case files.