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Judgment
The Revenue/Department has preferred ITA No. 7831/Del/2019, whereas the Assessee has preferred cross-objection being CO no. 64/Del/2022 against the order dated 22.07.2019impugned passed by the Ld. Commissioner of Income-tax (Appeals)-IV, Kanpur(in short ‘Ld. Commissioner’) u/s 250(6) of the Income Tax Act, 1961 (in short “the Act”), pertaining to the assessment year 2014-15.
In the instant case, on the basis of search and seizure operation u/s. 132 of the Act dated 28-04-2015 carried out at the premises of a third party , certain documents were seized and consequently, the satisfaction note was prepared and on the basis of satisfaction note, proceedings u/s. 153C of the Act were initiated against the Assessee, which resulted into making of the addition of Rs.3,06,35,244/- on account of disallowance @ 2% of the total cash purchases during the year under consideration.
2.1 Admittedly the said addition on account of disallowance, is not based on any incriminating material pertaining to the year under consideration, found during the course of search, therefore, the assessment order passed u/s. 153C/143(3) of the Act was annulled by the ld. Commissioner by following the judgment of the Hon’ble Apex Court in the case of CIT-3, Pune vs. Singhad Technical Education Society (2017) 397 ITR 4 (SC), wherein, the Hon’ble Apex Court has approved the proposition that as per provisions of Section 153C of the Act, incriminating material/seized documents must be incriminating and relate to the A.Y. for which case sought to be reopened, as the same is judicial requirement.
2.2 We observe, the finding of the ld. Commissioner are specific, logical and based on the dictum of the Hon’ble Apex Court in the case of Singhad Technical Education Society (supra) as well as by the jurisdictional High Court in the case of Index Security Pvt. Ltd. (86 taxmann.com 84 (Delhi), wherein the said dictum of Hon’ble Apex Court has been followed. Consequently, we do not find any infirmity in the order of the ld. Commissioner.
2.3 The ld. DR specifically argued that the ld. Commissioner did not decide the appeal on merits. In our considered view, once the ld. Commissioner decided the appeal on legal aspects, then it is not mandatory to decide the appeal on merits until and unless it is necessitate and urged specifically. As we have upheld the order of the ld. Commissioner on legal aspects, therefore, considering the fact that the impugned order is not on merit, we find no purpose to decide the appeal on merits, as the same would become a futile exercise. Accordingly, the appeal filed by the Revenue Department deserves dismissal.
Coming to the C.O. filed by the Assessee, we find grounds Nos. 1, 2, 3 & 4 are more or less against the assessment order. The only ground No. 2.1 is contentious whichhas been withdrawn by the Ld. AR. Consequently, the C.O. filed by the Assesseeis also liable to be dismissed.
In the result, the appeal filed by the Revenue and the C.O. filed by the Assessee stands dismissed.