Deputy Commissioner Of Income Tax vs Binary Network Solution

“1.

That the Ld. CIT(A) has erred in concluding that no incriminating material was found during the course of the search to justify the initiation of proceedings u/s 153C of the Act, ignoring the seized material including Tally data and ledger entries that directly relate to the assessee and establish its involvement in providing accommodation entries.

2.

That the Ld. CIT(A) has misinterpreted the ratio laid down by the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. by narrowly construing the definition of incriminating material and ignoring the relevance of digital and documentary evidence seized during search proceedings.

3.

That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,34,45,760/- made under section 68 of the Act on account of unexplained cash deposits in the bank account of the assessee, despite the corroboration of such deposits with seized material and the assessee's failure to provide any credible or satisfactory explanation regarding the nature and source of such deposits.

4.

That the order of the CIT (A) is erroneous and is not tenable on facts and in law.

5.

That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.”

“4.

It is in this factual backdrop that the learned counsel, inter alia, reiterates the assessee's pleadings that both the lower authorities have erred in law and on facts in making the impugned addition going by a mere loose paper found in survey; and, that too, without having substantiated the contents thereof during scrutiny as well as in remand proceedings. His case is that in these peculiar facts and circumstances as well as going by it's sister concern M/s Jay Enn Infotech Pvt. Ltd.'s order dated 17.6.2017, we ought to reverse the lower authorities' action making the impugned addition of Rs. 60,96,027/-.

5.

The Revenue, on the other hand, draws strong support from the learned CIT(A)'s above extracted lower appellate discussion upholding the impugned addition.

6.

We have given our thoughtful consideration to the foregoing vehement contentions and find no merit in the assessee's stand. This is for the precise reason that the impugned addition is very much based on the seized document 'A-12' indicating the assessee to have excluded the corresponding transaction, which form part of the lower appellate discussion extracted hereinabove. Learned counsel sought to rebut the same that it is in fact a loose document only which ought to have been substantiated by the learned departmental authorities. We are of the considered view that even such a loose document as well as contents thereof; seized during the course of a search or survey, as the case may be, carries presumption of correctness qua contents thereof u/s 292C of the Act, which ought to have been rebutted by the taxpayer's side only. It was, therefore, not the department's onus to further substantiate it's contents herein once the same once the same carried presumption of correctness itself regarding each and every entry forming part thereof. The Revenue further invites our attention to the fact that the said seized material further indicated cheques as well as cash payments, as well as survey statement recorded as well. It is in these peculiar facts and going by the statutory presumption u/s 292C of the Act that we conclude the issue against the assessee and in department's favour that the learned lower authorities have rightly made the impugned addition in the course of assessment framed on 30.12.2017 and upheld in the learned CIT(A)'s findings under challenge.

7.

So far as the assessee's other grounds, placing reliance on the decision in group concerns is concerned, we are of the view that same does not form sufficient material to cure the statutory presumption therein. We thus reject the assessee's instant sole substantive ground and confirm the impugned addition. It's former appeal ITA 2115/Del/2023 fails therefore.

8.

Coming to the assessee's latter appeal ITA 2116/Del/2023 for A.Y. 2013-14, it emerges at the outset that there arises the first and foremost legal issue of validity of the impugned section 153C assessment itself framed on 14.12.2018 not making any addition based on the seized material going by PCIT v. Abhisar Buildwell (P) Ltd. (2023) 150 taxmann.com 267 (SC).

9.

The Revenue at this stage sought to highlight the fact that the assessment year A.Y. 2013-14 involved herein is an 'abated' and not 'unabated' one, as the search took place on 17.12.2015. We are afraid that the Revenue's instant contention goes against section 153C(1) 1" proviso making it clear that the date of initiation of the search in such an instance "shall be construed as reference to the date of receiving the books of account or documents having jurisdiction over such other person". by the Assessing Officer

10.

The Revenue could hardly dispute that the assessee's Assessing Officer had in fact recorded his satisfaction on 22.03.2018 and, therefore, the assessment year 2013-14 is an 'unabated' one and hence covered by Abhisar Buildwell (supra). We further wish to clarify that assessing authority had added an amount of Rs. 88,00,000/- u/s 68 of the Act based on its bank statement which never formed part of the seized material. We, thus quash the impugned section 153C assessment in very terms. This assessee's instant latter appeal ITA 2116/Del/2023 succeeds therefore.”