M/s. Dharam Raj Construction & Infrastructure (P) Ltd. vs DCIT, Central Circle-14, New Delhi

PER SATBEER SINGH GODARA, JM

These assessee’s twin appeals ITA Nos.4966 & 4967/Del/2013 for assessment years 2007-08 and 2028-09, arises against the Commissioner of Income Tax (Appeals)-XXXIII [in short, the “CIT(A)”], New Delhi’s orders, both dated 26.02.2013 in case nos. 298/11-12/983 and 266/11-12/957, involving proceedings under section 153A/143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively.

It transpires during the course of hearing that there arises the first and foremost issue of validity of the impugned section 153C r.w.s. 143(3) assessments; both framed by the learned Assessing Officer on 30.12.2011 itself. This is for the precise reason that the assessee raises its legal ground that both the learned lower authorities have erred in law and on facts in invoking section 40A(3) disallowance involving varying sums in the impugned twin assessment years in absence of any corresponding incriminating material found/seized during the course of search dated 30.07.2009 in Ramprastha group of companies.

Learned CIT(DR) at this stage seeks to clarify that the twin assessment years before us are AYs 2007-08 and 2008-09 i.e. “abated” assessments wherein such additions could be very well made in the assessee’s hands. We find no merit in the Revenue’s foregoing stand. We make it clear that the learned Assessing Officer(s) had recorded his section 153C satisfaction in the assessee’s case on 12.10.2011 and going by section 153C(1) 1^st proviso that the date of search in an instance is that of such a satisfaction only as per CIT-7 Vs. RRJ Securities Ltd. (2016) 380 ITR 612 (Del), PCIT Vs. Ojjus Medicare (P) Ltd., (2024) 465 ITR 101 (Del) and CIT Vs. Jasjit Singh (2024) 465 ITR 101 (SC) both these impugned assessment years are “unabated” ones when accounted from 12.10.2011 wherein any addition ought to be made in the assessee’s hands has to be based on the specific incriminating material only as per PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC). We further wish to observe at the cost of repetition that both the learned lower authorities have rather invoked section 40A(3) cash payments disallowance in the assessee’s hands based on its book entries only. We thus quash the impugned twin assessments framed in the assessee’s case as per their lordships’ landmark decision in very terms.

These assessee’s twin appeals ITA Nos.4966 & 4967/Del/2013 are allowed in very terms. A copy of this common order be placed in the respective case files.