In a significant development, a search and seizure operation was recently carried out at the business and residential premises of M/s KGK Infrastructure and Developers Pvt. Ltd. on 6th May 2010. This operation, conducted by the authorities, resulted in the discovery and seizure of various incriminating materials.
Following the search, a notice under Section 153C of the Act was issued to the assessee on 20th March 2014. It is worth noting that the assessee had previously filed the return of income for the impugned assessment orders on different dates, namely 24th October 2007, 27th September 2008, and 28th March 2011.
It is important to highlight that the assumption of jurisdiction under Section 153C of the Act, based on the satisfaction recorded, establishes the date of search in the case of the assessee (as a person other than the one being searched) to be 20th March 2014. Considering the dates of the return filed for the impugned assessment orders, it can be reasonably concluded that these assessments are unabated assessments. Therefore, it is expected that the assessment framed under Section 153C of the Act will have a direct connection with the incriminating material discovered during the search operation.
Upon reviewing the impugned assessment orders, it becomes evident that the additions made by the Assessing Officer (AO) lack any reference to the incriminating materials. In this regard, the ratio established by the Hon’ble Jurisdictional High Court of Delhi in the case of Kabul Chawla (380 ITR 573) is of utmost relevance. This ratio has also been affirmed by the Hon’ble Supreme Court in the cases of Abhisar Buildwell (P) Ltd. (454 IT 212) and M/s U.K. Paints (Overseas) Ltd. (454 ITR 441).
It is worth mentioning that the Commissioner of Income Tax (Appeals) [CIT(A)] has correctly followed the binding decisions mentioned above. Consequently, there is no reasonable basis to interfere with the findings of the CIT(A) in this matter. Therefore, the appeals filed by the Revenue have been dismissed.
Case Title: Asstt. Commissioner of Income Tax v/s M/s C.P. & Associates Pvt. Ltd.
Citation: ITA Nos:- 576, 577 & 578/Del/2018