|Question And Answer|
|Subject:||Sec. 153C and incriminating documents|
|Answered by:||Dr .K. Shivaram Senior Advocate|
|Tags:||incriminating documents, search assessment|
|Date:||June 3, 2022|
Assessee is an individual. during the course of search with his brother and his companies on Aug.2013 following documents were found .
a. Cash deposit slip about deposit of cash 1050000/- by the said co.
b. Gift deed for gift of shares in Pvt. limited co by the assessee to his father. and other relatives were found.
on the basis of these documents Notice U/Sec.153C was issued in jan 2016 for A.Y. 2008-09 to 2013-14. while recording the satisfaction the AO has stated that from verification of seized documents it reveals that assessee has certain undisclosed income for the A.Y. 2013-14. Verification of seized documents revels cash deposits and gifts given by assessee and assessee has not filed his return of Income for A.Y. 2013-14.
Assessee submitted the following explanation:
Documents sized do not indicate any cash deposits by the assessee , the documents relied up on by the AO for cash deposits is in facts of the belongs to CO.
Gift deed of shares are notarised and accepted in the hands of co as valid transfer and they do not indicate that there is cash involvement of cash transaction.
As regards to non filling of Return assessee submitted that since his return was below taxable limit he has not filed the the same and which is evident from the ROI filed in response to Notice U/Sec.153C the taxable income is at Rs.199920.10.
There are no incriminating documents which has bearing on undisclosed income of the assessee.
Accordingly it is submitted that the Notice issued U/SEc. 153C and assessment order passed by the AO is bad in law ,however the both the AO as well as CIT A has held that since the above documents are found during the search proceedings initiated U/sec.153C are valid with out assigning any valid reasons as to how these documents are incriminating?
when the AO has not shown the single documents which was seized during the course of search with the companies about the cash transaction or cash deposits with Bank by the assessee, whether proceedings U/SEc. 153C is valid ?
Is there any other defence which Assessee can take before the ITAT apart from validity of the assessment?
pl . guide
If no incriminating documents found addition cannot be made u/s 153C of the Act . Each case has to be argued on facts .
Courts have held that the completed assessment could not be abated unless some incriminating evidence or material was found during search qua additions made by Assessing Officer . Refer following case laws;
PCIT v. Caprihans India Ltd. (2020) 114 taxmann.com 103 (Bom.)(HC) CIT v. Deepak Kumar Agarwal ( 2017) 398 ITR 586/299 CTR 62/ 251 Taxman 22/ 158 DTR 100 (Bom.)(HC), CIT v. All Cargo Global Logistics Ltd (2015) 374 ITR 645 (Bom.) (HC), CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015) 374 ITR 645 (Bom.) (HC) ( Decision of Special Bench in All Cargo Global Logistics Ltd v. Dy. CIT (2012) 137 ITD 287 / 18 ITR 106 (SB)(Mum.)(Trib.) is affirmed.) . CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344/156 DTR 161/297 CTR 441/250 Taxman 225 (SC)
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