2023 (10) TMI 278 - HC - Income Tax

Appeals Dismissed: Section 153A Notice Invalid; No Incriminating Evidence Found; Section 68 Additions Unsustainable.

The Commissioner of Income Tax,. Income Tax Officer, DCIT/ACIT, Circle-3, Guwahati Versus M/s Goldstone Cements Limited And M/s Goldstone Cements Limited Versus The Commissioner of Income Tax,. Income Tax Officer, DCIT/ACIT, Circle-3, Guwahati

The Commissioner of Income Tax,. Income Tax Officer, DCIT/ACIT, Circle-3, Guwahati Versus M/s Goldstone Cements Limited And M/s Goldstone Cements Limited ... Issues Involved: 1. Validity of notice under Section 153A.2. Nature of seized document GCL-HD-1 as incriminating material.3. Discharge of burden of substantiation by the assessee.4. Deletion of additions under Section 68 of the Income Tax Act.Summary:1. Validity of Notice under Section 153A:The appeals questioned whether the notice under Section 153A was issued by the Assessing Officer without authority of law and without satisfying the essential jurisdictional fact. The High Court upheld the ITAT's decision that the Assessing Officer did not have the jurisdiction to issue the notice under Section 153A, as no undisclosed asset valued at Rs. 50 Lakhs or more was unearthed during the search.2. Nature of Seized Document GCL-HD-1 as Incriminating Material:The core issue was whether the seized document GCL-HD-1 constituted 'incriminating material.' The High Court agreed with the ITAT and CIT(A) that the document, which contained the shareholding pattern of the assessee, was not incriminating as it was verifiable from the books of accounts and secretarial records filed with the ROC prior to the search. The court emphasized that the document did not lead to unearthing of unexplained cash credit and thus could not justify reassessment under Sections 153A and 153C.3. Discharge of Burden of Substantiation by the Assessee:The appeals also questioned whether the assessee had discharged its burden of substantiation of the identity, creditworthiness, and genuineness of the transactions involving receipt of share application monies. The High Court upheld the ITAT's findings that the assessee had indeed discharged this burden, and the additions made by the Assessing Officer under Section 68 were unsustainable.4. Deletion of Additions under Section 68:The appeals contested the deletion of additions under Section 68 of share application money received from various entities. The High Court found no reason to interfere with the ITAT's decision to delete these additions, as the document GCL-HD-1 did not constitute incriminating material, and the assessee had substantiated the transactions.Conclusion:The High Court dismissed the appeals, holding that the seized document GCL-HD-1 did not constitute incriminating material, and thus, the reassessment under Sections 153A and 153C was unjustified. The court also held that the assessee had discharged its burden of substantiation, and the additions under Section 68 were rightly deleted by the ITAT. The appeals did not involve any substantial question of law warranting admission.