2023 (11) TMI 324 - AT - Income Tax

Assessee wins section 153C case as surname match in seized documents insufficient without corroborative evidence

Dy. CIT Central Circle-1 Gurugram Versus Sh. Jethmal Mehta, Delhi

Dy. CIT Central Circle-1 Gurugram Versus Sh. Jethmal Mehta, Delhi - TMI Issues Involved:1. Legality of satisfaction note recorded by the AO.2. Validity of proceedings under Section 153C.3. Addition of cash receipts under Section 68.4. Addition of unexplained investment in jewellery.Summary:1. Legality of Satisfaction Note Recorded by the AO:The assessee argued that the satisfaction note recorded by the AO was illegal and bad in law as a single satisfaction for all the years (2008-09 to 2014-15) was recorded. The Ld. CIT(A) observed that the AO failed to establish that the seized materials belonged to the assessee. The satisfaction note did not contain concrete satisfaction that the seized documents contained the name of the assessee.2. Validity of Proceedings Under Section 153C:The Revenue contended that Section 153C, amended by the Finance Act, 2015, applies to proceedings initiated after 01.06.2015. However, the Ld. CIT(A) quashed the assessment framed under Section 153C, noting that the documents seized did not belong to the assessee but to Sh. Rakesh Yadav and Sh. Rajbir Goyat. The presumption under Section 292C was not rebutted by the AO with cogent material. The Tribunal upheld this observation, noting that the seized documents did not mention the name of the assessee and were merely dumb documents without corroborative evidence.3. Addition of Cash Receipts Under Section 68:The AO made an addition of Rs. 6,75,17,615/- on account of alleged cash receipts. The Ld. CIT(A) found that the addition was based on documents found during the search at the premises of Sh. Rakesh Yadav and Sh. Rajbir Goyat, which did not belong to the assessee. The Tribunal upheld this finding, noting that the Revenue failed to prove that the seized documents pertained to the assessee.4. Addition of Unexplained Investment in Jewellery:The AO made an addition of Rs. 2,82,020/- on account of unexplained investment in jewellery. The Ld. CIT(A) found that this addition was not based on any incriminating material found during the search. The Tribunal upheld this finding, noting that the addition was not supported by any evidence linking it to the assessee.Conclusion:The Tribunal upheld the Ld. CIT(A)'s decision to quash the assessments framed under Section 153C for the AYs 2012-13, 2013-14, and 2014-15, and dismissed the Revenue's appeals on the grounds of legality and validity of the proceedings. The Tribunal also dismissed the Cross Objections filed by the assessee as not pressed.