DCIT, CENTRAL CIRCLE, NOIDA V. SUNNY ENTERTAINMENT P.LTD, PANCHKULLA

ITA 4950/DEL/2018

AI Insights

The case involves appeals by the Revenue against the order of the CIT(A)-IV, Kanpur, which had set aside the assessments made under section 153C/143(3) for the assessment years 2011-12 and 2012-13. The Revenue contended that the CIT(A) erred in law by holding that there was no incriminating material for the issuance of notice under section 153C. The tribunal referenced a similar case involving the same search action dated 27.11.2014, where it was held that the assessments were not sustainable as they were not based on any seized materials. The tribunal also noted that the Assessing Officer did not make any addition based on the incriminating material found/seized during the course of search, which is a prerequisite for the validity of the proceedings under section 153C.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 40574 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Other Referred Cases: CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC), PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212
• Laws Referred To: Section 153C, Section 143(3)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHAUDHARY
• Assessee Lawyers: VED JAIN
• Keywords: Set aside; Document seized; Documents seized; Accommodation entries
• Section: 153; 153C; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA Nos.4950 & 4951/Del/2018 Assessment Years: 2011-12 & 2012-13 DCIT, Central Circle, Noida Vs. M/s. Sunny Entertainment Pvt. Ltd, 689, Sector-6, Panchkulla, Haryana PAN :AAOCS5457N (Appellant) (Respondent) With C.O. Nos.168/Del/2018 & 13/Del/2019 [In ITA Nos.4950 & 4951/Del/2018] Assessment Years: 2011-12 & 2012-13 M/s. Sunny Entertainment Pvt. Ltd, 689, Sector-6, Panchkulla, Haryana Vs. DCIT, Central Circle, Noida PAN :AAOCS5457N (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM These Revenue’s twin appeals ITA Nos. 4950 & 4951/Del/2018 with the assessee’s as many cross objections Assessee by Sh. Ved Jain, Adv. Ms. Uma Upadhyay, CA Department by Ms. Jaya Chaudhary, CIT(DR) Date of hearing 16.12.2024 Date of pronouncement 03.01.2025 ITA Nos.4950 & 4951/Del/2018 C.O. Nos.168/Del/18 & 13/Del/2019 2 | P a g e therein C.O. No.168/Del/2018 & 13/Del/2019 for assessment years 2011-12 and 2012-13; arise against CIT(A)-IV, Kanpur’s common order passed in CIT(A)-IV/11256 & 11273/DCIT-CC- Noida/2016-17/29 to 30, respectively, involving proceedings under section 153C/143(3). 2. The Revenue’s “lead” appeal ITA No. 4950/Del/2018 for assessment year 2011-12 raises the following substantive grounds: 1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in law while holding that there was no incriminating material for the issuance of notice u/s 153C, without appreciating that in the satisfaction note the AO had clearly brought out all the facts and circumstances, which indicated that the names of the entities including the assessee, appearing on seized documents pertaining to Golf Link Hospitality Pvt. Ltd. were in the nature of accommodation entries only for routing the undisclosed income of Yadav Singh Group and hence such documents constituted \"incriminating material\" for the purpose of the issue of notice u/s 153C in the context of assessee. 2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in law while holding that the seized balance sheet of Golf Link Hospitality Pvt. Ltd. did not constitute \"incriminating material\" on grounds that the balance sheet was part of regular books, without appreciating that since all the searched entities of the Yadav Singh Group were found to be engaged in routing the unaccounted funds by layering through various entities including assessee, controlled by them as mentioned in the satisfaction note, therefore the mere fact that the entries were recorded in regular balance sheet of the beneficiary could not by itself allow the treatment of such seized documents as non-incriminating in the context of entities providing accommodation entries ie, assessee as the expression used in 153C is \"in relation to\" person other than the searched person. 3. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in law while holding that the seized balance sheet of Golf Link Hospitality Pvt. Ltd. did not constitute \"incriminating material\" on grounds that the balance sheet was part of regular books, without appreciating that whether the material is incriminating or not, ITA Nos.4950 & 4951/Del/2018 C.O. Nos.168/Del/18 & 13/Del/2019 3 | P a g e is to be seen in context of totality of facts and circumstances and in the context of the person in whose hands such entries in the document represent the unexplained income. 4. Whether on facts and circumstances of the case and in law, the Ld. CIT (A) erred in law while holding that there was no incriminating material for the issuance of notice u/s 153C, without appreciating that while recording the satisfaction for issue of 153C the test for \"incriminating material\" has to be only in nature of prima facie belief based on some material having live nexus and not in the nature of absolute evidence established after detailed investigation of facts or law. 5. Whether on facts and circumstances of the case and in law, the Ld. CIT (A) erred in law while holding that there was no incriminating material found during the search for the issuance of notice u/s 153C, without appreciating that he himself accepted that for AY. 2011-12 the satisfaction recorded in respect of loan entry of 20 lacs to Golf Link Hospitality Pvt. Ltd. as per seized documents, was factually correct to that extent. 6. Whether on facts and circumstances of the case and in law, the Ld. CIT (A) erred in applying the decision of the Hon'ble Supreme Court in the case of M/s Sinhgad Technical Education Society, which was distinguishable on the facts of the present case. 7. The order of the CIT (A) is erroneous in law and on facts of the case and is liable to be set aside and the order of the AO be restored. There is hardly any dispute between the parties that the Revenue’s latter appeal ITA No. 4951/Del/2018 also raises identical substantive grounds. 3. Learned counsel at this stage invites our attention to this tribunal’s order DCIT, Central, Noida Vs. Munny Entertainment Pvt. Ltd. ITA No.4952 to 4954/Del/2018 with Cross objection Nos. 169 to 171/Del/2018; 412/Del/2023 in group cases, emanating from very search action dated 27.11.2014, holding the ITA Nos.4950 & 4951/Del/2018 C.O. Nos.168/Del/18 & 13/Del/2019 4 | P a g e corresponding assessment proceedings as not sustainable in law since not based on any seized materials in light of CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC). 5. The assessee’s further case before us is that the learned Assessing Officer had initiated the impugned section 153 proceedings herein which culminated in the corresponding assessments framed on 28.12.2016 wherein no addition was made based on the corresponding seized material which forms a condition precedent as per PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212. We gave adequate opportunity to the Revenue’s side which failed to rebut the assessee’s foregoing stand indicating the learned Assessing Officer not to have made any addition based on the incriminating material found/seized during the course of search. 6. Faced with this situation, we find merit in the assessee’s instant first and foremost legal contention and decline the Revenue’s twin appeals here in ITA No. 4950 & 4951/Del/2018 in very terms. Ordered accordingly. 7. Learned counsel representing assessee does not wish to press for its twin cross objections C.O. Nos. 168/Del/2018 and ITA Nos.4950 & 4951/Del/2018 C.O. Nos.168/Del/18 & 13/Del/2019 5 | P a g e 13/Del/2019 (supra) once we have declined the Revenue’s appeals hereinabove. Rejected accordingly. 8. All other pleadings on merits stand rendered academic at this stage. 9. These Revenue’s twin appeals ITA No. 4950 & 4951/Del/2018 are dismissed and assessee’s as many cross objections C.O. Nos.168/Del/2018 & 13/Del/2019 are dismissed as not pressed in above terms. Copy of this common order be placed in the respective case files. Order pronounced in the open court on 03.01.2025 Sd/- Sd/- (AVDHESH KUMAR MISHRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 03.01.2025 RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "