Case Number: ITA 965/DEL/2021
Appellant: Jakhotia Plastics Pvt. Ltd., Telangana
Respondent: ACIT, CC-26, New Delhi
Assessment Year: 2012-13
Case Filed On: August 12, 2021
Order Type: Final Tribunal Order
Date of Order: October 21, 2022
Pronounced On: October 21, 2022
The legal dispute between Jakhotia Plastics Pvt. Ltd. and the Assistant Commissioner of Income Tax (ACIT), Circle-26, New Delhi, involves complex issues pertaining to the assessment year 2012-13. The case, filed on August 12, 2021, culminated in a Final Tribunal Order pronounced on October 21, 2022.
The primary issue in this case was whether the addition under section 153A could be made without any inquiry or incriminating material, solely based on a declaration before the Settlement Commission.
Jakhotia Plastics Pvt. Ltd. is a private limited company incorporated on October 14, 1992, and is engaged in the manufacturing of polypropylene woven sack bags supplied to cement and sugar companies. The company has three directors: Shri Om Prakash Jakhotia (Managing Director), Smt. Lata Bai Jakhotia, and Shri Balkishan Jakhotia.
A search under section 132 of the Income Tax Act was conducted at the residential and business premises of the company on January 20, 2012. During the search, the company admitted to undisclosed income of Rs. 21.42 crores for the assessment years 2011-12 and 2012-13.
On October 31, 2013, the company, along with its two other entities (Jakhotia Plastics Pvt. Ltd. and Jakhotia Polymers Pvt. Ltd.), filed settlement applications under section 245C(1) of the Act, disclosing additional income. The Settlement Commission, on November 26, 2014, passed the final order, settling the undisclosed income at Rs. 7,48,04,200/-.
The Department challenged the Settlement Commission’s order before the Delhi High Court, which quashed the order on April 15, 2019, and remitted the matter to the Assessing Officer for fresh assessment in accordance with the law.
The Assessing Officer finalized the assessment for the company for the assessment year 2010-11, making additions based on unexplained payments and undisclosed income. Upon appeal, the CIT(A) confirmed some additions and deleted others.
The appellant argued that the additional income was offered to qualify for the Settlement Commission and was not based on any incriminating material. The Tribunal, following various judicial pronouncements, held that additions under section 153A cannot be made solely on the basis of declarations before the Settlement Commission without any incriminating material.
The Tribunal allowed the appeal, setting aside the orders of the lower authorities and holding that additions made solely on the basis of declarations before the Settlement Commission, without any incriminating material, are not sustainable.
Final Judgment: In the Income Tax Appellate Tribunal, Delhi Bench, ‘C’: New Delhi, the appeals filed by the assessee were allowed as per the order pronounced on October 21, 2022.
Jakhotia Plastics Pvt. Ltd. vs ACIT, 2012-13: Case Filed in 2021
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