Case Number: ITA 675/DEL/2021
Appellant: Zoom Developers SEZ (Indore) Pvt Ltd, New Delhi
Respondent: ACIT Central Circle-13, New Delhi
Assessment Year: 2013-14
Case Filed on: 2021-06-10
Order Type: Final Tribunal Order
Date of Order: 2023-08-25
Pronounced on: 2023-08-25
This case involves Zoom Developers SEZ (Indore) Pvt Ltd and the ACIT Central Circle-13. The core issues revolve around the validity of assessments made under section 153C of the Income Tax Act for the assessment year 2013-14. The appellant challenged the assessment on grounds of procedural lapses and improper disallowances.
The appeals in this case span multiple assessment years from 2012-13 to 2016-17, involving different appellants such as Startle Constructions Pvt Ltd, Tyagi Portfolio Management Pvt Ltd, and Jaguar Equity Ltd, represented by the same legal counsel. The primary issues under contention include the validity of assessments made under section 153C and disallowances of assumed expenditure.
On 23.07.2015, a search and seizure operation under section 132 of the Income Tax Act was conducted at the premises of Shri Deepak Aggarwal, Shri Mukesh Kumar, and related entities. The operation revealed incriminating documents suggesting that the group was involved in providing accommodation entries. Based on the seized documents, proceedings under section 153C were initiated against the appellants.
The Satisfaction Note, a crucial document in these proceedings, indicated that the seized documents had a bearing on the determination of the total income of the appellants. However, the appellants argued that the Satisfaction Note lacked specific correlation with the assessment years in question.
The appellants challenged the validity of the assessments on the following grounds:
The respondent, represented by the CIT-DR, defended the assessments, citing precedents and arguing that the Satisfaction Note and the subsequent assessments were legally sound.
The ITAT Delhi Tribunal, comprising Shri N.K. Billaiya and Shri Kul Bharat, meticulously examined the case records, satisfaction notes, and the relevant documentary evidence. The Tribunal’s key findings included:
In light of the findings, the Tribunal quashed the assessment orders for all the appellants, declaring the assessments invalid due to lack of incriminating material. The appeals were allowed, providing significant relief to the appellants.
The Tribunal emphasized the importance of strict adherence to procedural requirements in search and seizure cases, reiterating the need for clear and specific incriminating evidence to support assessments under section 153C.
The order was pronounced in the open court on 25.08.2023, marking a significant victory for Zoom Developers SEZ (Indore) Pvt Ltd and other appellants in this case.
This ruling underscores the critical importance of procedural accuracy and the necessity for specific evidence in tax assessment cases, particularly under section 153C of the Income Tax Act. It serves as a precedent for future cases involving search and seizure operations, highlighting the need for detailed and relevant incriminating material to substantiate assessments.
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