DCIT, CC-17, NEW DELHI Vs. M/S MANI CAPITAL LIMITED

Parties Involved

Facts Summary

The original return of income was filed by the assessee on 23.9.2015 declaring income of Rs. 3,21,843/-. A search and seizure operation u/s. 132 of the Act was carried out on 18.10.2019 in the case of M/s Alankit Limited, Shri Alok Kumar Aggarwal, Sh. Ankit Agarwal, M/s Alankit Group. During search proceedings some documents including digital data were found and seized. On perusal of the seized data/ documents it was found that certain documents and information contained therein pertains to the assessee M/s Mani Capitals Limited. Thereafter, assessment was completed u/s. 144 r.w.s. 153C of the Act with an addition of Rs. 8,84,540/-. Against the above, assessee appeal before the Ld. CIT(A), who vide his impugned order dated 23.12.2024 has allowed the appeal of the assessee on the ground that addition made by the AO for the assessment years 2014-15 to 2016-17 is Rs. 8,84,540/- which is below the amount threshold of Rs. 50 lacs and accordingly, the condition as prescribed under the proviso to Section 153A are not met. Aggrieved, Revenue is in appeal before the Tribunal.…

Legal Issues

• 1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) is correct in allowing relief to the assessee by holding that the additions were not based on seized / incriminating material when the order of the AO contains exhaustive details of incriminating material and the information regarding the assessee extracted from it?
• 2. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) erred in holding that transactions of the assessee recorded in unaccounted / parallel books of accommodation entry provider do not constitute incriminating document of the assessee?
• 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) is correct in allowing relief to the assessee by holding that the additions were not based on seized / incriminating material when reasons for additions u/s. 69A of the Act and disallowance of interest u/s,. 37 of the Act are directly linked to the incriminating material.
• 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in relying on jurisdictional High Court’s decision in case of Ojjus Medicare in holding that block periods for assessment under section 153C of the Income Tax Act, 1961 have to be calculated from the date of receipt of the books of accounts, documents or assets seized, by the jurisdictional AO of the non-searched person and not from the date of initiation of search by relying on First Proviso to Section 153C, even when this Proviso specifically deals only with the abatement of proceedings (as referred to second proviso of Section 153A) and does not deal with the calculation of block periods?
• 5. Whether on the facts and circumstances of the case and in law, the CIT(A) was justified in holding that block periods for assessment u/s. 153C of the Act, have to be calculated from the date of receipt of the books of accounts, documents or assets seized, by the jurisdictional AO of the non-searched person and not from the date of initiation of search by relying on First Proviso to Section 153C, even when this Proviso cannot override the main provisions of Section 153C(1) which clearly mentions that calculation of block period has to be done from the year of search?
• 6. Whether on the facts and under the circumstances of the case and in law, the CIT(A) was justified in holding that block periods for assessment u/s. 153C of the Act have to be calculated from the date of receipt of the books of accounts, documents, or assets seized, by the jurisdictional AO of the non searched person, even when the position of law is clarified after the amendment introduced by Finance Act, 2017, that the block period of 6 AYs and 10 AYs as mentioned in sub section (1) of Section 153C and Section 153A have same meaning and have to be calculated from the “assessment year relevant to the previous year in which search is conducted.”

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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