THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A No.576 of 2014 DATE: 04.09.2014 Between:
The Commissioner of Income Tax – III, Hyderabad.
… Appellant And M/s. Janapriya Engineers Syndicate (JV), Hyderabad.
… Respondent This Court made the following:
THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.576 of 2014 JUDGMENT: (per Sri Sanjay Kumar,J) This appeal by the Revenue is directed against the common order dated 29.11.2013 passed by the Income Tax Appellate Tribunal, Hyderabad Bench ‘B’ insofar as it relates to I.T.A.No.1362/Hyd/2012, in the context of the Assessment Year 2008-09.
The following are the suggested questions of law:
1. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in deleting the addition made under Section 69C of the Income Tax Act, 1961 holding that there is no nexus between the unofficial payments mentioned in the seized material with the projects of the Respondent- assessee, though the name of the project is mentioned in the seized material?
2. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in deleting the addition made under Section 69C of the Income Tax Act 1961 though the Respondent- assessee failed to explain the contents of the seized material during the course of search and post search proceedings?
Perusal of paragraphs 31 and 33 of the order under appeal reflects that the addition under Section 69C of the Income Tax Act, 1961 (for short ‘the Act’) was sought to be made on the basis of documents which were found during the search and seizure operations without establishing any nexus between the contents thereof and actual expenditure by the assessee. The finding arrived at by the authorities below was that in the absence of such nexus it would be difficult to assume that the entries in the documents indicate unexplained expenditure or investment liable for addition under Section 69C of the Act. We are in complete agreement.
We therefore find no reason to interfere with the order passed by the Tribunal.
The appeal is accordingly dismissed. No costs.
K.J. SENGUPTA, CJ SANJAY KUMAR, J Date: 04.09.2014 va