Pr. Commissioner of Income-tax-5 v. L. T. Foods Pvt. Ltd. (Previously Known As L .T. Overseas Ltd.)
[Citation -2020-LL-0204-25]

Citation 2020-LL-0204-25
Appellant Name Pr. Commissioner of Income-tax-5
Respondent Name L. T. Foods Pvt. Ltd. (Previously Known As L .T. Overseas Ltd.)
Court HIGH COURT OF DELHI AT NEW DELHI
Relevant Act Income-tax
Date of Order 04/02/2020
Assessment Year 2005-06
Judgment View Judgment
Keyword Tags substantial question of law • deduction of tax at source • disallowance of expenses • disallowance of payment • assessment proceedings • incriminating material • short deduction of tax • assessment order • seized material • personal expenditure • non deduction of tds
Bot Summary: The Tribunal allowed the appeal of the assessee and disallowed the appeal of the Revenue on the premise that the Revenue had not been able to establish that any of the additions made during the course of the assessment proceedings were premised on any incriminating material found during the search of the Dawat Group of Companies to which the assessee belongs. Therefore if any addition is required to be made by the learned assessing officer should have been made on the basis of the seized material found during the course of search. We have perused the various additions/disallowances made by the learned assessing officer and found that there is no discretion of any seized material found during the course of search based on which these disallowances/additions have been made. The learned departmental representative also could not show us any seized material based on which the said additions have been made. Accordingly we direct the learned assessing officer to delete the disallowance of payment in contravention is of provisions of section 40A(3) of the income tax act, disallowance of expenses on account of non-deduction and short deduction of tax at source and addition on account of personal expenditure. The Assessing Officer, while passing the assessment order, has not clearly stated as to what is the incriminating material on the basis of which the additions were sought to be made. The co-relation between the so-called incriminating material which has not even been disclosed, and the additions made, should have been established by the Assessing Officer, which had not been done.


$ 44. * IN HIGH COURT OF DELHI AT NEW DELHI + ITA 67/2020 and C.M. Nos. 4576-77/2020 PR. COMMISSIONER OF INCOME TAX -5 Appellant Through: Ms. Adeeba Mujahid, Advocate. versus M/S. L.T. FOODS PVT. LTD. (PREVIOUSLY KNOWN AS M/S L.T. OVERSEAS LTD.) Respondent Through: Mr. Rohit Jain, Mr. Aniket D. Agrawal and Ms. Kannopriya Gupta, Advocates. CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE SANJEEV NARULA ORDER % 04.02.2020 Revenue appeals against order dated 03.07.2019 passed by Income Tax Appellate Tribunal, Delhi Bench D, New Delhi in ITA No.4162/Del/2013 and ITA No.4044/Del/2013. first was appeal preferred by assessee and second was appeal preferred by Revenue in relation to Assessment Year 2005-06. Tribunal allowed appeal of assessee and disallowed appeal of Revenue on premise that Revenue had not been able to establish that any of additions made during course of assessment proceedings were premised on any incriminating material found during search of Dawat Group of Companies to which assessee belongs. Tribunal has held in paragraph 40 of impugned order as follows: 40. We have carefully considered rival contention and perused orders of lower authorities. It is apparent that on date of initiation of search on 10/2/2009 assessment proceedings u/s 143(3) of income tax act was completed on 18/12/2007. Therefore on date of search no assessment proceedings were pending for impugned assessment year. Therefore if any addition is required to be made by learned assessing officer should have been made on basis of seized material found during course of search. We have perused various additions/disallowances made by learned assessing officer and found that there is no discretion of any seized material found during course of search based on which these disallowances/additions have been made. learned departmental representative also could not show us any seized material based on which said additions have been made. Therefore, respectfully following decision of honourable Delhi High Court in CIT vs Kabul Chawla (supra) above additions deserve to be deleted. Accordingly we direct learned assessing officer to delete disallowance of payment in contravention is of provisions of section 40A(3) of income tax act, disallowance of expenses on account of non-deduction and short deduction of tax at source and addition on account of personal expenditure. In result, we reverse order of learned CIT - income from above disallowances and allow appeal of assessee to these extent. Assessing Officer, while passing assessment order, has not clearly stated as to what is incriminating material on basis of which additions were sought to be made. co-relation between so-called incriminating material which has not even been disclosed, and additions made, should have been established by Assessing Officer, which had not been done. In these circumstances, in our view, no substantial question of law arises for our consideration. Dismissed. VIPIN SANGHI, J SANJEEV NARULA, J FEBRUARY 04, 2020 B.S. Rohella Pr. Commissioner of Income-tax-5 v. L. T. Foods Pvt. Ltd. (Previously Known As L .T. Overseas Ltd.)
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