Itta/576/2014 Of Commissioner Of Income Tax-Iii v. M/S.janapriya Engineers Syndicate (Jv)

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA 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.… AppellantAndM/s. Janapriya Engineers Syndicate (JV),Hyderabad.… Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTAANDTHE 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 commonorder 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, whetherthe Hon’ble Tribunal (ITAT) is correct in law indeleting the addition made under Section 69C of theIncome Tax Act, 1961 holding that there is no nexusbetween the unofficial payments mentioned in theseized material with the projects of the Respondent-assessee, though the name of the project ismentioned in the seized material?the Hon’ble Tribunal (ITAT) is correct in law indeleting the addition made under Section 69C of theIncome Tax Act, 1961 holding that there is no nexusbetween the unofficial payments mentioned in theseized material with the projects of the Respondent-assessee, though the name of the project ismentioned in the seized material? 2.In the facts and circumstances of the case, whetherthe Hon’ble Tribunal (ITAT) is correct in law indeleting the addition made under Section 69C of theIncome Tax Act 1961 though the Respondent-assessee failed to explain the contents of the seizedmaterial during the course of search and post searchproceedings?the Hon’ble Tribunal (ITAT) is correct in law indeleting the addition made under Section 69C of theIncome Tax Act 1961 though the Respondent-assessee failed to explain the contents of the seizedmaterial during the course of search and post searchproceedings? Perusal of paragraphs 31 and 33 of the order under appealreflects that the addition under Section 69C of the Income Tax Act,1961 (for short ‘the Act’) was sought to be made on the basis ofdocuments which were found during the search and seizureoperations without establishing any nexus between the contentsthereof and actual expenditure by the assessee. The finding arrived at by the authorities below was that in the absence of such nexus itwould be difficult to assume that the entries in the documents indicateunexplained expenditure or investment liable for addition underSection 69C of the Act. We are in complete agreement. We therefore find no reason to interfere with the order passedby the Tribunal. The appeal is accordingly dismissed. No costs. _________________ K.J. SENGUPTA, CJ Date: 04.09.2014va _________________SANJAY KUMAR, J