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2018 (5) TMI 1940 - AT - Income TaxAssessment u/s.153A - absence of any incriminating found during the course of search - HELD THAT - On the date of search, i.e., 15.11.2007, the assessment for the Assessment Year 2005-06 was not pending and hence it cannot be reckoned as abated assessment in terms of 2nd proviso to Section 153A. It is now a well settled law by the Hon'ble Jurisdictional High Court that in case of unabated assessment, if no incriminating material has been found or seized during the course of search, then no addition can be made merely based on information already available on record, i.e., in the return of income filed originally/original assessment. AO himself in the impugned assessment order has not referred to any seized documents or incriminating material found during the course of search albeit has proceeded on the perusal of the computation of income filed in the original return of income. The Hon'ble Jurisdictional High Court in the case of CIT vs. Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT after considering catena of decision has held that if in relation to any Assessment Year, no incriminating material is found then no addition or disallowance can be made in relation to that Assessment Year in exercise of power u/s.153A. This principle has been reiterated in the case of Pr.CIT vs. Meeta Gutgutia 2017 (5) TMI 1224 - DELHI HIGH COURT and again in the case of Pr.CIT vs. Best Infrastructure (India) Pvt. Ltd. 2017 (8) TMI 250 - DELHI HIGH COURT . In view of the binding judicial precedent of the Hon'ble Jurisdictional High Court, we hold that no addition can be roped in the assessment made u/s.153A in absence of any incriminating found during the course of search, especially in the case of unabated assessment. Appeal of the Revenue is dismissed.
Issues:
1. Whether the addition made without incriminating material found during search is valid under section 153A? 2. Whether the CIT(A) erred in not deciding the issue of addition of ?1.10 crores made in the assessment order on merits? 3. Whether the order of the CIT(A) is erroneous and not tenable on facts and in law? Analysis: Issue 1: The appeal was filed by the Revenue against the order passed by CIT (Appeals)-XXXIII, New Delhi regarding the quantum of assessment passed u/s.153A/143(3). The Revenue contended that the CIT(A) erred in deleting the addition without incriminating material found during the search, which the Revenue argued was outside the scope of section 153A. The CIT(A) based the deletion of the addition on the absence of incriminating material seized during the search, thus concluding that the addition could not be made u/s.153A. The CIT(A) referenced various decisions, including the Hon'ble High Court of Delhi's judgment in the case of Anil Bhatia, to support the decision. The Tribunal affirmed the CIT(A)'s decision, emphasizing that no addition can be made in the absence of incriminating material found during the search, especially in cases of unabated assessments. Issue 2: The Assessing Officer disallowed the claim of deduction u/s.54F made by the assessee, leading to the addition of ?1.10 crores as income from other sources. The CIT(A) challenged this addition, arguing that it was not based on incriminating material found during the search. The CIT(A) held that since no incriminating material was seized, the addition could not be made u/s.153A. The Tribunal concurred with the CIT(A)'s decision, highlighting the principle that in the absence of incriminating material, no addition can be made in relation to unabated assessments. Issue 3: The Revenue contended that the order of the CIT(A) was erroneous and not tenable on facts and in law. However, the Tribunal upheld the CIT(A)'s decision, citing the well-settled law established by the Hon'ble Jurisdictional High Court. The Tribunal emphasized that if no incriminating material is found during the search in relation to any assessment year, no addition can be made under section 153A. The Tribunal referred to judicial precedents, including the cases of CIT vs. Kabul Chawla and Pr.CIT vs. Meeta Gutgutia, to support its decision to dismiss the appeal of the Revenue. In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision to delete the addition made by the Assessing Officer, as no incriminating material was found during the search, and the assessments were unabated. The Tribunal's decision was based on established legal principles and binding judicial precedents from the Hon'ble Jurisdictional High Court.
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