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2018 (2) TMI 2042 - HC - Income TaxAssessment u/s 153A - Addition u/s 68 - Whether no incriminating materials were found during the course of the search that have resulted in a valid addition in the search assessment? - HELD THAT - The Court notices that for a previous year A.Y. 2011-12 which too was covered by the same search assessment the ITAT s decision has been upheld in PCIT v. Sameer Gupta 2018 (2) TMI 2041 - DELHI HIGH COURT . The Court notices that the Court had applied the rule in CITv. Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT . Since the present impugned order is part of the same search assessment but for a later year the appeal is unmerited as the additions were made in the absence of any fresh incriminating material seized by virtue of Kabul Chawla (supra).
Issues:
Setting aside of search assessment under Section 68 of the Income Tax Act, 1961 due to lack of incriminating materials leading to a valid addition. Analysis: The High Court addressed the issue of setting aside the search assessment by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961, where a sum of Rs. 5,62,61,726 was brought to tax. The Court noted that both the Commissioner of Income Tax (Appeals) [CIT(A)] and the Income Tax Appellate Tribunal (ITAT) had found that no incriminating materials were discovered during the search, leading to the conclusion that the addition made in the search assessment was not valid. The Court referred to a previous year's decision covered by the same search assessment, where the ITAT's ruling was upheld in a similar case. This reference highlighted the application of the rule established in Commissioner of Income Tax v. Kabul Chawla 380 ITR 573, emphasizing that additions made without fresh incriminating material were unjustified. The Court emphasized that since the impugned order was part of the same search assessment but for a subsequent year, the appeal lacked merit as the additions were made without any new incriminating material seized, in line with the principles laid down in the Kabul Chawla case. Consequently, the Court dismissed the appeal, upholding the decision to set aside the search assessment due to the absence of incriminating materials justifying the addition under Section 68 of the Income Tax Act, 1961.
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