2022 (6) TMI 1309 - AT - Income Tax

Assessment u/s 153A - incriminating material found during search - addition by the Ld. CIT(A) by holding that in the absence of any incriminating material, the completed assessment could not be interfered with - HELD THAT - We find that the Hon ble Delhi High Court and the Delhi Benches of the Tribunal by following the decision of Hon ble Delhi High Court in the case of CIT vs., Kabul Chawla ( 2015 (9) TMI 80 - DELHI HIGH COURT has been consistently holding that in absence of any incriminating material, no addition could be made when the assessment orders have attained finality. Considering the totality of the facts and circumstances of the case and in absence of any contrary binding decision of jurisdictional High Court we find no reason to interfere with the order of Ld. CIT(A) and thus, we dismiss the ground raised by the Revenue.

Summary

Issues:
Appeal against orders of CIT(A) for A.Ys. 2010-11 & 2012-13 - Common issues - Application of A.Y. 2012-13 decision for A.Y. 2010-11.

Analysis:
1. Background and Assessment Details:
The individual assessee underwent a search and seizure operation under sections 132/133A of the I.T. Act, 1961, leading to assessment for A.Y. 2012-13 under section 153A. The AO determined the total income at Rs.1,98,21,110, which was contested by the assessee before CIT(A) who granted substantial relief.

2. Grounds Raised by Revenue:
The Revenue challenged CIT(A)'s decision on various grounds, including the reliance on Kabul Chawla case for not allowing additions without incriminating material, deletion of specific additions, and admitting additional evidence under Rule 46A. The issue of whether additions can be made under section 153A without incriminating material was a focal point.

3. Arguments Before the Tribunal:
The Revenue argued against the deletion of additions without incriminating material, citing decisions from Allahabad and Kerala High Courts. They contended that the time limit for issuing notice under section 148 had not expired. In contrast, the assessee's representative supported CIT(A)'s decision, emphasizing the absence of incriminating material and completion of assessment before the search.

4. Tribunal's Decision:
The Tribunal considered the precedents, including the Kabul Chawla case, and held that without incriminating material, no additions could be made once assessment orders are final. They noted the absence of contrary binding decisions and upheld CIT(A)'s order. Consequently, the appeals of the Revenue for both A.Ys. 2010-11 and 2012-13 were dismissed.

5. Conclusion:
The Tribunal dismissed the appeals, applying the decision taken for A.Y. 2012-13 to A.Y. 2010-11 due to common issues. The judgment emphasized the necessity of incriminating material for making additions under section 153A and upheld the principle established in the Kabul Chawla case.