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2022 (11) TMI 1389 - HC - Income TaxAssessment u/s 153A - incriminating material of document has been found at the time of search or not? - HELD THAT - Upon a perusal of the paper book, this Court finds that both CIT(A) and the ITAT have given concurrent findings of fact that no incriminating material has been found during the search. The ITAT also recorded that the present case of the respondent was of non-abated assessment. In fact, the AO in his remand report filed before the CIT(A) admitted that no documents were found or seized during the course of search nor there was any admission by the Assessee. This Court in Shiv Kumar Agarwal 2022 (8) TMI 268 - DELHI HIGH COURT has held where assessment of the respondent had attained finality prior to the date of search and no incriminating material of document has been found at the time of search, no addition could be made u/s 153A as the case of the respondent was of non-abated assessment. Though the judgment in Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT has been challenged by Revenue in connected matters and is pending before the Hon ble Supreme Court, yet there is no stay of the said judgment till date. Consequently, in view of the judgment passed by the Hon ble Supreme Court in Kunhayammed and Others. Vs. State of Kerala and Another 2000 (7) TMI 67 - SUPREME COURT the present appeal is covered by the judgment of this court in Kabul Chawla (supra) and Shiv Kumar Agarwal (supra). Decided in favour of assessee.
Issues:
Challenge to Income Tax Appellate Tribunal's order dated 27th February, 2018 for Assessment Year 2009-10. Analysis: 1. The appellant challenged the ITAT's order, arguing that the addition made under Section 68 was based on incriminating evidence discovered during a search operation. The appellant contended that the ITAT erred in deleting the addition without considering the incriminating evidence found during the search. The appellant emphasized that the incriminating evidence led to the addition under Section 68. 2. The appellant further argued that the addition under Section 68 was justified as the Assessee failed to prove the identity, creditworthiness, and genuineness of the share capital and premium received. The respondent cited precedents to support their position, emphasizing that no addition can be made under Sections 153A and 153C if no incriminating material is found during a search. 3. The High Court examined the findings of the CIT(A) and ITAT, which concurred that no incriminating material was found during the search. The AO's remand report confirmed the absence of incriminating documents or admissions by the Assessee during the search. The High Court upheld the ITAT's decision to delete the addition under Section 68, following the legal principles outlined in previous judgments. 4. The legal position established in the case of Kabul Chawla was reiterated, emphasizing that additions under Section 153A must be based on seized material or related information. The High Court also referenced the judgment in Principal Commissioner of Income Tax vs. Shiv Kumar Agarwal, highlighting that no addition can be made under Section 153A for non-abated assessments without incriminating material found during a search. 5. Despite challenges to the Kabul Chawla judgment pending in the Supreme Court, the High Court held that the present appeal aligns with the principles established in Kabul Chawla and Shiv Kumar Agarwal. Consequently, the High Court dismissed the appeal, clarifying that the orders would be subject to the final decision of the Supreme Court in the related Special Leave Petition. This detailed analysis of the judgment showcases the legal arguments presented, the court's examination of the facts, and the application of relevant legal principles to reach a decision.
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