2019 (6) TMI 350 - AT - Income Tax

Assessment u/s 153A - no incriminating material unearthed during search on the basis of which the assessment was framed by the AO - HELD THAT - We take note that the AO did not take the aid of any incriminating materials unearthed during search qua these assessment years to make the addition. We note that undisputedly these assessment years were not pending before the AO on the date of search and so it is an unabated assessment. So as per the settled law, in sec. 153A assessment pursuant to search u/s 132 of the Act, for assessment years which are unabated assessments as in the present cases before us, no addition/disallowance can be made without the aid of incriminating materials unearthed during search qua these assessment years. - Decided in favour of assessee.

Summary

Issues:
Appeals by Revenue against CIT(A) order for Assessment Years 2010-11, 2012-13 & 2013-14.

Analysis:
The appeals by the Revenue were delayed by 17 days, but the delay was condoned after a detailed explanation was provided. The case involved a search under section 132 of the Income Tax Act, 1961, at the premises of M/s. Inland Group. The AO did not rely on any incriminating material during the assessment for the years in question, which were not pending before the AO at the time of the search. The Tribunal noted that in similar cases, the AO could only reiterate the income filed under different sections of the Act. The decision of the Hon'ble Delhi High Court in Kabul Chawla was cited, emphasizing the need for incriminating material for additions in Section 153A proceedings.

The Tribunal referred to a previous case involving the same assessee, where the Ld. CIT(A) had ordered deletion of additions based on similar grounds. The Tribunal concurred with the Ld. CIT(A) that in the absence of incriminating material, no additions could be made for the unabated assessments. The legal position emerging from Section 153A was discussed, highlighting the necessity of incriminating material for any additions. The judgments of various High Courts were cited to support the decision of the Ld. CIT(A) in deleting the additions made by the AO.

Given the identical facts and legal principles, the Tribunal upheld the decision of the Ld. CIT(A) for the current appeals and dismissed the Revenue's appeals for the years in question. The Tribunal relied on previous decisions and confirmed the action of the Ld. CIT(A) based on the law and facts presented. Consequently, all appeals by the Revenue were dismissed, and the order was pronounced on 3rd June 2019.