2021 (10) TMI 1137 - AT - Income Tax

Assessment u/s 153A - Addition u/s 68 - action of CIT(A) in holding that no addition was warranted in the present case - HELD THAT - CIT(A) while deciding the issue in favour of the assessee has given a finding that the original return of income filed by assessee was processed u/s. 143(1) of the Act and at the time of search action no assessment or reassessment proceedings were pending or abated. He has further given a finding that the addition made u/s. 68 of the Act was not based on any incriminating document/record or any other material found/seized during the course of search proceedings. Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.

Summary

Issues:
1. Scope of proceedings under section 153A for abated vs. completed assessment.
2. Addition under section 153A without incriminating material found during search.
3. Power of Assessing Officer under section 153A.
4. Interpretation of section 153A and related sections.
5. Application of Delhi High Court decision in CIT vs. Kabul Chawla.
6. Strict interpretation of statute under section 153A.
7. Merits of addition of unexplained share application money under section 68.
8. Consideration of incriminating material for addition.

Analysis:
1. The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) relating to the Assessment Year 2009-10. The case involved a company engaged in manufacturing liquor beverages, which was subject to search and seizure operations. The Assessing Officer (AO) made additions under section 68 of the Act, treating share capital/share application money as unexplained cash credit.

2. The Commissioner of Income Tax (Appeals) decided in favor of the assessee, noting that no incriminating material was found during the search action. The Revenue raised various grounds challenging the CIT(A)'s decision, including the scope of proceedings under section 153A, the power of the Assessing Officer, and the interpretation of section 153A.

3. The Tribunal found that the addition under section 68 was not based on any incriminating material found during the search proceedings. The CIT(A)'s decision was upheld as no fallacy in the findings was pointed out by the Revenue. Therefore, the Tribunal dismissed the appeal of the Revenue.

4. The Tribunal emphasized that in the absence of any incriminating material, no addition could be made in the case of the assessee. It was noted that the original return of income was processed under section 143(1) of the Act, and no assessment or reassessment proceedings were pending during the search action.

5. The Tribunal's decision highlighted the importance of incriminating material for making additions under section 153A. The Tribunal found no reason to interfere with the CIT(A)'s order, as the addition under section 68 was not supported by any incriminating documents or records seized during the search proceedings.

6. The Tribunal's analysis focused on the specific grounds raised by the Revenue, including the interpretation of section 153A and the relevance of the Delhi High Court decision in CIT vs. Kabul Chawla. The Tribunal's decision was based on a thorough examination of the facts and legal provisions involved in the case.

7. Overall, the Tribunal's judgment provided a detailed analysis of the issues raised by the Revenue, ultimately upholding the CIT(A)'s decision in favor of the assessee. The Tribunal's decision was based on a careful consideration of the facts, legal arguments, and precedents cited during the proceedings.