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2022 (4) TMI 586 - AT - Income TaxAssessment u/s. 153A - Whether assessment pertaining to AY 2014-15 was abated as per section 153A? - HELD THAT - It is noted that only on the basis of retracted statements, the AO has made the addition. From a perusal of the assessment order, it is noted that there is no other incriminating material seized during search. Other than the retracted bald statement of assessee s father addition has been made by AO which has been retracted within few days wherein assessee s father/assessee has alleged coercion/duress of obtaining it. It is noted that other than the statement of his father which has been obtained under threat/coercion/duress which has been retracted within few days the AO has made the addition as undisclosed income the assessee s LTCG - However we find that other than the retracted statement there was no iota of evidence/material to substantiate the impugned additions. CIT(A) has given a finding of fact that other than the assessee s father s statement regarding the LTCG of assessee, there was no incriminating material found during search qua the assessee qua the AY 2014-15. In such a scenario, no addition was legally sustainable as held by the Hon ble Delhi High court in Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT Thus unless there is incriminating material qua each of the A Y s in which additions are sought to be made, pursuant to search and seizure operation, the assumption of jurisdiction under Section 153A of the Act would be vitiated in law for an unabated assessment. - Decided in favour of assessee.
Issues Involved:
1. Whether the assessment for AY 2014-15 is abated or non-abated. 2. Whether the addition made by the AO is justified in the absence of any incriminating material. Detailed Analysis: Issue 1: Abatement of Assessment for AY 2014-15 The primary issue is whether the assessment for AY 2014-15 is abated as per Section 153A of the Income-tax Act, 1961. The facts reveal that the assessee filed the original return of income under Section 139(1) on 31.07.2014, declaring an income of ?2,00,080/-. No notice under Section 143(2) was issued by the AO before the deadline of 30.09.2015, meaning the assessment was completed under Section 143(1)(a). A search and seizure operation under Section 132 was conducted on 02.06.2016, after which the AO issued a notice under Section 153A. The AO assessed the income at ?4,25,30,080/-, but the CIT(A) deleted the addition, stating the assessment for AY 2014-15 was non-abated. The Tribunal upheld the CIT(A)'s decision, noting that since no notice under Section 143(2) was issued, the assessment was not pending on the date of the search, making it an unabated assessment. This conclusion aligns with the judicial precedent set by the Delhi High Court in CIT vs. Kabul Chawla, which states that for unabated assessments, additions can only be made based on incriminating materials found during the search. Issue 2: Justification of Addition Without Incriminating Material The second issue concerns whether the AO's addition is justified without any incriminating material. The AO made the addition based solely on a statement given by the assessee's father, which was retracted within ten days, alleging coercion and duress. The CIT(A) held that in the absence of any incriminating material found during the search, the addition was unwarranted. The Tribunal agreed with the CIT(A), emphasizing that the addition was based solely on the retracted statement without any supporting evidence. The Tribunal referenced the Delhi High Court's decision in Pr. CIT vs. Best Infrastructure (India) P. Ltd., which held that no addition should be made based solely on a retracted statement. The Tribunal also reiterated the principle from Kabul Chawla that for unabated assessments, additions must be based on incriminating material. Conclusion The Tribunal dismissed the revenue's appeals, affirming the CIT(A)'s decision that the assessment for AY 2014-15 was non-abated and that the addition made by the AO was unjustified in the absence of any incriminating material. The Tribunal's decision is consistent with the legal principles established in previous judicial precedents, including Kabul Chawla and Best Infrastructure (India) P. Ltd. Order Pronounced: The Tribunal dismissed all three appeals of the revenue and pronounced the order in the open court on 7th April, 2022.
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