2022 (5) TMI 1342 - AT - Income Tax

Assessment u/s 153A - incriminating material found during the course of search or not? - HELD THAT - The impugned assessment order clearly shows that the impugned additions are devoid of any incriminating material found at the time of search. We are of the considered opinion that on the given facts of the case, the ratio laid down by the Hon'ble Supreme Court in the case of Singhad Technical Education 2017 (8) TMI 1298 - SUPREME COURT squarely apply wherein the Hon'ble Supreme Court has held that the nexus between issue of notice u/s 153C of the Act and incriminating material found as a result of search must exist. - Decided against revenue.

Summary

Issues:
Appeals against common order of ld. CIT(A)-IV, Kanpur for Assessment Years 2011-12 and 2014-15.

Analysis:
1. Issue of Incriminating Material for Notice u/s 153C:
- The Revenue contended that incriminating material existed for issuing notice u/s 153C, emphasizing the importance of a live nexus.
- The CIT(A) held that no incriminating material was found during the search operations, applying the Supreme Court's decision in a specific case.
- The Tribunal noted that the additions lacked incriminating material, aligning with the Supreme Court's requirement of a nexus for issuing notices u/s 153C.

2. Assessment Year 2011-12 & 2014-15 Additions:
- Unverified share application money and capital were added in the respective assessment years.
- Assessee challenged the additions citing lack of reference to incriminating material, invoking the Supreme Court's precedent.
- The CIT(A) canceled the assessment due to the absence of incriminating material supporting the additions.

3. Contentions and Decision:
- The Department supported the Assessing Officer's findings, while the assessee's counsel reiterated arguments made before lower authorities.
- After review, the Tribunal upheld the CIT(A)'s decision, emphasizing the necessity of a nexus between incriminating material and the notice u/s 153C.
- The Tribunal dismissed the Revenue's appeals, affirming the CIT(A)'s cancellation of the assessment due to the lack of incriminating material supporting the additions.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the final decision rendered by the Tribunal, ensuring a comprehensive understanding of the legal aspects involved in the case.