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2022 (12) TMI 1092 - AT - Income TaxAssessment u/s 153A - addition of penny stocks LTCG - incriminating material found during search or not ? - HELD THAT - We find that this is an unabated assessment. Hence, de hors incriminating material, addition is not sustainable in assessment u/s 153A. This issue is duly decided by Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT - Other decisions referred by ld. CIT (A) are also germane. Accordingly, following the precedent, we do not find any infirmity in the order of the ld. CIT (A). Accordingly, we uphold the same. Appeal filed by the Revenue stands dismissed.
Issues:
1. Interpretation of scope of proceedings under section 153A for abated vs. completed assessment. 2. Addition under section 153A without incriminating material. 3. Restriction on Assessing Officer's powers under section 153A. 4. Interpretation of section 153A and related sections. 5. Difference between search assessment under section 153A and Chapter XIVB. 6. Judicial interpretation of statute in search cases. 7. Application of judgments on additions in search cases under section 153A. 8. Disallowance of exemption under section 10(36). Issue 1: The appeal questioned the difference in scope of proceedings under section 153A for abated vs. completed assessments. The CIT(A) held that addition under section 153A without incriminating material is not sustainable, citing the absence of any such material during search proceedings. The order referenced judicial pronouncements supporting the appellant's argument that the assessment made under section 153A was legally flawed. Issue 2: Regarding the addition made without incriminating material under section 153A, the CIT(A) emphasized that no assessment was pending during the search action, leading to the conclusion that the addition lacked a legal basis. The order highlighted the absence of incriminating documents or evidence during the search, resulting in the deletion of the addition by the CIT(A). Issue 3: The issue of whether there are restrictions on the Assessing Officer's powers under section 153A was raised. The CIT(A) based the decision on the absence of incriminating material during the search, leading to the deletion of the addition. The order referred to judicial pronouncements supporting the appellant's argument against the validity of the assessment made by the Assessing Officer under section 153A. Issue 4: Interpretation of section 153A and related sections was a key point of contention. The CIT(A) highlighted the legal flaw in the assessment made under section 153A due to the lack of incriminating material during the search. The order referenced the decision of the Hon'ble ITAT, Chandigarh Bench, supporting the deletion of additions made without such material. Issue 5: The difference between search assessment under section 153A and Chapter XIVB was discussed. The CIT(A) emphasized that the addition made in the case did not stem from any incriminating material found during the search, leading to the deletion of the addition. The order cited the application of legal principles from the Hon'ble High Court of Delhi and other judgments in support of deleting the addition. Issue 6: The appeal raised concerns about the judicial interpretation of the statute in search cases. The CIT(A) based the decision on the absence of incriminating material during the search, leading to the deletion of the addition. The order referenced judicial pronouncements supporting the appellant's position against the Assessing Officer's actions under section 153A. Issue 7: The application of judgments on additions in search cases under section 153A was a significant issue. The CIT(A) relied on legal precedents to support the deletion of the addition made without incriminating material during the search. The order referenced specific judgments to justify the deletion of the addition in line with established legal principles. Issue 8: The issue of disallowance of exemption under section 10(36) was raised. The CIT(A) upheld the appellant's argument that the addition made by the Assessing Officer under section 153A lacked a legal basis due to the absence of incriminating material during the search. The order referred to the decision of the Hon'ble Delhi High Court and other judgments to support the deletion of the addition. This detailed analysis covers the various issues raised in the legal judgment, providing a comprehensive overview of the arguments presented and the decisions made by the authorities involved.
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