2023 (7) TMI 460 - HC - Income Tax

Assessment u/s 153A - incriminating material found during the course of search u/s. 132(1) or not? - HELD THAT - It is pertinent to note that this Court has recently passed an order 2023 (5) TMI 1235 - GUJARAT HIGH COURT wherein also similar type of substantial questions of law were proposed by the Revenue and this Court, after considering case of Abhisar Buildwell P. Ltd 2023 (4) TMI 1056 - SUPREME COURT and Saumya Construction 2016 (7) TMI 911 - GUJARAT HIGH COURT as well as Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT dismissed the appeal filed by the appellant Revenue as held that no addition can be made in respect of completed assessment in absence of any incriminating material - Decided in favour of assessee.

Summary

Issues involved:
The judgment involves appeals filed under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal in similar matters for different assessment years.

Issue 1:
The original Assessment Order made additions to the return of income of the assessee, which was challenged on the ground that no incriminating material was found during the search, making the additions unsustainable under Section 153A of the Act.

Issue 2:
The assessee challenged the order before the CIT (A) and then before the Tribunal, which allowed the appeal. The appellant Revenue appealed under Section 260A of the Act, raising substantial questions of law related to the interpretation of Section 153A.

Details for Issue 1:
The Assessing Officer disallowed the claim of deduction under Section 80IA(4) of the Act, leading to the addition of Rs.6,40,86,418. The assessee's contention that such additions are not sustainable under Section 153A due to lack of incriminating material was rejected by the Assessing Officer.

Details for Issue 2:
The substantial questions of law proposed by the appellant Revenue questioned the Tribunal's interpretation of Section 153A, including whether additions during assessment under Section 153A should be based only on incriminating material found during the search. The Tribunal's decision was influenced by the Supreme Court's judgment in a related case.

Separate Judgment:
The judgment references a recent decision by the Supreme Court in the case of Abhisar Buildwell P. Ltd., which clarified the scope of assessment under Section 153A. The Supreme Court held that no additions can be made in completed assessments without incriminating material found during the search.

Conclusion:
Considering the precedents set by the Supreme Court and the High Courts, the High Court dismissed the appeals, stating that no substantial question of law arises in light of the Supreme Court's decision in Abhisar Buildwell P. Ltd. The Court found that the issues raised by the appellant Revenue were already addressed in the aforementioned judgment, leading to the dismissal of the appeals.