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2024 (1) TMI 59 - AT - Income TaxAssessment u/s 153A - whether the addition made by the AO is sustainable in the absence of any incriminating material when the assessments are unabated? - HELD THAT - It is the finding of the CIT(A) that no incriminating material was unearthed during search/survey and in view of the proposition laid down in the case of Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT the addition made by the AO was held to be bad in law as no incriminating material was found or seized which relating to the assessment year under consideration. We observe that the decision of Kabul Chawla (supra) has been affirmed in the case of PCIT Vs. Abhisar Buildwell Pvt. Ltd. 2023 (4) TMI 1056 - SUPREME COURT - The Revenue could not place on record any seized material based on which the additions were made in the assessment order. In the circumstances, we do not see any infirmity in the order passed by the Ld.CIT(A) in deleting the addition made by the AO in the absence of any incriminating material seized in the course of search - no incriminating materials were seized leading to the additions in dispute. Decided in favour of assessee.
Issues Involved:
1. Validity of additions made by the AO without incriminating material. 2. Credibility of the assessee's retracted statement. 3. Applicability of the case law M/s Pebble Investment and Finance Pvt. Ltd. Vs. ITO. Summary: Issue 1: Validity of Additions Without Incriminating Material The primary issue in these appeals was whether the addition made by the AO is sustainable in the absence of any incriminating material when the assessments are unabated. The Tribunal noted that the Ld.CIT(A) deleted the additions made by the AO on the grounds that no incriminating material was found during the search. The Ld.CIT(A) relied on the jurisdictional High Court's decision in CIT Vs. Kabul Chawla, which was affirmed by the Supreme Court in PCIT Vs. Abhisar Buildwell Pvt. Ltd. The Tribunal upheld this view, stating that the Revenue could not produce any seized material to justify the additions, thus rendering the additions bad in law. Issue 2: Credibility of Retracted Statement The Tribunal observed that the assessee had retracted his statement made under section 133A of the Act by an affidavit and further clarified his position in a subsequent statement recorded by the DDIT(Inv.). The Tribunal found that the original statement, made under duress, was not supported by any incriminating material, and thus, the retraction was valid. The Ld.CIT(A) held that the retraction had no evidentiary value, especially in the absence of corroborative evidence. Issue 3: Applicability of Case Law The Revenue argued that the case of M/s Pebble Investment and Finance Pvt. Ltd. Vs. ITO was applicable. However, the Tribunal found that the facts of the present case were distinguishable as no incriminating material was found during the search, unlike in the cited case. The Tribunal noted that the principles laid down in Kabul Chawla and subsequent affirmations by the Supreme Court were more pertinent to the present case. Conclusion: The Tribunal dismissed the appeals of the Revenue, sustaining the order of the Ld.CIT(A) for the assessment years 2011-12 and 2013-14. The Tribunal concluded that in the absence of any incriminating material seized during the search, the additions made by the AO were not justified. The Tribunal's decision was pronounced in the open court on 29/12/2023.
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