2024 (6) TMI 23 - AT - Income Tax

Assessment u/s 153A - addition u/s 68 and addition on account of undisclosed sources on verifying the bank statement produced by the Assessee - Incriminating material found during search or not? - HELD THAT - In the entire assessment order, there is not even a single whisper on any incriminating material found during the search to substantiate the addition. The Co-ordinate Bench of the Tribunal in Assessee s wife s case in 2023 (2) TMI 632 - ITAT DELHI by relying on the Judgment of Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT and Meeta Gutgutia Pro M/s Ferns N Petals 2017 (5) TMI 1224 - DELHI HIGH COURT deleted the addition. Further, the Hon'ble Supreme Court in the case of Abhisar Build well P. Ltd. . 2023 (4) TMI 1056 - SUPREME COURT decided the issue in favour of the Assessee holding that the Assessing Officer cannot make additions to assessee s income in respect of completed/unabated assessment if no incriminating material has been found during the course of search u/s 132 or requisition u/s 132A of the Act. Appeal of the Assessee is allowed.

Issues Involved:
The appeal challenges the order of the Learned Commissioner of Income Tax (Appeals) for the Assessment Year 2014-15, raising multiple grounds including jurisdictional issues, violation of natural justice, and legality of assessment under section 153A r.w.s 143(3).

Grounds of Appeal:
1. The order passed by the CIT (A) is challenged as bad in law and on facts.
2. The CIT (A) erred in passing an ex-parte order without giving the assessee an opportunity to be heard.
3. Contention that the order passed under section 153A r.w.s 143(3) lacks valid jurisdiction.
4. Allegation that the order under section 153A r.w.s. 143(3) is framed consequent to an unlawful search.
5. Claim that the assessment order violates statutory conditions and procedures.
6. Dispute regarding reissuance of notice under section 153A despite pending proceedings.
7. Allegation of passing the assessment order in violation of section 124 of the Income Tax Act.
8. Challenge to the legality of proceedings under section 153A and assessment under section 143(3).
9. Objection to the order issued beyond the statutory time limit.
10. Issue with the sequence of notices under sections 142(1) and 143(2).
11. Addition made under section 153A r.w.s 143(3) without incriminating material.
12. Allegation of violation of mandatory provisions of Section 153A and illegal approval under section 153D.
13. Assessment order challenged for non-compliance with circular No. 19/2019 issued by CBDT.
14. Addition of income from undisclosed sources under section 68 r.w.s. 115BBE contested.
15. Confirmation of additional income from undisclosed sources challenged.
16. Allegation of drawing conclusions based on conjecture and surmises.
17. Dispute regarding tax liability determination under section 115BBE.
18. Challenge to interest charged under sections 234A, 234B, and 234C.

Judgment Details:
The case involved a search and seizure operation leading to the issuance of notices under section 153A of the Income Tax Act. The assessment order made additions without incriminating material, prompting the appeal. The Counsel argued the illegality of the assessment order, citing a precedent and a Supreme Court judgment. The Tribunal found no incriminating material to support the additions and referred to previous decisions to rule in favor of the Assessee, deleting the contested additions. The appeal was allowed, overturning the assessment order.

Conclusion:
The Tribunal allowed the Assessee's appeal, highlighting the absence of incriminating material to support the additions made in the assessment order, in line with legal precedents and a Supreme Court judgment.

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