9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (2) TMI 1132 - AT - Income TaxValidity of Assessment u/s 153A - Addition u/s 68 - non-current liabilities in the balance sheet of the appellant company - HELD THAT - Additions have been made by the AO in assessment orders passed u/s 153A of the IT Act. We have already noted earlier that the relevant facts are not in dispute. It is not in dispute that no incriminating materials were found in the course of search u/s 132 of the IT Act in respect of the various additions made by the AO. Further it is also not in dispute that no assessment proceedings were pending in the cases of the assessee at the time of search conducted on 08/07/2016 in the case of the assessee u/s 132 of the IT Act. Furthermore as no assessment proceedings were pending in the case of the assessee at the time when (on 08/07/2016) search u/s 132 was conducted the case of the assessee in the present appeals before us falls in the category of completed/unabated assessments within the meaning of orders passed in the case of Abhisar Buildwell 2023 (4) TMI 1056 - SUPREME COURT and Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT which was approved by Hon ble Supreme Court in 2023 (4) TMI 1056 - SUPREME COURT Abhisar Buildwell (supra). We are of the view that the issue in dispute is squarely covered in favour of the assessee by the orders of Abhisar Buildwell (supra) and U.K. Paints (Overseas) Ltd. 2023 (5) TMI 373 - SC ORDER and by the aforesaid instruction No. 1 of 2023 of CBDT which is binding on Revenue authorities. We direct the AO to delete the additions.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in the judgment were: 1. Whether additions made under Section 68 of the Income Tax Act, 1961, in the absence of any incriminating material found during a search under Section 132, are valid. 2. Whether the approval under Section 153D was given in a mechanical manner without application of mind, and if such approval was valid. 3. Whether the orders under Section 153A were valid when no incriminating material was found during the search proceedings. ISSUE-WISE DETAILED ANALYSIS 1. Validity of Additions under Section 68 in Absence of Incriminating Material Relevant Legal Framework and Precedents The legal framework involves Section 68 of the Income Tax Act, which pertains to unexplained cash credits, and Section 153A, which deals with assessments in case of search or requisition. The judgment heavily referenced the Supreme Court's decision in Principal Commissioner of Income-tax vs. Abhisar Buildwell (P.) Ltd, which established that in cases of completed or unabated assessments, no additions can be made under Section 153A unless incriminating material is found during the search. Court's Interpretation and Reasoning The Tribunal interpreted that the absence of incriminating material during the search invalidated the additions made by the Assessing Officer under Section 68. The Tribunal relied on precedent cases where the Supreme Court held that in the absence of incriminating material, the Assessing Officer cannot make additions in completed or unabated assessments under Section 153A. Key Evidence and Findings The Tribunal found that no incriminating materials were discovered during the search operations conducted under Section 132. This lack of evidence was pivotal in determining the invalidity of the additions made by the Assessing Officer. Application of Law to Facts The Tribunal applied the principles established in the Supreme Court's decision, concluding that the additions under Section 68 were not sustainable as they were not based on any incriminating evidence found during the search. Treatment of Competing Arguments The Tribunal noted the Departmental Representative's reliance on the orders of the CIT(A) and the Assessing Officer but found the precedents set by the Supreme Court to be decisive. The Tribunal emphasized that the Department did not dispute the applicability of the Supreme Court's rulings to the present case. Conclusions The Tribunal concluded that the additions made under Section 68 for the assessment years in question were to be deleted due to the lack of incriminating material. 2. Validity of Approval under Section 153D Relevant Legal Framework and Precedents Section 153D of the Income Tax Act requires prior approval for assessments made under Section 153A. The issue raised was whether this approval was given in a mechanical manner, thus lacking validity. Court's Interpretation and Reasoning The Tribunal did not find it necessary to adjudicate this issue separately, as the primary issue concerning the absence of incriminating material was dispositive of the appeals. The Tribunal deemed this issue academic in light of its decision to delete the additions. SIGNIFICANT HOLDINGS Core Principles Established The Tribunal reaffirmed the principle that in cases of completed or unabated assessments, no additions can be made under Section 153A without incriminating material found during a search. This principle aligns with the Supreme Court's rulings in Abhisar Buildwell and related cases. Final Determinations on Each Issue The Tribunal directed the Assessing Officer to delete the additions made for the assessment years 2013-14 to 2016-17, amounting to Rs.5,00,00,000/-, Rs.56,75,000/-, Rs.38,00,000/-, and Rs.2,05,00,000/- respectively. The issue of mechanical approval under Section 153D was rendered academic and not adjudicated. In conclusion, the Tribunal allowed the appeals, directing the deletion of the contested additions, thereby siding with the assessee based on the absence of incriminating material and the established legal precedents.
|
