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2019 (3) TMI 698 - AT - Income TaxAssessment u/s 153A - unabated assessment - necessity of any incriminating materials - HELD THAT - There was a search u/s. 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) which was conducted on 18.02.2013 at the residence, offices, factories and other business concerns of the M/s. Rashmi Group and the assessment for this year was not pending before the AO on the date of search. Since it was not an unabated assessment, the AO could not have made any addition without the aid of any incriminating material and the CIT(A) has given relief to the assessee taking note of the decision of the Hon ble Delhi High Court in CIT Vs. Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT . We note that undisputedly this assessment year was not pending before the AO on the date of search and so it is an unabated assessment. So as per the settled law, in sec. 153A assessment, for assessment of unabated assessment as in the present case, no addition/disallowance can be made without the aid of incriminating materials unearthed during search qua this assessment year - Decided in favour of assessee
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Legality of additions made under Section 153A of the Income Tax Act, 1961, without incriminating material in unabated assessments. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal by the revenue was time-barred by 26 days. A condonation application dated 07.07.2017 was filed by the Revenue explaining the reasons for the delay. After reviewing the application and hearing both sides, the delay in filing the appeal was condoned. 2. Legality of Additions under Section 153A without Incriminating Material: At the outset, it was noted that the case was covered in the assessee's own case for AYs 2008-09 and 2010-11 by the Tribunal. A search under Section 132 of the Income Tax Act, 1961, was conducted on 18.02.2013 at the premises of the assessee. The assessment for the year was not pending before the AO on the date of the search, making it an unabated assessment. The AO could not make any addition without incriminating material, as per the settled law. The CIT(A) had given relief to the assessee based on the decisions of the Hon’ble Delhi High Court in CIT Vs. Kabul Chawla (2016) 380 ITR 573 (Del), the Hon'ble Calcutta High Court in Commissioner of Income Tax vs. Veerprabhu Marketing Ltd., and the Hon'ble Delhi High Court in Pr. CIT Vs. Kurele Paper Mills Pvt. Ltd. (2016) 380 ITR 571 (Del). The Tribunal upheld these decisions, noting that no incriminating materials were used by the AO to make the additions. The Tribunal referenced several court decisions, emphasizing that in the absence of incriminating material, no additions could be made in unabated assessments under Section 153A. The Tribunal cited the following key judgments: - CIT, Kolkata-III Vs. Veerprabhu Marketing Limited [2016] 73 taxmann.com 149 (Calcutta) - PCIT-2, Kolkata Vs. Salasar Stock Broking Limited (ITAT No. 264 of 2016) - Anurag Dalmia vs. DCIT in ITA Nos. 5395 & 5396/DEL/2017 - Pr. CIT vs. Somaya Construction Pvt. Ltd. 387 ITR 529 (Guj) - CIT vs. IBC Knowledge Park Pvt. Ltd. 385 ITR 346 (Kar) - CIT vs. Gurinder Singh Bawa 386 ITR 483 (Bom) - Pr. CIT vs. Meeta Gutgutia The Tribunal reiterated that for completed assessments, any additions under Section 153A must be based on incriminating material found during the search. In the present case, the additions were not based on such material. The CIT(A) had correctly applied the law, and the Tribunal found no infirmity in the order of the CIT(A), thus upholding it. Conclusion: The Tribunal dismissed the revenue's appeal, confirming that no additions could be made in the absence of incriminating material in an unabated assessment under Section 153A. The order was pronounced in the open court on 8th March 2019.
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