2019 (11) TMI 814 - HC - Income Tax

Assessment u/s 153C - Additions u/s 68 - unexplained cash credit - HELD THAT - There are concurrent findings of fact to the effect that the additions made by the AO u/s 68 are not based on any incriminating document found/seized during the search action under Section 132 of the Act. In this view of the matter, the assumption or jurisdiction under Section 153C by the AO was not justified and accordingly the additions made under Section 68 cannot be sustained. The concurrent factual position is squarely covered by the decision of this Court in CIT v. Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT . Thus, the present appeal does not raise any substantial question of law and we therefore are not inclined to entertain the present appeal and accordingly the same is dismissed.

Summary

Issues:
1. Appeal under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal (ITAT) challenging the deletion of additions made under Section 68 of the Act on account of unexplained cash credit.
2. Jurisdiction of the Assessing Officer under Section 153C of the Act in relation to seized documents during a search and seizure operation.
3. Validity of additions made under Section 68 without any incriminating document found/seized during the search action under Section 132 of the Act.

Analysis:
1. The appeal was directed against the ITAT order upholding the deletion of additions made under Section 68 of the Income Tax Act. The case involved a search and seizure operation resulting in the discovery of cash and jewellery from the assessee's father's residence. The Assessing Officer treated unsecured loans as unexplained credit under Section 68, leading to additions in the assessment. The CIT (A) allowed the appeal, citing the decision in CIT v. Kabul Chawla, which emphasized the need for incriminating documents to justify additions under Section 68.

2. The CIT (A) observed that the addition of unsecured loans made under Section 68 was without any incriminating document found during the search and seizure operation. The CIT (A) held that no addition could be made under Section 153C/153A without such documents when the assessment was not abated. The issue of charging interest under sections 234A and 234B was also addressed. The ITAT concurred with the CIT (A)'s findings, dismissing the appeal and emphasizing the absence of incriminating documents to support the additions under Section 68.

3. The High Court reviewed the orders of the Tax Authorities and found that the additions made under Section 68 were not based on any incriminating documents seized during the search operation. The Court held that the Assessing Officer's assumption of jurisdiction under Section 153C was unjustified, as the additions lacked evidentiary support. Citing the precedent in CIT v. Kabul Chawla, the Court concluded that the appeal did not raise any substantial legal question, leading to the dismissal of the appeal. The decision highlighted the importance of incriminating evidence for additions under Section 68, reaffirming the principles established in previous case law.