2020 (10) TMI 283 - AT - Income Tax

Assessment u/s 153A - Whether evidence found during the course of search? - HELD THAT - The impugned orders do not refer to these statements. No doubt, the statement recorded u/s 132 (4) of the Act on its own, withot any corroboruating evidence does not constitute incriminating material. In this case, however, the statement is coupled with bank statement and such bank statements are for the relevant assessment years. In CIT vs. Chethan das Lachman das 2012 (8) TMI 367 - DELHI HIGH COURT and in Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT made a reference not only to the evidence found during the course of search, but also to the other post search material or information available with the Ld. AO to make an addition under this section. This aspect missed the attention of the CIT(A). Since such statements are produced before us in the paper book vide Annexure A-5, we are of the considered opinion that it requires consideration before reaching a conclusion as to whether or not there is any incriminating material in this case. Since the Ld. CIT(A) did not advert to this aspect at all in the impugned orders and no finding is returned as to the impact of these bank statements on the fact in issue, we are of the considered opinion that an error had crept in, in the order of the learned Ld. CIT(A). We set aside the impugned orders and remand issue to the file of the Ld. CIT(A) to consider the bank statements that were handed over by the assessee at the time of the search and recording of the statements u/s 132 (4) to reach a conclusion according to law. CIT(A) will afford an opportunity to the assessee while considering this issue and consider the submissions, if any, made by the assessee on this aspect - Appeals of the Revenue are allowed for statistical purpose.

Summary

Issues:
- Appeal filed by Revenue challenging orders passed by Ld. CIT(A) for assessment years 2010-11 and 2011-12.
- Addition of cash deposits and unsecured loans made by Assessing Officer.
- Deletion of additions by Ld. CIT(A) based on absence of incriminating material.
- Revenue's contention regarding bank statements provided during search.
- Assessee's argument on absence of incriminating material and expired notice period.
- Scrutiny of seized materials and bank statements.
- Consideration of bank statements by Ld. CIT(A).
- Decision to set aside impugned orders and remand the issue.

Detailed Analysis:
The judgment involves two appeals filed by the Revenue challenging the orders passed by the Ld. CIT(A) for the assessment years 2010-11 and 2011-12. The Assessing Officer had made additions to the income of the assessee on account of cash deposits and unsecured loans. However, the Ld. CIT(A) deleted these additions citing the absence of incriminating material found during the search, following the decision in the case of CIT vs. Kabul Chawla. The Revenue contended that relevant bank statements provided during the search established a direct nexus with the cash deposits and loans, arguing that incriminating material existed to warrant the additions.

The assessee, on the other hand, argued that since the notice period under section 143(2) of the Act had expired before the search, and no incriminating material was found, the additions were unjustified. The Ld. CIT(A) did not find any seized bank statements related to the years under consideration, and the statement of the assessee did not indicate any incriminating material seized during the search. The Revenue emphasized that the bank statements provided during the search, coupled with statements, should be scrutinized for incriminating evidence.

Upon scrutiny of the seized materials and bank statements, the Tribunal found that the seized documents did not contain any incriminating evidence against the assessee. However, the Tribunal noted that the bank statements for the relevant assessment years were not considered by the Ld. CIT(A) in the impugned orders. Citing precedents, the Tribunal highlighted that bank statements, when coupled with statements, could constitute incriminating material. As the Ld. CIT(A) did not address this aspect in the orders, the Tribunal set aside the impugned orders and remanded the issue for further consideration, directing the Ld. CIT(A) to evaluate the bank statements provided during the search and recording of statements under section 132(4) of the Act.

In conclusion, the Tribunal allowed the Revenue's appeals for statistical purposes, emphasizing the need for a comprehensive consideration of the bank statements to determine the presence of incriminating material. The judgment was pronounced in open court on 14th August 2020.