2021 (9) TMI 857 - AT - Income Tax

Assessment u/s 153A - Whether any incriminating material find by the ld AO in search? - HELD THAT - Assessment has already been made u/s 143(3) of the Act on 02.09.2011. Search took place on the other party on 06.05.2014 and survey u/s 133A of the Act took place on the assessee s premises on that date. AO assessment has already been made u/s 143(3) of the Act on 02.09.2011. Search took place on the other party on 06.05.2014 and survey u/s 133A of the Act took place on the assessee s premises on that date. AO has stated that on perusal of the survey report regarding survey u/s 133A of the Act there is an error higher discount and rebate debited by the assessee in its books of account. There is no reference of any incriminating material found during the course of search in case of 3rd party. The assessment is also passed by issuance of notice u/s 153A of the Act and not u/s 153C - there is no search in case of the assessee but there was only a survey u/s 133A of the Act. There is no reference of any incriminating material by the ld AO in the whole of the assessment order. The ld DR also could not show us whether any incriminating material was found during the course of search. Admittedly the addition was made only on the basis of survey report.- Decided in favour of assessee.

Summary

Issues:
Appeals against deletion of addition made by AO under section 153A without incriminating material found during search.

Analysis:
1. Assessment Year 2009-10:
- AO made addition in assessee's hands under section 153A without incriminating material.
- CIT(A) deleted the addition, citing completed assessment without any incriminating material found during search.
- Revenue appealed, challenging CIT(A)'s decision.
- CIT(A) relied on Delhi High Court judgment in Kabul Chawla case, emphasizing the need for incriminating material for additions under section 153A.
- Tribunal upheld CIT(A)'s decision, confirming deletion of addition for Assessment Year 2009-10.

2. Assessment Year 2010-11:
- Similar situation as in 2009-10 assessment.
- AO made addition under section 153A without any seized incriminating material.
- CIT(A) quashed the addition based on completed assessments without any relevant material found during search.
- Revenue appealed, disputing CIT(A)'s decision.
- Tribunal, considering the absence of incriminating material, upheld CIT(A)'s decision, dismissing the appeal.

3. Key Points:
- Search conducted on certain individuals, survey on assessee's premises.
- Discrepancy noted in rebate and discount in assessee's accounts.
- AO made additions under section 153A without incriminating material.
- CIT(A) followed Delhi High Court's ruling in Kabul Chawla case, emphasizing the necessity of seized material for additions under section 153A.
- Tribunal affirmed CIT(A)'s decision, emphasizing the lack of incriminating material for sustaining the additions.
- Both appeals by AO dismissed, confirming deletion of additions for both assessment years.