2023 (7) TMI 372 - AT - Income Tax

Assessment u/s 153A - unexplained cash shortages - incriminating material found during the search - HELD THAT - As evident from the above that the addition made by the A.O. which was sustained by the CIT(A) is without their being any incriminating material found during the search and the addition has been made only based on the personal cash book produced by the AR of the Assessee during the assessment proceedings. The judgment in the case of ABHISAR BUILDWELL P. LTD. 2023 (4) TMI 1056 - SUPREME COURT is squarely applicable to the present case. Addition made by the A.O. in the absence of any incriminating material found during the search operation conducted u/s 132 is liable to be deleted. Decided in favour of assessee.

Summary

Issues involved:
The judgment involves issues related to unexplained cash shortages, assessment made u/s 153A of the Income Tax Act, completion of assessment case, use of unaccounted income, and addition of undisclosed income.

Unexplained cash shortages:
The appeal was filed against the addition of Rs. 14,25,000 on account of unexplained cash shortages made by the Assessing Authority. The Tribunal found that the addition was made without any incriminating material found during the search, solely based on the personal cash book produced by the Assessee during the assessment proceedings.

Assessment u/s 153A:
The Assessee contended that the assessment made u/s 153A was not in accordance with the provisions of the Income Tax Act as there was no incriminating material found during the search operation. The Tribunal referred to the judgment of the Hon'ble Supreme Court in a similar case and concluded that in the absence of incriminating material, no addition can be made by the Assessing Officer.

Completion of assessment case:
The Assessee argued that the case for the relevant year was a completed assessment case and no incriminating documents were found during the search operation. The Tribunal observed that the addition made by the Assessing Officer without any incriminating material was not justified, as per the legal provisions and judicial precedents cited.

Use of unaccounted income:
The Tribunal noted that the allegation of using unaccounted income for unexplained cash credit in the Assessee's hands was made without pointing out any incriminating document in the Assessee's case. It was highlighted that the addition made without any such evidence was not valid.

Conclusion:
In the judgment, the Tribunal allowed the appeal, deleting the addition made by the Assessing Officer as there was no incriminating material found during the search operation. The Tribunal emphasized the legal principle that in the absence of such material, no addition can be made, as per the provisions of the Income Tax Act and relevant judicial decisions.