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2023 (8) TMI 1276 - AT - Income TaxAssessment u/s 153A - Addition made protectively in respect of share capital in the absence of any incriminating material found in the course of search - CIT(A) deleted the addition - HELD THAT - The finding of the CIT(Appeals) that it is an undisputed fact apparent from the assessment order that no incriminating documents/records for any other evidence was found or seized during the course of search proceedings which resulted in any addition in the case of the assessee was not rebutted with evidences by the Revenue before us. In the circumstances the ratio laid down in case of CIT vs. M/s Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT was rightly applied by the Ld.CIT(A) also affirmed in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd 2023 (4) TMI 1056 - SUPREME COURT .- In the circumstances, no valid reason to interfere with the findings and the decision taken by the Ld.CIT(A) on the issue. Thus, we reject the grounds raised by the Revenue and sustain the order of the Ld.CIT(Appeals). Decided against revenue.
Issues Involved:
1. Validity of the addition of Rs. 5,30,62,000/- made on a protective basis in respect of share capital. 2. Applicability of incriminating material found during the course of search for making additions under section 153A of the Income Tax Act. Summary: Issue 1: Validity of the Addition of Rs. 5,30,62,000/- The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon, which deleted the addition of Rs. 5,30,62,000/- made on a protective basis concerning share capital. The addition was initially made by the Assessing Officer (AO) during the assessment completed under section 153A read with section 143(3) of the Income Tax Act, following a search and seizure operation on 09.05.2012. The AO's addition was based on the assessee's inability to prove the genuineness and creditworthiness of the investor. However, the Commissioner of Income Tax (Appeals) deleted the addition, citing the absence of any incriminating material found during the search, following the Delhi High Court's decision in CIT vs. Kabul Chawla and the Supreme Court's affirmation in PCIT vs. Abhisar Buildwell Pvt. Ltd. Issue 2: Applicability of Incriminating Material for Additions under Section 153A The Tribunal reviewed the assessment proceedings and noted that the search and seizure operations did not yield any incriminating documents or evidence that warranted the addition of Rs. 5,30,62,000/-. The Tribunal cited several judicial pronouncements, including the Delhi High Court's decision in CIT vs. Kabul Chawla and the Supreme Court's affirmation in PCIT vs. Abhisar Buildwell Pvt. Ltd., which established that completed assessments could only be interfered with based on incriminating material found during the search. The Tribunal emphasized that the addition made by the AO was not based on any such material and thus upheld the Commissioner of Income Tax (Appeals)'s decision to delete the addition. Conclusion: The Tribunal concluded that the Revenue's appeal lacked merit, as no incriminating material was found during the search to justify the addition. The Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision, applying the legal principles established in the cited judicial pronouncements. Consequently, the appeal of the Revenue was dismissed.
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