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2024 (6) TMI 800 - AT - Income TaxIssues Involved: 1. Legality of assessment u/s 153A without a search or Panchnama. 2. Additions made without corroborative and relevant incriminating material. 3. Specific additions upheld by CIT(A) regarding various amounts. 4. Disallowance of loss and depreciation. 5. Department's appeal against deletion of addition by CIT(A). Summary: Issue 1: Legality of Assessment u/s 153A The assessee contended that the assessment u/s 153A was illegal as no search was conducted on the company nor any Panchnama was prepared in its name. The CIT(A) found that a warrant was executed in the name of the assessee on 6.2.2018, justifying the initiation of assessment proceedings u/s 153A. The Tribunal confirmed that the name of the assessee company was mentioned in the search warrant, rejecting the assessee's objection. Issue 2: Additions Without Corroborative Material The assessee argued that the additions made were not based on any incriminating material found during the search. The CIT(A) held that the AO was justified in making additions based on the material available at the time of assessment, relying on various High Court decisions. The Tribunal, however, noted that no incriminating material was found during the search and cited the Supreme Court's decision in 'PCIT vs M/s Abhisar Buildwell P. Ltd.' which held that no addition can be made in the absence of incriminating material for completed/unabated assessments. Consequently, the Tribunal found the AO's additions unsustainable and rejected Ground No. 5. Issue 3: Specific Additions Upheld by CIT(A) - Addition of Rs. 3,70,000/- from Sh. Vashisht Kumar Goyal: The Tribunal found that the AO and CIT(A) ignored the documentary evidence submitted by the assessee, such as bank statements and ITRs, and deleted the addition. - Addition of Rs. 10,50,000/- on account of cash deposits: The Tribunal noted that the assessee had explained the source of cash deposits, including income from leasing vehicles, and found the addition unjustified, thus deleting it. - Addition of Rs. 14,20,000/- u/s 68: The Tribunal observed that the AO did not consider the documentary evidence provided by the assessee and acted on the dictate of a third party. The Tribunal deleted the addition, finding it unsustainable. Issue 4: Disallowance of Loss and Depreciation - Disallowance of loss of Rs. 50,231/-: The Tribunal found that the AO and CIT(A) did not consider the documentary evidence submitted by the assessee, such as the computation of income and balance sheet, and deleted the disallowance. - Disallowance of depreciation on vehicle to the extent of Rs. 5,62,672/-: The Tribunal noted that the vehicle was registered in the name of the assessee company and used for business purposes, and deleted the disallowance. Issue 5: Department's Appeal Against Deletion of Addition by CIT(A) The Department contended that the CIT(A) erred in deleting the addition of Rs. 1,88,03,250/- credited in the bank account of the assessee company. The Tribunal found that the CIT(A) had correctly examined the identity and creditworthiness of the persons from whom the credits were received and the genuineness of the transactions. The Tribunal dismissed the Department's appeal, finding no merit in the grounds raised. Conclusion The Tribunal partly allowed the assessee's appeal, deleting various additions and disallowances made by the AO, and dismissed the Department's appeal against the deletion of addition by CIT(A). The order was pronounced on 19.03.2024.
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