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TMI Blog2016 (10) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal ('the Tribunal for short) dated 12.02.2016 raising following question for our consideration: "Whether the Income Tax Appellate Tribunal has substantially erred in law and on facts, in deleting the addition, made u/s 2(22)(e) on a ground that no incriminating material were recovered during search proceedings?" 2. The issue pertains to assessment year 2007-08. The assessee was subjected to search operations. The assessment was framed under section 143(3) read with section 153A of the Income Tax Act, 1961 ('the Act' for short). The Assessing Officer made additions with the aid of section 2(22)(e) of the Act. 3. Before the Tribunal, the assessee contended that there was no material found during the search whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of subsection (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur v. Assistant Commissioner of Income Tax (supra), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the onmoney received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to crossexamine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to crossexamine the said persons, the Assessing Officer made the addition in question." 5. In the result, tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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