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TMI Blog2024 (1) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... has been duly accepted and reduced from the fair value derived by the valuer. The additions appear to have been made towards cost of construction of premises thereon. The construction however has been commenced in the subsequent year and has no relation to the AY 2011-12 in question. Secondly, the cost incurred in the respective subsequent year were made by the AO but deleted by the CIT(A). Thirdly, the addition on cost of construction is based on valuation report which is in the realm of estimations without any nexus to any incriminating documents per se. Hence, in the absence of any incriminating material found, We see no perceptible reason to interfere with the finding returned by the CIT(A). Decided against revenue. - SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER For the Appellant : Shri Anmol Sinha, Adv. For the Respondent : Shri H. K. Choudhary, CIT-D.R. ORDER PER PRADIP KUMAR KEDIA, AM: The captioned appeals have been filed by the assessee as well as Revenue for Assessment Year (A.Y.) 2011-12 in question: Sr. Nos. ITA/CO Nos. CIT(A) Order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is higher that the value shown by the assessee. 3.3 The Ld. CIT(A) has erred in ignoring the fact that the assessee could not file any explanation to the said Valuation report. 4.(a) The Ld. Commissioner of Income Tax (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal. 4. The Grounds raised in Cross Objection filed by the assessee reads as under: 1. That the Ld. AO grossly erred in invoking provisions of Sec. 153A(1)(a) of the Act to the case of the assessee despite the fact that there existed no books of account or document or evidence in his possession on the basis of which it could have been alleged that the assessee had made unaccounted investment. 2. That the Ld. AO grossly erred in law and in facts of the case in relying upon an erroneous and incorrect valuation report prepared by valuer only on the basis of estimations without taking proper cognizance of facts and producing reliable comparable for valuation of land. 3. That the valuation report obtained u/s 142A of the Act in the case of assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f unexplained investment in the property on the basis of Valuation Report. Similar additions were made in the hands of Kailash Mittal and Aanishka Mittal being co-owners of the joint ownership property. 7. Aggrieved by the additions made by the AO under section 69A of the Act on account of unexplained source of investment towards properties, the assessee preferred an appeal before the learned CIT(A). Detailed submissions were filed on behalf of the assessee as reproduced in the First Appellate Order. One of the grounds taken by the assessee seeking to challenge the additions made in 153A proceedings was on the premise that the additions were carried out without any reference to incriminating material found in the course of search operation and the assessment of the assessee relevant to AY 2011-12 stood concluded at the time of search. 8. The aforesaid challenge has been adjudicated by the CIT(A) in favour of the assessee by placing reliance upon the judgment of the Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla (2015) 61 taxmann.com 412 (Delhi) and Pr. CIT vs. Ram Avtar Verma 395 ITR 252 (Delhi). The CIT(A) also categorically observed that the assessment stood c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. As per Hon'ble Court, such assessment has to be made under the section 153A/153C only on the basis of the seized material. It is further opined by Hon'ble Court that completed assessment can be interfered with by the Assessing Officer while making the assessment in the section 153A only on the basis of some incriminating material found during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. In the subsequent decisions also, Hon'ble Court has reiterated their aforesaid views. In the case of Pr. CIT vs. Ram Avtar Verma 395 ITR 252, Hon'ble Court has supported the aforesaid view that if the assessments are completed on the date of search and no incriminating material is found during the search, assessment/s153A of the Act is invalid. 7.4 Now the facts of the appellant are to be examined in view of this legal position. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has filed an appeal before the Tribunal. 11. We have heard the rival submissions and perused the First Appellate order and the assessment order, material referred and relied upon in the course of hearing was also perused. 11.1 The Hon ble Supreme Court in the case of Pr. CIT vs. Abhisar Builwell (Pvt.) Ltd. (2023) 454 ITR 212(SC), on first principles, has endorsed the interpretation of s. 153A in the lead Judgment rendered by the Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla (2016) 380 ITR 573(Del) and plethora of other judicial precedents thereafter by different Courts that in case where the assessment of an assessment year stood concluded at the time of search and remains unabated, the additions and disallowances are permissible in s. 153A proceedings only qua incriminating material found in the course of search. In the instant case, no incriminating material was found during the search and referred in the assessment order and hence the AO is not entitled to make additions in such completed/unabated assessments. 11.2 In view of the judgment delivered by Hon ble Supreme Court, the law is well settled. In search assessment under s. 153A, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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