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TMI BlogNavigating the Complexities of Search and Seizure Assessments: Unraveling the Intricacies of Section 68 AdditionsX X X X Extracts X X X X X X X X Extracts X X X X ..... (FY) 2010-11 u/s 68 of the Act. Arguments Presented Revenue's Contentions The Revenue contended the following arguments: The additional grounds raised before the Income Tax Appellate Tribunal (ITAT) for the first time, urging that the assessment made u/s 143(3) ought to have been made u/s 153C of the Act. The ITAT's finding that no incriminating material was found during the search is invalid, particularly in light of the explicit admission of the Directors of the respondent-assessee companies that accommodation entries were taken. The Assessing Officer (AO) acted on a bona fide belief that the date of the search should be taken as the date for initiating assessment proceedings u/s 153C of the Act. The statement of Mr. Jain, the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot contemplate computing undisclosed income solely based on statements made during a search. While these statements constitute information, they can be used in proceedings under the Act only if they relate to the evidence or material found during the search. However, such statements alone, without any other corroborating material discovered during the search, do not grant the AO the authority to make an assessment, as held in the cases of Principal Commissioner of Income Tax, Central-3 Versus Abhisar Buildwell P. Ltd. - 2023 (4) TMI 1056 - Supreme Court and Commissioner of Income Tax (Central) -III Versus Kabul Chawla - 2015 (9) TMI 80 - DELHI HIGH COURT . Violation of Principles of Natural Justice The Court found that in the case of Pavitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material gathered from the search of the Jain group of companies belonged to the respondent-assessee group and was incriminating. The satisfaction note prepared by the AO was also found to be mechanical and devoid of any details about the incriminating material. Consequently, the Court dismissed the appeals filed by the Revenue, holding that they did not raise any substantial question of law. Comprehensive Summary of the Judgement The High Court, in this judgement, upheld the order of the ITAT, which had set aside the assessment order and deleted the additions made u/s 68 of the Act against the respondent-assessee companies. The Court emphasized that additions cannot be sustained solely based on statements recorded u/s 132(4) of the Act wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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