Deputy Commissioner Of Income Tax vs. Ajmera Associates Ltd, Mumbai - (Income Tax Appellate Tribunal) (28 Jun 2023)

In case of unabated assessment years, the addition could be made only on the basis of any incriminating material found during the course of search

MANU/IU/0548/2023

Direct Taxation

The revenue is aggrieved by the decision of learned CIT(A) in deleting the addition of Rs.6.00 crore, being the loans taken by the assessee from Praveen Jain group of companies, under Section 68 of the Income Tax Act, 1961 (IT Act). In the cross objection, the assessee is contesting the validity of addition made in an unabated assessment year in the absence of any incriminating material.

It is well settled principle of law that, in case of unabated assessment years, the addition could be made only on the basis of any incriminating material found during the course of search, as per the decisions rendered by Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation and CIT vs. Gurinder Singh Bawa.

In the instant case, the AO has made the impugned addition of Rs.6.00 crores on the basis of information already available in the return of income/completed assessment. It is not the case of the revenue that the search officials have unearthed any incriminating material, which revealed that the impugned loans are bogus in nature. The AO has made the addition on the basis of report of investigation wing, which cannot be considered as the incriminating material found during the course of search. Accordingly, in the absence of any incriminating material relating the above said addition of Rs.6.00 crores, the same could not have been added by the AO under Section 68 of the IT Act in the assessment completed under Section 153A read with Section 143(3) of the IT Act during the year under consideration, as it falls in the category of unabated assessment year. Accordingly, the decision of CIT(A) in deleting the impugned addition is confirmed. The appeal filed by the revenue is dismissed and the cross objection filed by the assessee is allowed.

Tags : ASSESSMENT ADDITION DELETION