DCIT vs. SRS Real Estate Ltd. - (Income Tax Appellate Tribunal) (21 Sep 2023)

Addition under Section 153A of IT Act, in case of unabated assessment can only be made on the basis of incriminating material found during search

MANU/ID/1343/2023

Direct Taxation

In present case, a search action under Section 132(1)(A) of the Income-tax Act, 1961 (IT Act) was carried out in the case of the assessee. Subsequently, assessment proceedings were initiated and order under Section 153(1)(b) read with Section 143 (3) of the Act was passed making addition of Rs.1,87,00,000 on account of unexplained credit under Section 68 of the Income Tax Act, 1961.

Upon assessee's appeal, learned CIT (A), upon a finding that no incriminating documents/records or any other evidence was found or seized during the course of search, deleted the addition referring to Hon'ble Delhi High Court decision in the case of CIT vs. Kabul Chawla.

There is a clear finding by the learned CIT (A) that there is no incriminating material found during the course of search on the basis of which addition was made.

It is now judicially settled that, addition under Section 153A of IT Act, in case of unabated assessment can only be made on the basis of incriminating material found during search. Since, in the present case, there is no dispute that addition has not been made on incriminating material found during search. The addition is not legally sustainable. Hence, in view of precedents, present Tribunal confirm the order of learned CIT (A). The appeal of the Revenue is dismissed.

Tags : ASSESSMENT DELETION LEGALITY