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Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI AVDHESH KUMAR MISHRA
Appellant by Sh. Dayainder Singh Sidhu, CIT-DR Respondent by Shri Sudesh Garg, Advocate Shri Shubham Sharma, AR Date of Hearing 23/07/2025 Date of Pronouncement 23/07/2025 ORDER PER AVDHESH KUMAR MISHRA, AM Common facts and similar grounds arise in the above captioned appeals for the Assessment Year (‘AY’) 2010-11 preferred by the Revenue; therefore, these appeals were heard together and are being disposed off by this common order. These appeals are directed against orders dated 06.06.2024 of the Commissioner of Income Tax (Appeals)-31, New Delhi [‘CIT(A)’].
Issue raised vide various grounds in both appeals revolve around the deletion of addition of share capital and share premium received from companies managed & promoted by Sh. S. K. Jain, an Entry Operator, on whose Group search operations carried out on 14.09.2010 resulted seizure of incriminating material, etc.
ITA No.3981/Del./2024:
The relevant facts giving rise to these appeals are similar. Hence, Kalawati Builders Pvt. Ltd. is taken as a lead case. The assessee filed its Income Tax Return (‘ITR’) of the relevant year on 25.03.2011 declaring income of Rs.1,77,700/-. The case was later on reopened and the consequential assessment was completed by the Ld. Assessing Officer (‘AO’) on 12.03.2015 at income of Rs.3,30,135/- under section 147 r.w.s. 143(3) of the Income Tax Act, 1961 (‘Act’). Later on, search and seizure operations were carried out at the assessee’s business premises on 09.09.2015 along with the Vishwanath Agarwal Group of cases. The Ld. AO therefore, assumed jurisdiction under section 153A of the Act for assessment years immediately preceding the year in which searches were taken place. In compliance to the notice under section 153A of the Act, the assessee submitted that the original return filed on 25.03.2011 should be treated as 2 ITR filed in pursuance of the notice under section 153A of the Act. The AO, taking note of the fact that the assessee had received the sum of Rs.12,65,00,000/- as share capital & share premium. The Ld. AO had also received a report from the Investigation Directorate of the Income Tax Department based on the search carried out at the premises of S K Jain Group of cases, Entry Operator Group, which revealed that the assessee had taken accommodation entry of Rs.12,65,00,000/- in the garb share capital & share premium. The details thereof have been summed up in para 3.2 of the assessment order. Hence, the Ld. AO show-caused the assessee to explain creditworthiness and genuineness of the said transactions. However, the assessee did not ensure any compliance before the AO as evident from para 3 of the assessment order. The corroboratory seized material detailing the accommodation entries received in the garb of share capital & share premium from various persons were duly mentioned in para 3.3 and 3.9 (page no. 6 to 24) of the assessment order. The facts emerge from the above referred pages (page no. 6 to 24) of the assessment order is summed up in para 3.10 to 3.10.5 of the assessment order, which reads as under:
“3.10 The above referred information as received from the Investigation Wing was duly analyzed along with details of transaction as recorded in the seized documents which reveal following important facts: i. That passbooks and cheque books of approximately 200 persons/ firms/ companies engaged in the business of providing accommodation entries along with details of beneficiary companies/entries were found and seized from the residence of Sh. Surendra Kumar Jain and Sh. Virendra Kumar ii. Undated blank cheque and signed by entities engaged in providing accommodation entries were also seized from custody and control of Jain Brothers. iii. That computer hard discs seized from the residence of Sh Surendra Kumar Jain and Sh. Virendra Kumar Jain contained confidential details like user name, passwords and IDs of the various companies engaged in providing accommodation entries required for filing of e-returns of these companies, authority letter of these companies authorizing to represent these companies in various Govt. Department. These companies were used to provide accommodation entries of beneficiary including the assessee company. iv. That details of funds transferred through cheque /RTGS/pay order to various entities/ persons through these dummy companies maintained by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain in excel sheets were found and seized during the course of search. v. That maintenance of books of accounts in tally format as well as in the format required for preparing Income Tax Return of these companies in the Computer Hard Disks found and seized from the residence of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain. vi. That daily cash books, balance sheet and cheque books found and seized from Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain wherein details of cash received from different beneficiary companies/persons through various middleman/agents in lieu of accommodation entries provided to them on different dates have been recorded. vii. That one of the mediators, Sh. Rajesh Aggarwal admitted that he arranged accommodation entries for a group through a person named Sh. Ravinder Goel through various companies directly controlled by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain and also accepted the fact that he knew since long that Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain are engaged in the business of providing the accommodation entries in lieu of cash charging a certain. amount of commission for the same. The name of Sh. Rajesh Aggarwal is also appearing as a middleman in the seized document page no. 122), as discussed in para 3.8 above.
ITA No. 3981/Del/2024 viii. That these dummy companies are running their activities from the residential and the other premises of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain. ix. That existence of third-party correspondence with these companies in the custody of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain have been re-covered from S.K. Jain Group Company. x. That S.K. Jain/ Virendra Jain are/were director in many of these companies presently or at one point of time in the past. It is proved from the above facts that all the relevant documents pertaining to conduit companies were found in the custody & control of Sh. S.K. Jain. 3.10.1 It has been further noticed that out of 99 companies controlled by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain, these were being used for providing accommodation entries and large number of companies were registered at following common addresses: i. 106, Palco House, T-10, Main Patel Road, Patel Nagar, Delhi (12 companies). ii. 3198-15, 4th Floor, Gali No. 1, Sangatrashan, Paharganj, New Delhi (14 companies). iii. 209, Bhanot Plaza, 3, D. B. Gupta Road, Pahargary, New Delhi 11 companies). In order to verify the genuineness and the existence of these companies at the above-mentioned addresses, a survey action 133A of the I.T. Act, 1961 was carried out on 14.09.2010 on above referred address by officers of Investigation Wing of the department which resulted following facts: a. On the address, 106, Palco House, T-10, Main Patel Road, Patel Nagar, Delhi, the survey party found only one person named Sh. Mukesh Kumar, S/o Sh. Satyender Kumar, R/o Village Gazera, Distt. Pauri Gadhwal in this premises. He deposed before the survey party that his employer and owner of that place is one Sh. Virendra Jain R/o somewhere in Rajender Nagar, Delhi and provided his telephone No. as 9891095232. It was already proved from the call records that this telephone number pertained to Sh. Virendra Jain resident of 221/. New Rajinder Nagar, New Delhi. He also disclosed that Sh. Virendra Jain used to visit the place once in a while. Sh. Mukesh Kumar also told that no books of account of companies registered on this address was available in the premises i.e. 106, Paico House, T-10, Main Patel Road, Patel Nagar, Delhi. b. During the course of the survey at premise no. 3198-15, 4th Floor, Gali No.1, Sangatrashan, Paharganj, New Delhi, it was found that this premise was a small room, which was incapable of accommodating so many companies and persons. Books of accounts and document of companies registered at this address was not found. c. At the third premises 209, Bhanot Plaza, 3. D.B. Gupta Road, Pahargani, New Delhi, there was single office occupied by one Sh. Jaikishun Tikku Riu late Sh. Prem Nath Tikku, who was running bis courier business from there is the name and style of M/s Linkers Couriers since Aug 2006 Tikku had told the survey team that he was a tenant of an Surendra Kumar Jain and was paying hum monthly rent of Rs.3,000/-in cash every month. d. It is evident from the findings of the survey that the companies controlled by Shri S.K. Jain having registered office at the above mentioned three addresses, did not exist at those addresses, neither books of account and document neither relating to business nor was employee of these companies found at those addresses. From a single address a number of companies were registered as well as this address was also declared as the residential address of various directors of different companies and partners/ proprietors of various firms engaged in providing accommodation entries. As mentioned above, during the course of survey operation at these addresses, the premises were found to be very small dwelling units 3.10.2 Another fact that was highlighted by Investigation Wing that during the course of post search enquiries they had obtained the bank details of companies of S.K. Jain Group for example; account opening forms, introducers' form and statement of accounts etc. for last few years. It was pointed out that in some cases where the option of mobile banking was exercised, the mobile numbers of either of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain were provided in the account opening forms of those specific companies/firms/persons. Some of these bank accounts as illustration are mentioned in the following table. …………………………… ITA No. 3981/Del/2024 The above facts prove beyond doubts that the 200 odd entities, data pertaining to which were found and seized from the premises of S.K. Jain Group, were controlled and used by Shri S.K. Jain his brother Shri Virendra Kumar Jain for providing accommodation entries. 3.10.3 It is also noticed from the following finding as recorded in the report of investigation wing that incriminating documents in the form of hand written cash books were also seized from the residence of Shri S.K. Jain showing the receipts of cash by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain to provide accommodation entries. Findings, in this regard may be summarized as under: a. Cash books seized during search operation were being maintained on daily basis to keep a record of their daily transactions of receipts and payments of cash as well as to keep them updated in respect of accommodation entries provided as well as accommodation entries pending in lieu of the cash which they had received. However, the cash transactions which were being recorded by them in hand written cash books were not recorded in their regular books of accounts. To introduce and channelize this unexplained cash in their books, they have shown the sales of various items including Rice etc. through the bogus proprietary/ partnerships firms directly controlled by them. b. Thus, the cash received from the recipient parties for providing the accommodation entries was first deposited in the accounts of these dummy firms/companies in the disguise of the cash received against the bogus sales, duly shown in the books of accounts. Later, this cash was transferred to different paper companies floated by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain through complex series of transactions, so as to hide the actual sources of funds. c. As part of well devised modus operandi the reserve & surpluses and the capital account of a specific set of companies were enhanced with the help of the unexplained cash received by Sh. Surendra Kumar Jan and Sh. Virendra Kumar Jain, which was routed to these companies through their dummy concern/firm/ companies. Once the funds of these companies were increased sufficiently, accommodation entries through RTGS/Cheque/P.O. in the shape of the share capital, share premium, capital gains or loans as per the specific requirement of the recipient clients were provided to beneficiary in lieu of the cash received from ITA No. 3981/Del/2024 them. In this way, the chain for providing an accommodation entry gets completed. d. The above findings corroborated with the seizure of documents by investigation wing evidencing the above-mentioned process used by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain for providing accommodation entry. 3.10.4 It has also been noticed that various specific documents were seized from S.K. Jain Group which established that Sh. SK, Jain and Sh. Virendra Jain were engaged in the business of providing accommodation entries by issuing cheque in lieu of cash through several paper companies controlled by them by charging a certain amount of commission. The contents of seized documents are summarized as under: a. Pages No. 1 to 10 of the Annexure A-150 found and seized from the residence of Sh. Surendra Kumar Jam and Sh. Virendra Kumar Jain contained one account in respect of one Sh. Satish Garg for a period spread over to three Financial Years i.e. April 2007 to March 2010. Below the printed table on page no. 2 the consolidated amount of commission on an aggregate amount of accommodation entries of Rs.816702000/- provided to different companies through this above- mentioned person Satish Garg was calculated at Rs.14292285/- @ 1.75%. The scanned copy of the above said page is pasted here below: …………. b. Out of this total amount of commission of Rs.14292285/- on the accommodation entries provided till 31.03.2010 an amount of Rs.10159000/- was reduced, apparently being paid, and an amount of Rs.342343/- was added to the balance of Rs.4133285/- recording ‘new before it. Below these calculations three more amounts were recorded against three different dates which were apparently received by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain apart from the amount of Rs.10159000/- shown as received till 31.03.2010. The date wise and amount wise breakup of the receipts of Rs.10159000/- is given in a printed table on page no. 1 of this seized annexure A-150. The scanned copy of the above said page is pasted here below: …………… ITA No. 3981/Del/2024 3.10.5 It is further noted that Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain kept a meticulous record of cheque/RTGS (handwritten ‘cheque books’) issued from the bank accounts of these concerns to various beneficiary parties (in lieu of the cash) that had been regularly received by them over a period time and regularly entered in the cash books maintained by them in their own hand writing.” 3.1 Since the assessee failed to explain the genuineness of transactions and creditworthiness of the persons who paid share capital & share premium of Rs.12,65,00,000/-; therefore, the AO taxed the same as unexplained credits in the hands of the assessee. Further, the AO, holding that the sum of Rs.12,65,00,000/- had been received from Entry Operator on payment of commission, worked out commission @ 2% of Rs.12.65,00,000/- and taxed the sum of Rs.25,30,000/- under section 69C of the Act. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who deleted the additions made on account of unexplained share capital & share premium of Rs.12.65,00,000/- under section 68 of the Act and commission of Rs.25,30,000/- under section 69C of the Act on the reasoning that there was no incriminating material seized during the search carried out on the assessee as under:
“4.3 I have perused the assessment order and the records of the case and the following is observed: a) The appellant filed the return of income u/s 139 of Income Tax Act for AY 2010-11 on 25.03.2011. b) The search in the case of the appellant was carried out u/s 132 of Income Tax Act on 09.09.2015.
ITA No. 3981/Del/2024 c) Thus, this is a case of unabated or closed assessment for AY 2010-11. d) As per records, the case was not selected for scrutiny and the last date of issue of notice u/s 143(2) was before the date of search. Therefore, the assessment stood completed on the date of search. Various courts have held that no addition could be made in the hands of the appellant where no incriminating material was unearthed during course of search and the assessment of the appellant stood completed on the date of search. e) Notice u/s 148 of Income Tax Act was issued in this case on 06.05.2013 and the reassessment order u/s 147 of Income Tax Act was passed on 12.03.2015. f) As per the assessment order, the Assessing Officer did not point out any incriminating were made in the order passed u/s 153A of Income Tax Act. material unearthed during the course of search on the basis of which, the additions were made in the order passed u/s 153A of the Income Tax Act. 4.4 Hon'ble Delhi High Court, in the case of CIT vs Kabul Chawla (2016) 380 ITR 573 (Delhi) held that completed assessments can be interfered with by Assessing Officer while making assessment under section 153A only on basis of some incriminating material unearthed during course of search which was not produced or not already disclosed or made known in course of original assessment. Operative part of the judgment is reproduced below: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AY's immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments, and reassessments pending on the date of the search shall abate. The total Income for such AYs will have to be computed by the AOs as a fresh exercise. 10 iii. The AQ will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed Income would be brought to tax iv. Although Section 153A does not say that additions should be strictly made on the bases of evidence found in the course of the search, or other post-search material or Information available with the AO 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. Obviously, an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess in Section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word reassess to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed 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." 4.5 Hon'ble Delhi High Court in the case of Pr. CIT vs Meeta Gutgutia [(2017) 395 178 526 (Delhi) held that Invocation of section 153A by revenue for assessment years 2000-01 to 2003-04 was without any legal basis where there was no incriminating material qua each of those assessment years. The operative part of judgment is reproduced below: …………. 4.6 SLP was dismissed by Hon’ble Supreme court in the above case of Pr. CIT Gutgutia [2018] 96 taxmann.com 468 (SC) vide order dated 02.07.2018. 4.7 This issue has attained finality by the judgment of Hon'ble Supreme Court of India in the case of Principal Commissioner of Income-tax, Central- 3 v. Abhisar Buildwell (P.) Ltd., [2023] 149 taxmann.com 399 (SC). The Hon'ble Supreme Court held that in respect of completed assessments/unabated assessments no addition can be made by the Assessing Officer in the absence of any incriminating material found during course of search under section 132 or requisition under section 132A of Income Tax Act. 4.8 The relevant extracts of the judgment of the case of Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd., [2023] 149 taxmann.com 399 (SC) are as under: …………………… 4.9 In view of the above, the Hon'ble Supreme Court held that in case no Incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the of search under section 132 or requisition under section 132A of the Act, 1961. 4.10 This is a case where appellant had filed return of income for AY 2010- 11 on 25.03.2011 i.e. before the date of search. The case was not selected for scrutiny and the last date of issue of notice u/s 143(2) was before the date of search. Therefore, the assessment stood completed on the date of search. The appellant pointed out that the notice 148 was issued in this case on 06.05.2013 and reassessment order u/s 147 was passed on 12.03.2015 i.e. prior to the date of search. Therefore, this is not a case of abated assessment. This is a case of completed/unabated assessment and therefore, no addition could be made by the AO in absence of any incriminating maternal found during the course of search under section 132 of Income Tax Act.
ITA No. 3981/Del/2024 4.11 Therefore, it is required to be seen whether any incriminating material was found during the course of search proceedings or not and whether this material has resulted in any audition for year under consideration or not. As per the assessment order, the Assessing Officer has pointed out that the issues of additions came to his knowledge on the basis of information received from the Investigation Wing. There is no mention of any material found and seized during the course of search which was utilized for the purpose of making additions in the assessment order. The perusal of assessment order indicates that the additions have been made on the basis of the Information received from the Investigation Wing as a result of search and post search proceedings in the case of accommodation entry provider Sh. Surender Kumar Jain. The appellant has been found to be a beneficiary of the accommodation entries found the entities identified after verification of document seized as a result of search operation conducted against Sh. S.K. Jain group. The Assessing Officer had observed that incriminating documents seized during search (date of search 14.09.2010) revealed that Accommodation entries obtained by way of shares capital/share premium/loans etc. It is undisputed fact that this information regarding the accommodation entries taken by the appellant were in the knowledge of the Assessing Offer from the sources other than the present search. All the additions have been made on the basis of information in possession of the department as a result of some other search prior to the search in the case of the appellant. The Assessing Officer did not place on record any incriminating document found and seized during search in the assessment order. As per records, available before me and the submissions made by the appellant and on perusal of assessment order it is clear that only two additions were made in this order and both the additions made in the assessment order are not based on the incriminating material found during search of the appellant. In this order passed u/s 153A of Income Tax Act no addition was made on the basis of incriminating material. Therefore, this is a case of completed assessment, where the additions have been made based on the material other than the Incriminating material. Therefore, in view of the directions of the Hon'ble Supreme Court in the case of Abhisar Buildwell Private Limited (supra), no addition could be made by the AO in absence of any Incriminating material found during the course of search under section 132 of Income Tax Act. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfillment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. Moreover, the CBDT had already issued instruction No. 1 of 2023 dated 23.08.2023 for implementation of judgement of Hon'ble Supreme Court in the case of Abhisar Buildwell Private Limited. In view of the above, it is clear that the additions made by the Assessing Officer are not based on any Incriminating material found during the course of search and therefore, the additions made by the Assessing Officer are legally outside the Jurisdiction of the Assessing Officer in proceedings u/s 153A of Income Tax Act. The additions have therefore been made on the basis the information received by the Assessing Officer as a result of some other search, thus not arising from any incriminating material during Search. Therefore, this is a case of completed assessment where additions have been made based on the material other than Incriminating material. Thus, I am of the considered opinion that the additions made by the Assessing Officer, amounting to Rs.12,65,00,000/- u/s 68 of Income Tax Act and of Rs.25,30,000/- made u/s 69C of Income Tax Act, in the proceedings u/s 153A of Income Tax Act in this case are not sustainable and are therefore deleted. Therefore, respectfully following the judgment of Hon'ble Supreme Court in the case of Abhisar Buildwell Private Limited the Ground No.3 of appeal is allowed.” [Emphasis supplied]
Before us, the Ld. CIT-DR vehemently argued the case by submitting that the incriminating material referred in Section 153A of the Act did not necessarily have to be seized in searches carried out on the assessee under section 132 of the Act as the section 153A of the Act did not mandate so. His proposition was that the search carried out under section 132 of the Act mandated initiation of proceedings under section 153A of the Act and completion of the said proceedings with the consequential assessment, based on the incriminating material available from all sources, under section 153A of the Act as one and only one assessment had to be made after search under section 132 of the Act as it was not a case of assessment of undisclosed income only (Refence was invited to the erstwhile section 158BC and 158BD of the Act).
On the other hand, the Ld. Counsel submitted that the Hon’ble Supreme Court, in the case of Abhisar Buildwell P. Ltd. (supra), had categorically held that the presence of incriminating material (applicable on a year-by-year basis) was an indispensable requirement under section 153A of the Act. Further, Mr. Garg, the Ld. Counsel of the assessee submitted that the incriminating material under section 153A of the Act specifically qua the unabated assessments had to be seized during the search carried out on the assessee. He submitted that the statute might not explicitly state this requirement. But the judicial interpretations had made it clear that search assessment could not be proceed with arbitrarily and must be substantiated by the incriminating material found during the assessee’s own search, qua each assessment year involved.
5.1 Mr. Garg, the Ld. Counsel of the assessee, placing emphasis on the findings of the Hon’ble Delhi High Court in the case of Kabul Chawala, 380 ITR 573, submitted that the absence of such incriminating material would result the assessment proceeding only in the abated proceedings and the unabated assessment must remain untouched. The Hon’ble Delhi High Court had clarified that the intervening in such complete assessment was permissible only when such incriminating material had been seized from the assessee. He further submitted that the Hon’ble Supreme Court in the case of Abhisar Buildwell P. Ltd. (supra) had given categorically finding that assessment stemming from searches must be grounded on ‘incriminating material’ with direct year wise nexus where the AO must first pinpoint which unabated assessment years were tied to the ‘incriminating material’ found during the search and only those years might face reassessment under section 153A/153C of the Act. He argued that same legal principles had been applied in toto to the jurisdictional fetters laid down under section 153C of the Act wherein the Hon’ble Supreme Court, in the case of Sinhgad Technical Education Society [2017] 84 taxmann.com 290 had held so. He thus, contended that under section 153A and 153C of the Act, it was a jurisdictional necessity that ‘incriminating material’ had not only be discovered during the search but also had to be directly relatable to the respective AY sought to be reexamined/reopened/visited again.
5.2 The Ld. Counsel, therefore, submitted that the seized material found in the search of S. K. Jain Group of cases were different and could not be used for initiating proceedings under section 153A of the Act in the case of the assessee as, there was no seized ‘incriminating material’ found during the course of search operation carried out on the assessee. Mr. Garg, the Ld. Counsel of the assessee drew our attention to the fact that the seized material relied upon by the Ld. AO was seized in 2010 whereas the assessee was searched in 2015. Hence, he contended that the assumption of jurisdiction under section 153A of the Act in the case of the assessee in the relevant year to the unabated AY could not be assumed in 2015. Hence, he prayed for quashing the relevant assessment order on the reasoning that there was no seized material based on which the jurisdiction under section 153A of the Act was assumed in the case of the assessee.
We have heard both parties and have perused the material available on the record. We find force in the arguments/submissions/ contentions of the Ld. Counsel. We are of the considered view that the assessment under section 153A of the Act in the case of unabated AY has necessarily to be concluded exclusively on "incriminating material" discovered during the course of assessee's own search. In the absence of such material, the original assessment for the unabated AYs must remain undisturbed. Therefore, for unabated assessment, the assessment under section 153A of the Act is permissible only if incriminating material for the concerned year is discovered/found during the course of assessee's own search. In the absence of incriminating material, addition cannot be made for completed/unabated years under section 153A of the Act, but such years can still be reopened under section 147/148, subject to those procedures, as held by the Hon'ble Supreme Court in the case of Abhisar Buildwell (P.) Ltd. (supra). We do not find any infirmity in the impugned order of the Ld. CIT(A). Hence, we decline to interfere with the order of Ld. CIT(A). Accordingly, the appeal of Revenue stands dismissed.
ITA No.3975/Del./2024:
The above finding shall apply mutatis mutandis in this appeal also. Hence, this appeal of Revenue also stands dismissed.
ITA No.3975 & 3981/Del./2024
In the result, both appeals of the Revenue stand dismissed as above. Order pronounced in open Court on 23rd July, 2025