ASHISH GARG ,NOIDA vs. ACIT CENTRAL CIRCLE-2 , DELHI

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ITA 6434/DEL/2025Status: DisposedITAT Delhi29 April 2026AY 2016-173 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that for unabated assessments, additions can only be made based on incriminating material found during the search. Since no such material was found, the addition made by the AO was invalid.

What were the facts?

The assessee's appeal is against an addition made under Section 153A for AY 2016-17. The assessment was unabated at the time of search, and no incriminating material was found.

What were the issues?

Whether additions under Section 153A are permissible in an unabated assessment year without any incriminating material found during the search.

Which sections of the Income-tax Act were involved?

Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL

For Appellant: CA Sh. Pranav Yadav, Adv
Hearing: 25.02.2026Pronounced: 29.04.2026

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated

25.09.2025 of the Ld. Commissioner of Income Tax (Appeals)-31, Delhi

(hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’)

in DIN & Order No.: ITBA/APL/S/250/2025-26/1081171770(1) arising out

P a g e | 2 ITA No.6434/Del/2025 Ashish Garg (AY: 2016-17) of the order dated 09.04.2021 u/s 153A of the Income Tax Act, 1961

(hereinafter referred to as ‘the Act’) passed by the ACIT, Central Circle-2,

New Delhi for AY: 2016-17.

2.

We find that primarily the contention of assessee is that the addition

was made by the assessing officer beyond the scope of Section 153A of the

Act as there was no incriminating material/evidence found during the course

of search and the reliance has been placed on the decision of Hon’ble Delhi

High Court in CIT Vs. Kabul (2015) Chawla 61 taxmann.com 412 (Delhi).

Admittedly the date of search is 7.12.2018 and as on date of search no

assessment for the year under consideration was pending, thus, it is the case

of unabated assessment.

3.

Hon’ble Delhi High Court in case of Kabul Chawla (supra) and

thereafter in Abhisar Buildwell 454 ITR 212 Hon’ble Supreme Court has

categorically laid down that in case of unabated assessment it is only the

incriminating material found during search can be relied.

4.

We find that additions have been made in respect of cash deposited in

the account of 3 other companies. After going through the assessment order

we find that allegation is that assessee was engaged in the paper companies

P a g e | 3 ITA No.6434/Del/2025 Ashish Garg (AY: 2016-17) which have been attributed to the assessee by lifting and corporate veil. Thus,

admittedly, no addition was made on the basis of any material found during

the search and what assessing officer has examined is source of cash deposit

made in various bank account of alleged paper companies. Thus, certainly in

regard to present assessment year being unabated assessment year the

impugned addition in the hands of assessee could not have been made. Thus,

we sustain the ground No. 3 and appeal is allowed.

Order pronounced in the open court on 29.04.2026

Sd/- Sd/- (Manish Agarwal) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 29.04.2026 Rohit, Sr. PS

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