ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(2), AHMEDABAD, AHMEDABAD vs. SANKALP ORGANISERS PVT LTD , AHMEDABAD

ITSSA 77/AHD/2023Status: DisposedITAT Ahmedabad07 September 2026AY 2014-159 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the addition made by the AO under Section 68 of the Act for Assessment Year 2014-15 was beyond the scope of Section 153A of the Act. The Tribunal noted that the assessment year was unabated, and the search action on 30.10.2018 did not yield any incriminating material related to the addition. The AO had issued a notice under Section 142(1) to explain unsecured loans, but no seized material was referenced. The Tribunal relied on the jurisdictional Gujarat High Court's decision in PCIT Vs. Saumya Construction Pvt Ltd (387 ITR 529) and other pronouncements, including the Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212, which affirmed the Gujarat High Court's view. These decisions establish that in unabated assessment years, additions under Section 153A can only be made on the basis of incriminating material found during the search. Since no such material was found, the addition was rightly deleted by the CIT(A). Therefore, the Revenue's Ground No. 3 was dismissed.

What were the facts?

This appeal by the Revenue concerns Assessment Year 2014-15. The Assessing Officer (AO) made an addition of Rs. 6,44,50,000/- on account of unsecured loans. The assessee contended that the addition was made without any incriminating material seized during the search action on 30.10.2018, and that the assessment year was unabated. The CIT(A) deleted the addition. The Revenue filed an appeal before the ITAT, which had initially not adjudicated Ground No. 3. The appeal was recalled to adjudicate this ground, which pertains to the deletion of the addition by the CIT(A). The AO had issued a notice under Section 142(1) to explain the unsecured loans, without reference to any seized material.

What were the issues?

1. Whether, in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 6,44,50,000/-, without appreciating the finding of the AO in the assessment order, in the context of an unabated assessment year and absence of incriminating material seized during search? Assessee's Contentions: The assessee argued that the AO made the addition based on verification of the return of income and balance sheet, not on any incriminating material found during the search. As the assessment year was unabated on the date of search, and the time limit for issuing a notice under Section 143(2) had expired, the AO lacked jurisdiction to make the addition without incriminating material. The assessee relied on the jurisdictional Gujarat High Court decision in PCIT-4 Vs. Saumya Construction Pvt. Ltd. and other judicial pronouncements holding that in unabated assessments under Section 153A, additions can only be made on the basis of incriminating material found during the search. Revenue's Contentions: The Revenue contended that the Ld. CIT(A) erred in deleting the addition without appreciating the AO's findings.

Which sections of the Income-tax Act were involved?

Section 153A,Section 142(1),Section 68,Section 132,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, AHMEDABAD

For Respondent: Shri Kiran Unavekar, CIT-DR

PER :T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal was heard and the impugned common order was pronounced on 06.06.2025 by the Bench, against which Revenue filed M.A. No. 120/Ahd/2025 in IT(SS)A No. 77/Ahd/2023 on the ground that Ground no. 3 raised by the Revenue is not adjudicated in the above appeal, which is apparent mistake on record. Therefore the appeal was recalled vide MA order dated 24-02-2026 only to adjudicate Ground No. 3 raised by the Revenue, which reads as follows:-

2 IT(SS)A No.77/AHD/2023

“3. In

The order continues below.

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