ACIT CENTRAL BILASPUR, BILASPUR vs. ARUN KUMAR AGRAWAL, SAKTI

ITSSA 26/RPR/2025Status: DisposedITAT Raipur21 October 2026AY 2018-1922 pages
AI SummaryDismissed

What were the facts?

The Revenue has appealed the order of the Learned Commissioner of Income Tax (Appeals) [Ld. CIT(A)] for Assessment Year (AY) 2018-19. The Ld. CIT(A) had deleted additions of Rs. 2,97,00,000/- made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961, and Rs. 21,99,989/- on account of commission income. The AO's assessment order was passed under Section 153A of the Act, dated 30.09.2021, following a search and seizure action. The Revenue's appeal challenges the deletion of these additions, arguing that the Ld. CIT(A) erred in holding that no incriminating material was found during the search, particularly concerning cash found and alleged hawala transactions. The assessee, Arun Kumar Agrawal, contends that the assessment under Section 153A is void for unabated assessment years without incriminating material, citing the Supreme Court judgment in PCIT v. Abhisar Buildwell (P.) Ltd.

What did the Tribunal hold?

The Tribunal held that for unabated assessment years, additions under Section 153A can only be made if incriminating material is found during the search. The Supreme Court in PCIT v. Abhisar Buildwell (P.) Ltd. has categorically held that in completed/unabated assessments, additions under Section 153A are permissible only on the basis of incriminating material found during the search. Since AY 2018-19 was an unabated assessment year and the assessment order did not record any incriminating material found during the search, the AO lacked jurisdiction to assess or reassess income. The Tribunal upheld the Ld. CIT(A)'s order in deleting the addition of Rs. 2,97,00,000/- under Section 68 and the addition of Rs. 21,99,989/- on account of commission income, as these were not based on any incriminating material found during the search for the unabated AY 2018-19. All other grounds raised by the Revenue were rendered academic and dismissed. The appeal filed by the Revenue was dismissed.

What were the issues?

1. Whether, on the facts and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 2,97,00,000/- made by the AO under Section 68 of the Income Tax Act, 1961, holding that the AO was not justified in making additions in an unabated assessment year in the absence of any incriminating material found or seized during the search and seizure action. - Assessee's Contention: The assessment under Section 153A is void for unabated assessment years without incriminating material, as held in PCIT v. Abhisar Buildwell (P.) Ltd. Cash found was not from the assessee's premises. The statement recorded under Section 132(4) is not incriminating by itself and lacks corroborative seized material relevant to AY 2018-19. Alleged transactions were not found during the search. Even on merits, the addition fails as the assessee maintained no books and Section 68 cannot be invoked. - Revenue's Contention: The assessee failed to furnish justification for cash found (Rs. 1,80,85,350/-) in his statement under Section 132(4), constituting "incriminating material." Statements under Section 132(4) are admissible evidence. The Ld. CIT(A) ignored that "incriminating material" is not explicitly defined and that misrepresentation or suppression of facts constitutes incriminating material. The Ld. CIT(A) deleted the addition without adjudicating on merits despite the assessee failing to offer a satisfactory explanation for unsecured loans. 2. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 21,99,989/- made by the AO on account of commission income. - Assessee's Contention: The addition was based solely on third-party statements and WhatsApp chats unconnected to the respondent. The respondent denied all such transactions. The AO assumed "Arun Agrawal" in WhatsApp messages belonged to the respondent without proof. - Revenue's Contention: Data extracted from a mobile handset and statements of individuals clearly established the assessee's involvement in hawala transactions. The Ld. CIT(A) has wide powers to conduct further inquiries and should have appreciated this evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 153A,Section 132(4),Section 270A(9),Section 133A,Section 131,Section 147,Section 148,Section 153D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI Dr. DIPAK P. RIPOTE

For Appellant: Shri Dinesh Kumar Agrawal &
For Respondent: Shri Rituparna Namdeo, CIT-DR

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals), Raipur-3 [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2018-19 on 13.08.2025, emanating from the Assessment Order u/s 153A of the Act, dated 30.09.2021. 2. The Revenue has raised the following grounds of appeal :

“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,97,00,000/- made by the AO u/s 68 of the Income Tax Act, 1961?

2.

Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the

The order continues below.

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