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Facts
During a routine vehicle check, ₹40 lacs cash was intercepted from Shri Manoj Kumar. The assessee accepted ownership of the cash. Subsequently, a search and seizure action was conducted, and a notice u/s 153A of the Act was issued, to which the assessee did not make any compliance. The Assessing Officer (AO) made additions for power and fuel charges, business promotion expenses, and godown rent.
Held
The Tribunal held that for an unabated assessment year, additions can only be made on the basis of seized incriminating material, as per Section 153A of the Act. Since no incriminating material was seized in this case, the AO's action was not sustainable. The CIT(A)'s deletion of additions was upheld.
Key Issues
Whether additions made by the AO are sustainable in the absence of seized incriminating material for an unabated assessment year under Section 153A of the Act?
Sections Cited
153A, 143(3), 143(2), 69C, 131(1)(d), 132A, 133A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA
Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM
(Assessment Year:2019-20) ACIT, Central Circle-3, Patna Radha Mohan Roy, 6th Floor, Room No.602 Mohan Nivas At Chopra Bazar, Central Revenue Building Ramnagar, Farshi Banmanki, Vs. (Annexe), Beer Chand Patel Purnea, Bihari-854102 Marg, Patna, Bihar-800001 (Appellant) (Respondent) PAN No. BUZPR3181H CO No. 03/PAT/2025 (Arising in for A.Y. 2019-20) ACIT, Central Circle-3, Patna Radha Mohan Roy, 6th Floor, Room No.602 Mohan Nivas At Chopra Bazar, Central Revenue Building Ramnagar, Farshi Banmanki, Vs. (Annexe), Beer Chand Patel Purnea, Bihari-854102 Marg, Patna, Bihar-800001 (Applicant) (Respondent) Assessee by : S/Shri A.K. Rastogi, Rakesh Kumar, ARs Revenue by : Shri Md. AH Chowdhary, DR Date of hearing: 26.11.2025 Date of pronouncement: 28.11.2025 O R D E R Per Rajesh Kumar, AM:
The appeal of the Revenue and the CO of the assessee are arising against the order of the Commissioner of Income-tax (Appeals)-Patna-3, (hereinafter referred to as the “Ld. CIT (A)”] dated 22.04.2022 for the AY 2019-20.
The issue raised in ground no.1 to 3 is against the deletion of addition of ₹1,15,89,409/-, ₹21,16,645/- and ₹1,80,000/- by the learned CIT (A) as made by the learned Assessing Officer in respect of power & fuel and handling labour charges, business promotion expenses and godown rent.
The learned AO made the disallowance at the rate of 20% in respect of power fuel and handling charges. Similarly, the learned AO added ₹21,16,645/- in respect of business promotion expenses on the ground of no supporting evidences u/s 69C of the Act. Similarly, ₹1,80,000/- was added on account of godown rent, when the assessee admitted that he was not paying any such rent.
In the appellate proceedings, the learned CIT (A) deleted the additions on the ground that books were not rejected by the learned AO and therefore, the disallowances were not sustainable in the eyes of law.
After hearing the rival contentions and perusing the materials available on record, we find that undisputedly, the instant assessment year is an unabated assessment on the date of search as there was no pending proceedings against the assessee u/s 143(3) of the Act and the time limit for issuing notice u/s 143(2) of the Act had also expired. The police authorities of SST Purnea, intercepted Shri Manoj Kumar and recovered ₹40.00 lacs from his possession, during routine vehicle
In the result, the appeal of the Revenue is dismissed and CO of the assessee is allowed.
Order pronounced in the open court on 28.11.2025.