DCIT, CENTRAL CIRCLE 4(2), KOLKATA, AAYAKAR BHAWAN, POORVA vs. BALAJEE VINIMAY PRIVATE LIMTED, RAMNATH GOWENKA MARG, MUMBAI

ORDER Per Shri Rajesh Kumar, AM

The appeal filed by the revenue and the Cross Objection filed by the assessee are against the order of Ld. CIT(A), Kolkata-27 dated 02.02.2024 for AY 2014-15 arising out of assessment order passed u/s. 153A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by ACIT, Central Circle-4(2), Kolkata dated 30.03.2022.

“1. For that on the facts and in the circumstances of the case and in law, the Ld. CIT(A) should have held that in absence of any incriminating material found in the course of search, the additions of Rs.4,08,45,000/- on account of share capital raised during the relevant FY 2013-14 and Rs.3,OO,140/- on account of gain on sale of shares made u/s 68 of the Act in the impugned unabated AY was unjustified.

2. For that the appellant craves leave to submit additional cross objections and/or amend or alter the cross objections already taken either at the time of hearing of the appeal or before.”

“9.1.1. I have perused the assessment order as well as the submissions of the assessee. It is observed that this ground of appeal had not been pressed by the assessee. It is pertinent to mention that on going through the assessment record, it is noticed the AO had followed all the requisite procedure while framing the assessment u/s. 153A of the Act. Hence, the contention raised by the assessee in this legal ground is not acceptable. Therefore, this ground of appeal raised by the assessee is dismissed.”

6. After hearing the rival contentions and perusing the material available on record, we find that the return of income was filed u/s 139(1) of the Act on 28.10.2019. A search action u/s 132(1) was conducted on the assessee on 02.04.2019. So on the date of search there were no pending proceedings before the AO qua this assessment year and also that the time limit for issuing notice u/s 143(2) had already expired. Therefore the impugned assessment was unabated on the date of search or had attained finality in terms provisions of section 153A of the Act. Now the issue before us for adjudication is whether the AO has jurisdiction to make additions without there being any incriminating materials seized during the search. N our opinion the addition in case of unabated assessment can only be made with reference to incriminating materials seized during search and not otherwise. We note that in the appellate order, Ld. CIT(A) has clearly recorded a finding of fact that AO has not referred to any incriminating materials found during the course of search qua the share capital/share premium and scrip sold by the assessee during the impugned financial year. Accordingly, we are in agreement with the Ld. CIT(A) that addition in case of unabated assessment year can only be made on the basis of search material found and seized during search. The case of the assessee is squarely covered by the decision of Hon’ble Supreme Courtin the case of “Pr. CIT Vs. Abhiser Buildwell (P) Ltd.” [2023] 149 taxmann.com 399 (SC), wherein the Hon’ble Supreme Court has held that in the case of non-abated/completed assessments, no addition can be made by the Assessing Officer in an assessment carried out u/s.153A of the Act in the absence of any incriminating material found during the search action. Accordingly, the cross objection by the assessee is allowed.