Loading judgment…
Facts
A search and seizure operation was conducted on the assessee on 30.09.2015 for AY 2012-13. The Assessing Officer made an addition of Rs. 50 lakhs under Section 153A read with 143(3) of the Income-tax Act, 1961, treating an unsecured loan as unexplained income, based on an analysis of audited financial statements. The original assessment for AY 2012-13 was already completed before the search, with the return filed on 26.09.2012 and the time limit for Section 143(2) notice having expired.
Held
The Tribunal admitted an additional ground challenging the addition without incriminating material found during the search. Citing the Supreme Court decision in CIT v. Abhisar Buildwell (P.) Ltd., the Tribunal held that no addition could be made in a completed assessment under Section 153A unless based on incriminating material found during the search. As no such material was found, the addition of Rs. 50 lakhs was not sustainable.
Key Issues
Whether an addition made in a completed assessment under Section 153A of the Income-tax Act, 1961, is sustainable without any incriminating material found during the search operation.
Sections Cited
153A, 143(3), 68, 153D, 132, 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2012-13, arises out of the order of the Commissioner of Income Tax (Appeals)-IV, Kanpur [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No. CIT(A)-IV/10793 & 10807/DCIT- CC/NOIDA/2017-18/615 & 616 dated 19.11.2018 against the order of assessment passed u/s 153A/ 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 30.12.2017 by the Assessing Officer, DCIT, Central Circle, Noida (hereinafter referred to as „ld. AO‟).
The assessee has raised the following grounds of appeal before us:-
“1. On the facts and circumstances of the case, the order passed by the learned CIT (A) is bad, both in the eye of law and on the facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming an addition despite assessee fulfilling the burden cast on him u/s 68 of Income Tax Act.
On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming addition by ignoring the submission and evidences submitted during appellate proceedings.
4. The appellant craves leave to add, amend or alter any of the grounds of appeal
.”
3. The assessee has raised the following additional grounds of appeal:-
“1. The learned CIT-A has erred both in law and in facts in confirming addition on account of unsecured loan of Rs. 50,00,000/- despite the fact that no incriminating material or no undisclosed income or any evidence has been found during the search at the premises of the Appellant and therefore the addition under Section 153A is not sustainable.
2. The learned CIT-A has erred in law and in facts as the approval taken under Section 153D is mechanical. The approval for Section 153D of the Income Tax Act, 1961 has to be separate for each assessment year and cannot be a common approval.”
We find that the additional grounds raised hereinabove goes to the root of the matter and does not require any verification of facts thereon, hence, they are admitted and taken up for adjudication.
We have heard the rival submissions and perused the material available on record. With regard to the additional grounds, the ld DR placed on record the factual report received from the ld AO vide letter dated 17.01.2024. A search and seizure operation u/s 132 of the Act was conducted on 30.09.2015 in the premises of the assessee. The ld AO in his factual report has stated that the addition of Rs. 50 lakhs made in the assessment completed u/s 153A read with section 143(3) of the Act on 30.12.2017 for AY 2012-13 was framed based on analysis of the audited financial statements of the assessee company wherein, loan of Rs. 50 lakhs was brought to tax as unexplained income of the assessee. As on the date of search on 30.09.2015, the assessment for AY 2012-13 was a completed assessment in view of the fact that the return of income for AY 2012- 13 was originally filed by the assessee company on 26.09.2012 and the time limit for issuance of notice u/s 143(2) of the Act stood expired as on the date of search on 30.09.2015. Now the short question that arises for our consideration is Page | 2 that whether any addition could be made in a completed assessment without the existence of any incriminating material found during the course of search? This issue is no longer res integra in view of the decision of the Hon'ble Supreme Court in the case of CIT v. Abhisar Buildwell (P.) Ltd. reported in 454 ITR 212 (SC). Respectfully following the said decision and in view of the undisputed fact that the addition of Rs. 50 lakhs was made without the existence of any incriminating material found during the course of search, the addition made in the sum of Rs. 50 lakhs could not be sustainable in the eyes of law for the year under consideration in the search assessment completed u/s 153A of the Act. Accordingly, the additional ground No. 1 raised by the assessee is allowed.
Since, the relief is granted to the assessee vide additional ground No. 1, the other additional ground No. 2 and regular grounds of appeal need not be adjudicated as adjudication of the same would be merely academic in nature and hence, they are left open.
In the result, the appeal of the assessee is allowed.