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Facts
The assessee filed two appeals against CIT(A) orders for AYs 2012-13 and 2014-15. A search and seizure operation u/s 132 was carried out on March 2, 2017, leading to additions under Section 69A (and Section 68 for AY 2014-15) in assessments made u/s 153A. The Assessing Officer admitted that no incriminating material was found during the search for the relevant assessment years, and these were unabated assessments, yet made additions based on cash deposits.
Held
The Tribunal held that in respect of completed/unabated assessments made under Section 153A, no addition can be made by the Assessing Officer in the absence of any incriminating material found during the course of a search operation under Section 132 of the Act, citing the Supreme Court decision in PCIT v. Abhisar Buildwell (P.) Ltd. Since no incriminating material was found, the additions made by the AO were unsustainable.
Key Issues
Whether additions can be sustained under Section 153A of the Income Tax Act, 1961, when no incriminating material is found during a search operation for completed or unabated assessment years.
Sections Cited
153A, 132, 69A, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”, DELHI
Before: SHRI VIKAS AWASTHY & SHRI AVDHESH KUMAR MISHRA
ORDER PER VIKAS AWASTHY, JM: These two appeals by the assessee are directed against the orders of Commissioner of Income Tax (Appeals)(24), Delhi [in short ‘the CIT(A)’] for the Assessment Years 2012-13 & 2014-15, respectively. Both the impugned orders are of even date i.e. 11.09.2020.
2 & 2770/DEL/2023 (A.Ys.2012-13 & 2014-15) 2. Since, these appeals emanate from identical set of facts and similar issues are involved in both appeals, these appeals are taken up together for adjudication and are decided by this common order. ITA No. 2769/Del/2023 for AY 2012-13 3. Shri S. K Gupta, appearing on behalf of the assessee submitted at the outset that he is not pressing ground no. 1 and 3 of appeal challenging validity of assessment made u/s. 153A of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’). The ld. Authorized Representative of the assessee pointed that the solitary issue in appeal is that the addition has been made without there being any incriminating material found during the course of search. He submitted that a search and seizure operation u/s. 132 of the Act, was carried out on 02.03.2017. No incriminating material whatsoever was found during the course of search in respect of assessment year under appeal. Nor there was any pending assessment for the impugned assessment year, still the AO made addition of Rs. 9,39,100/- u/s. 69A of the Act.
Aggrieved by the assessment order, the assessee carried the issue in appeal before the CIT(A), inter alia challenging the addition made u/s. 69A of the Act. The CIT(A) upheld the assessment order. The ld. AR pointed that in the office note the AO has admitted the fact that no incriminating material was found during the course of search relating to assessment year under appeal, nor it is a case of abated assessment. The ld. AR submitted that it is a well-settled law that in the absence of any incriminating material no addition can be made in assessment u/s. 3 & 2770/DEL/2023 (A.Ys.2012-13 & 2014-15) 153A of the Act. In support of his contentions, he placed reliance of the following decisions:
1.
PCIT v. Abhisar Buildwell (P.) Ltd, 149 taxmann.com 399 (SC) 2. CIT v. Kabul Chawla, 61 taxmann.com 412 (Del) 5. Per contra, Shri Anuj Garg, Sr. DR, representing the Department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submitted that during the period relevant to assessment year under appeal, cash deposits of Rs. 9,39,100/- were reflected in bank account of the assessee. The assessee was asked to explain the source of cash deposits. Though the assessee explained that the cash deposits were out of past savings and amount realized from sales, however, there was no documentary evidence to support the said contention. Hence, the AO made addition of said cash deposits u/s. 69A of the Act.
6. We have heard the submissions made by rival sides and have examined the orders of authorities below. On perusal of the assessment order and the order of CIT(A) it is observed that they do not refer to any incriminating material found and seized during the course of search. It is also an undisputed fact that at the time of search there was no pending assessment. Thus, it is a case of unabated assessment. The ld. AR has drawn our attention to the office note annexed to the assessment order, which reads as under: “Office note:- There is no incriminating material found during the course of search, in the case, relating to assessment year, under consideration, nor the case was abated. Therefore, assessment is made on Rs. 11,17,820/-. Sd/- Assistant Commissioner of Income-Tax