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Facts
The assessee, Alka Chaturvedi, filed an appeal challenging the correctness of taxability of Rs.4,216/- under Section 2(22)(e) of the Income Tax Act, which was added by the Assessing Officer (AO) for AY 2014-15 following a search operation. The assessee contended that since the assessment for AY 2014-15 was concluded and unabated at the time of search, no additions could be made without incriminating material found during the search.
Held
The Tribunal, relying on the Supreme Court's decision in Pr.CIT vs. Abhisar Buildwell (P.) Ltd., held that for unabated assessments under Section 153A, additions cannot be made without specific incriminating material found during the search. As no such material was found to support the addition of Rs.4,216/-, the Tribunal quashed the addition made by the AO.
Key Issues
Whether additions under Section 153A can be made in an unabated assessment year without incriminating material found during search, specifically concerning taxability under Section 2(22)(e).
Sections Cited
Section 143(3), Section 153A, Section 2(22)(e)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “H” DELHI
Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA
PER PRADIP KUMAR KEDIA - A.M.: The captioned appeal has been filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-IV, Kanpur (‘CIT(A)’ in short) dated 10.08.2022 arising from the assessment order dated 09.08.2021 passed by the Assessing Officer (AO) under Section 143(3) r.w. Section 153A of the Income Tax Act, 1961 (the Act) concerning AY 2014-15.
When the matter was called for hearing, the ld. counsel for the assessee submitted at the outset that the solitary grievance which requires adjudication in the present case is correctness of taxability of Rs.4,216/- under Section 2(22)(e) of the Act. The ld. counsel also pointed out that other grounds taken in the grounds of appeal may be ignored for the purposes of adjudication of the appeal.
The ld. counsel for the assessee submitted that the search and seizure operation was conducted at the premises of the assessee on 11.10.2018 and consequently the proceedings under Section 153A was set in motion. It was pointed out that the impugned assessment for A.Y. 2014-15 stood concluded / completed at the time of search and remained unabated. Consequently, the AO was not entitled to make additions / disallowances without making reference to any incriminating material found in the course of search. The AO has made additions of Rs.4,216/- by invoking provisions of Section 2(22)(e) of the Act by taking cognizance of the facts emerging from books of account and records. No reference to any incriminating material has been made.
The ld. DR for the Revenue could not controvert the assertions made on behalf of the assessee towards absence of any incriminating material for making additions under Section 2(22)(e) of the Act.
We have carefully considered the orders of the authorities below and examined the merit of legal contentions raised on behalf of the assessee and counter raised on behalf of the Revenue.
It is the case of the assessee that additions under Section 2(22)(e) could not be made in the assessment framed under Section 153A of the Act dehors reference to any incriminating material found in the course of search in the hands of the assessee. The issue is no longer res integra. The judgment rendered by the Hon’ble Apex Court in the case of Pr.CIT vs. Abhisar Buildwell (P.) Ltd., (2023) 149 taxmann.com 399 (SC) would squarely apply to the facts of the case and thus the scope of assessment under Section 153A is restricted to the incriminating material found in the course of search of the assessee owing to the fact that such assessment stood concluded / completed and thus do not get abated by operation of law. Guided by the principles laid down by the Hon’ble Apex Court in the case of Abhisar Buildwell (supra), we find force in the legal plea raised on behalf of the assessee. Hence, in the absence of any incriminating material found in an unabated assessment, the additions made by the AO in the captioned appeal require to be quashed.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 19th April, 2024.