NAVEEN SHIVHARE,GWALIOR vs. A.C.I.T., CIRCLE-3, GWALIOR

The Ld. AR argued that this year is unabated year and the impugned additions are not based on any incriminating material as found during search. Therefore, the impugned additions are not sustainable as per recent decision of Hon’ble Apex Court in the case of Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. (149 Taxmann.com 399). The Ld. CIT-DR controverted the arguments of Ld. AR. Having heard rival submissions and upon perusal of case records, our adjudication would be as under.

It emerges that the assessee filed return of income on 26-12-2003 which was processed u/s 143(1). The assessee was subjected to search on 12-05-2008 and admittedly, no assessment proceedings were pending against the assessee for this year. Accordingly, this year was an unabated year. In the assessment order, Ld. AO made addition of cash deposit in bank account for Rs.5.51 Lacs, addition of low household personal expenses for Rs.0.30 Lacs and estimated business income of Rs.5 Lacs. The Ld. CIT(A) not only confirmed the assessment but also enhanced income by adding LIC premium and opening capital balance. Aggrieved, the assessee is in further appeal before us.

It is quite clear that the impugned additions are not based on any incriminating material as found during the course of search on assessee. This is unabated year. This being so, the ratio of cited decision of Hon’ble Apex Court in the case of Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. (149 Taxmann.com 399) would squarely apply to the fact of this case. In this decision, it was held that in respect of completed assessments / unabated assessments, no addition could be made by Assessing Officer in the absence of any incriminating material found during course of search under section 132 or requisition made under section 132A. Respectfully following the same, we delete the impugned addition as made by Ld. AO and also the enhancement as made by Ld. CIT(A). The appeal succeeds on this foremost legal ground alone.

It is admitted position that the nature of additions in AYs 2004-05 to 2006-07 are quite similar. All these years are unabated years. Therefore, taking the same view, we delete the impugned additions for all these years as well. All these appeals stand allowed.

Against quantum additions, the assessee has been saddled with consequential penalty u/s 271(1)(c) in all the four years. Since we have deleted quantum additions, these penalties would not survive. The assessee succeeds in the penalty appeals as well.

All the appeals stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.