INCOME TAX ACT, 1961,

Section 153A

Search and seizure - Assessment under section 153A - Addition not based on incriminating material found during search -

AO made addition under section 153A on the basis of materials seized during course of search and seizure operation at business and residential premises of assessee, which was confirmed by CIT(A). The assessee's contention was that the addition made by the AO under section 153A, without there being any incriminating material. Further that, assessment had attained finality. Therefore, no additions could be made as per decision of High Court in case of CIT v. Kabul Chawla (2015) 61 taxmann.com 412 (Del) : 2015 TaxPub(DT) 3486 (Del-HC). Held: High Court in case of Kabul Chawla held that section 153A does not state that additions should be strictly made on the basis of evidence found in the course of the search, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Completed assessments can be interfered with by the AO while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Further that, the assessment had attained finality and no incriminating material was unearthed during the search. Therefore, no additions could have been made to the income already assessed. Thus, following the said decision, appeal of the assessee was allowed.

REFERRED : CIT v. Kabul Chawla (2015) 61 taxmann.com 412 (Del) : 2015 TaxPub(DT) 3486 (Del-HC); Pr. CIT v. Ram Avtar Verma (2017) 88 Taxmann.com 666 (Del) : 2017 TaxPub(DT) 1854 (Del-HC)

FAVOUR : In assessee's favour

A.Y. :

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