INCOME TAX ACT, 1961

Section 153A Section 68

Search and seizure - Assessment under section 153A - Incriminating material not available with AO - Addition of alleged unexplained share capital

Search assessment for assessment year 2006-07 had attained finality and accordingly in terms of second proviso to section 153A such an assessment was to be treated as unabated; and without any reference to any seized material or incriminating evidence found during the course of search. In the impugned proceedings, AO on the basis of balance sheet noted that fresh share application money had been received by the assessee and as such, for on non-satisfied with answer to query raised by the AO the AO made addition, which was confirmed by the CIT(A).Held: It was an admitted fact that the original assessment completed under section 143(3) vide Order, dated 31-12-2008 which had attained finality at the time of search. It was also undisputed that addition made by the AO was not based on incriminating material found during the course of search, albeit was based on perusal of balance sheet which was part of the assessment record and duly scrutinise during the course of original assessment proceedings. Whence there was no incriminating material qua each of the assessment year roped in under section 153A, then, no addition can be made while framing the assessment under section 153A. As admittedly no incriminating material relating to these assessment years or as a matter of fact for any of the assessment years were found during the course of search and accordingly, the originally assessed income. The addition was directed to be deleted being beyond the scope of assessment under section 153A.

Followed:Pro CIT v. Meeta gutgutia Since (2017) 82 Taxmann.com 287 (Del) : 152 DTR 153<.i> and CIT v. Kabul Chawla (2016) 380 ITR 573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC). Distinguished:CIT v. Anil Kumar Bhatia reported in (2013) 352 ITR 493 (Del) : 2013 TaxPub(DT) 245 (Del-HC) and Smt. Dayawanti Gupta reported in (2017) 390 ITR 496 (Del) : 2016 TaxPub(DT) 4888 (Del-HC).