INCOME TAX ACT, 1961

Section 153A Section 68

Search and seizure - Assessment under section 153A - Alleged unexplained share capital and share premium - Addition not based on incriminating material

A search and seizure action under section 132(1) was conducted on 17-12-2014 & 18-12-2014 and the addition made by the AO in the unabated assessment completed in pursuance of the search under section 153A on account of share capital and share premium received during the year under consideration by treating the same as unexplained cash credit was deleted by the CIT(A) on the ground that the same was not based on any incriminating material found during the course of search. Held: In the case of Dy. CIT v. Salasar Stock Broking Limited, the decision of the Tribunal holding that the addition made by the AO in the assessment completed under section 153A was beyond the scope in the absence of any incriminating material found during the course of search was upheld by the Calcutta High Court. The consistent view taken by the Jurisdictional High Court was in favour of the assessee and respectfully following this binding precedent, since the assessment for the year under consideration was not pending as on the date of search, there was no abatement and the addition made by the AO in the unabated assessment completed under section 153A on account of share capital and share premium amount by treating the same as unexplained cash credit was not sustainable as the same was not made on the basis of any incriminating material found during the course of search. Accordingly the impugned order of the CIT(A) deleting the said addition made by the AO was upheld and this appeal of the revenue was dismissed.

Followed:Pr. CIT-2, Kolkata v. Salasar Stock Broking Limited (ITAT No. 264 of 2016, dated 24-8-2016): (Cal)Relied:CIT v. Kabul Chawla (2016) 380 ITR 0573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC), PCIT v. Meeta Gutgutia, 96 taxmann.com 468 : 2018 TaxPub(DT) 4130 (SC), dated 2-7-2018, PCIT v. Kurele Paper Mills Pvt. Ltd. (2016) 380 ITR 571 (Del-HC) : 2016 TaxPub(DT) 1068 (Del-HC), Pr. CIT v. Kurule Paper Mills (P) Ltd., S.L.P (C) No. 34554 of 2015: (2016) 380 ITR (St) 64, Dy. CIT v. MBL Infrastructure Ltd. IT(SS)A No. 65, 66, 67 & 76/Kol/2016, dated 1-5-2019 : 2019 TaxPub(DT) 3198 (Kol-Trib), CIT, Kolkata-III v. Veerprabhu Marketing Limited (2016) 73 Taxmann.com 149 (Cal), CIT v. Kabul Chawla (2016) 380 ITR 573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC), Mridul Commodities Pvt. Ltd. v. Dy. CIT, Cent. Cir-XXI, Kol. (IT(SS) A Nos. 14 & 15/Kol/2015), dt. 7-10.2016 : 2016 TaxPub(DT) 4451 (Kol-Trib), All Cargo Global Logistics Ltd. v. Dy.CIT, Cent. Circle-44, Special Bench Mumbai (IT Appeal Nos. 5018 to 5022 & 5059 (Mum) of 2010, dt. 6-7-2012) : 2012 TaxPub(DT) 2464 (Mum-Trib), Asstt. CIT v. PHPL Stock Broking Pvt. Ltd. IT(SS)A No. 12/Ko1/2017, dt. 21-8-2018, Dy.CIT v. B.R. Infraprojects Pvt. Ltd. in IT(SS)A No. 11/Kol/2017, dt. 26-9-2018 : 2018 TaxPub(DT) 6368 (Kol-Trib) and Dy.CIT v. Rosemarry Sponge & Ispat Pvt. Ltd. IT(SS)A No. 75 & 76/Kol/2017, dt. 30-11-2018.