The Tax Publishers2019 TaxPub(DT) 8398 (Del-Trib)

INCOME TAX ACT, 1961

Section 153A

The profit and loss account and balance sheet of the assessee company, by any stretch of imagination, cannot be considered as incriminating material. It was also not the case of the Revenue that the bank accounts were unearthed during the search operation. Thus, in the absence of any incriminating material found during the course of search, addition made by AO was liable to be deleted.

Search and seizure - Assessment under section 153A - No incriminating material unearthed during search -

Search and seizure operation was carried out at various premises of HBN Group and that included premises of the assessee also.AO made additions under section 68. Assessee contended that no incriminating material was found during the course of search and additions made by the AO had no reference to any such incriminating material found at the time of search, hence the additions made were beyond the scope of section 153A. However, Revenue contended that during search, several incriminating documents were found which included the balance sheet of the assessee company. Therefore, it could not be said that the assessment was devoid of any incriminating material. Held: The profit and loss account and balance sheet of the assessee company, by any stretch of imagination, cannot be considered as incriminating material. It was also not the case of the Revenue that the bank accounts were unearthed during the search operation. Moreover, 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 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. In the instant case, on the date of search, as the assessment was already stood completed and since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed.

Followed:CIT v. Kabul Chawla (2015) 380 ITR 573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC), Pr. CIT v. Meeta Gutgutia (2018) 96 Taxmann.com 468 (SC) : 2018 TaxPub(DT) 4130 (SC)

REFERRED : CIT v. Anil Kumar Bhatia (2013) 352 ITR 0493 (Del) : 2013 TaxPub(DT) 0245 (Del-HC),CIT v. Chetan Das Lachman Das (2012) 254 CTR 0392 (Del) : 2013 TaxPub(DT) 0009 (Del-HC) and Dayawanti v. CIT (2017) 390 ITR 0496 (Del) : 2016 TaxPub(DT) 4888 (Del-HC)

FAVOUR : In assessee's favour

A.Y. : 2005-06 & 2006- 07



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