INCOME TAX ACT, 1961

Section 153A Section 69

Search and seizure - Assessment under section 153A - Alleged bogus purchases - No incriminating material

So far as the deletion of additions made by CIT(A) on account of purchases made during the respective assessment years holding them to be bogus by the AO was concerned, the AR submitted that these additions by the AO on account of bogus purchases from assessment years 2008-09 to 2012-13 were not related to any seized material found during the course of search action. Referring to the provisions of section 153A, he submitted that the assessment under section 153A was specialised proceeding for the purpose of assessing the normal income of the assessee along with any undisclosed income, pursuant to the search action. He submitted that the normal income already assessed cannot be disturbed in the absence of any incriminating material found during the search. On the decision of Delhi High Court in the case of CIT v. Kabul Chawla (2016) 380 ITR 573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC), wherein it was held that completed assessment can be interfered by the AO while making assessment under section 153A only on some incriminating material that was unearthed during the course of search which was not produced or not already disclosed or not made in the case of the original assessment. Since the decision of the CIT(A) was based on the decision of the Delhi High Court in the case of Kabul Chawla, therefore, the same being in accordance with law should be upheld and the ground raised by the revenue on this issue should be dismissed. Held: An altogether separate addition had been made by the AO by disallowing part of the purchases as bogus by holding that substantiating evidence in the form of bills and vouchers and invoices was not produced. There was no incriminating material found/seized for forming basis for such addition. CIT(A) had deleted the addition for assessment years 2008-09 to 2012-13 by holding that in the absence of any incriminating material no addition can be made for these assessment years which were non-abated years, therefore, there is no merit in altogether new argument now being made by the CIT-DR that bunch of papers produced during the course of hearing were incriminating documents in relation to the bogus purchases made by the assessee. The argument advanced by the CIT-DR that the addition was based on incriminating documents was not in accordance with the law.

Relied:CIT v. Kabul Chawla, (2015) 61 Taxmann.com 412 (Del-HC) : 2015 TaxPub(DT) 3486 (Del-HC). Distinguished:CIT v. Chetan Das Laxman Das, (2012) 211 Taxman 61 (Del-HC) : 2013 TaxPub(DT) 9 (Del-HC) and Filatex India Ltd. v. CIT (2015) 229 Taxman 555 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008- 09 to 2010-11 & 2012-13

INCOME TAX ACT, 1961

Section 153A

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