INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Addition on the basis of statement recorded of third-party - No incriminating material found during search--Unabated assessment

Search was conducted at premises of one Mool Chand Malu along with premises of assessee company. According to AO, Mool Chand Malu was the promoter of Kuber Group of companies, including the assessee company. Mool Chand Malu during the course of search action in statement, under section 132(4) offered undisclosed income of estimated Rs. 150 crores, including investment in unexplained share capital. Accordingly, AO made addition in assessee's hands, while framing search assessment under section 153A. Assessee contended that entire addition is based upon the admission/statement under section 132(4) of Mool Chand Malu, who was neither a director nor employee of assessee company. Held: Statement of Mool Chand Malu under section 132(4) alone could not be considered as incriminating material unless any corroborating incriminating material was found during the course of search from premises of assessee. As assessment for the year under consideration remained unabated as on date of search, therefore, addition made by AO, not based on incriminating material unearthed during search, could not be sustained.

Followed:CIT v. Kabul Chawla, 381 ITR 570 (Del-HC) : 2015 TaxPub(DT) 3486 (Del-HC) and Pr. CIT v. Best Infrastructure Private Ltd. (2017) 397 ITR 182 (Del-HC.) : 2017 TaxPub(DT) 3839 (Del-HC). Distinguished:B. Kishore Kumar v. Dy. CIT (2015) 62 Taxmann.com 215 (SC) : 2015 TaxPub(DT) 5204 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10 to 2013-14

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