INCOME TAX ACT, 1961

Section 153A

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

A search and seizure operation under section 132 was conducted in case of assessee-company. Subsequently, the assessee in response to notice under section 153A submitted its return of income. AO noted that the assessee received share capital from 7 parties; however, it failed to prove the genuineness of the transaction under section 68. Accordingly, he made addition under section 68 in order under section 153A read with section 143(3). Assessee contended that during the course of search, no incriminating material was found for making the said addition and thus, the same was not sustainable. Held: It is settled that completed assessments can be interfered with by AO while making assessment under section 153A only on the basis of some incriminating material unearthed during the course of search which were not produced or not already disclosed or made known in the course of original assessment. In instant case, assessee's original return was completed before search and no assessment was pending on the date of the search. Further, as no incriminating material was unearthed during the course of search, therefore, no addition could be made under section 153A and hence, the addition made under section 68 in order under section 153A was deleted.

REFERRED : CIT v. Kabul Chawla 380 ITR 573 & Ors. Meeta Gutgutia 395 ITR 526

FAVOUR : In assessee's favour

A.Y. :

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