INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - No incriminating material found during search - Unabated assessment

AO, pursuant to search conducted at assessee's premises, framed assessment under section 153A and made addition under section 68 towards unexplained share capital on the basis of statement made by Director of assessee under section 132(4) and photocopies of the documents found during search and seizure. Assessee challenged this on the ground of no incriminating material found during search. Tribunal deleted addition. Revenue challenged this by way of appeal before High Court. Held: Statement of Managing Director did not allude to the fact that assessee had introduced 'unaccounted money' in the form of share capital/share premium through investor entities. The retraction letter, as noted by the Tribunal, also did not advert to the introduction of investment of money in assessee in the form of share capital/share premium. Furthermore, based on past precedents, Tribunal noted that photocopies of documents such as blank share transfer forms, blank receipts and blank power of attorney did not constitute incriminating material. Significantly, Revenue chose not to examine those, who had ostensibly executed these documents. As regular assessment stood concluded in respect of assessment years 2012-13, 2013-14 and 2014-15 under section 143(3), therefore, same could not be interfered with while framing search assessment under section 153A in the absence of incriminating material found during search. Further, on merits assessee had been able to prove identity of the investors, their creditworthiness and genuineness of the transactions. Therefore, deletion of addition by the Tribunal was justified.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13 to 2014-15

INCOME TAX ACT, 1961

Section 145(3)

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