INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - No incriminating material found during search - Share capital accepted in scrutiny assessment

During search conducted at assessee's premises, some incriminating papers were found indicating purchase/sales of milk and milk products outside the books of account. Based on these documents, a director of assessee-company admitted undisclosed income of Rs. 93 lacs in his individual capacity. However, these transactions did not relate to the assessee-company. However, in the proceedings under section 153A, consequent to the search, AO treated share premium received as unexplained credit under section 68. Held: Assessment was earlier completed under section 143(3) wherein share capital had been scrutinized and accepted by the revenue, then holding the same share capital as unexplained in reassessment under section 153A tantamounted to change of opinion not backed by any evidence and, therefore, not legally sustainable in the absence of anything incriminatory found against the assessee during search.

Relied:CIT v. Kabul Chawla, (2016) 380 ITR 573 (Del-HC) : 2015 TaxPub(DT) 3486 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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