INCOME TAX ACT 1961

Section 153A

Search and seizure - Assessment under section 153A - Addition not based on incrementing material found during course of search -

Assessee's assessment was completed under section 153A and additions were made firstly on, brand launch expenses including the advertisement/publicity and sales promotion and secondly, the disallowance of expense under section 40(a)(i) on account of various discounts and incentives. Held: Both these additions admittedly were not based on any seized document or material and neither there was any whisper in the impugned orders. Now, it is a well-established jurisprudence that in the case of unabated assessment which had attained finality on the date of search, no addition can be made unless any incriminating material or evidence had been found during search qua that addition and for that particular assessment year. Admittedly, no such incriminating material or evidence has been found on such disallowance/addition during the course of search and, therefore, following the ratio laid down in CIT v. Kabul Chawla [(2013) 352 ITR 493 (Del) : 2013 TaxPub(DT) 245 (Del-HC)] & Pr. CIT v. Meeta Gutgutia (2018) [(2018) 257 Taxman 441 (SC) : 2018 TaxPub(DT) 4130 (SC)], the additions made were deleted.

Followed:CIT v. Kabul Chawla [(2013) 352 ITR 493 (Del) : 2013 TaxPub(DT) 245 (Del-HC)] & Pr. CIT v. Meeta Gutgutia (2018) [(2018) 257 Taxman 441 (SC) : 2018 TaxPub(DT) 4130 (SC)].