INCOME TAX ACT, 1961

Section 153A Section 68 Section 132(4)

Search and seizure - Assessment under section 153A - Addition under section 68 without incriminating material, only on statement recorded under section 132(4) -

In this case of assessee the assessment was unabated on the date of search, i.e., 25-7-2013 since there were no ending proceedings either under section 143(3) or 148. The legal position is that no addition can be made in case of an unabated assessment if no incriminating material is found in the course of search. On a perusal of the Assessment Order, the Tribunal noticed that there was no reference to any of the incriminating material found and seized in the premises of the assessee in the course of the search proceedings. The AO in the Assessment Order referred to the seized incriminating material in the case of one Shirish C. shah and the post search enquiries made in his case to make an addition in the hands of the assessee denying the long-term capital gain claimed by the assessee. Tribunal also noticed from the remand report dated 9-1-2017 furnished by the Dy. CIT to the CIT(A) in the course of appeal proceedings the AO stated that in the present case under consideration, though no incriminating material was found, the assessee admitted undisclosed income in his statement under section 132(4). Held: In the present case, except the statement of the assessee under section 132(4) agreeing for the addition, there was no seized incriminating material found in the premises of the assessee in the course of assessment proceedings. When there was no incriminating material found in the course of search in assessee's premises, the addition/disallowance cannot be made merely on the statements recorded in the course of the search proceedings. The Delhi Bench of the Tribunal considering various circulars of CBDT, held that the assessments made pursuant to search operation are required to be based on incriminating material discovered as a result of search operation in assessee's case but not on the recorded statements. Since no incriminating material was found during the course of search in the premises of assessee, assessment made making addition by the AO in respect of long-term capital gain under section 68 was therefore, bad in law.

Relied:Pr.CIT v. Meeta Gutgutia [(2017) 82 Taxmann.com 287 (Del-HC) : 2017 TaxPub(DT) 1767 (Del-HC)] : (2018) 96 taxmann.com 468 (SC) : 2018 TaxPub(DT) 4130 (SC), CIT v. Gurinder Singh Bawa [(2016) 386 ITR 483 (Bom) : 2016 TaxPub(DT) 3900 (Bom-HC)], CIT v. Kabul Chawla [(2015) 380 ITR 573 (Del-HC) : 2015 TaxPub(DT) 3486 (Del-HC)], CIT v. Continental Warehousing Corporation [(2015) 374 ITR 645 (Bom) : 2015 TaxPub(DT) 2182 (Bom-HC)], CIT v. Anil Kumar Bhatia [(2013) 352 ITR 493 (Del) : 2013 TaxPub(DT) 245 (Del-HC)], Brij Bhushan Singal & Ors v. ACIT in ITA.Nos. 1412 to 141/Del/18 Order, dated 31-10-2018 and Sanjay & Aarti Singal v. DCIT in ITA.Nos. 706, 707, 709/Chd/18, Order, dated 07-2-2020 : 2020 TaxPub(DT) 1033 (Chd-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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