INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Addition on account of unaccounted payment of interest on PDC - Addition already made in original assessment proceedings and matter pending before Tribunal

A search and seizure operation was carried out on a group concern and its associated persons. Assessee was associated with that group and, therefore, notice under section 153A was issued. AO noted that assessment in the assessee's case had been completed earlier under section 143(3) after making an addition on account of unaccounted payment of interest on post-dated cheques (PDCs). Accordingly, the AO completed assessment under section 153A, wherein he once again made the addition on account of unaccounted payment of interest on PDCs. Assessee submitted that the said addition had been partially deleted by CIT(A) and the matter was pending before the Tribunal. Held: AO once again made addition under section 153A on account of unaccounted payment of interest on PDCs, which had already been made in original assessment proceedings. Such addition being made in the original assessment proceedings under section 143(3) and the matter being pending before Tribunal, the same could not have been repeated once again in assessment proceedings under section 153A. Even otherwise, it was a concluded assessment and same could have been tinkered only if any incriminating material found during the course of search. No such material was found during the course of search but the addition was made only for the reason that CIT(A) sustained the said addition in the assessee's appeal against order under section 143(3). Accordingly, AO was directed to delete the addition on account of unaccounted payment of interest on PDC.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2007-08

INCOME TAX ACT, 1961

Section 40A(3)

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