Additions cannot be Made Without Incriminating Document: ITAT Set Asides Rs. 2 Crore Unexplained Cash Credit Addition [Read Order]
The tribunal observed that since no incriminating evidence was found during the search, the addition was not sustainable under the law
![Additions cannot be Made Without Incriminating Document: ITAT Set Asides Rs. 2 Crore Unexplained Cash Credit Addition [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/Made-Without-Incriminating-Document-Incriminating-Document-ITAT-ITAT-Set-Unexplained-Cash-Credit-Unexplained-Cash-Credit-Addition-taxscan.jpg "Additions cannot be Made Without Incriminating Document: ITAT Set Asides Rs. 2 Crore Unexplained Cash Credit Addition [Read Order]")
The Lucknow Bench of the Income Tax Appellate Tribunal (ITAT) has set aside an addition of Rs. 2 crore made under Section 68 of the Income Tax Act, ruling that no additions can be made without any incriminating material. Ocean Dream Infrastructures Pvt. Ltd. (assessee), a real estate company, was subjected to a search and seizure operation under Section 132 of the Income Tax Act....
The Lucknow Bench of the Income Tax Appellate Tribunal (ITAT) has set aside an addition of Rs. 2 crore made under Section 68 of the Income Tax Act, ruling that no additions can be made without any incriminating material.
Ocean Dream Infrastructures Pvt. Ltd. (assessee), a real estate company, was subjected to a search and seizure operation under Section 132 of the Income Tax Act. The Assessing Officer (AO) made an addition of Rs. 2 crore treating them as unexplained cash credit based solely on balance-sheet figures.
Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], contending that no incriminating document was found during the search to justify the addition.
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The CIT(A) upheld the addition and relied on the Judgement in the case of Raj Kumar Arora (2014) which allowed such additions. Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT.
The counsel for the assessee relied on the Judgement of the Supreme Court in PCIT vs. Abhisar Buildwell Pvt. Ltd. which held that in cases of completed assessments, additions cannot be made unless incriminating material was found during the search.
The Counsel for the revenue supported the order of the AO and CIT(A) and sought to dismiss the appeal filed by the assessee.
The two-member bench comprising Shri Kul Bharat (Vice President) and Shri Anadee Nath Misshra (Accountant Member) observed that since no incriminating evidence was found during the search, the addition was not sustainable under the law.
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The tribunal observed the Supreme Court judgment in the case of PCIT vs Abhisar Buildwell held that additions could not be made unless incriminating material was found during the search operation. The tribunal also observed several judgments of ITAT which were decided in the favour of the assessee.
The tribunal also observed the instruction of Central Board of Direct Taxes (CBDT) No. 1 of 2023 which also favored the assessee. Therefore, the tribunal decided the matter in favour of the assessee.
Therefore the tribunal directed the Assessing Officer to delete the additions of Rs. 2 crore. Thereby, the appeal of the assessee was allowed for statistical purposes.
To Read the full text of the Order CLICK HERE
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