The Income Tax Appellate Tribunal (ITAT), Delhi Bench, recently ruled in favor of an assessee by deleting an addition of ₹13.60 lakhs under section 68 of Income Tax Act 1961 (ITA) noting that the addition was made without any incriminating evidence.
The assessee/appellant is. Aashiyana Civil Contractors Pvt. Ltd. The case began in the assessment year 2011-12, during which the assessee faced a reassessment under Sections 153A and 143(3) of ITA following a search operation conducted on September 30, 2015. The Assessing Officer had added ₹13.60 lakhs to the company’s income, citing it as unexplained cash credits under Section 68. The Commissioner of Income Tax (Appeals)-IV [CIT(A)] Kanpur, upheld this addition, prompting the assessee-company to appeal to the ITAT.
At the hearing, the tribunal bench of Mr Satbeer Singh Godara and Mr M Balaganeshl observed that the assessment year in question was “unabated,” implying that it could not be reopened unless there was incriminating material unearthed during the search. However, upon examining the records, the tribunal noted a glaring absence of such evidence. The judicial members referred to the Supreme Court’s ruling in PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023), which clearly established that additions in unabated assessments must be based solely on seized material.
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The Revenue’s representative, despite attempting to defend the addition, could not dispute the absence of incriminating evidence in the assessment records. Consequently, the tribunal declared the addition legally unsustainable and ordered its deletion.
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