No Additions Allowed in Completed Assessments u/s 153A Without Incriminating Material seized during search: ITAT [Read Order]
Considering the absence of incriminating material, the ITAT ruled that no additions could be made to completed assessments under Section 153A of the Income Tax Act.
![No Additions Allowed in Completed Assessments u/s 153A Without Incriminating Material seized during search: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/01/ITAT-No-Additions-Allowed-in-Completed-Assessments-incriminating-material-Section-153A-of-the-Income-Tax-Act-assessments-under-Section-153A-share-capital-ITAT-news-Taxscan.jpg "No Additions Allowed in Completed Assessments u/s 153A Without Incriminating Material seized during search: ITAT [Read Order]")
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no additions could be made in completed or unabated assessments under Section 153A of the Income Tax Act, 1961, unless supported by incriminating material seized during a search. Balajee Vinimay Pvt. Ltd., the assessee, filed its original income tax return declaring a total income of Rs. 10,96,073. A search...
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no additions could be made in completed or unabated assessments under Section 153A of the Income Tax Act, 1961, unless supported by incriminating material seized during a search.
Balajee Vinimay Pvt. Ltd., the assessee, filed its original income tax return declaring a total income of Rs. 10,96,073. A search operation under Section 132 of the Act was conducted on February 11, 2020, on the "Rika-Lalwani-Patodia-Prakash Group," of which the assessee was a part.
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After the search, a notice under Section 153A of the Income Tax Act was issued on July 12, 2021, ordering the assessee to file its income tax return on July 30, 2021, declaring the same income as in the original filing.
The assessing officer (AO) made two additions during the assessment proceedings for Rs. 4,08,45,000 concerning share capital/share premium and Rs. 3,00,140 as profits from the sale of investments in group companies.
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The Commissioner of Income Tax (Appeals) directed the deletion of both additions but dismissed the assessee's jurisdictional objection regarding the AO's power to make such additions in the absence of incriminating material.
Aggrieved, the revenue approached ITAT questioning the deletion and the assessee cross objected that additions in an unabated assessment could not be justified without any incriminating materials seized during the search.
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The two-member bench, comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member) referenced the Supreme Court ruling in Pr. CIT Vs. Abhiser Buildwell (P) Ltd. [2023] which held that additions in non-abated or completed assessments under Section 153A require incriminating material found during the search.
The tribunal found that the AO made no reference to any incriminating material supporting the additions during the search. The tribunal allowed the assessee's cross-objection and dismissed the revenue's appeal as infructuous.
To Read the full text of the Order CLICK HERE
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