No Income Tax Addition can be made in the Absence of Incriminating Materials in respect of Unabated Assessment: ITAT Allows Assessee's Appeal [Read Order]

The Delhi Bench of Income tax Appellate Tribunal (ITAT) held that the addition made towards cash deposit in bank account were made recuperation of any incriminating material found during the course of search.

The assessee Sushil Singla has field the original return of income for the Assessment Year (AY) 2014-15 , for AY 2015-16 and for AY 2016-17 . As on the date of search no proceeding for AY 2014-15, 2015-16 and 2016-17 were pending and hence, these three assessments become unabated assessments. A search and seizure operation was carried out in the premises of the assessee. The time limit for issuance of notice under Section 143(2) of the Income Tax Act, 1961 had already expired for aforesaid three assessments as on the date of search.

Aggrived by the order of Assessing Officer and Commissioner of Income Tax (Appeal) [CIT(A)], the assessee filed an appeal before the Tribunal, challenging the Income Tax addition towards cash deposits made in the bank account in the sums of Rs. 45,000/-, Rs. 2 lac and Rs. 1,50,000/-  made in the hands of the assessee for AY 2014-15, 2015-16 and 2016-17 respectively in the absence of incriminating material found during the course of search in respect of unabated assessment.

The Bench comprising of M. Balaganesh, Accountant Member and Anubhav Sharma, Judicial Member observed that the AO in the search assessment under Section 143(1) of the Income Tax Act for the aforesaid years had merely examined the bank account maintained by the assessee with UBI and had resorted to make addition towards cash deposit made in the said bank account.

Further it noted that AO while making an addition towards cash deposit in the bank account had not referred to any seized document in the assessment order, and

Therefore, it was concluded that the addition made towards cash deposit in bank account were made recuperation of any incriminating material found during the course of search.

The Bench referred to the decision of the Supreme Court in the case of PCIT Vs. Abhisar Buildwell P. Ltd,  where it had been categorically held that in respect completed assessment/unabated assessments no addition can be made by AO in absence of any incriminating material found during the course of search under Section 132 or Section 132A of the Income Tax Act.

Hence, the appeals of the assessee were allowed.

To Read the full text of the Order CLICK HERE

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