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2022 (11) TMI 738 - HC - Income TaxAssessment u/s 153A - incriminating material is found during search under Section 132 or not?- HELD THAT:- It is to be noted that the Appellant-Revenue has not placed reliance or even referred to any statement recorded under Section 132(4) of the Act, 1961. No such statement has been produced before this Court. Therefore, in the facts of the present case, the issue does not arise for consideration unless it can be demonstrated by the Appellant-Revenue that the statements recorded under Section 132(4) disclose some incriminating material on the basis of which orders under Section 153A have been passed. This Court in the case of CIT v. Harjeev Aggarwal [2016 (3) TMI 329 - DELHI HIGH COURT] in the context of erstwhile provisions of Block Assessment, has held that the statement recorded during the course of search, on a standalone basis, without any reference to material found/discovered during the search would not empower the AO to make block assessment merely because of any admission made by Assessee during the search operation. Similarly, this Court in CIT v. Sunil Aggarwal [2015 (11) TMI 286 - DELHI HIGH COURT] has held that when a statement recorded under Section 132(4) of the Act, 1961 is retracted, then, the AO would require some corroborative material before making any additions/disallowances on the basis of the statement. This Court in the following decisions has considered and distinguished the decision of Dayawanti (supra) holding that the decision of Dayawanti [2016 (11) TMI 211 - DELHI HIGH COURT] was rendered in the peculiar facts and circumstances of that case and the ratio of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] has not been diluted. EFFECT OF JUDGMENT OF THE PUNJAB & HARYANA HIGH COURT AND THE SUPREME COURT - Insofar as the judgment [2004 (7) TMI 359 - HIGH COURT OF PUNJAB AND HARYANA] of the Punjab & Haryana High Court is concerned, the said judgment is prior to the search.A special audit under Section 142(2A) of the Act, 1961 was also made in the case of Respondent in the original assessment proceedings for AY 1998-99, which has also not been produced by the Appellant citing unavailability. Given the fact that the Assessing Officer has not even referred to the judgment of the Punjab & Haryana High Court nor has he relied upon the conclusions of the High Court and that the SEBI Order, High Court judgment and the Special Audit report were made before the date of search, it can be concluded that assessment has not been framed on the basis of incriminating material culled from the decision of the High Court or found during search. Judgment of the Supreme Court [2013 (3) TMI 390 - SUPREME COURT] cannot be said to incriminating material found during search conducted on in 2005 and, therefore, cannot form the basis of the assessment order passed in 2007. The Supreme Court in the said decision has only directed the Income tax Department to examine any wrong doings by the respondent. At best, such directions could constitute material for initiating proceedings under Section 148 the Act, 1961 provided some material was found as a result of the enquiry conducted by the Income Tax Department pursuant to the decision of the Supreme Court. However, such findings of the Supreme Court in 2013 cannot constitute incriminating material found during search in 2005 which would validate assessment order under Section 153A passed in 2007. Given the facts and circumstances of the present cases, no substantial question of law arises for consideration of this Court. Accordingly, the present appeals are dismissed.
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