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2019 (9) TMI 95 - AT - Income TaxAssessment u/s 153A - addition on the basis of statement in the absence of incriminating material - deemed dividend addition u/s 2(22)(e) - HELD THAT:- The Hon’ble Delhi High Court in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] has held that if two conditions of completed assessment and no incriminating material for making addition are fulfilled then no addition could have been made in that assessment year. On perusal of the order of the lower authorities, we find that the instant addition has been made on the basis of the submissions made by the assessee during the course of assessment proceedings under section 153A of the Act. DR could not point out any incriminating material on the basis of which this addition could have been claimed to be made. It is also not disputed that the assessments stood completed prior to the date of the search in view of no notice issued under section 143(2) for scrutiny of the case within the limitation period available in the Act. Thus, the assessee fulfils both the conditions for invoking the ratio in the case of Kabul Chawla that no addition could have been made in case of completed assessment in absence of any incriminating material found during the course of the search. In similar set of facts, the Hon’ble High Court of Bombay in the case of Principal CIT Vs. Jignesh P. Shah [2015 (9) TMI 80 - DELHI HIGH COURT] held that no addition of deemed dividend could be made in assessment order passed under section 153A of the Act in absence any incriminating material. Addition on the ground that the document relied upon for making the addition was found from the premises of the third party and thus, the addition could have only been made u/s 153C - HELD THAT:- Separate search warrant has been issued in the case of the assessee as well in the case of Sh. Ashok Chowdhary and the Assessing Officer has used the material found in the course of search at the premise of Sh. Ashok Chowdhary, which is not permitted in view of the express provision of the law. The addition made by the Assessing Officer in violation of the procedure provided in the Act is bad in law and void-ab-initio and cannot be sustained. Accordingly, the addition of ₹ 3.3 crore, made protectively on the basis of the documents found from the premises of the third party, by the Assessing Officer and upheld by the Ld. CIT(A) on substantive basis, is deleted. The ground of the appeal of assessee is accordingly allowed.
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