TMI Blog2022 (1) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial statements and Form 26AS only, We find that the difference has been offered by the assessee in the subsequent assessment years, which is clear from the order of the CIT(A). In respect of prior period expenses, the assessee had debited it in P L Account and the addition made on this count also by the AO only based on the books of account of assessee, which were audited without referring to any incriminating material found during the course of search. On both the additions made, no incriminating material found with regard to these issues in the search operations. It clearly shows that the basis of additions is only from the books of account of the assessee. Thus we set aside the order of the CIT(A) and direct the AO to delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee on 21/03/2018 and in response to which, the assessee filed its return of income on 02/07/2018 declaring an income of Rs. 8,47,91,090/-. After filing of return of income, the AO issued notice u/s 143(2) on 26/10/2018 and other statutory notices were issued. 3.1 During the course of assessment proceedings, the AO observed that there was a difference in the interest income offered in the financial statements and Form No. 26AS available and, therefore, such difference of interest income of Rs. 6,39,294/- was added to the returned income of the assessee. 3.2 Further, the AO observed that the assessee had debited an amount of Rs. 16,64,866/- in the P L Account as prior period expenses. In this regard, the explanation offered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Before us, the ld. AR of the assessee besides reiterating the submissions made before the revenue authorities, submitted that the AO has not referred to any incriminating material/documents while making additions, namely, difference in interest income and prior period expenses respectively. He submitted that if no incriminating material found during the course of search, no addition can be made in respect of unabated assessments. For this proposition, he relied on the following cases: 6.1 Further, the ld. AR relied on the following cases: 1. PCIT Vs. Saumya Construction (P) Ltd., 81 taxman 292 (Guj. HC) 2. Trishul Hi-Tech Industries Vs. DCIT, IT(SS)A Nos. 84-86/Kol/2011 (ITAT Kol.) 7. The ld. DR, on the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the books of account of assessee, which were audited without referring to any incriminating material found during the course of search. On both the additions made, no incriminating material found with regard to these issues in the search operations. It clearly shows that the basis of additions is only from the books of account of the assessee. There are catena of judicial precedents wherein the issue was decided in favour of the assessee that if no incriminating material found during the course of search, no additional can be called for in respect of unabated assessment years. The judgments relied upon by the ld. AR of the assessee quoted supra support the case of the assessee. Whereas the judgments relied upon by the ld. DR quoted supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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