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TMI Blog2025 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant documentary evidence brought on record, duly considered in the light of Rule 18(6) of the ITAT Rules, 1963. Judicial decisions relied upon, have been considered as and where necessary. 5. Briefly stated the facts of the case are that a search and seizure action was conducted on 22/03/2018 by DDIT (Inv.), Unit-6(1), Mumbai in the case of Aachman Group and other related entities. Case of the assessee company was covered under search and seizure action on 22/03/2018. 6. Consequent to search, notice u/s 153A dated 03/07/2019 was issued to the assessee in response to which the assessee filed its return of income. We are addressing the issues on the facts of AY 2012-13 as the facts of the other assessment years under consideration are identical, though quantum may differ. 7. The returned income of the assessee was assessed after making addition u/s 68 of the Act which was challenged before the ld. CIT(A). It was strongly contended that the additions have been made by the AO which are not based on any incriminating material found/seized during the course of search conducted in the case of assessee. 7.1. The ld. CIT(A) called for a remand report from the AO on this conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in questionable or dubious transactions, and it is observed that either some of the searched parties or other third parties have engaged in similar transactions with these entities, such information would be considered incriminating. 2.3. Further, reliance is also placed upon decision in the case of Nau Nidh Overseas (P.) Ltd. [2017] 88 taxmann.com 665 (Delhi), in a search conducted prior to 1.6.2015, when the director of the company also admitted that part of the cash belonged to another party, the Delhi High Court has observed that: 12. Like in Super Malls (P.) Ltd. (supra), the AO considered the totality of the statement to conclude - undoubtedly facially, that the cash seized belonged to the third party, i.e. the assessee in the present case. Such statement also constitutes as material because it is made in the course of the search under Section 132(4) and is also in consonance with the ruling of this Court in Smt. Dayawanti (supra). 13. For the above reasons, these appeals have to succeed. The question of law framed is accordingly answered in favour of the Revenue. The impugned order of the ITAT is, therefore, set aside. The ITAT is now directed to hear the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been strongly contended by the ld. D/R, that it is not necessary that the incriminating material should be found and seized from the premises of the searched person i.e., the assessee. The ld. D/R strongly relied upon the findings of the AO. 9. The undisputed fact is that, there is no incriminating material found and seized from the premises of the assessee to trigger the proceedings u/s 153A of the Act in respect of unabated years covered in the block period. Assessment for AY 2012-13 was completed on 30/09/2014, for AY 2013-14 on 31/03/2016, AY 2014-15 on 22/11/2016 and AY 2015-16, the time limit to issue notice u/s 143(2) of the Act expired on 30/09/2016 and no assessment proceedings were initiated u/s 143(3) of the Act. Thus, it is clear that the assessment years are unabated and, therefore, the ratio laid down by the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. [454 ITR 212] squarely applies, wherein the Hon'ble Supreme Court has held as under:- "On a plain reading of section 153A of the Income-tax Act, 1961, it is evident that once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished by the assessee as well as the undisclosed income. However, where during the search no incriminating material is found, in the case of a completed or unabated assessment, the only remedy available to the Department would be to initiate reassessment proceedings under section 147 or section 148 of the Act, subject to fulfilment of the conditions mentioned in those sections, as in such a situation, the Department cannot be left with no remedy. If, even in a case of search where no incriminating material is found during the course of search, and the assessment is unabated or completed, the Assessing Officer were to assess or reassess the income or total income taking into consideration the other material, there would be two assessment orders, which shall not be permissible under the law. The second proviso to section 153A and sub-section (2) of section 153A would then be redundant. Rewriting provisions is not permissible under the law. Thus in a case of search under section 132 or requisition under section 132A, the Assessing Officer assumes jurisdiction for assessment under section 153A; all pending assessments or reassessments shall stand abated. In case any incriminating m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputed fact that the statement recorded under s. 132(4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements. 21. In the case of Kailashben Manharlal Chokshi us. CIT (2008) 220 CTR (Guj) 138: (2008) 14 DTR (Guj) 257: 2008 SCC Online Guj 436, the Gujarat High Court held that the additions could not be made only on the basis of admissions made by the assessee, in the absence of any corroborative material. The relevant paragraph No. 26 of the said decision has been reproduced herein below : "26. In view of what has been stated herein above we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under s. 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under s. 132(4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assessment. 25. Also, the Supreme Court in the case of Principal CIT us. Abhisar Buildwell (P) Ltd. (2023) 332 CTR (SC) 385 : (2023) 225 DTR (SC) 105 : 2023 SCC Online SC 481, has clarified that in case no incriminating material is found during the search conducted under s. 132 of the Act, the AO will have no jurisdiction to make an assessment. The relevant paragraph is reproduced herein below : "36.4. In case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under s. 132. or requisition under s. 132A of the 1961 Act. However, the completed/unabated asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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