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TMI Blog2025 (5) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the quantum addition which was made initially while completing the assessment u/s 143(3) in the AY 2006-07 was deleted by the Tribunal and therefore even the appeal of the Revenue is recalled the same is liable to be dismissed. 3. We have heard rival submissions, perused the orders of the authorities below. On perusal of the assessment order for the assessment year under consideration, we noticed that an addition of Rs. 93,00,953/- was made on account of undisclosed interest income earned on undisclosed deposits in foreign bank account (HSBC) and therefore the case of the Revenue will fall under exception clause (d) provided in CBDT Circular 3/2018 dated 20.08.2018. Thus, allowing the miscellaneous application filed by the Revenue, we recall the order of the Tribunal in ITA No. 6538/Del/2017 dated 23.08.2019. 4. Coming to the merits of the addition made as stated earlier the addition was made on account of undisclosed interest income earned on undisclosed deposits in foreign bank account. We observe that in the AY 2006-07 the Tribunal deleted the quantum addition and therefore the consequential interest which was added during the assessment year under consideration has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of the assessee had also figured and 11 pages document pertaining to the assessee was also received. The contents of the documents have been reproduced in the assessment order. These documents revealed that in the bank accounts of certain entities, the assessee was either beneficial owner in the account or had been shown as the person having right of inspection or as account holder. The name of the entities which held the bank accounts have already been discussed above. The total sums standing in the bank accounts for the relevant financial year, aggregated to Rs. 27.92 crore in terms of INR. The details of amount appearing in the account of various entities have already been incorporated above. After receiving the said information, the Investigation Wing of the department carried out search and seizure action in the case of the assessee and group cases on 20.01.2012, to find out the assessee's link with these bank accounts and to get some corroborative material or documents. During the course of search and seizure action, as culled out from the impugned orders as well as the material placed on record, it is an admitted fact that no documents or any incriminating material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132(4) it constitutes incriminating material within the meaning and scope of Section 153A. However, such an observation and the finding is de hors the fact as admittedly in the statement recorded on oath u/s 132(4) at the time of search, assessee has categorically denied having such transaction or any kind of link with the foreign bank accounts. Thus, the observation of the ld. CIT (A) to this extent is erroneous on facts and hence cannot be upheld. In the letter filed by the ld. CIT-DR written by the Assessing Officer before us, it is clearly established that the information was received by the French Authority on 28.06.2011 and based on this information the investigation wing had carried out search in the case of the assessee. This fact itself is a testament that the material information which has been referred to in the assessment order was prior to the date of search and not found in the course of search or even in the post search events. 14. The information which has been received from the foreign authorities wherein the name of the assessee is appearing at the outset appears to be incriminating which warrants not only inquiry but also can lead to prima facie belief that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly 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. In so far as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Verma {supra) followed the decision in Kabul Chawla (supra). The decision of this Court in Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd. {supra) which was referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue's SLP on 7th December 2015." 16. Thus, following the aforesaid proposition of law and admitted fact of the case that there is no incriminating material found during the course of search qua the assessment year for which impugned addition has been made, we hold that such an addition cannot be roped in in the assessment order passed u/s 153A. Accordingly, same is directed to be deleted. 17. So far as the reliance placed by the Learned CIT DR on the judgment of Anil Kumar Bhatia, we find that the Hon'ble High Court itself had clarified that there no incriminating material was found during the course of search and therefore, no express opinion as to whether the addition can be made u/s 153A was made by their Lordships. The relevant observation in para 23 of the judgment reproduced here under, clarifies this aspect:- "We are not concerned with a case where no incriminating material was found duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the purview of Section 153A as per the binding judicial precedents of the Hon'ble Jurisdictional High Court. We again reiterate that if the Income Tax Department had any material information in its possession received from any external source and in wake of such an information search u/s 132 has been carried out and nothing incriminating has been found having live-link nexus with the said information already in hand, then the Revenue has other courses open to implicate the assessee or carry out further inquiry under the other provisions of the Act, but definitely not u/s.153A. 19. Thus, we hold that despite there being incriminating material in the possession of the Revenue which may implicate assessee, but same cannot be used within the scope of Section 153A when nothing has been found from the search, especially when assessee too has denied any such involvement and there is no material gathered during the search to rebut such a denial by the assessee. Accordingly, the addition made by the Assessing Officer for sum of Rs. 28,24,48,860/- is deleted." Therefore, since the quantum addition has already been deleted by the Tribunal the interest income which was added i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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