RMS Diversified Pvt. Ltd. Vs DCIT (ITAT Delhi)
Search Assessments: No Incriminating Evidence, No Addition – Abhisar Buildwell Applied- 153A Additions Need Incriminating Material – Suspicion Is No Substitute
Delhi ITAT held that additions u/s 153A for unabated assessment years cannot survive in absence of incriminating material found during search.
Search u/s 132 was conducted on 11-10-2018 in PMC Group cases & assessments were framed u/s 153A r.w.s. 143(3) making additions mainly u/s 68, 69C & 14A on account of unsecured loans, share application money & related interest. Tribunal noted that AO nowhere referred to any seized incriminating document/material and merely proceeded on suspicion, past records, third-party assessments & alleged accommodation entry allegations.
Applying the binding ratio of Hon’ble Supreme Court in PCIT vs. Abhisar Buildwell (454 ITR 212), Tribunal held that for unabated AYs (2014-15 to 2018-19), additions de hors incriminating material are impermissible. Even 14A disallowance was held to be clearly unrelated to search material. For AY 2019-20 (abated year), Tribunal observed that additions were purely consequential to earlier years, and once earlier additions fail, consequential disallowances also lose their substratum.
Accordingly, assessee’s appeals were allowed in full & Revenue’s appeals dismissed, reaffirming that “suspicious circumstances are not incriminating material” and search assessments have clear jurisdictional limits
FULL TEXT OF THE ORDER OF ITAT DELHI
