Faiz Zakir Vali Vs ACIT (ITAT Nagpur)
In the case of Faiz Zakir Vali vs. ACIT (ITAT Nagpur), the assessee challenged the order passed by the CIT(A) for the assessment year 2010-11, which included additions made by the Assessing Officer (AO). The primary issues revolved around the AO’s additions related to reclassification of agricultural land as non-agricultural, resulting in short-term capital gains, and a deemed dividend under Section 2(22)(e) of the Income Tax Act. The assessee argued that since no incriminating materials were found during the search, and the assessment year in question was unabated, the additions were unjustified. The Tribunal referenced the Supreme Court’s judgment in Abhisar Buildwell Pvt. Ltd., which established that no additions could be made in unabated assessments without incriminating evidence. The ITAT found that all relevant documents were already recorded in the company’s books and no new or undisclosed information was discovered during the search. Therefore, the Tribunal ruled that the AO lacked grounds to make the additions, as the assessment could only be reopened under Sections 147/148 if proper conditions were met. Consequently, the ITAT allowed the assessee’s appeal, deleting the contested additions, affirming that the jurisdiction for the assessment under Section 153A was unwarranted without incriminating material.
