Sharan Complex Pvt. Ltd. Vs ACIT (ITAT Kolkata)
In the case of Sharan Complex Pvt. Ltd. vs. ACIT, the Kolkata Bench of the ITAT dealt with a series of appeals related to assessments made under Section 153A read with Section 143(3) of the Income Tax Act for the Assessment Years 2010–11 to 2016–17. These assessments followed a search on the assessee’s premises in August 2015. During the post-search assessment proceedings, the cost of construction of a building developed by the assessee was estimated by the Departmental Valuation Officer (DVO) at ₹4.95 crore, whereas the assessee had disclosed ₹3.75 crore up to 31.03.2017. The Assessing Officer made additions based on this difference over the relevant assessment years.
The assessee challenged the additions on the grounds that no incriminating material had been found during the search to suggest any undisclosed investment. They argued that the DVO’s valuation report was merely an estimate and not evidence of actual unreported expenditure. Moreover, the DVO’s report was obtained post-search and was not part of the seized material. Relying on the Supreme Court judgment in Pr. CIT vs. Abhisar Buildwell Pvt. Ltd., the assessee contended that in the absence of incriminating documents or findings during the search, assessments under Section 153A could not result in fresh additions if the original assessments were already completed.
