ITAT deletes Addition which were based on Manual Cash Books in Section 153A Assessments

Bijender Singh Lohia Vs JCIT (OSD) (ITAT Delhi)

The recent decision by the Income Tax Appellate Tribunal (ITAT) Delhi in the case of Bijender Singh Lohia Vs JCIT (OSD) sheds light on the crucial issue of additions made during Section 153A assessments based on manual cash books. The tribunal’s order, dated April 16, 2024, highlights the importance of incriminating material and adherence to procedural requirements in such assessments.

The case originated from a search and seizure operation conducted under Section 132(1) of the Income Tax Act, 1961, on May 29, 2018, involving M/s. Lion Manpower Solutions Pvt. Limited, where the appellant was a director. No incriminating material was found during the search on the appellant’s premises. However, certain documents, including a manual cash book, were seized from Lion Manpower, forming the basis for additions in the appellant’s assessment under Section 153A read with Section 143(3) of the Act.

The crux of the appellant’s argument rested on the absence of any incriminating material found during the search on their premises. They contended that since the seized material, including the manual cash book, was from Lion Manpower’s premises and not theirs, no additions could be made in their case.

The ITAT’s decision to delete the additions hinged on several critical observations:

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