DCIT Vs Balajee Vinimay Pvt. Ltd. (ITAT Kolkata)
In the case DCIT vs. Balajee Vinimay Pvt. Ltd. (ITAT Kolkata), the issue revolves around the applicability of section 153A of the Income Tax Act in cases where the assessment is already completed (unabated) before the search. The revenue filed an appeal challenging the decision of the CIT(A) who had deleted the additions made by the Assessing Officer (AO) under section 68 for bogus share capital and profits from the sale of shares. The AO had made these additions without referring to any incriminating material seized during the search. The assessee, through a cross-objection, contended that the AO did not have jurisdiction to make these additions without any seized incriminating evidence.
The ITAT upheld the assessee’s cross-objection, agreeing that for unabated assessments, the AO can only make additions based on incriminating materials seized during the search. In this case, there was no such material linked to the share capital/share premium and the sale of shares. The Tribunal referred to the Supreme Court’s judgment in Pr. CIT Vs. Abhiser Buildwell (P) Ltd. (2023), which clarified that for non-abated or completed assessments, additions cannot be made under section 153A in the absence of incriminating material. As a result, the ITAT dismissed the revenue’s appeal, and the cross-objection filed by the assessee was allowed.
