DCIT Vs Aachman Vanijya Private Limited (ITAT Mumbai)
In a ruling with implications for income tax assessments following search and seizure operations, the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has dismissed appeals filed by the revenue department, affirming that additions to income in completed assessments for years preceding a search cannot be made without incriminating material found during the search of the assessee. The tribunal’s decision, covering Assessment Years 2012-13 and 2015-16, reinforces the principle that Section 153A of the Income Tax Act, 1961, primarily targets undisclosed income unearthed during a search.
The case involved appeals filed by the Deputy Commissioner of Income Tax against orders of the Commissioner of Income Tax (Appeals) – 50, Mumbai, dated December 6, 2024. The assessee also filed cross-objections, although these were later not pressed during the hearing. The core of the dispute stemmed from additions made by the Assessing Officer (AO) under Section 68 of the Act, which deals with cash credits, following a search and seizure action conducted on March 22, 2018, on the Aachman Group and related entities, including the assessee company.
Following the search, a notice under Section 153A was issued to the assessee on July 3, 2019, requiring the filing of returns for the six assessment years preceding the search. The assessee filed its returns, but the AO proceeded to make additions to the returned income, particularly under Section 68, treating certain credits as unexplained.
