Ocean Dream Infrastructures Pvt. Ltd Vs DCIT (ITAT Lucknow)
Income Tax Appellate Tribunal (ITAT) Lucknow has set aside an addition of ₹2 crore made against Ocean Dream Infrastructures Pvt. Ltd. under Section 68 of the Income Tax Act, 1961. The case involved assessment orders for AY 2013-14 and AY 2014-15, wherein additions were made without any incriminating material found during a search operation under Section 132. The assessee argued that such additions were legally unsustainable, citing the Supreme Court’s ruling in PCIT vs. Abhisar Buildwell Pvt. Ltd. and DCIT vs. U.K. Paints (Overseas) Ltd. The ITAT upheld this contention, confirming that in the absence of incriminating material, no addition could be made in search assessments for completed/unabated cases. The tribunal directed the deletion of the additions, following CBDT’s Instruction No. 1 of 2023, which mandates compliance with the Supreme Court’s rulings on the matter.
The ITAT noted that the assessing officer had based the additions solely on balance sheet figures without any supporting seized documents. The tribunal ruled that such additions could only be made if incriminating material was unearthed during the search. With no pending assessments at the time of search and no such material found, the case fell under the category of completed/unabated assessments, as clarified in Kabul Chawla vs. CIT. Consequently, the tribunal held that the assessing officer lacked jurisdiction to make additions under Section 153A. The decision aligns with prior judgments and ensures adherence to principles established by the Supreme Court, reinforcing that completed assessments cannot be disturbed without new evidence.
