Late Mahabir Prasad (through L/H Mrs. Parul Kansaria) Vs DCIT (ITAT Bangalore)
ITAT Bangalore Restricts Additions in Search Assessment – Statement Alone Not Incriminating- No Addition in Concluded Years Without Incriminating Material- Unaccounted Sales – Only GP Taxable, Not Entire Turnover
Bangalore ITAT dealt with additions arising out of search proceedings in the A-One Steel group. The dispute involved alleged unaccounted sales, bogus purchases & validity of additions in concluded years.
AO relied on seized mobile data, rough papers & a statement u/s 132(4) of the assessee’s daughter Mrs. Parul Kansaria, wherein she admitted undisclosed sales of about ₹12.83 crore. Additions were made for different years on account of unaccounted sales as well as bogus purchases from three alleged hawala suppliers.
CIT(A) deleted additions for AYs 2017-18 & 2018-19 holding them to be concluded assessments (unabated) where no incriminating material was found, but upheld additions for AYs 2019-20 & 2020-21. Bogus purchase addition of ₹4.38 crore was also sustained. Both assessee & Revenue appealed.
The Tribunal made the following key findings:
AYs 2017-18 & 2018-19 (Revenue’s appeals dismissed): These were concluded years. As per SC in Abhisar Buildwell, additions u/s 153C are permissible only if backed by incriminating material. No such material was found; only a retracted statement of legal heir existed. Following Best Infrastructure (Del HC) & Harjeev Aggarwal, statement u/s 132(4) alone cannot constitute incriminating material. Hence, deletion of additions by CIT(A) was
