Akshaya Vinimay Pvt. Ltd Vs ACIT (ITAT Delhi)
The Delhi ITAT quashed a ₹42.10 Crore addition made in a Section 153A assessment, confirming that additions cannot be made to completed assessments without incriminating material seized during the search. The ruling follows the binding Supreme Court precedent in Abhisar Buildwell.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has delivered a significant ruling by quashing an assessment order and confirming that additions made during an assessment under Section 153A of the Income Tax Act must be strictly based on incriminating material found during the search operation, provided the original assessment was already completed or not pending.
The case involved Akshaya Vinimay Pvt. Ltd., whose return for the Assessment Year (A.Y.) 2018-19 had already been processed under Section 143(1) before a search was conducted on the group in January 2021. The Assessing Officer (AO) subsequently passed an order under Section 153A, making a substantial addition of ₹42,10,50,000.
Post-Search Investigation Not Sufficient
The core of the dispute lay in the basis of this large addition. The assessee argued that the addition was legally unsustainable because it was not founded on any document or evidence seized during the search. The assessment order itself admitted that the addition was related to issues “detected during post search investigation,” specifically mentioning analysis of the balance sheet and bank statements. The AO failed to reference any specific seized material linking the undisclosed income to the search operation.
