K.K. Builders Vs DCIT (Kerala High Court)
The Kerala High Court set aside the order passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, in a dispute arising from assessment proceedings initiated under Section 153A of the Income Tax Act, 1961 following a search and seizure operation conducted under Section 132. According to the facts recorded by the Court, incriminating materials were allegedly found during the search, leading to the issuance of a notice under Section 153A for Assessment Year 2009-10. The assessee filed returns in response to the notice, and the Assessing Officer subsequently completed the assessment by making additional additions.
The assessee challenged these additions before the Commissioner of Income Tax (Appeals), contending that they were unsupported by incriminating material discovered during the search. It was further argued that the approval granted by the Joint Commissioner of Income Tax (JCIT) under Section 153D had been accorded mechanically and without the application of mind required by law. After the first appeal was dismissed, the assessee approached the ITAT, raising three principal issues: the validity of the Section 153A notice in the absence of incriminating material, the legality of the Section 153D approval, and the permissibility of additions without incriminating material in light of the Supreme Court’s decision in Abhisar Buildwell.
