PCIT Vs Mamta Agarwal (Delhi High Court)
HC held that if no incriminating material is found during the course of Income Tax search in respect of an issue, then no addition in respect of such an issue can be made in the assessment under Sections 153A and 153C of Income Tax Act, 1961.
ITAT held that since no assessment was pending for the relevant assessment year 2010-11 on the date of search and no incriminating material was found during the course of search, the issue is covered in favour of the assessee by the judgment of this Court in the case of Commissioner of Income Tax vs. Kabul Chawla (2016) 380 ITR 573 and Principal CIT vs. Meeta Gutgutia (2017) 395 ITR 526 as well as by the orders of the ITAT in the group cases of Madho Gopal Agarwal and M/s Kapis Impex LLP (supra).
A predecessor Division Bench of this Court in Kabul Chawla (supra) has held that if no incriminating material is found during the course of the search in respect of an issue, then no addition in respect of such an issue can be made in the assessment under Sections 153A and 153C of the Act.
Though the judgment in Kabul Chawla (supra) has been challenged in connected matters and is pending before the Supreme Court, yet there is no stay of the said judgment till date. Accordingly, this Court finds no ground not to follow the said judgment.
Keeping in view the aforesaid, this Court is of the opinion that the question of law raised in present appeal has been settled by earlier Division Bench in Kabul Chawla (supra) and no incriminating documents or materials had been found and seized at the time of search.
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