Murari Lal Harish Chand Jaiswal Pvt. Ltd Vs DCIT (ITAT Delhi)
No Addition u/s 56(2)(x) in 153A Without Incriminating Material: ITAT Delhi Deletes Addition Based on Annulled 143(3) Order
The Delhi Bench of the ITAT allowed the assessee’s appeal for AY 2018-19 and deleted the addition of ₹1.81 crore made under section 56(2)(x) in the assessment framed under section 153A, holding that the addition was unsustainable in the absence of any incriminating material found during search.
The Tribunal noted that a search under section 132 was conducted on 06.01.2021 while the regular assessment proceedings under section 143(3) were pending. Consequently, those proceedings stood abated by operation of law. Although the Assessing Officer nevertheless completed the assessment under section 143(3) on 16.02.2021 and made an addition under section 56(2)(x), the CIT(A), in a separate appellate order dated 04.01.2024, annulled the 143(3) assessment as non est.
Subsequently, while framing the assessment under section 153A, the AO mechanically adopted the very same addition made in the annulled 143(3) order, without referring to any seized document or incriminating evidence unearthed during the search. The ITAT held that such an approach was impermissible. Relying squarely on the Supreme Court judgment in PCIT v. Abhisar Buildwell (2023) 454 ITR 212 (SC), the Tribunal reiterated that in respect of completed or unabated assessments, no addition can be made under section 153A in the absence of incriminating material found during search.
