DCIT Vs Yardley Investment And Trading Company Private Limited (ITAT Mumbai)
The appeal by the Revenue and the cross-objection by the assessee were heard by the Income Tax Appellate Tribunal, Mumbai for Assessment Year 2013–14. The dispute arose from an order passed by the Commissioner of Income Tax (Appeals), Mumbai, deleting an addition made under Section 68 of the Income-tax Act in respect of unsecured loans. The assessee, through its cross-objection, challenged the validity of proceedings initiated under Section 153A on the ground that no incriminating material was found during the search.
The assessee had originally filed its return of income on 30.08.2013 declaring a total income of ₹6,19,520. This return was not selected for scrutiny and had attained finality by the time a search under Section 132 was conducted on 17.04.2018 in the case of the Jatia Group and related entities. The assessee’s premises were also covered during the search, which concluded on 21.04.2018. Consequent to the search, notice under Section 153A was issued, and the assessee filed a return declaring the same income as originally returned. Since no assessment proceedings were pending on the date of search, the year under consideration was an unabated assessment year.
The Tribunal noted that, as per settled law, additions in unabated years under Section 153A can be made only on the basis of incriminating material found during the search. Reliance was placed on the decision of the Supreme Court in PCIT v. Abhisar Buildwell Pvt. Ltd., which held that in the absence of incriminating material, no addition can be made for completed assessments.
