Tribunal rules in favor of assessee, deems assessments invalid under Section 153A and Section 68.

The tribunal ruled in favor of the assessee on both grounds. The assessment under Section 153A was deemed invalid as no incriminating material was found during the search, and additions made by the AO were ordered to be deleted. Similarly, the addition under Section 68 for share application money was deleted due to lack of corroborative evidence and reliance on a retracted statement.

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Issues Involved:
1. Validity of Assessment under Section 153A without Incriminating Material.
2. Addition under Section 68 on Account of Share Application Money based on Statement of Entry Operator.

Detailed Analysis:

1. Validity of Assessment under Section 153A without Incriminating Material:
The primary issue raised by the assessee was the validity of the assessment under Section 153A of the Income Tax Act, 1961, where no incriminating documents were found during the search and seizure operations. The assessee argued that the assessments for various group concerns were completed before the date of the search and that no new or incriminating material was found during the search, except for the statement of Shri Naresh Kumar Chhaparia, which was later retracted by an affidavit.

The tribunal examined several judgments, including those from the jurisdictional ITAT and High Courts, which supported the view that for assessments under Section 153A, there should be some new or incriminating material found during the search. It was emphasized that the assessment should not be reopened if it was already completed under Section 143(3) or 143(1) without any new incriminating material. The tribunal concluded that the additions made by the AO under Section 153A without any incriminating documents were invalid and needed to be deleted.

2. Addition under Section 68 on Account of Share Application Money based on Statement of Entry Operator:
The second issue pertained to the addition of Rs. 10,00,000/- under Section 68 on account of share application money received by the assessee, based on the statement of Shri Naresh Kumar Chhaparia, who was identified as an entry operator. The assessee contended that the statement of Shri Naresh Kumar Chhaparia, which was the basis for the addition, should not be relied upon as he had retracted his statement by an affidavit, claiming it was made under coercion.

The tribunal noted that the assessee had provided sufficient evidence to prove the identity, creditworthiness, and genuineness of the transactions related to the share application money. The tribunal also observed that the AO did not bring any corroborative material to support the statement of Shri Naresh Kumar Chhaparia. It was highlighted that the share applicants had responded to notices under Section 133(6) with supporting documents, and no incriminating documents were found during the search.

The tribunal referred to various judgments, including those of the jurisdictional High Court and ITAT, which supported the assessee's position that no addition under Section 68 could be made without any incriminating material. The tribunal concluded that the addition made by the AO under Section 68, based solely on the retracted statement of Shri Naresh Kumar Chhaparia, was not justified and needed to be deleted.

Conclusion:
In conclusion, the tribunal allowed the appeals filed by the assessee on both grounds. The assessment under Section 153A was deemed invalid due to the absence of any incriminating material, and the addition under Section 68 on account of share application money was deleted due to lack of corroborative evidence and reliance on a retracted statement.

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