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of <h1>Tribunal sets aside tax assessment, emphasizes need for incriminating material</h1> <h3>M/s HBN Insurance Agencies Versus The A.C.I.T Central Circle - 4 New Delhi</h3> M/s HBN Insurance Agencies Versus The A.C.I.T Central Circle - 4 New Delhi - TMI Issues:Assessment under section 153A of the Income Tax Act, 1961 based on incriminating material found during a search and seizure operation.Analysis:- The appeals were filed against a common order of the Commissioner of Income Tax [Appeals] for assessment years 2005-06 & 2006-07. The search and seizure operation under section 132 of the Income Tax Act was conducted at various premises, including the assessee's premises. The assessee's return of income was filed, declaring total income for both years. The Assessing Officer made additions under section 68 of the Act due to unexplained bank deposits.- The assessee contended that no incriminating material was found during the search, and the additions made were beyond the scope of section 153A. However, the ld. CIT(A) confirmed the assessment, stating that the source of cash deposits was not explained by the assessee.- The Tribunal considered the timeline of assessment and search operation, concluding that since no notice was issued under section 143(2) of the Act, the assessment was complete. It was emphasized that the profit and loss account and balance sheet cannot be considered incriminating material.- Referring to the decision in the case of Kabul Chawla, the Tribunal highlighted the legal position emerging from section 153A. The Tribunal also cited the Supreme Court's decision in the case of Meeta Gutgutia, emphasizing the need for incriminating material for assessments under section 153A.- Following the legal precedents, the Tribunal set aside the assessment framed under section 153A for both assessment years, directing the Assessing Officer to delete the additions. Consequently, the appeals of the assessee were allowed.This detailed analysis of the judgment highlights the issues involved, the arguments presented by the parties, the legal principles applied, and the final decision rendered by the Tribunal.
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