Tribunal partially allows appeals, stresses incriminating material for Section 153A additions.

The Tribunal partly allowed the appeals of the assessees, emphasizing that additions under Section 153A of the Income Tax Act must be based on incriminating material found during the search. The Tribunal found that the Assessing Officer's additions were not supported by any such material, contrary to established legal principles. The Tribunal allowed specific grounds in favor of the assessees, following judicial precedents and the Supreme Court decision in *Meeta Gutgutia*, leading to a partial success for the assessees in the case.

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Issues Involved:
1. Validity of assessment orders under Section 153A of the Income Tax Act in absence of incriminating material.

Detailed Analysis:

Issue 1: Validity of Assessment Orders under Section 153A

Arguments by Assessee:
- The assessments were completed under Section 153A following a search and seizure operation on 31.08.2015.
- The additions made by the Assessing Officer (AO) were based on entries in the books of accounts and not on any incriminating material found during the search.
- The legal position, as confirmed by various High Courts and the Supreme Court in cases like *Kabul Chawla* and *Meeta Gutgutia*, is that additions in concluded assessments can only be made based on incriminating material found during the search.

Arguments by Revenue:
- The CIT(A) upheld the assessment orders, stating that under Section 153A, there is no requirement for incriminating material to make additions.
- The CIT(A) relied on several judicial pronouncements, including *E.N. Gopalkumar vs. CIT* and *CIT vs. Raj Kumar Arora*, which support the view that additions can be made without incriminating material.

Tribunal's Findings:
- The Tribunal noted that the assessment years involved were 2011-12 and 2012-13, and the original returns were filed and processed before the search date.
- The Tribunal observed that the AO made additions based on entries in the books of accounts without referring to any incriminating material found during the search.
- The Tribunal referred to the CIT(A)’s findings, which dismissed the appellant's grounds by stating that Section 153A does not require incriminating material for making additions.

Judicial Precedents Considered:
- The Tribunal cited several cases, including *Ashish Kumar Chaurasia HUF vs. DCIT* and *M/s Accumen Poly Pack Pvt. Ltd. vs. DCIT*, where it was held that additions in concluded assessments under Section 153A must be based on incriminating material found during the search.
- The Tribunal heavily relied on the case law of *Meeta Gutgutia* decided by the Hon'ble Supreme Court, which supports the assessee's contention that additions in concluded assessments can only be made based on incriminating material.

Conclusion:
- The Tribunal concluded that the AO's additions were not based on any incriminating material found during the search, which is contrary to the settled legal position.
- The Tribunal allowed Ground Nos. 1 and 2 in IT(SS) No. 417/Lkw/2019 and similar grounds in the other appeals, following the judicial precedents and the Supreme Court's decision in *Meeta Gutgutia*.
- The Tribunal did not adjudicate the remaining grounds as they became infructuous after allowing the primary grounds.

Final Order:
- The appeals of the assessees were partly allowed, with the Tribunal emphasizing that the additions under Section 153A must be based on incriminating material found during the search.

Pronouncement:
- The order was pronounced in the open court on 14/09/2021.

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