Incriminating material requirement limits additions in unabated section 153A assessments; deletion of the addition was upheld.

In an unabated assessment under section 153A, additions cannot be sustained unless they are supported by incriminating material found during search. Here, the relevant assessment year was not pending on the date of search and had not abated, and the addition was made without reference to any such material. Applying the settled rule for completed assessments, the ITAT held that the jurisdiction to disturb the assessment was confined to material unearthed in the search, so the addition was not sustainable and the deletion was upheld.

---

---

Issues: Whether additions made under section 153A in respect of an unabated assessment can be sustained in the absence of incriminating material found during search.

Analysis: The assessment year in question was not pending on the date of search and had therefore not abated. The addition was made without reference to any incriminating material discovered in the search. In such circumstances, the jurisdiction to make additions under section 153A is confined by the settled position that, for completed assessments, additions must rest on incriminating material found during the search. The precedent relied upon was held applicable on the facts.

Conclusion: The addition was not sustainable in the unabated assessment under section 153A and the appellate order deleting the addition was upheld.

Ratio Decidendi: In a completed or unabated assessment under section 153A of the Income-tax Act, 1961, additions cannot be made de hors incriminating material found during search.

---