Appeals for A.Y. 2012-13, 2013-14, 2015-16 dismissed; A.Y. 2016-17 remanded for reassessment of incriminating material.

The Tribunal dismissed the appeals for A.Y. 2012-13, 2013-14, and 2015-16, confirming the CIT(A)'s deletion of additions due to the absence of incriminating material, as the assessments were completed before the search. For A.Y. 2016-17, where the assessment was pending, the Tribunal found the CIT(A) erred in deleting additions without considering incriminating material. The case was remanded to the CIT(A) to decide on merits after hearing the assessee, allowing the appeal for statistical purposes.

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Issues Involved:
1. Whether the CIT(A) was right in holding that no incriminating material was found to sustain the addition.
2. Whether the CIT(A) was right in deleting the entire additions made in the assessment order on the ground that no incriminating material was found.

Summary:

Issue 1: Incriminating Material for Sustaining Addition

The Revenue challenged the CIT(A)'s decision that no incriminating material was found during the search and seizure operation to sustain the additions for A.Y. 2012-13, 2013-14, and 2015-16. The Tribunal noted that the assessments for these years were already completed under section 143(3) of the Income Tax Act, 1961, prior to the search on 16.02.2017. The Tribunal emphasized that no specific incriminating material was found during the search, and the AO failed to bring any such material on record during the assessment or remand proceedings. The Tribunal upheld the CIT(A)'s decision, relying on the Special Bench decision in Alcargo Global Logistics Ltd. and the Bombay High Court's ruling in Continental Warehousing Corporation, which held that no addition can be made in the absence of incriminating material in the case of completed assessments.

Issue 2: Deletion of Additions

For A.Y. 2016-17, the Tribunal found that the assessment was pending as of the search date, and thus, the principle of requiring incriminating material for additions did not apply. The AO had made additions based on certain documents and statements found during the search, which the CIT(A) had deleted on the same ground of absence of incriminating material. The Tribunal held that the CIT(A) erred in applying this principle to a pending assessment and remanded the case back to the CIT(A) to decide on merits after providing an opportunity of being heard to the assessee.

Conclusion:

The appeals for A.Y. 2012-13, 2013-14, and 2015-16 were dismissed, confirming the CIT(A)'s deletion of additions due to the absence of incriminating material. However, the appeal for A.Y. 2016-17 was allowed for statistical purposes, directing the CIT(A) to decide the case on merits.

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