Completed assessments under section 153A require incriminating material from search, retracted statements insufficient without corroboration

ITAT Delhi held that completed assessments can only be interfered with under section 153A based on incriminating material found during search. The assessee's statement recorded during search was retracted and not corroborated by any incriminating material. Following SC precedents in Meeta Gutgutia and Kabul Chawla cases, the tribunal found no incriminating documents were seized or relied upon by AO for additions made in completed assessments. Since revenue failed to prove additions were based on material found during search under section 132, the appeal was decided against revenue and in favor of assessee.

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Issues Involved:
1. Deletion of addition on account of share capital and premium.
2. Deletion of addition on account of commission expense.
3. Reliance on the decision of Kabul Chawla and its implications.
4. Validity of the CIT(A) order on the grounds of law and facts.

Summary:

1. Deletion of Addition on Account of Share Capital and Premium:
The Revenue contested the CIT(A)'s decision to delete an addition of Rs. 6,25,00,000/- made by the AO concerning share capital and premium received by the assessee company. The tribunal examined the records and upheld the CIT(A)'s decision, finding no incriminating material to support the AO's addition.

2. Deletion of Addition on Account of Commission Expense:
The Revenue also challenged the deletion of an addition of Rs. 17,18,750/- related to commission expenses incurred by the assessee. The tribunal, after reviewing the material, found that the CIT(A) rightly deleted the addition due to a lack of incriminating evidence.

3. Reliance on the Decision of Kabul Chawla:
The tribunal noted that the CIT(A) relied on the Delhi High Court's decision in CIT vs Kabul Chawla, which established that additions under \u/s 153A must be based on incriminating material found during the search. The tribunal reiterated the legal position that completed assessments can only be disturbed if incriminating material is discovered during a search.

4. Validity of the CIT(A) Order:
The tribunal found the CIT(A)'s order to be neither perverse nor erroneous. It emphasized that the AO's additions were not based on any incriminating documents found during the search. The tribunal also referenced the Supreme Court's affirmation of the Delhi High Court's judgment in Kabul Chawla and similar decisions in other cases, reinforcing the principle that completed assessments can only be reassessed based on incriminating material.

Conclusion:
The tribunal dismissed the Revenue's appeals, upholding the CIT(A)'s deletions of additions due to the absence of incriminating material found during the search. The tribunal's decision was pronounced in the open court on 14/03/2024.

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