Incriminating search material is required to support section 153A additions in unabated assessment years; completed assessments were quashed.

Section 153A additions for unabated assessment years cannot be sustained unless they are based on incriminating material seized during the search and relatable to the relevant years. Here, the assessment years were already completed on the date of search, and the disallowance of losses and estimated profit addition were not shown to arise from any specific seized material. As the statutory precondition for disturbing completed assessments was not met, the additions were quashed and the assesments could not be sustained.

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Issues: Whether the assessments framed under section 153A read with sections 143(3) and 144C of the Income-tax Act, 1961 for unabated assessment years could be sustained in the absence of any incriminating material seized during the search.

Analysis: The assessment years were undisputedly unabated on the date of search. In such cases, additions in section 153A proceedings must be founded on seized material relatable to the respective assessment years. The impugned disallowance of losses and the estimated profit addition were not shown to arise from specific seized material, so the statutory precondition for making additions in completed assessments was not satisfied.

Conclusion: The assessments were quashed and the additions could not be sustained, which is in favour of the assessee.

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