Incriminating material requirement for unabated search assessments led to quashing of unsustained additions.

For unabated search years, additions in an assessment under section 153A must rest on seized incriminating material; absent such evidence, the assessment cannot be sustained. On the facts discussed, the record did not show that the alleged unexplained investments or other additions were supported by incriminating material found in search, so the common assessment orders were quashed. The remaining objections, including whether the assessee was a searched entity and the validity of approval under section 153D, were not examined further because the principal legal objection succeeded, and the other grounds became academic.

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Issues: Whether the assessments framed under section 153A read with section 143(3) of the Income-tax Act, 1961 for the unabated assessment years could be sustained in the absence of any addition founded on seized incriminating material; and whether the other legal objections survived after the principal issue was decided.

Analysis: The assessments related to unabated years arising from a search conducted in another group case. The record did not show that the alleged unexplained investments or other additions in the assessee's hands were based on any seized incriminating material. In such circumstances, the legal position governing unabated search assessments required the additions to be supported by incriminating evidence found during search. Once the foundational requirement failed, the assessments could not be upheld. The remaining objections regarding the assessee not being a searched entity and the approval under section 153D were not adjudicated further because the principal challenge succeeded.

Conclusion: The impugned assessments were unsustainable in law and were quashed. The remaining legal and merits-based grounds became academic.

Final Conclusion: The appeals succeeded and the common assessment orders could not stand.

Ratio Decidendi: For unabated years, additions in a search assessment under section 153A must be founded on seized incriminating material; in its absence, the assessment is liable to be quashed.

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