Incriminating material is essential for additions in unabated section 153A assessments; Rule 27 support on legal grounds was admitted.

A respondent may support a Commissioner (Appeals) order on a legal ground already raised below, so a Rule 27 application was admitted to uphold the relief granted. In respect of unabated assessments under section 153A, additions must be founded on incriminating material found during the search; absent such material, no independent addition can be sustained. Applying that principle, the additions for the relevant years were held unsustainable and the reassessment was quashed.

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Issues: (i) Whether the assessee's application under Rule 27 of the Income-tax (Appellate Tribunal) Rules, 1963 could be admitted to support the order of the Commissioner (Appeals) on a legal ground; (ii) Whether additions made in a completed assessment under section 153A of the Income-tax Act, 1961 could survive in the absence of incriminating material found during search.

Issue (i): Whether the assessee's application under Rule 27 of the Income-tax (Appellate Tribunal) Rules, 1963 could be admitted to support the order of the Commissioner (Appeals) on a legal ground.

Analysis: The assessee had already raised the jurisdictional ground before the Commissioner (Appeals), and the application was intended only to sustain the relief granted by the first appellate authority. A respondent may support the impugned order on a legal ground that was raised below, and the objection to maintainability was therefore not accepted.

Conclusion: The Rule 27 application was admitted in favour of the assessee.

Issue (ii): Whether additions made in a completed assessment under section 153A of the Income-tax Act, 1961 could survive in the absence of incriminating material found during search.

Analysis: The assessments for the relevant years were unabated on the date of search. In such a situation, additions under section 153A must be based on incriminating material found during the search, and no independent addition can be sustained dehors such material. Since the additions were not founded on seized material, the reassessment could not stand.

Conclusion: The additions were held unsustainable and the reassessment was quashed in favour of the assessee.

Final Conclusion: The Revenue's appeals failed because the reassessment under section 153A could not be sustained without incriminating material, and the first appellate relief was upheld.

Ratio Decidendi: In respect of unabated assessments under section 153A of the Income-tax Act, 1961, additions cannot be made unless they are founded on incriminating material found during search.

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