Incriminating material requirement under section 153C; addition based only on bank deposits was not sustained.

Additions under section 153C require incriminating material found in search proceedings; where the assessment is based only on cash deposits in a bank account and not on seized documents or data, the statutory foundation for the action fails. On those facts, the assessment under section 153C was held invalid and the addition was not sustained in favour of the assessee.

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Issues: Whether the addition made in proceedings under section 153C could be sustained in the absence of incriminating material found during search.

Analysis: The addition was made on the basis of cash deposits in bank account and not on the basis of any seized material. The appellate record showed that the assessment was completed without reference to incriminating documents or data recovered in search proceedings. In such circumstances, the foundation for action under section 153C was held to be lacking.

Conclusion: The assessment made under section 153C was held invalid and the addition was not sustained, in favour of the assessee.

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