For search-based jurisdiction under income-tax law, additions in...

For search-based jurisdiction under income-tax law, additions in completed or unabated years require incriminating material discovered during the search; absent such material, a 153A assessment cannot be sustained and was quashed for AY 2012-13. Additions made without issuing a specific show-cause notice or affording an opportunity to reconcile seized entries with regular books violate principles of natural justice and are unsustainable. Where seized entries reflect interest receipts/payments and source is explained, taxability must be determined on a net basis as business income; reconciliation-based additions lacking cogent incriminating material were deleted and the CIT(A)'s net-interest approach was sustained.

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