AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 676
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.... "1. That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 76,43,975 /- made on account of disallowance of expenses, without properly appreciating the facts and circumstances of the case where assessee failed to file any evidence in support of expenses claimed. 2. That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 3,18,84,338 /- made on account of disallowance of purchases without properly appreciating the facts and circumstances of the case where assessee failed to file any evidence in support of expenses claimed. 3. That the Ld. CIT(A) erred in law and on facts in deleting the additions on the basis of decision of Hon'ble High Court in the case of CIT Vs Kabul C....
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.... assessee. 7. Before us, none appeared on behalf of the assessee and the matter is being adjudicated on hearing the arguments of ld. DR and based on the record available before us. On perusal of the record, we find that it is an admitted fact that no addition has been made in any of the years which was based on incriminating material or evidence was found during the course of search. 8. Thus, no addition can be twined in the present proceedings u/ s 153A. We have examined the findings of the AO and Ld. CIT(A) and find that it is an undisputable fact that the addition made by the AO is not based on seized material / documents found during the course of search. In such a situation, addition is beyond the scope of section 153A and we rel....
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....se of search, albeit it is based on the assessment record only. 11. In such a situation, additions made are beyond the scope of 153A proceedings. This proposition of law has been well settled and reiterated by the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla reported in [2016] 380 ITR 573 (Delhi) and has been reiterated in the case of Pr. CIT vs. Meeta Gutgutia reported in [2017] 152 DTR 153 (Delhi). 12. In the case of CIT vs. Kabul Chawla (supra), the Hon'ble High Court, after discussing various judgments and analyzing section 153 A, have laid down the following legal proposition: i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to ....
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....eedings (i.e. those pending on the date of search) and the word 'reassess'to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search whi....
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.... (supra). Incidentally, both these decisions were discussed threadbare in the decision of this Court in Kabul Chawla {supra). As far as Anil Kumar Bhatia (supra) was concerned, the Court in paragraph 24 of that decision noted that "we are not concerned with a case where no incriminating material was found during the search conducted under Section 132 of the Act. We therefore express no opinion as to whether Section I53 A can be invoked even under such situation". That question was, therefore, left open. 15. As far as case law Chetan Das Lachman Das is concerned, in para 11of the decision it was observed: "11. Section 153A (1) (b) provides for the assessment or reassessment of the total income of the six assessment years immed....
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..... Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section I53A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the ITAT, deleting the addition, was not interfered with." 17. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) v. Assn. CIT [2013] 36 taxmann.com 523 /219 Taxman 223. The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: "33. The decision of the Rajasthan High C....