No Addition Under Section 153A Without Incriminating Material or Proper Procedure; Third-Party Statements Inadmissible

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Full Text of the Document

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....The ITAT held that no addition under section 153A could be sustained against the assessee as no incriminating material was found during the search relating to the unsecured loan in question. Additions based solely on statements of unrelated third parties, which were subsequently retracted, were held inadmissible since such parties had no connection with the assessee. The tribunal distinguished the present facts from precedents where statements of connected persons were relied upon. The AO's failure to follow the prescribed procedure under section 153C, as mandated by the Supreme Court, was noted, and since the assessment year was unabated, no further action under section 153C could be initiated. Consequently, all additions made under section 153A were deleted, resulting in the complete quashing of the impugned assessment order.....