TaxTMI 
TaxTMI 
2025 (8) TMI 1738
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.... 1961 (hereinafter referred to as 'the Act'). 2. The brief facts of the case are that a search under Section 132 of the Act was conducted in Popular Group of cases on 08.10.2020, in which the premises of the assessee was also covered. Thereafter, proceeding under Section 153A of the Act was initiated in the case of the assessee for different years. In the course of search, various loose papers and digital data was found. On verification of the digital data seized from the premises of the assessee, it was found that the accounts were maintained in Tally Software. Further, in the said software data, large amounts of credits from several entities, during the period from F.Y. 2012-13 to F.Y. 2019-20, in the form of unsecured loans and amount....
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....hat none of the companies were found in existence at their registered addresses. Further, a statement of some of the Directors of the companies was also recorded, who had expressed their ignorance to the entire transactions. On the basis of these enquiries and the information available on record, the Assessing Officer had held that the entire amount of Rs.35,56,77,701/- received as loan and advances against Banakhat was unexplained cash credit and accordingly the Assessing Officer had made additions under Section 68 of the Act in the following three years: - Assessment Year Amount 2013-14 Rs.24,49,94,071/- 2014-15 Rs.10,00,00,000/- 2018-19 Rs. 1,06,83,630/- Total Rs.35,56,77,701/- 2.1 In addition, the Assess....
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....ted on technical ground that the additions were not based on any incriminating material found and seized during the course of search. The Ld. CIT-DR explained that this finding of the Ld. CIT(A) was not correct as the Assessing Officer had discussed in details about various materials which were found in the course of search. The Ld. CIT-DR has taken us through the assessment orders to explain the various materials which were considered by the Assessing Officer while making the addition. The Ld. CIT-DR also relied upon the decision of Hon'ble Supreme Court in the case of K. Krishnamurthy vs. DCIT, 171 taxmann.com 413 wherein the Hon'ble Court has held that the documents found in the course of search does not mean documents found in the asses....
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....dditions as made by the Assessing Officer but deleted the additions on technical ground that the additions were not based on any incriminating material found from the assessee during the course of search. The Ld. CIT(A) has relied upon the decision of Hon'ble Supreme Court in the case of PCIT vs. Abhisar Buildwell (P.) Ltd. wherein it was held that no addition can be made by the Assessing Officer in the absence of any incriminating material found in the course of search. In fact, the word "incriminating" is nowhere defined under the Income Tax Act. The provision of section 153A of the Act, only refers to books of accounts or other documents or assets or evidences found during the search and which has a bearing on the total income of the ass....
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....llant's premises, it cannot be said that the said documents were not found in the course of the search. 41. Further, this Court is of the opinion that the expression 'found in the course of search' is of a wide amplitude. It does not mean documents found in the assessee's premises alone during the search. At times, search of an assessee leads to a search of another individual and/or further investigation/ interrogation of third parties. All these steps and recoveries therein would fall within the expression 'found in the course of search'." 9. The Hon'ble Apex Court in the case of K. Krishnamurthy (supra) has held that the material found in the course of search does not mean documents found during the search ....
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....ding of the Ld. CIT(A) that additions made by the AO were dehors any incriminating material found in the course of search is, therefore, reversed. 10. It is found that the Ld. CIT(A) did not examine the additions made by the Assessing Officer on merits. The Assessing Officer had treated the entire loans/advances taken from 11 Kolkata based companies as accommodation entries. On the other hand, the assessee has contended that the entire loan and advance was subsequently repaid to the concerned parties and, therefore, these transactions cannot be considered as accommodation entries. The assessee has also filed yearwise chart as per which loan/advance of Rs.24.15 Crores was received during the A.Y. 2013-14 from nine companies, out of which ....