TaxTMI 
TaxTMI 
2025 (12) TMI 1876
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....ve basis without application of mind by the learned Assessing Officer. The addition made on u/s 68 of the IT Act, 1961 on substantive basis. 2. (B) The learned Commissioner of Income tax (Appeals) erred both on facts and in law confirmed the addition on account of addition of Rs. 63,41,000/- u/s 68 of the I.T. Act. 3. That no incriminating material found during the search proceedings and the order u/s 153A is bad in law. 4. That the Approval u/s 153D has been given without application of mind and the impugned order passed deserves to be dropped. 5. The order passed by the learned CIT (Appeals) is arbitrary capricious, misconceived, erroneous and against the principal of natural justice." (B) In this case, a search & seizure operation under section 132 of the Income Tax Act, 1961 (hereinafter referred as "the Act") was conducted on 14/12/2020, in pursuance whereof assessment order dated 26/09/2022 was passed under section 153A of the I.T. Act and addition amounting to Rs.63,41,000/- was made under section 68 of the I.T. Act on substantive basis; while protective additions were made in the hands of the respective lenders. The assessee filed appe....
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....the Ld. CIT(A) which was dismissed. Aggrieved, the assessee has filed the present appeal in Income Tax Appellate Tribunal ("ITAT" for short). (C) The aforesaid additions was made even without any incriminating material found in the course of search u/s 132 of I.T. Act. He further submitted that at the time of hearing, the Ld. Counsel for the assessee submitted that the issue as to whether addition can be made in a search assessment in the absence of any incriminating material is now well settled in favour of the assessee by the order of the Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd (2023) 149 taxmann.com 399 (SC)/(2023) 293 Taxman 141 (SC)/(2023) 454 ITR 212 (SC). He further submitted that the Lucknow Bench of ITAT in the case of Smt. Shashi Agarwal (2024) 167 taxmann.com 687 (Lucknow Trib.), considered aforesaid decision of Hon'ble Supreme Court in the case of Abhisar Buildwell (P.) Ltd (supra) and decided the issue in favour of the assessee relying on the same. He also submitted that moreover, in the case of Ocean Dream Infrastructures Pvt. Ltd. vs. DCIT (Order dated 21/01/2025 in I.T.A. No.146 and 147/Lkw/2023) also, identical issu....
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....d by Hon'ble Supreme Court by dint of orders of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra). Further, in paragraph 14 of the aforesaid order of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra), the Hon'ble Supreme Court concluded as under: "14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; in case any incriminating material is found/unearthed, even, (iii) in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed durin....
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....n respect of the additions made. (C.2) The issue whether additions can be made in assessment orders passed u/s 153A or u/s 153C of IT Act in cases falling under unabated/completed assessments, when no incriminating material was found at the time of search u/s 132 of the IT Act, was a disputed issue in the past. While a view in favour of assessee was taken, for example, in cases such as CIT vs. Kabul Chawla (supra), Pr. CIT vs. Saumya Construction 387 ITR 523 (Guj), CIT vs. Continental Warehousing 374 ITR 645 (Bom.), Smt. Jami Nirmala vs. Pr.CIT 437 ITR 673 (Orissa), CIT vs. Veerprabhu Marketing Ltd. 388 ITR 574 (Cal.), Pr. CIT vs. Delhi International Airport (P.) Ltd. 443 ITR 574 (Kar.), Pr. CIT vs. Meeta Gutgutia 395 ITR 526 (Delhi), Dr. A. V. Sreekumar vs. CIT 404 ITR 642 (Ker.), Pr. CIT vs. Smt. Daksha Jain 2019 (8) TMI 474 (Rajasthan), etc.; courts took a view in favour of Revenue in cases reported as CIT vs. Rajkumar Arora (supra), CIT vs. Mahndipur Balaji 447 ITR 517 (All.), CIT vs. K. P. Ummer 413 ITR 251 (Ker.), Sunny Jacob Jewellers and Wedding Centre vs. DCIT 362 ITR 664 (Ker.), E. N. Gopakumar 75 taxmann.com 215 (Kerala), etc. The issue has now been finally sett....
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....ly academic in nature and do not require any adjudication. Therefore, we decline to make any order with regard to the merits of the various additions made." (D.1) Identical view, in favour of the assessee, has also been taken by Lucknow Bench of ITAT, in the case of Ocean Dream Infrastructures Pvt. Ltd. (supra). (D.2) No material has been brought to our attention from either side to distinguish the facts and circumstances of the present appeal before us from the facts and circumstances of the precedents mentioned in foregoing paragraph (C) of this order; or to persuade us to take a view different from view taken in precedents mentioned in the foregoing paragraph (C) of this order. In the present case, addition has been made on substantive basis. However, it is irrelevant whether the addition is made on substantive basis or protective basis; and no additions could have been made in either situation, when no incriminating material was found at the time of search u/s 132 of IT Act. The ratio of these precedents is applicable irrespective of whether the additions is made on substantive basis or protective basis, when no incriminating material is found in the course of....
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....dint of orders of Hon'ble Supreme Court in the case of Principal Commissioner of Income tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra). Further, in paragraph 14 of the aforesaid order of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra), the Hon'ble Supreme Court concluded as under: "14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; in case any incriminating material is found/unearthed, even, (iii) in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess....
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.... (C.2) The issue whether additions can be made in assessment orders passed u/s 153A or u/s 153C of IT Act in cases falling under unabated/completed assessments, when no incriminating material was found at the time of search u/s 132 of the IT Act, was a disputed issue in the past. While a view in favour of assessee was taken, for example, in cases such as CIT vs. Kabul Chawla (supra), Pr. CIT vs. Saumya Construction 387 ITR 523 (Guj), CIT vs. Continental Warehousing 374 ITR 645 (Bom.), Smt. Jami Nirmala vs. Pr. CIT 437 ITR 673 (Orissa), CIT vs. Veerprabhu Marketing Ltd. 388 ITR 574 (Cal.), Pr. CIT vs. Delhi International Airport (P.) Ltd. 443 ITR 574 (Kar.), Pr. CIT vs. Meeta Gutgutia 395 ITR 526 (Delhi), Dr. A. V. Sreekumar vs. CIT 404 ITR 642 (Ker.), Pr. CIT vs. Smt. Daksha Jain 2019 (8) TMI 474 (Rajasthan), etc.; courts took a view in favour of Revenue in cases reported as CIT vs. Rajkumar Arora (supra), CIT vs. Mahndipur Balaji 447 ITR 517 (All.), CIT vs. K. P. Ummer 413 ITR 251 (Ker.), Sunny Jacob Jewellers and Wedding Centre vs. DCIT 362 ITR 664 (Ker.), E. N. Gopakumar 75 taxmann.com 215 (Kerala), etc. The issue has now been finally settled by decisions of Hon'ble S....