Facts of the Case

  • The assessee, Forum Sales Pvt. Ltd., was subjected to proceedings under Section 153A.
  • The relevant assessment years were already completed (i.e., not pending at the time of search).
  • No incriminating material was found during the search relating to these assessment years.
  • The ITAT ruled in favor of the assessee, deleting additions.
  • The Revenue filed appeals before the Delhi High Court.

Issues Involved

  1. Whether additions can be made under Section 153A for completed assessment years without any incriminating material found during search.
  2. Whether the Tribunal’s order deleting such additions was legally sustainable.

Petitioner’s Arguments (Revenue)

  • The Revenue challenged the ITAT order and sought to justify additions under Section 153A.
  • However, it was fairly conceded that the issue was already covered by judicial precedent.

Respondent’s Arguments (Assessee)

  • The assessee relied on settled law that no addition can be made in respect of completed assessments in absence of incriminating material.
  • Supported reliance on binding precedents governing Section 153A assessments.

Court Findings / Order

  • The Court noted that:
    • No incriminating material was found during the search for the relevant assessment years.
    • The issue was squarely covered by the judgment in CIT v. Kabul Chawla.
    • The said judgment has been affirmed by the Supreme Court in CIT vs. Abhisar Buildwell Pvt. Ltd..
  • Therefore, no substantial question of law arose.
  • The appeals filed by the Revenue were dismissed.

Important Clarification by the Court

  • In respect of completed assessments, additions under Section 153A are not permissible unless incriminating material is found during search.
  • The principle laid down in Kabul Chawla and affirmed in Abhisar Buildwell continues to be binding law.

Link to download the order - 

https://delhihighcourt.nic.in/app/showFileJudgment/RAS21072023ITA5512022_181508.pdf

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