Facts of the Case

  • A search and seizure operation under Section 132 was conducted on the Saluja Group.
  • Cash and jewellery relating to the assessee (Ankush Saluja) were found at his father’s premises.
  • Proceedings were initiated under Section 153C read with Section 153A.
  • The assessee filed returns declaring income.
  • The Assessing Officer (AO) made an addition of ₹11.90 crores under Section 68 treating unsecured loans as unexplained cash credits.
  • The assessment was completed determining a higher total income.
  • CIT(A) deleted the additions relying on the precedent of CIT vs Kabul Chawla.
  • ITAT upheld CIT(A)’s order.
  • The Revenue filed an appeal before the Delhi High Court under Section 260A.

Issues Involved

  1. Whether additions under Section 68 can be made in proceedings under Section 153C/153A without any incriminating material found during search?
  2. Whether jurisdiction under Section 153C is valid in absence of incriminating evidence?
  3. Whether completed (non-abated) assessments can be disturbed without new material?

Petitioner’s Arguments (Revenue)

  • The AO rightly assumed jurisdiction under Section 153C.
  • Documents belonging to the assessee were found during search.
  • ITAT erred in upholding deletion of addition under Section 68.
  • Additions were justified based on seized material and assessment findings.

Respondent’s Arguments (Assessee)

  • No incriminating material was found during the search relating to the alleged unsecured loans.
  • Original assessment under Section 143(3) was already completed and not abated.
  • Additions under Section 153C/153A without incriminating material are invalid.
  • Relied on binding precedent: CIT vs Kabul Chawla (Delhi HC).

Court Findings / Judgment

  • The High Court observed concurrent findings of fact by CIT(A) and ITAT.
  • No incriminating material was found during the search.
  • Additions under Section 68 were not based on any seized evidence.
  • Jurisdiction under Section 153C was wrongly assumed.
  • The case was squarely covered by CIT vs Kabul Chawla.
  • No substantial question of law arose.

Final Order:

  • Appeal of the Revenue dismissed.

Important Clarification 

  • No addition can be made under Section 153A/153C in respect of completed (non-abated) assessments unless based on incriminating material found during search.
  • Mere existence of search proceedings does not justify reassessment without evidence.
  • Section 68 additions require concrete incriminating evidence in search cases.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:5949-DB/SVN14112019ITA1862019.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.