Ashish Garg vs ACIT, Central Circle-2

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 25.09.2025 of the Ld. Commissioner of Income Tax (Appeals)-31, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No.: ITBA/APL/S/250/2025-26/1081171770(1) arising out of the order dated 09.04.2021 u/s 153A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the ACIT, Central Circle-2, New Delhi for AY: 2016-17.

We find that primarily the contention of assessee is that the addition was made by the assessing officer beyond the scope of Section 153A of the Act as there was no incriminating material/evidence found during the course of search and the reliance has been placed on the decision of Hon’ble Delhi High Court in CIT Vs. Kabul (2015) Chawla 61 taxmann.com 412 (Delhi). Admittedly the date of search is 7.12.2018 and as on date of search no assessment for the year under consideration was pending, thus, it is the case of unabated assessment.

Hon’ble Delhi High Court in case of Kabul Chawla (supra) and thereafter in Abhisar Buildwell 454 ITR 212 Hon’ble Supreme Court has categorically laid down that in case of unabated assessment it is only the incriminating material found during search can be relied.

We find that additions have been made in respect of cash deposited in the account of 3 other companies. After going through the assessment order we find that allegation is that assessee was engaged in the paper companies which have been attributed to the assessee by lifting and corporate veil. Thus, admittedly, no addition was made on the basis of any material found during the search and what assessing officer has examined is source of cash deposit made in various bank account of alleged paper companies. Thus, certainly in regard to present assessment year being unabated assessment year the impugned addition in the hands of assessee could not have been made. Thus, we sustain the ground No. 3 and appeal is allowed.