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Judgment
PER KRINWANT SAHAY, A.M.:
Appeal in this case has been filed by the Revenue against the order dated 23.12.2025 passed by the CIT(A)-31, New Delhi for the A.Y. 2013-14.
The revenue has raised the following grounds of appeal which are under :-
“1.Whether on the facts and circumstances of the ease, and in law, the Ld. CIT(A), relying on the contention of assessee, erred in treating the addition of Rs. 71,58,039/-made in the case of assessee u/s153A is not based on incriminating material found during the course of search proceedings u/s132, while ignoring the fact that assessment u/s153A was made on seized material i.e. jewellery found on locker no. 789, and AO has incorporated the fact that addition made on jewellery is part of total addition made in assessment order.
2.Whether on the facts and circumstances of the case, and in law, the Ld. CTT(A), erred in properly appreciating the findings of honourable Supreme Court in Abhisar Buildwell case. i.c. in case incriminating material seized, AO assumes jurisdiction to reassess income based on incriminating material as well as other information.
3.Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A), relying on the contention of assessee, erred in treating Kabul Chawla case is squarely applicable in the case of assessee, while ignoring the fact that addition of Rs.71,58,039/-was made on the basis of seized material and the case of assessee is squarely covered under judgement of honourable Allahabad High Court in Pr.CIT Vs. Mehandipur Balaji (2022) 4471TR517.”
Although the revenue has taken three grounds of appeal. The main issue involved in this case is whether any addition can be made in a search case without any seizure/ reference of incriminating material. Ld. Counsel for the assessee before us submitted that the Ld. CIT(A) has rightly rejected/ quashed the of addition of Rs.7158039/-. It was made in the case of the assessee in assessment u/s.153A of the Act without taking any note of the fact that after the Hon’ble Supreme Court has held in the case of Pr. CIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 149 taxmnan.com 39 (SC) that no addition can be made without bringing on record any incriminating document.
Per contra the Ld. DR relied on the order of the AO.
We have considered the findings given by the AO in the assessment order and by the Ld. CIT(A) in the appellate order. We have also considered the nature of addition made in the assessment order passed u/s.153A of the Act and we have gone through the legal position and Hon’ble Supreme Court’s decision in the case of Pr. CIT vs. Abhisar Buildwell. It is evident from the record that the AO has made addition of Rs.7158039/-without making any reference or bringing on record any incriminating document found during the search. As the legal position is very clear after the Hon’ble Supreme Court decision in the case of Abhisar Buildwell that no addition in a search case can be made without bringing on record incriminating document and without reference thereto found during the search. The AO has made addition in a search assessment without making any reference of any incriminating document. Accordingly, addition made by the AO has been rightly rejected by the Ld. CIT(A). In this search assessment passed u/s.153A of the Act in our considered view the findings of the Ld. CIT(A) is very much justified. Accordingly, the appeal filed by the revenue is dismissed.
The assessee has filed cross objection in this case. The grounds of cross objection are as under :-
“1.That without prejudice to the above and strictly in the alternative, in the event this Hon'ble Tribunal were to hold that the Assessing Officer had jurisdiction under Section 153A, the additions of Rs. 70,17,685/- under Section 68 and Rs. 1,40,354/- under Section 69C are wholly unsustainable on merits and liable to be deleted.
2.That the Cross-Objector had duly furnished complete documentary evidence in support of the purchase, holding and sale of shares, including purchase documents, banking records, demat statements, bonus allotment details, contract notes, sale proceeds through banking channels, and payment of Securities Transaction Tax, and no contrary material specific to the Cross-Objector was brought on record by the Assessing Officer. The said proposition is squarely covered by the ratio laid down in Pr. CIT v. Sanjaykumar Damjibhai Gangani [SLP (Civil) Diary No. 23191/2026, order dated 01.09.2025] (SC) and ITO, Ward-5(3)(1), Ahmedabad v. M/s Iceworth Realty LLP (ITAT, Ahmedabad).
3.That the impugned additions were made merely on the basis of third-party material and general allegations, without independent enquiry, without confronting any adverse material to the Cross-Objector, and without granting effective opportunity including opportunity of cross-examination. The said proposition is squarely covered by the ratio laid down by the Hon'ble Supreme Court in Andaman Timber Industries v. CCE [Civil Appeal No. 4228 of 2006, decided on 02.09.2015); Pr. CIT v. Renu Aggarwal [2023] 153 Taxmann.com 579 (SC); and Pr. CIT v. Pradip Kumar Jajodia HUF [SLP (C)] No. 16198/2026, order dated 04.05.2026] (SC).
Since we have already confirmed the order of the Ld. CIT(A) of rejecting the addition made by the AO, therefore, the Cross objection filed by the assessee remains just academic in nature.
In the result, the cross objection filed by the assessee is allowed and the appeal filed by the revenue is dismissed.