ADHYATM JAIN PROP. M/S JAMBU KUMAR ADHYTM JAIN SARAF,LUCKNOW V. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, LUCKNOW

ITSSA 113/LKW/2025

AI Insights

The case involves an appeal by Adhyatm Jain, proprietor of M/s Jambu Kumar Adhytm Jain Saraf, against the order of the Commissioner of Income Tax (Appeals) which confirmed an addition of Rs.63,41,000 as income from an unsecured loan for the assessment year 2016-17. The addition was made under section 68 of the Income Tax Act, 1961, following a search and seizure operation under section 132. The assessee contested that the addition was made without any incriminating material and was thus illegal. The Tribunal, referencing decisions from the Supreme Court and previous ITAT rulings, found in favor of the assessee, emphasizing that no addition could be made in the absence of incriminating material.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792665 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 17-02-2025
• Other Referred Cases: PCIT Vs. Abhisar Buildwell (P.) Ltd, Smt. Shashi Agarwal vs. DCIT, Ocean Dream Infrastructures Pvt. Ltd. vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KUMAR
• Assessee Lawyers: AKSHAY AGRAWAL
• Keywords: Principle of natural justice; Block assessment
• Section: 132; 153A; 68

Judgement Text

"I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER I.T.(SS)A. No.113/Lkw/2025 Assessment Year:2016-17 Adhyatm Jain Prop. M/s Jambu Kumar Adhytm Jain Saraf, 322/34, Surangi Tola Chowk, Lucknow-226003 PAN:AAQPJ4623E Vs. DCIT-2, Central Circle-2, Lucknow (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA, A.M. (A) This appeal vide I.T.A. No.113/Lkw/2025 has been filed by the assessee for assessment year 2016-17 against impugned appellate order dated 04/02/2025 (DIN & Order No.ITBA/APL/S/250/2024- 25/1072908454(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. In this appeal, the assessee has raised the following grounds of appeal: “1. The Learned Commissioner of Income tax (Appeals) has erred in confirming the addition of Rs.63,41,000/- as unsecured loan taken during the year by the appellant towards the income of the appellant on substantive basis. The Addition made on Appellant by Shri Akshay Agrawal, Advocate Respondent by Shri Amit Kumar, Addl. CIT (D.R.) Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 2 presumption is illegal & void. The Assessment made on the protective and substantive 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. 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 appeal against the aforesaid assessment order in the office of the Ld. CIT(A) which was dismissed. Aggrieved, the assessee has filed the present appeal in Income Tax Appellate Tribunal. (C) Learned Counsel for the assessee submitted at the time of hearing that the aforesaid addition was made 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 issue as to whether addition can be made in a search assessment in the absence of any incriminating material is now well Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 3 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 further submitted that in the present appeal also, the addition made by the Assessing Officer is not based on any incriminating documents found in the course of search. Relying on the aforesaid cases of Abhisar Buildwell (P.) Ltd (supra), Smt. Shashi Agarwal (supra) he contended that the addition made in the assessment order should be deleted. He also submitted that in the case of this appellant/assessee also, in identical facts and circumstances, co-ordinate Bench of ITAT, Lucknow has already taken a view in favour of the appellant/assessee, vide order dated 07/05/2025 in the case of Adhyatm Jain vs. DCIT (in I.T.A. No.787/Lkw/2024), and drew our attention to relevant part of the order, which is reproduced below for the ease of reference: (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 Shri Kailash Chand Jain & Others 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.1,00,00,000/- 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 appeal against the aforesaid assessment order in the office of 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 Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 4 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 issue has been decided by Lucknow Bench of Income Tax Appellate Tribunal in favour of the assessee. He further submitted that in the present appeal also, the addition made by the Assessing Officer is not based on any incriminating documents found in the course of search. Relying on the aforesaid cases of Abhisar Buildwell (P.) Ltd (supra), Smt. Shashi Agarwal (supra) and Ocean Dream Infrastructures Pvt. Ltd. (supra), he contended that the addition made in the assessment order should be deleted. The Ld. Departmental Representative for Revenue fairly accepted that the aforesaid addition of Rs.1 Cr was made even without any incriminating material found in the course of search u/s 132 of IT Act. The learned Departmental Representative also did not dispute the claim made from assessee’s side that the issue is covered in favour of the assessee by the aforesaid precedents. However, he relied on the impugned orders of the learned CIT(A), and the assessment orders passed by the Assessing Officer. (D) We have heard both sides and have gone through the materials placed on record. In the case of Smt. Shashi Agarwal (supra), co- ordinate bench of ITAT Lucknow has decided the matter in favour of the assessee, relying on the case of Abhisar Buildwell (P.) Ltd (supra). The relevant portion of the order of Smt. Shashi Agarwal vs. DCIT (supra) is reproduced as under: - “(C) We have heard both sides. We have perused materials on record. There is no dispute regarding relevant facts. It is not in dispute that no incriminating materials were found in the course of search u/s 132 of the IT Act in respect of the various additions made by the Assessing Officer. Further it is also not in dispute that no assessment proceedings were pending in the cases of the assessee at Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 5 the time of search conducted on 08/07/2016 in the case of the assessee, u/s 132 of the IT Act. Further, as no assessment proceedings were pending at the time of search & seizure operation u/s 132 of the Act on 08/07/2016, the case of the assessee falls in the category of unabated/completed assessments within the meaning of orders passed by Hon'ble Supreme Court in the cases of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra) and within the meaning of order passed in the case of Kabul Chawla 380 ITR 573 (Delhi), which stands approved 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; (iii) in case any incriminating material is found/unearthed, even, 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 or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 6 thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re- opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfillment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs.” (C.1) Hon'ble Supreme Court in the case of U. K. Paints (Overseas) Ltd. (supra) widened the application of the order in the case of Abhisar Buildwell (supra) to assessments conducted u/s 153C of the IT Act also. In both orders of Hon'ble Supreme Court i.e. in Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra), the Hon'ble Supreme Court held that in respect of the completed/unabated assessments, no additions can be made in assessment order passed u/s 153A or passed u/s 153C of the IT Act in respect of which incriminating materials were not found in the course of search action u/s 132A of the Act; although Hon'ble Supreme Court held that the completed/unabated assessments can be reopened by the Assessing Officer in exercise of powers u/s 147/148 of the IT Act subject to fulfillment of the conditions as envisaged/mentioned u/s 147/148 of the IT Act. Thus, although the powers of the Assessing Officer u/s 147/148 of the IT Act were saved by Hon'ble Supreme Court in the cases of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra), subject to fulfillment of conditions envisaged u/s 147/148 of the IT Act; it has been categorically held that in respect of completed/unabated assessments, no Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 7 additions can be made u/s 153A or under section 153C of the Act if incriminating material was not found / unearthed during the course of search u/s 132 of the IT Act in 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 settled by decisions of Hon'ble Supreme Court in the aforesaid cases of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra) wherein view in favour of assessee has been taken. (C.2.1) In the present appeals before us, the additions have been made by the Assessing Officer in assessment orders passed u/s 153A of the IT Act. Further, we have already noted earlier that the relevant facts are not in dispute. It is not in dispute that no incriminating materials were found in the course of search u/s 132 of the IT Act in respect of the various additions made by the Assessing Officer. Further it is also not in dispute that no assessment proceedings were pending in the cases of the assessee at the time of search conducted on 08/07/2016 in the case of the assessee, u/s 132 of the IT Act. Furthermore, as no Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 8 assessment proceedings were pending in the case of the assessee at the time when (on 08/07/2016) search u/s 132 of the IT Act was conducted, the case of the assessee in the present appeals before us, falls in the category of completed/unabated assessments within the meaning of orders passed by Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and in the case of CIT vs. Kabul Chawla (supra) which was approved by Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax vs. Abhisar Buildwell (supra). In view of the foregoing, and having regard to the relevant facts and circumstances of the present case before us, and further, as representatives of both sides are in agreement with this, we are of the view that the issue in dispute is squarely covered in favour of the assessee by the orders of Hon'ble Supreme Court in Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra) and by the aforesaid instruction No. 1 of 2023 of CBDT, which is binding on Revenue authorities. Accordingly, we direct the Assessing Officer to delete the additions made amounting to a total of Rs.2,24,81,900/- for assessment year 2015-16 and addition amounting to Rs.44,25,000/- for assessment year 2016-17. (C.2.2) Since we have directed that the aforesaid additions be deleted, the other issues regarding merits of the additions made in the aforesaid two years, become merely 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 Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 9 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 search u/s 132 of IT Act in the case of assessee. (D.2.1) In view of the foregoing, and respectfully following the orders of the Hon'ble Supreme Court in the cases of Abhisar Buildwell (P.) Ltd (supra) and DCIT vs U.K. Paints (Overseas) Ltd (2023) 150 Taxmann.com 108 (SC), and further, on due consideration of aforesaid Instruction of Central Board of Direct Taxes (CBDT) [Instruction No.1 of 2023 (F. No.279/Misc./M-54/2023-IT)] directing the field authorities to implement the aforesaid orders of Hon'ble Supreme Court in the cases of Abhisar Buildwell (P.) Ltd (supra) and U.K. Paints (Overseas) Ltd (supra), in uniform manner; we direct the Assessing Officer to delete the aforesaid addition amounting to Rs.1,00,00,000/- made by the Assessing Officer and confirmed by the learned CIT(A).” (C.1) Learned Departmental Representative relied on the impugned orders of the learned CIT(A), and the assessment order passed by the Assessing Officer. (C.2) We have heard both sides and have gone through the materials placed on record. In the case of Smt. Shashi Agarwal (supra), co-ordinate bench of ITAT Lucknow has decided the matter in favour of the assessee, relying on the case of Abhisar Buildwell (P.) Ltd (supra). The relevant portion of the order of Smt. Shashi Agarwal vs. DCIT (supra) is reproduced as under: - “(C) We have heard both sides. We have perused materials on record. There is no dispute regarding relevant facts. It is not in dispute that no incriminating materials were found in the course of search u/s 132 of the IT Act in respect of the various additions made by the Assessing Officer. Further it is also not in dispute that no assessment proceedings were pending in the cases of the assessee at the time of search conducted on 08/07/2016 in the Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 10 case of the assessee, u/s 132 of the IT Act. Further, as no assessment proceedings were pending at the time of search & seizure operation u/s 132 of the Act on 08/07/2016, the case of the assessee falls in the category of unabated/completed assessments within the meaning of orders passed by Hon'ble Supreme Court in the cases of Principal Commissioner of Income- tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra) and within the meaning of order passed in the case of Kabul Chawla 380 ITR 573 (Delhi), which stands approved 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; (iii) in case any incriminating material is found/unearthed, even, 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 or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 11 147/148 of the Act, subject to fulfillment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs.” (C.1) Hon'ble Supreme Court in the case of U. K. Paints (Overseas) Ltd. (supra) widened the application of the order in the case of Abhisar Buildwell (supra) to assessments conducted u/s 153C of the IT Act also. In both orders of Hon'ble Supreme Court i.e. in Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra), the Hon'ble Supreme Court held that in respect of the completed/unabated assessments, no additions can be made in assessment order passed u/s 153A or passed u/s 153C of the IT Act in respect of which incriminating materials were not found in the course of search action u/s 132A of the Act; although Hon'ble Supreme Court held that the completed/unabated assessments can be reopened by the Assessing Officer in exercise of powers u/s 147/148 of the IT Act subject to fulfillment of the conditions as envisaged/mentioned u/s 147/148 of the IT Act. Thus, although the powers of the Assessing Officer u/s 147/148 of the IT Act were saved by Hon'ble Supreme Court in the cases of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra), subject to fulfillment of conditions envisaged u/s 147/148 of the IT Act; it has been categorically held that in respect of completed/unabated assessments, no additions can be made u/s 153A or under section 153C of the Act if incriminating material was not found / unearthed during the course of search u/s 132 of the IT Act in 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 Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 12 (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 Supreme Court in the aforesaid cases of Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Ltd. (supra) wherein view in favour of assessee has been taken. (C.2.1) In the present appeals before us, the additions have been made by the Assessing Officer in assessment orders passed u/s 153A of the IT Act. Further, we have already noted earlier that the relevant facts are not in dispute. It is not in dispute that no incriminating materials were found in the course of search u/s 132 of the IT Act in respect of the various additions made by the Assessing Officer. Further it is also not in dispute that no assessment proceedings were pending in the cases of the assessee at the time of search conducted on 08/07/2016 in the case of the assessee, u/s 132 of the IT Act. Furthermore, as no assessment proceedings were pending in the case of the assessee at the time when (on 08/07/2016) search u/s 132 of the IT Act was conducted, the case of the assessee in the present appeals before us, falls in the category of completed/unabated assessments within the meaning of orders passed by Hon'ble Supreme Court in the case of Principal Commissioner of Income- tax vs. Abhisar Buildwell (supra) and in the case of CIT vs. Kabul Chawla (supra) which was approved by Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax vs. Abhisar Buildwell (supra). In view of the foregoing, and having regard to the relevant facts and circumstances of the present case before us, and further, as representatives of both sides are in agreement with this, we are of the view that the issue in dispute is squarely covered in favour of the assessee by the orders of Hon'ble Supreme Court in Principal Commissioner of Income-tax vs. Abhisar Buildwell (supra) and Dy. CIT vs. U. K. Paints (Overseas) Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 13 Ltd. (supra) and by the aforesaid instruction No. 1 of 2023 of CBDT, which is binding on Revenue authorities. Accordingly, we direct the Assessing Officer to delete the additions made amounting to a total of Rs.2,24,81,900/- for assessment year 2015-16 and addition amounting to Rs.44,25,000/- for assessment year 2016-17. (C.2.2) Since we have directed that the aforesaid additions be deleted, the other issues regarding merits of the additions made in the aforesaid two years, become merely 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.2.1) 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; no addition 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 search u/s 132 of IT Act in the case of assessee. In view of the foregoing, and respectfully following the orders of the Hon'ble Supreme Court in the cases of Abhisar Buildwell (P.) Ltd (supra) and DCIT vs U.K. Paints (Overseas) Ltd (2023) 150 Taxmann.com 108 (SC), and further, on due consideration of aforesaid Instruction of Central Board of Direct Taxes (CBDT) [Instruction No.1 of 2023 (F. No.279/Misc./M-54/2023-IT)] directing the field authorities to implement the aforesaid orders of Hon'ble Supreme Court in the cases of Abhisar Buildwell (P.) Ltd (supra) and U.K. Paints (Overseas) Ltd (supra), in Printed from counselvise.com I.T.A. No.113/Lkw/2025 Assessment Year:2016-17 14 uniform manner; we direct the Assessing Officer to delete the aforesaid addition amounting to Rs.63,41,000/- made by the Assessing Officer and confirmed by the learned CIT(A). (E) Since we have directed that the aforesaid addition of Rs.63,41,000/- be deleted, the other grounds regarding merits of the additions made become merely academic in nature and do not require any adjudication. Therefore, we decline to make any order with regard to remaining grounds of appeal pertaining to merits of the addition made. (F) In the result, the appeal of the assessee is allowed. (Order pronounced in the open court on 04/12/2025) Sd/. Sd/. (SUBHASH MALGURIA) (ANADEE NATH MISSHRA) Judicial Member Accountant Member Dated:04/12/2025 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T. Printed from counselvise.com "