When the assessments already stood completed and no incriminating material was unearthed during the search, no additions could have been made to the income already assessed.
1. A search was carried out under Section 132 of the Act on 15th November 2007 on BPTP Ltd., a leading real estate developer operating all over India and mainly in the National Capital region and some of its group companies
2. A search was on the same date carried out in the premises of the Assessee who along with his wife Mrs. Anjali Chawla owned and controlled the group. As on the date of the search, no assessment proceedings were pending for AYs 2002-03, 2005-06 and 2006-07. For the said AYs, assessments had already been made under Section 143(1) of the Act
3. Pursuant to the search a notice under Section 153A (1) of the Act was issued to the Assessee on 3rd September 2008. Pursuant to the said notice, the Assessee filed returns for the three AYs on 19th January 2009
4. AO made additions on account of deemed dividend u/s 2(22)(e) in three assessment years
5. Assessee preferred appeal before the CIT(A) who confirmed the addition and it was held that the addition need not be restricted only to the seized material
6. Assessee moved to the Tribunal who held that the additions were not based on any incriminating material found during search operation. Accordingly, these were held not sustainable in law, the impugned assessment orders for the said AYs were set aside and the additions directed to be deleted
7. Revenue moved to the High Court who after hearing both the parties decided in favour of the Assessee
The present appeals concern AYs, 2002-03, 2005-06 and 2006-07.On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. The question framed by the Court is answered in favour of the Assessee and against the Revenue.
Cases referred to
Filatex India Ltd. v. CIT-IV  49 Taxmann.Com 465 (Delhi)
CIT v. Continental Warehousing Corporation Ltd.  58 Taxmann.Com 78 (Bom)