No addition under section 153A permissible in unabated assessments absent incriminating search material; interest from seized documents not taxable u/s 69A/69C but as net business income; additions require opportunity of hearing.

ORDER 

Per Bench :

A bunch of appeal of different assessee and revenue filed against the order of the Ld. Commissioner of Income-tax Appeal-11, Pune [for brevity ‘the Ld. CIT(A)’], order passed under section 250 of the Income-tax Act 1961 for assessment year 2012-13, 2014-15 to 2016-17 and 2019-20, date of order 27.02.2025 related to the petitioner-1 and dated 13.03.2025 related to other two petitioners. Impugned orders emanated from the order of the Ld. Assistant Commissioner of Income-tax C.C.-2 Thane (for brevity the Ld. AO ) order passed under section 143(3) r.w.s. 153A of the Act, date of order 29.09.2021 for A.Y. 2012-13 and 30.09.2021 for A.Y. 2015-16 to 2016-17 related to petitioner-1 and related to petitioner-2 the date of order 30.09.2021.

2. Since all the appeals pertain to the three assesses and one appeal pertain to the revenue, involving similar issues arising out of a similar factual matrix, these appeals were heard together as a matter of convenience and are being decided by way of this consolidated order. With the consent of the parties, The ITA No. 2871, 2872, 3208 & 3418/Mum/2025 are taken together and ITA No 2871/Mum/2025 for AY 2012-13 is treated as lead case, and the decision rendered therein shall apply mutatis mutandis to other appeals.

ITA No.2871/Mum/2025

3. The assessee has taken the following grounds:-

“1. That, the learned CIT(A)-11, Pune has grossly erred in not considering the impugned block assessment order passed is against natural justice and bad in law. The AO may please be directed to annul the impugned block assessment order.

2. That, the learned CIT(A)-11, Pune is not justified in upholding the addition of Rs.50,00,000 in case of Olender Manufacture & Credit Ltd u/s.68 r.w.s 115BBE on the basis of non-incriminating material. The Assessing Officer may please be directed to delete such addition.

3. The appellant craves leave to add, alter, and amend any ground/s of an appeal on or before hearing of the appeal.”

4. The Ld. AR contended that the assessment order was passed u/sec. 143(3) r.w.s. 153A of the Act and accordingly the said order was passed during the assessment year related to the search occurred on 08.08.2019 in the M/s Patel RPL Reality Group. The assessee challenged the jurisdiction of the Ld. AO for assessment U/s. 153A without relying on any incriminating documents carried out from the search. The said issue was duly agitated before the Ld. CIT(A) during the appeal. The Ld. CIT(A) made the observations on the said legal issue which is noted in page no.12 para no.10 of the impugned appellate order which is reproduced as below:

“10. I have considered the facts of the case and the submissions made by the appellant. The first contention of the appellant is that the addition made by the AO is not based on any incriminating material. Before deciding the contention raised by the appellant, it is necessary to consider as to what constitutes an incriminating material. Though the said term has not been defined in the Act, incriminating material may comprise of document or evidence found in search which demonstrates or proves that what is apparent is not real or what is real is not apparent. The nature of the evidence or information gathered during the search should be of such nature that it should prima facie show that the real and true nature of transaction between the parties is something different from the one recorded in the books or documents maintained in ordinary course of business. If such conditions are satisfied, it can be held that the material found or collected d