Section 158BB of the Income Tax Act, 1961- Search and Seizure - Addition cannot be made merely on presumption that assessee had earned undisclosed income and incurred expenses outside books of account, which need no interference being finding of fact.[2019] 52 ITCD 36 (ALL)
Facts: Being aggrieved of the order of Tribunal, Revenue went on appeal before High Court and raised the question of law that "(1) Whether the Ld. Income Tax Appellate Tribunal was correct in law in deleting the Addition of Rs.3,82,66,276/- and  Rs. 1,00,00,000/- by holding that additions in fresh assessment cannot exceed the additions made in the set aside assessment ignoring that the assessment was completed according to the direction of Ld. ITAT itself to frame the assessment on the basis of seized material and documents u/S 158BB(1) of the IT Act, 1961. Whether such findings of ITAT are according to the provisions of Income Tax Act, 1961.
Held, that the Tribunal  recorded a categorical finding that Assessing Officer instead of working out undisclosed income, as per the provisions of Section 158 BD had totalled up amount mentioned in various annexures, which according to the assessee are part of the contract work done by him. No evidence was found to suggest that the assessee had been indulging in construction business outside books of account. Further, the Tribunal had recorded a finding that merely because ITAT remanded the matter to Assessing Officer, the total of all the entries whether recorded in regular books of accounts or without any date would constitute income of the assessee, that to undisclosed income. The Tribunal had remanded the matter with a direction to complete assessment under Section 158 BD based on seized material, but the Assessing Officer determined the taxable income of Rs.4,82,66,276/- as against addition of Rs.51,44,968/- has put the assessee in more adverse situation which is not permitted in law, and the addition cannot be made under Section 158 BD of the Act merely on presumption that assessee had earned undisclosed income and had incurred expenses outside the books of accounts. We find that the Tribunal has recorded a finding in regard to the additions made by the Assessing Officer which was confirmed by the CIT (Appeals), which was based only on mere assumption and not on any material recovered during search and seizure. The Tribunal had recorded a categorical finding that addition cannot be made merely on presumption that assessee had earned undisclosed income and incurred expenses outside books of account, which need no interference being finding of fact, the appeal lacks merit and is hereby dismissed. The question of law is, therefore, answered in favour of the assesseee and against the Revenue.