Anubhav Sharma ORDER
Shamim Yahya, Member (A)
1. This appeal by the assessee is directed against the order of the ld. Commissioner of Income-tax-3, Gurgaon dated 12.03.2018 pertaining to assessment year 2007-08.
2. Grounds of appeal taken by the Revenue read as under :-
"i) Whether on facts and in the circumstances of the case the Ld. CIT(A) was right in concluding that there was a difference in scope of proceedings under section 153A of the Income Tax Act, 1961 for an abated assessment and for a completed assessment.
ii) Whether on facts and in the circumstances of the case the Ld. CIT(A) was right in holding that no addition can be made u/s 153A in respect of completed assessment if no incriminating material is found during search.
iii) Whether there is any restriction on the power of the Assessing officer under section 153A of the Income Tax Act, 1961 to confine only to the "incriminating material found during the search", even though such words or conditions are not mentioned in the section per se.
iv) Whether on the facts and in the circumstances of the case the Ld. CIT(A) was correct in interpreting section 153A which starts with a non- obstinate clause stating therein that the operation of section 139,147,148,149,151 & 153 was deposed meaning thereby that in search cases the Assessing officer is duty bound to take up the assessment u/s 153A and that the above mentioned sections cannot be invoked. Therefore, even if incriminating material is not found during search, but if any escaped income or under-assessed income undisclosed income has to be assessed for such completed assessment, then it has to be done in the proceedings u/s 153A in search cases as during the pendency of the proceedings u/ s 153A, the proceedings u/s 147 of the Income Tax Act, 1961 cannot be initiated.
v) Whether on the facts and in the circumstances of the case the Ld. CIT(A) was right in following Delhi High Court decision in the case of CIT vs. Kabul Chawla, 380 ITR 173 when the Hon'ble HC itself admits in para 37(iv) that "Although Section 153A does not say that additions should strictly be made on the basis of evidence found in course of search ..... " there by interpreting the statue in the manner which were never worded or intended by the legislature.
vi) Whether on the facts and in the circumstances of the case the Ld. CIT(A) has erred in ignoring the principles of strict interpretation of statute when the words used in the statute i.e. section 153A(1)(b) of the IT Act, 1961 are assess or reassess the "Total Income".
vii) Whether on the facts and in the circumstances of the case the Ld. CIT(A) has erred in not deciding the issue of addition of Rs.1,87,00,000/- as unexplained share application/ share capital money made u/s 68 of the Income Tax Act, 1961 on merits."
3. In this case, a search action under section 132(1)(A) of the Income-tax Act, 1961 (for short 'the Act') was carried out in the case of the assessee on 09.05.2012. Subsequently, assessment proceedings were initiated and order under section 153(1)(b) read with section 143 (3) of the Act was passed on 30.03.2015 making addition of Rs.1,87,00,000/- on account of unexplained credit u/s 68 of the Act.
4. Upon assessee's appeal, ld. CIT (A), upon a finding that no incriminating documents/records or any other evidence was found or seized during the course of search, deleted the addition referring to Hon'ble Delhi High Court decision in the case of CIT vs. Kabul Chawla. We may gainfully refer to the order of ld. CIT (A) in this regard as under:-
"5.3 It is an undisputed fact, apparent from the assessment order that no incriminating documents/records or any other evidence was found or seized during the course of search proceedings which resulted in any addition in the case of the appellant. The only addition made in the assessment order under section 153A read with section 143(3) is on account of share capital received amounting Rs.1,87,00,000/-. This addition is not borne out of search action.
5.4 It is also undisputed fact that the appellant h........