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2014 (7) TMI 1133 - AT - Income TaxValidity of assessment u/s 153A - Addition u/s 68 - CIT(A) deleted the addition - Held that - We uphold the contention of the assessee that no addition can be made for this assessment year u/s 153A has no incriminating material was found during the course of search and as no assessment is pending as on date of search. - Decided in favour of assessee.
Issues:
1. Addition of Rs. 10,00,000 made under section 68 of the Income Tax Act. 2. Validity of proceedings initiated under section 153A of the Income Tax Act. 3. Confirmation of the assessment order under section 153A of the Income Tax Act. 4. Action and procedure followed during the proceedings under section 153A of the Income Tax Act. Analysis: Issue 1: Addition under section 68 of the Income Tax Act The Revenue appealed against the deletion of an addition of Rs. 10,00,000 made by the Assessing Officer under section 68 of the Income Tax Act. The CIT(A) observed that no incriminating documents were found to suggest any doubtful transactions, and the appellant had provided necessary documentary evidence relating to share capital. It was noted that no new facts emerged during the search proceedings to question the creditworthiness or genuineness of transactions. The Tribunal upheld the CIT(A)'s decision, emphasizing that no incriminating material was found during the search, and the addition was not based on any such material. Issue 2: Validity of proceedings under section 153A The assessee filed cross objections challenging the initiation of proceedings under section 153A of the Income Tax Act. The CIT(A) confirmed the proceedings initiated under section 153A, leading to the impugned assessment order. However, the Tribunal considered the absence of any incriminating material found during the search and seizure operations. Referring to a previous ITAT decision, it was held that no additions can be made under section 153A for an assessment year if no incriminating material is found during the search and if no assessment is pending as of the date of search. Consequently, the Tribunal allowed the cross objections, dismissing the Revenue's appeal. Issue 3: Confirmation of assessment order under section 153A The Tribunal addressed the validity of the assessment order dated 30.12.2011 under section 153A of the Income Tax Act. It was noted that the AO's actions and procedures during the section 153A proceedings were questioned by the assessee. However, the Tribunal's decision focused on the absence of incriminating material during the search, leading to the conclusion that no additions could be sustained under section 153A without such material. Consequently, the Tribunal dismissed the Revenue's appeal and allowed the cross objections filed by the assessee. Issue 4: Action and procedure under section 153A The Tribunal examined the action and procedure followed by the AO during the proceedings under section 153A of the Income Tax Act. The Tribunal's decision emphasized the importance of incriminating material in making additions under section 153A. It was held that without such material, no additions could be justified for any assessment year under section 153A. Consequently, the Tribunal upheld the assessee's argument and dismissed the Revenue's appeal, allowing the cross objections. In conclusion, the Tribunal's decision centered on the absence of incriminating material during the search, leading to the dismissal of the Revenue's appeal and the allowance of the cross objections filed by the assessee.
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