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Issues Involved:
The issues involved in this judgment are: 1. Validity of assessment order u/s 153A/143(3) due to an invalid search u/s 132(1) of the Act. 2. Addition of loan amounts made by the Assessing Officer to the income of the assessee. Issue 1: Validity of Assessment Order: The appeals were filed challenging the assessment order u/s 153A/143(3) based on an invalid search u/s 132(1) of the Act. The appellant contended that the assessment order should be quashed due to the invalid search. Issue 2: Addition of Loan Amounts: The Assessing Officer made additions to the income of the assessee for alleged loans given to Shri Anant Himatsingka. The appellant disputed these additions and contended that no such loans were given. Summary of Judgment: The Tribunal considered the seized loan receipts and the statements recorded under section 132(4) of the Act. The Assessing Officer claimed that the loans were given in cash from undisclosed sources. The appellant later retracted the statement, citing mental pressure during the search. The CIT(A) upheld the additions, considering the seized receipts as credible evidence. During the hearing, the appellant argued that there was no evidence of actual loans given, and the retraction was valid due to mental pressure. The Department supported the original orders, emphasizing the credibility of the seized receipts. The Tribunal analyzed the evidence and retraction letters. For the assessment year 2003-04, the addition of Rs. 5,00,000 was upheld, considering the initial statement as reliable. However, for the assessment year 2004-05, the addition of Rs. 3,00,000 was deemed unjustified as there was no proof of loans given. The Tribunal allowed the appeal in part for 2004-05. In conclusion, the appeal for the assessment year 2003-04 was dismissed, while the appeal for the assessment year 2004-05 was partially allowed.
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