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2018 (12) TMI 1141 - AT - Income TaxAddition u/s 68 - assessment u/s 153A - Held that - CIT(A) has rightly held that there is no incriminating documents/assets found during the search operation. Though the DR disputed the same, but could not demonstrate that the documents are incriminating in nature. In fact, these documents prove the transactions of the assessee as claimed by the assessee in its books of accounts which were produced before the AO during the assessment proceedings. The CIT(A) has given a detailed and reasoned order on merit as well and the Ld. DR could not make out any contrary facts as stated in the order of the CIT(A). The submission of the Ld. DR that the documents were not filed before the AO is also not correct as these documents have been submitted before the AO as per the record. Therefore, there is no need to interfere with the findings of the CIT (A). This appeal filed by the Revenue does not survive.
Issues Involved:
1. Legality of the CIT(A)'s condonation of delay in filing the appeal. 2. Validity of the assessment under Section 153A in the absence of incriminating material. 3. Deletion of additions made by the AO on account of unexplained credits and cash credits. Detailed Analysis: 1. Legality of the CIT(A)'s condonation of delay in filing the appeal: The Revenue contended that the CIT(A) erred in law and on facts by condoning the delay in filing the appeal without considering the assessee's illegal conduct during the search operations, including manhandling officers, looting seized material, and the registration of criminal cases. The Revenue argued that the CIT(A) ignored the non-compliant and non-cooperative behavior of the assessee during the original and reassessment proceedings. The CIT(A) was also criticized for not appreciating the observations of his predecessor and for relying on judicial precedents without considering the bonafide conduct and absence of negligence by the assessee. 2. Validity of the assessment under Section 153A in the absence of incriminating material: The CIT(A) held that the AO could not proceed to frame assessment under Section 153A for the year under consideration as no incriminating documents or assets were found during the search operation. The CIT(A) relied on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. MGF Automobiles, which clarified that completed assessments can only be interfered with based on incriminating material unearthed during the search. The CIT(A) concluded that since no incriminating material was found, no additions could be made to the income already assessed. 3. Deletion of additions made by the AO on account of unexplained credits and cash credits: The CIT(A) deleted several additions made by the AO, including: - An addition of ?20,90,000 on account of unexplained credit in the bank account. - An addition of ?95,00,000 on account of unexplained cash credit in the form of advance, which the CIT(A) found to be a genuine transaction squared up by payment made by M/s Vatika Landbase P Ltd. - An addition of ?1,00,00,000 on account of unexplained credit, which was explained as refunds from Smt. Priti Paul and Sh. Sandeep Paul for a proposed land purchase that did not materialize. The CIT(A) provided a detailed analysis, considering the facts, the basis of the AO's additions, and the arguments presented. The CIT(A) found that the assessee had maintained regular books of accounts and provided sufficient evidence to support the transactions. The CIT(A) also noted that the AO did not bring any adverse evidence to suggest doubts over the identity, creditworthiness, or genuineness of the transactions. Conclusion: The Tribunal upheld the CIT(A)'s findings, concluding that there was no need to interfere with the detailed and reasoned order of the CIT(A). The Tribunal found that the documents were submitted during the assessment proceedings, contrary to the Revenue's claims. Consequently, the appeal filed by the Revenue was dismissed. The order was pronounced in the Open Court on 19th December 2018.
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