The case involved the legality of assessment u/s 153A vs. 153C based on materials found during a search...

The case involved the legality of assessment u/s 153A vs. 153C based on materials found during a search of a third party. It was held that assessment u/s 153A cannot be based on materials found during a third-party search; instead, proceedings must be initiated u/s 153C with proper satisfaction recorded by the assessing officers of both parties. Without this satisfaction, no additions can be made. The High Court ruled that additions based on statements from a third party are impermissible u/s 153A. The assessment was deemed bad-in-law due to these procedural lapses. Regarding the addition of undisclosed income, the CIT(A) found factual discrepancies and lack of corroborative evidence, leading to the dismissal of the revenue's appeal. .....

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