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2014 (10) TMI 668 - AT - Income TaxValidity of the proceeding initiated u/s 153C – Held that:- On a perusal of the assessment order, it is not forthcoming, what are the seized materials on the basis of which the assessing officer has initiated proceedings u/s 153C of the Act - the CIT(A) after examining the seized material has given a categorical finding that the so called seized materials by no stretch of imagination could be said to be belonging to the assessee – Relying upon Vijaybhai N. Chandrani Versus Assistant Commissioner of Income-tax [2010 (3) TMI 770 - Gujarat High Court] - the seized materials do not belong to the assessee - That besides, there are no incriminating materials indicating any undisclosed income of the assessee, which could have enabled the AO to invoke the provisions of section 153C of the Act - the income were determined for the assessment years 2001-02, 2002-03 & 2003-04 only on the ground that the assessee has not been approved u/s 10(23C) of the Act - The determination of income has absolutely no relation or relevance to the seized materials - the determination of income is on the basis of the impounded materials as a result of survey and not on the basis of any seized materials belonging to the assessee - the pre-conditions for assuming jurisdiction u/s 153C are not satisfied - the proceeding initiated u/s 153C of the Act is invalid in law. As rightly been stated by the assessee that on the date notice was issued u/s 153C of the Act, there is no assessment proceeding pending before the AO for the AY - in absence of any incriminating material showing concealed/undisclosed income of the assessee, the AO could not have proceeded to assess income which has already been reflected in the books of accounts and disclosed in the return of income filed by the assessee - conclusion drawn by the AO that the agricultural income is unexplained also found to be not on cogent material, because of the fact that the CIT(A) has accepted 50% of the income shown as agricultural income against which the department is not in appeal - in the remand report, the AO himself has accepted that the assessee has earned income from coconut trees and casurina plantation which can be considered as agricultural income - the proceeding initiated u/s 153C of the Act in absence of any incriminating material and only on the basis of the material already disclosed by the assessee is invalid and consequently the assessment orders passed are also unsustainable in law – Decided in favour of assessee.
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