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2017 (4) TMI 176 - AT - Income TaxAssessment u/s 153A - unexplained cash deposits - Held that:- In this case, the assessment for the assessment year 2003-04, 2004-05 & 2006-07 are already concluded and there is no proceedings pending for those assessment years. The time limit for issue of notice u/s 143(2) of the Act has been expired. The A.O. has made additions towards unexplained cash deposits found in the bank account, unexplained loans and advances and unexplained credits in apital account without any incriminating materials. Therefore, we are of the view that the A.O. has no jurisdiction to make additions for the assessment years 2003-04, 2004-05 & 2006-07 in the absence of any incriminating materials. In this case, the A.O. has made additions towards unexplained cash credits, unexplained advances and unexplained credits in capital accounts based on the books of accounts which were already part of regular return filed by the assessee u/s 139(1) of the Act, but not based on any incriminating materials. Hence, we are of the considered view that, the A.O. has no jurisdiction to make additions towards any income in the absence of seized materials for the assessment years which are concluded as on the date of search. Accordingly, we direct the A.O. to delete additions made for the assessment year 2003-04, 2004-05 & 2006-07. Additions towards cash found during the course of search for the assessment year 2009-10 we find force in the arguments of the assessee for the reason that the assessee has filed necessary evidences in the form of the confirmation letter from the debtor who has confirmed repayment of advance of Rs. 7 lakhs. We further observed that the debtor Shri P.N. Raju has given the deposition before the A.O., wherein he has confirmed that he has repaid the advance. The A.O. made additions by stating that the assessee has failed to prove the genuineness of transactions and creditworthiness of the debtor. We find no merits in the findings of the A.O., for the reason that once the debtor repaid the amount in the capacity as debtor to the assessee, the necessity of proving the creditworthiness, identity and genuineness is not on the assessee as it is only amount received back out of advance made in the earlier period and shown in the return. The CIT(A) without appreciating the facts, simply confirmed additions based on the remand report of the A.O., wherein the A.O. has reiterated its stand at the time of assessment proceedings. Therefore, we direct the A.O. to delete additions made towards cash found during the course of search. - Assessee appeal allowed.
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