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2022 (4) TMI 491 - ITAT MUMBAIAssessment under section 153A - Addition based on suo-moto disclosure made by the assessee before the ITSC u/s. 245D(1) - addition made by the AO in the absence of any incriminating material - Assessment proceedings pending before the AO the assessee has exercised its option under section 245D(1) by moving an application before ITSC - HELD THAT:- We have perused the order passed in case of Anantnadh Constructions and Farms (P.) Ltd. [2017 (5) TMI 1692 - ITAT MUMBAI] with the assistance of Ld. A.Rs for the parties to the dispute, which is on identical issues and has been decided in favour of the assessee by holding that after reopening of the assessment order no addition can be made on the basis of income suo-moto offered by the assessee before the ITSC when settlement got aborted for one reason or the other mentioned in section 245HA(1) As following the decision in cases of Anantnadh Constructions and Farms (P.) Ltd. (supra) & Shivali Mahajan [2019 (3) TMI 1196 - ITAT DELHI] we are of the considered view that when the proceedings before the ITSC fail on the ground of non fulfilment of conditions laid down under section 245 of the Act by the assessee, AO is required to decide the issue independently and is not permitted to make addition merely on the basis of suo-moto disclosure made by the assessee before the ITSC, which is undisputedly on adhoc basis. More particularly, when “no incriminating material” was found or seized during the search and seizure operation carried out on the basis of which assessment has been framed, any addition made otherwise is not sustainable. We are of the considered view that the Ld. CIT(A) has erred in upholding the addition made by the AO in the absence of any incriminating material, merely on the basis of suo-moto disclosure made by the assessee before the ITSC, as the said proceedings got aborted due to non fulfilment of conditions by the assessee, no addition is sustainable in the eyes of law. So the question framed is decided in favour of the assessee and against the Revenue. Consequently, addition made by the AO and confirmed by the Ld. CIT(A) is ordered to be deleted. Hence, appeal filed by the assessee allowed.
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