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2022 (7) TMI 1040 - ITAT AHMEDABADDisallowance of loss - absence of any justification to support the incurring of any genuine loss by the appellant in any business carried on in the name and style of M/s.Dindayal Associates - proprietorship firm “DA” where the assessee purportedly was carrying on share trading business - claim of the Revenue is that this share trading business was the benami of “SG” and not of the assessee, and therefore denied claim of loss - HELD THAT:- We uphold the order of the ld.CIT(A) that the business of share trading transactions carried on in the proprietorship concern, “DA” was not that of the assessee, but of “SG” and denial of claim of business loss to the tune is accordingly upheld. Ground No.1 raised by the assessee is dismissed. The appeal of the assessee is dismissed. Reopening of assessment u/s 147 - We fail to understand how the AO could now attribute escapement of income of the assessee on account of this same share trading business, which as per the AO himself ,does not belong to the assessee at all. As on the date of recording reasons for escapement of income i.e. on 4.10.2006, the assessment order passed, which was reopened under section 148 of the Act ,dated 30.3.2004 had categorically held that the assessee had not carried on the share trading business. Therefore, this very order passed u/s 143(3) wherein the assessee was held to have not carried out any share trading transactions, could not possibly have been reopened u/s 147 on account of escapement of income relating to this very share trading business only. Assumption of jurisdiction to frame reassessment u/s 147 is clearly invalid. Re-assessment framed, therefore, u/s 147 of the Act is set aside. The appeal of the assessee is allowed on this count. Validity of assessment order passed u/s 158BD - satisfaction note recorded by the AO of the assessee on various grounds - HELD THAT:- The information against the assessee not emanating from search conducted on any person, the proceedings u/s 158BD to assess undisclosed income of the assessee for the block period could not have been conducted as per law. The order passed therefore u/s 158BD of the Act is, we hold, invalid. The satisfaction note records confirmation of the assessment order passed in the case of “MRS” which event took place on 28/12/2004, which is much subsequent to the date of issuance of notice under section 158BD i.e. on 24.11.2003. This goes to show that in any case the satisfaction whatsoever was recorded by the AO after issuance of notice u/s 158BD. Thus we hold that present proceedings conducted on the assessee under section 158BD of the Act and consequent assessment order passed under section 158BD of the Act is against the law and hence invalid. The order so passed under section 158BD is therefore set aside. This ground is allowed, and the appeal of the assessee is allowed. Addition of withdrawal of cash from the benami accounts - CIT-A deleted the addition - HELD THAT:- Though the appeal of the Revenue is merely academic since we have already held the order passed by the AO under section 158BD in the present case in the appeal of the assessee, but even on merits, we find that the ld.CIT(A) thrashed the very basis of the AO for making addition of Rs.1.05 crores by noting that there was no cash withdrawal from the benami account of the proprietorship concern, “DA”, but in fact it was kept in fixed deposits in the name of proprietorship concern. The Department was unable to controvert this fact. Therefore, the very basis of the AO for making addition in the hands of the assessee of Rs.1.05 crores does not survive, since the Ld CIT(A) has noted the fact that no cash was actually withdrawn. In view of the same, we see no reason to interfere in the order of the CIT(A) in deleting the addition.
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