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2015 (11) TMI 1516 - AT - Income TaxAssessment u/s 153A - Held that:- Merely on the basis of statement which is not supported by the Department with cogent corroborative material cannot be a valid addition basis for sustaining such adhoc additions. It is the burden of the Department to prove that there existed relevant and cogent material to enable the Assessing Officer to make such additions. The Department has grossly failed to prove or demonstrate existence of any such relevant or cogent material supporting the addition. The assessee has demonstrated that the additions were not based on any incriminating material found during the course of search. Even in the absence of proof supported with cogent material, the statement recorded u/s 132(4) by itself cannot be taken as conclusive. A perusal of the CBDT Instruction dated 10.3.2003 reveals that even the Board is aware of such laconic disclosures and excepts its officers to rely on incriminating evidence. The CBDT also is not in favour of search assessments being based on such disclosures, it wants them to be based on incriminating material. In view of the facts and circumstances, CBDT instruction and various case laws relied on by the assessee, we are unable to uphold the additions made solely on the basis of statement recorded u/s 132(4) of the Act. Accordingly, we are of the opinion that for the assessment years 2005-06 to 2009-10 wherein assessments were framed not as a result of any material found during the course of search operation, in view thereof, the said additions cannot be sustained as they do not conform the mandate of section 153A of the Act. Assessment year 2010-11, there is time limit to issue notice u/s 143(2) upto 30.9.2011 as in this case, original return was filed on 25.9.2010. Therefore, in our opinion, even though there was no search material, the proceedings are pending on the basis of the return filed, therefore, the Assessing Officer has to pass a composite order for the undisclosed income and the normal income. In other words, one order has to be passed for the block period computing the taxable income including the undisclosed income, therefore, the Assessing Officer has to compute total taxable income on the basis of the material available on record. Since the assessee has admitted that calendaring, clearing and washing charges, staff salary were inflated, the same are to be considered. Assessment year 2011-12, the return of income was filed consequent to notice u/s 153C and no return was filed u/s 139. As discussed for assessment year 2010-11, the Assessing Officer has to pass a composite order for the undisclosed income and the normal income on the basis of material available on record. Being so, as discussed in assessment year 2010-11, the Assessing Officer is justified in passing assessment order for this assessment year also to bring the undisclosed income into tax. Accordingly, the assessee’s appeals for assessment years 2005-06 to 2009-10 are allowed and appeals for assessment years 2010-11 and 2011-12 are dismissed.
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