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2015 (8) TMI 1266 - AT - Income TaxAssessment u/s 153C - suppression of sales - Held that:- In the case before us, no material was found to indicate that the assessee either suppressed the sales or inflated the expenditure during the course of search operation. Only on the basis of statement recorded from the partner of the assessee-firm on the basis of the books of account, the addition was made. Therefore, this Tribunal is of the considered opinion that in the absence of any material to indicate the inflation of expenditure, there cannot be any addition on the basis of the statement alone. Accordingly, this Tribunal is unable to uphold the orders of the lower authorities for assessment years 2006-07 and 2007-08. Therefore, the orders of the lower authorities for the assessment years 2006-07 and 2007-08 are set aside and the addition made by the Assessing Officer is deleted. Assessment year 2011-12, from the orders of the lower authorities it appears that no return of income was filed u/s 139. The return was filed only consequent to the notice issued u/s 153C of the Act. Therefore, this Tribunal is of the considered opinion that even though there was no search material and the proceedings were not pending on the basis of the return filed, 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 the total taxable income on the basis of the material available on record. Since the assessee itself admitted that the weaving charges and staff salary were inflated to the extent of 20% and calendaring and washing charges to the extent of 10%, this Tribunal is of the considered opinion that the Assessing Officer has rightly made the addition for the assessment year 2011-12. The CIT(A), on the basis of the admission made by the partner of the assessee-firm, has rightly confirmed the addition. This Tribunal do not find any infirmity in the order of the CIT(A) for the assessment year 2011-12. Accordingly, the same is confirmed.
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