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2016 (7) TMI 1361 - AT - Income TaxDisallowance u/s 40A(3) - AO jurisdiction to pass the assessment order u/s 153A - no notice u/s 143(2) was issued - Held that:- Assessee in the instant case filed original return of income u/s 139(1) of the Act on 24.10.2005. A copy of the return physically received by the Department on 05.11.2005, is placed on record. AR contension that no notice u/s 143(2) was issued by the AO for the instant year remained uncontroverted on behalf of the Revenue. This shows that the assessee filed its return u/s 139(1) of the Act which was duly processed u/s 143(1) of the Act, thereby assigning finality to the assessment, because no notice u/s 143(2) was issued for completing assessment u/s 143(3). It indicates that the assessment for the instant year stood completed on the date of search. Going by the verdict given by the Hon’ble Delhi High Court in the case of Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT) that no addition can be made otherwise than those based on incriminating material found during the course of search in the case of completed assessments on the date of initiation of search, we find that the instant disallowance u/s 40A(3), which is not based on any incriminating material found during the course of search, cannot be sustained. We, therefore, order for the deletion of the addition on this legal ground. - Decided in favour of assessee.
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