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2014 (4) TMI 902 - AT - Income TaxValidity of notice issued u/s 148 of the Act – Proceedings initiated after four years - Addition made as unexplained cash credits – Held that:- The AO have not applied his mind at all, which is evident from the several observations made by him in his order and in the notice issued u/s 148 of the Act – AO assumed that the assessee intended to convert the unexplained cash through the route of capital gains, even after several years the assessee did not sell the shares, as stated by the assessee - the shares were demated and available in the name of the assessee but no mention was made at any stage of the proceedings on this aspect though the shares were purchased at a particular price and service tax, commission, etc. have been paid based on the rate for which it was purchased. The assessee had declared the investments in the books of account and even if the AO is of the opinion that the assessee has invested more than what is recorded in the books the differential amount can at best be treated as unexplained investment u/s 69B of the Act - the AO could not have assumed jurisdiction to reopen the assessment proceedings, that too beyond a period of four years, unless it is with the sole intention of bringing the case under the purview of section 149(b) of the Act, it is not permissible in law - what cannot be done directly cannot be done indirectly - AO having initiated the reassessment proceedings after a lapse of four years from the end of the relevant assessment year – thus, the reassessment proceedings are bad in law – also, the addition and assessment made on the strength of proceedings set aside – Decided in favour of Assessee.
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