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2014 (5) TMI 47 - AT - Income TaxAdmission of additional grounds – Held that:- The additional grounds are legal in nature and go to the root of the matter, thus, following the decision in National Thermal Power Corporation Ltd. V/s. CIT [1996 (12) TMI 7 - SUPREME Court] – the additional grounds are admitted for consideration. Invoncation of section 158BD of the Act - Non recording of satisfaction by the AO – Held that:- The condition precedent for initiating a block assessment under S.158BD is reaching/recording satisfaction by the AO, as enjoined in S.158BD of the Act, to the effect that incriminating material indicating undisclosed income assessable in the hands of the assessee, was found during S.132 proceedings of the person searched - revenue demonstrated that the material for such satisfaction has in fact been recorded by the AO – thus, there is no merit in ground raised by the assessee – Decided against Assessee. Service of assessment order – Impact on computation of period of limitation – Held that:- The decision in Commissioner Of Income-Tax Versus Gangadhar Gowd Rama Gowd And Co [1984 (11) TMI 19 - ANDHRA PRADESH High Court] followed - considering the fact of service of orders refusing the registration of the firm on one of the partners by name, after dissolution of the said firm, the appeal filed by the other partner, on obtaining certified copies of the relevant orders, was held to be within time and not barred by limitation - there was no delay in the filing of the first appeal before the CIT(A), and consequently, the CIT(A) was not justified in holding the appeal before him as barred by limitation – thus, the order of the CIT(A) set aside – Decided in favour of Assessee. Estimation of undisclosed income - Evidentiary value of the documents found and seized at the time of search – Held that:- The undisclosed income for the purpose of block assessment has to be completed solely on the basis of seized material and any enquiry made by the AO relatable to such material, meaning thereby neither any enquiry report nor any document procured either before or after search can be considered while computing the undisclosed income of the assessee - any document found and seized during the course of search has to be interpreted literally and nothing can be added or subtracted- The material found and seized are two sheets of typed paper - They are simply unsigned and cannot be attributed to the assessee - unsigned papers are mere dumb documents and cannot be relied upon for making a block assessment – Relying upon ACIT V/s. Dr. Kamla Prasad Singh [2010 (3) TMI 939 - ITAT PATNA] the addition made by the AO on the basis of unsigned papers cannot be sustained – thus, the order of the CIT(A) set aside – Decided in favour of Assessee. Penalty imposed u/S 158BFA(2) of the Act – Held that:- The decision in M/s. HSBC Electronic Data Processing India Ltd. Versus Dy. Commissioner of Income-tax Circle 2(2), Hyderabad [2013 (9) TMI 485 - ITAT HYDERABAD] followed – the addition is beind deleted, based on which penalty has been levied – the very basis of the penalty no longer survives – thus, the penalty confirmed by the CIT(A) also set aside - Decided in favour of Assessee.
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