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2014 (6) TMI 587 - AT - Income TaxValidity of assessment u/s 153A of the Act Reference to seized documents not made Held that:- Following Mr GOPAL LAL BHADRUKA, Versus DEPUTY COMMISSIONER OF INCOME TAX [2012 (6) TMI 657 - ANDHRA PRADESH HIGH COURT] - return filed for the AYs pending on the date of search - the assessment for the AYs stands abated on the date of initiation of search - even if there is no incriminating material to indicate any undisclosed income or income escaped assessment during the original assessment completed u/s 143(3), the AO is bound to make assessment u/s. 153A for all the AYs Decided against Assessee. Disallowance of expenses on commission income - Held that:- AO disallowed the expenditure without an iota of discussion in his order- There is no finding by the AO regarding how he doubted this expenditure and he in a mechanical manner disallowed the same which is not proper - Had he doubted the expenditure, he ought to have called for evidence and confronted the assessee to prove the genuineness of the expenditure - the expenditure cannot be disallowed Decided in favour of Assessee. Addition of unexplained credit u/s 68 of the Act - Held that:- Following Mr GOPAL LAL BHADRUKA, Versus DEPUTY COMMISSIONER OF INCOME TAX [2012 (6) TMI 657 - ANDHRA PRADESH HIGH COURT] - by virtue of section 158BI of the Act, various provisions of Chapter XIVB of the Act are made in applicable to the proceedings u/s. 153A/153C of the Act- while provisions of Chapter XIVB of the Act limit the enquiry by the AO to those materials found during the course of search and seizure operation, no such limitation is found in so far as section 153A/153C of the Act are concerned - there is no necessity of seized material to frame the assessment u/s. 153A of the Act as required for framing assessment u/s. 158BC r.w.s. 158BB of the Act - the assessee is required to explain the source while framing the assessment u/s 153A of the Act thus, the matter is remitted back to the AO to explain the source of receipt Decided partly in favour of Assessee. Addition of capital gain our of development agreement Already offered for tax - Held that:- The HUF has declared the income arising out of transfer of property vide Joint Development Agreement in the hands of HUF and paid tax consequent to the notice issued to the assessee u/s. 153A of the Act on 9.9.2009 - once the Department accepted the return of income declared by the HUF arising out of transfer of capital asset vide development agreement - it is not proper to tax the same in the hands of the assessee in any assessment year which amounts to double taxation - the lower authorities are not justified in taxing the capital gain arising out of transfer of capital asset vide development agreement. The entire control over the property was with the assessee inasmuch as the licence to construct the property was also in the name of the assessee - It was found that execution of the agreement could not amount to transfer as contemplated u/s 53A of the Transfer of Property Act Decided in favour of Assessee. Addition of unaccounted investment Investment of loans Held that:- There is no evidence to show that the assessee has given loans to these parties - the addition is made on the basis of conjectures and surmises - This is an assessment framed u/s. 153A r.w.s. 143(3) of the Act - There should be conclusive evidence to suggest that the assessee has carried on money lending business and in terms of money lending business the assessee has received these cheques - unless and until there is corroborative evidence to suggest that the assessee has carried on the money lending business no addition can be made Decided in favour of Assessee. Addition of value of gold and jewellery Held that:- Assessee rightly contended that the jewellery found at the residence of the assessee is not only belongs to the assessee but also belongs to the family members of the assessee and the same should be considered as per the CBDT circular 1916 dated 11.5.1994 - thus, the matter is required to the be remitted back to the AO to give credit to gold and jewellery to each member of the assessee's family members in terms of CBDT circular No. 1916 dated 11.5.1994 if they are living under single roof as supported by documentary evidence Decided partly in favour of Assessee.
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