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2014 (6) TMI 736 - AT - Income TaxValidity of proceedings initiated u/s 153A of the Act - No search action at premises - The assessee is a group company of Swastik Pipes Group - the warrants are issued to the premises which are mainly used by the group for conducting business of the company and warrants are issued in respect of premises - There are possibilities that documents and other unaccounted wealth could have been found at any of such premises occupied by the various group companies - once a valid search is conducted u/s 132 against the assessee then the AO has jurisdiction to issue notices u/s 153A and to complete the assessment – Decided against Assessee. Deletion of unexplained share application money – Creditworthiness of investors and genuineness of transaction not proved – Whether in the absence of any incriminating material found during the course of search addition can be made by assessing officer as undisclosed income u/s 153A of the Act - Held that:- When there is no abatement of assessment proceedings then in absence of any incriminating documents or unaccounted wealth or statement against the assessee then no addition can be made in the assessment framed u/s 153A of the Act – Relying upon Kusum Gupta Versus DCIT, Central Circle-15 New Delhi [2013 (11) TMI 665 - ITAT DELHI] - merely because a search is conducted and even though no incriminating material is found as a result, the original assessment of the assessee cannot be reviewed or substituted by a change of opinion about any claim of deduction, allowance or claim of exempt income - addition cannot be made u/s 153A as there was no material which could show that share application money received was not genuine or it has come out of the coffers of the assessee’s unaccounted income. Revenue has not doubted the identity of the share applicant - All the share applicants were on income-tax record having PAN - The ITR details of the same were submitted by the assessee - various documents related to these persons were submitted, which include share application, bank statement, balance sheet and profit & loss account of the shareholders, confirmations, PA, certificate of incorporation, etc. - The AO has not taken any pain to investigate the veracity of the documents - The identity of the share applicants was not in doubt by AO which has not been even disputed in the ‘grounds of appeal’ taken by the revenue – Following CIT vs Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SUPREME COURT OF INDIA] - the AO would have made further enquiries if he was in doubt about the genuineness of the confirmation and creditworthiness of the shareholders - there was a complete lack of enquiry on the part of the AO when the assessee has furnished the relevant material with regard to the share application money - The AO has neither issued summons u/s 131 of the Act nor has he received back any unserved notices from the shareholders – thus, the order of the CIT(A) is upheld – Decided against Revenue.
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