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2014 (11) TMI 603 - AT - Income TaxProceedings u/s 153C – Held that:- Assessment order u/s 143(3) of the Act was passed on 31.03.2006 by making various disallowances and additions - the AO framed the assessment order u/s 153C/143(3) of the Act despite the fact that no incriminating material was found during the course of search - This aspect is evident by the fact that the AO framed the impugned assessment order u/s 153C/143(3) of the Act by taking the total income arrived at in the original assessment order u/s 143(3)/154 of the Act dated 02.08.2006 which included various disallowance and additions - order u/s 143(3) of the Act has been passed earlier and the issue was further adjudicated before the higher authorities and accordingly the assessment for assessment year under dispute was not pending on the date of initiation of action u/s 153C of the Act - the hand over of the materials which belonged to the assessee was taken much later after passing of assessment order us 143(3) of the Act. Where none of the assessments were pending on the date of search the AO is precluded from re-agitating issues u/s 153C of the Act which have attained finality in original assessment dehorse any incriminating material found during the course of search - the only action left for the AO in that respect as no addition was conceived on incriminating materials is to drop the proceedings - under the provision of Act only the proceedings which is pending shall get abated - any proceedings that has reached its finality shall not be disturbed unless there are materials found, indicating existence of income embedded in incriminating documents - No incriminating material has been proved to have been found in the course of search which belonged to the assessee warranting the re-assessment u/s 153C of the Act for the AY. The person who is searched u/s 153A of the Act can be assessed only on the basis of incriminating material found and the other person who is assessed u/s 153C of the Act in connection with the same search should be assessed de hors any incriminating material - the provision of section 153C(1) was amended to obviate practical difficulties which arose in its interpretation - To put it simply this amendment to proviso to section 153C(1) of the Act debars the AO from making any assessment dehorse any incriminating material found during the search - assessment in the AYs have been completed u/s 143(3) of the Act - the assessment for the concerned assessment year does not abate - assessment u/s 153C of the Act in these cases dehorse any incriminating material is not sustainable –thus, the order is set aside – decided in favour of assessee.
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