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2015 (4) TMI 903 - ITAT LUCKNOWAppeal against validity of assumption of jurisdiction under section 153A - Additions in income on account of low house hold withdrawals & credit appearing in the capital account - Addition on account of waste material found - Held that:- We find that as per this judgment of Hon'ble jurisdictional High Court in Dr. A.K.Bansal [2013 (4) TMI 366 - ALLAHABAD HIGH COURT], the issue involved in these grounds is squarely covered against the assessee. In this case, it was held by Hon'ble jurisdictional High Court that neither the Assessing Officer nor the appellate authority, can look into the validity of the search by calling for the warrant of authorisation and examining the records authorising search for the purpose of an enquiry whether the search was valid. Respectfully following this judgment of Hon'ble jurisdictional High Court, this issue is decided against the assessee and accordingly these grounds are rejected. We find that it is noted by Assessing Officer in the assessment order that this is the first year of business of Shri Ram Agencies but the assessee has shown opening balance of capital as on 01/04/2007 at ₹ 1,57,010/-. The Assessing Officer asked the assessee to explain the same along with the supporting documents regarding the source of opening capital and also to explain the source of ₹ 20,000/- introduced during this year. In reply, the assessee has furnished a copy of the capital account and has not provided any details regarding sources of fund. During the year, the assessee has shown cash deposit in his capital account of ₹ 20,000/- on 01/10/2007. No explanation has been given regarding the source of this cash deposit. Considering the facts, as discussed above, we do not find any reason to interfere in the order of CIT(A) because the assessee could not establish the source of this credit appearing in the capital account of the assessee. Also neither before CIT(A) nor before us, the assessee could show that there was any source of house hold expenses during the first half year of the present previous year. Under these facts, we do not find any reason to interfere in the order of CIT(A) on this issue also. - Decided against the assessee. Addition on account of waste material - We find that before the Assessing Officer, the assessee has given two explanations. First explanation was that the stock found in course of search was waste material and therefore, no addition is justified. The second explanation was that they valued the stock at ₹ 3,99,570/- and it was submitted that this may be treated as part of ₹ 60 lacs surrendered against the stock by Shri K. N. Singh Patel. After considering this submission, it was held by the Assessing Officer that the material found at the time of search is waste material or not cannot be verified at this stage and no such contention was raised earlier. Regarding the claim of ₹ 60 lac surrendered against stock, it is noted by the Assessing Officer that such surrender was made by him against the stock of Pal Pan Private Limited and in this manner, the Assessing Officer rejected both the explanations of the assessee and made the addition. On this issue, a clear finding is given by CIT(A) in Para 9.2.2 of his order that Shri K. N. Singh Patel is not related to the assessee and as per the provision of section 292C, the assessee was liable to explain the source of the stock found in his premises as he was the owner of the business. He has also given a finding that Shri K. N. Singh Patel has nowhere owned up the assets found in the premises of the assessee and no benefit of set off can be allowed against the amount surrendered by him as no such specific bifurcation appears to have been given by Shri K. N. Singh Patel. These findings of CIT(A) could not be controverted by Learned A.R. of the assessee and therefore, we do not find any reason to interfere in the order of CIT(A). - Decided against the assessee.
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