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2015 (11) TMI 1373 - AT - Income TaxValidity of assessment order u/s 153C - Held that:- No material was found during the course of search operation. What was available with the Revenue is the computer statement of depositors which was found during the course of survey operation u/s 133A of the Act. Even assuming that the material found during the course of survey operation can be a basis for making a block assessment, this Tribunal is of the considered opinion that the details of deposits were very much before the Assessing Officer in the returns of income filed by the assessee in the regular course before the date of search. Therefore, in the absence of any further material with regard to non-genuineness of the deposits, this Tribunal is of the considered opinion that the concluded assessments for the assessment years 2001-02 to 2004-05 cannot be reopened. In view of the above discussion, this Tribunal is of the considered opinion that the assessment proceedings initiated by the Assessing Officer u/s 153C of the Act in the absence of any material found during the course of search operation cannot be justified. Accordingly, the orders of the lower authorities are set aside for assessment years 2001-02 to 2004-05. Now coming to the assessment proceedings for the assessment years 2005-06 and 2006-07, the assessee fled the return of income on 10.10.2005 for the assessment year 2005-06. The time limit for issuing notice u/s 143(2) for the assessment year 2005-06 is available upto 30.9.2006. In fact, the search operation was conducted on 4.7.2006. For the assessment year 2006-07, the due date for filing return of income has not expired and the assessee filed the return of income after the search on 31.10.2006. Therefore, for the assessment years 2005-06 and 2006-07, the assessment proceedings are pending, hence, the proceedings initiated by the Assessing Officer u/s 153C are valid for the assessment years 2005-06 and 2006-07. Un-genuine receipts - Held that:- The genuineness of the deposits made in assessment year 2001-02 cannot be examined in assessment year 2005-06 since the assessment proceedings were not pending on the date of search operation. Therefore, even assuming that the deposits are not genuine, this Tribunal is of the considered opinion that that cannot be a reason for making any addition for the assessment year 2005-06 and 2006-07, therefore, the Assessing Officer is not justified in following his observation for the assessment year 2001-02. The Assessing Officer is expected to make independent enquiry for the assessment years 2005-06 and 2006-07. Admittedly, the deposits were received in the earlier assessment years and the same were carried forward for the assessment years 2005-06 and 2006-07 and the assessee has also offered a sum of ₹ 55 lakhs in respect of fresh deposits received during the year under consideration. Therefore, this Tribunal is of the considered opinion that no further addition is required in respect of such deposits for the assessment years 2005-06 and 2006-07. The CIT(A) computed the peak deposit by computing the difference between the earlier deposits and the current deposits. For assessment year 2005-06 the peak credit computed by the CIT(A) is NIL. Therefore, this Tribunal is of the considered opinion that there is no justification for making any addition for the assessment year 2005-06. Now coming to assessment year 2006-07, the CIT(A) computed the peak credit at NIL. The Assessing Officer says that a sum of ₹ 50 lakhs was admitted by the assessee as undisclosed deposits. The CIT(A) rejected the claim of the assessee to set off the peak credit of ₹ 40,74,441/- for assessment year 2001-02. Since this Tribunal find that there cannot be any block assessment for assessment year 2001-02 u/s 153C of the Act, the income offered by the assessee has to be set off. Therefore, this Tribunal is of the considered opinion that no further addition is called for assessment year 2006-07 also. In view of the above discussion, we are unable to uphold the orders of the lower authorities. Accordingly, the orders of the lower authorities are set aside - Decided in favour of assessee.
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