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2018 (9) TMI 1774 - AT - Income TaxAssessment u/s 153A - disallowance of expenditure incurred for increase in the authorized share capital of the company by holding the same as capital expenditure - Held that:- AO cannot resort to the provisions of section 153A to fill up the lacuna left in the original assessment or not doing the original assessment except reassessment of the total income and addition, if any, based on incriminating material found during the course of search proceedings. In the case in hand, undisputedly no incriminating material was found to reveal any income not disclosed by the assessee in the return of income filed under section 139(1) - Rather the addition is made by the AO on account of disallowance of expenditure treating the same as capital in nature. Therefore, the issue of disallowance of expenditure is a debatable one and the disallowance is based on difference of opinion between the assessee and the AO. Hence when the original assessment was not pending as on the date of search then the AO cannot use the proceedings under section 153A to make an addition purely on the basis of difference of opinion. We set aside the impugned orders of the authorities below qua this issue and delete the addition made by the AO - addition made by the AO in the assessment framed under section 153A is deleted for want of incriminating material - Decided in favour of assessee.
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