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2015 (11) TMI 1773 - AT - Income TaxAssessment u/s 153A - addition u/s 68 - advance received from customers towards advances for sale of shops/flats - AO completed the assessment u/s. 143(3) - search action u/s. 132 - proof of incriminating material found in search - HELD THAT:- Admittedly, in the instant case, the assessee during the course of original assessment proceedings has filed the details of advance received from customers towards advances for sale of shops/flats. The assessment order passed by the AO u/s. 153A r.w.s.143(3) does not speak of any incriminating material that was found during the course of search. Only the ADIT had conducted certain post search enquiries in respect of 4 persons out of the 13 persons mentioned by the AO according to which the persons are having income from agriculture only. Despite having bank accounts they have paid amount in cash and their credit worthiness is doubtful. In view of the above and in absence of any plausible evidence filed by the assessee during assessment proceedings to substantiate the genuineness of the transactions and credit worthiness of the persons who had given huge advances, the AO made addition of ₹ 2.30 crores u/s. 68. CIT(A) allowed relief of only ₹ 7 lakhs and sustained addition of ₹ 2,23,00,000/-. It is the submission of the assessee that since no incriminating material was found during the course of search, therefore, in view of the decision of Continental Warehousing Corporation . [2015 (5) TMI 656 - BOMBAY HIGH COURT]and Murali Agro Products Ltd. [2010 (10) TMI 1052 - BOMBAY HIGH COURT] AO could not have made any addition u/s. 68 of the I.T. Act in respect of advance from customers towards sale of flats/shops. Although the decision of the Hon'ble Bombay High Court in the case of Murali Agro Products Ltd. (Supra) passed on 29-10-2010 was available at the time of completion of the assessment u/s. 143(3) r.w.s. 153A (passed on 31-12-2010) the same was neither brought to the notice of the AO nor before the CIT(A) for which the AO/CIT(A) have not considered the same. Similarly, the decision in the case of Continental Warehousing Corporation (Supra) was passed after the order of the CIT(A). Thus, the lower authorities have no occasion to consider the above 2 decisions and apply their mind which are being relied on by the Ld. Counsel for the assessee before us for the first time to the proposition that the AO could not have made any addition u/s. 68 in absence of any incriminating material found during the course of search. Under the aforementioned circumstances, we deem it proper to restore the issue to the file of the AO with a direction to decide the issue afresh - Additional ground by the assessee is accordingly allowed for statistical purposes.
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