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2016 (12) TMI 1862 - AT - Income TaxValidity of proceedings initiated u/s 153A - whether the proceedings under section 153A, have been validly initiated on the basis of incriminating material unearthed as a result of search revealing undisclosed income ? - HELD THAT:- On a careful perusal of the impugned assessment order, we have not come across any observations by the AO relating to detection of undisclosed income as a result of incriminating material found during the search. In fact, to put it correctly, the AO in the entire assessment order has not referred to a single piece of incriminating material found and seized during the search and seizure operation which could have been remotely connected to the so called undisclosed income assessed by the AO save and except the statement recorded from a director of a newly set–up company. In fact, on a perusal of the said statement also, we do not find in any way it is having any reference to the assessee. In fact, to a specific query from the bench to the learned Departmental Representative, to point out the specific incriminating material on the basis of which the addition has been made, the learned Departmental Representative fairly submitted, in the assessment order there is no reference to any such incriminating material. Thus, prima–facie it is established that there is no incriminating material unearthed as a result of search which could reveal undisclosed income of the assessee. In the present case, admitted factual position is, there is no incriminating material found at the time of search and seizure operation which could demonstrate that the money received towards share application and allotment of shares is not genuine. In the aforesaid circumstances, the initiation of proceedings under section 153A, in our view, is not permissible since these issues are subject matter of original assessment proceedings, completed before the date of search. - Decided in favour of assessee. Addition u/s 68 - unexplained cash credit at the hands of the assessee represents share application money received from Preksha Exports Pvt. Ltd. - HELD THAT:- As treated as unexplained cash credit at the hands of the assessee represents share application money received from Preksha Exports Pvt. Ltd. We have noted, Preksha Exports Pvt. Ltd. is an income tax assessee and not only it has reflected the investment in share application money, in its books of account but also in the financial statements submitted along with return of income. The concerned party has also confirmed the investment in the share application money. In fact, the same Assessing Officer has completed assessment in case of Preksha Exports Pvt. Ltd. without making any corresponding addition in case of the said party. That being the case, in our considered opinion, the addition made at the hands of the assessee cannot be sustained. Accordingly, we delete the same. Ground no.1 is allowed.
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