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2018 (6) TMI 1794 - AT - Income TaxValidity of assessment u/s 147 - search and seizure operation u/s 132 - documents seized in search action under section 132 of the Act on a third party - HELD THAT:- When the AO finally found that the material on the basis of which the proceedings for reassessment were initiated were not sufficient to assess the income and only made a protective assessment then such an exercise of the AO is not permissible to take a chance by resorting to the provisions of section 147/148 of the Act. In view of the above discussion, facts and circumstances of the case and the decision of Hon’ble Bombay High Court in the case of DHLF Venture Capital Fund [2013 (6) TMI 575 - BOMBAY HIGH COURT] we hold that the reopening of the assessment is not valid and consequently we quash the reopening and reassessment made by the AO. Reopening of assessment u/s 147 OR assessment u/s 153C - Assessment order that after the initial assessment u/s 143(3) r.w.s. 153A the AO got the alleged incriminating material in the shape of diary and transactions recorded therein found and seized in the search and seizure operation in case of Rajendra Jain Group. Accordingly, the AO proceeded to reassess the income of the assessee u/s 147 of the Act. The entire decisions of the AO to reassess the income of the assessee is based on the seized material and statement of Shri Madan Mohan Gupta recorded u/s 132(4) of the Act for which the specific remedy is provided u/s 153C. Assessment order that after the initial assessment u/s 143(3) r.w.s. 153A the AO got the alleged incriminating material in the shape of diary and transactions recorded therein found and seized in the search and seizure operation in case of Rajendra Jain Group. Accordingly, the AO proceeded to reassess the income of the assessee u/s 147 of the Act. The entire decisions of the AO to reassess the income of the assessee is based on the seized material and statement of Shri Madan Mohan Gupta recorded u/s 132(4) of the Act for which the specific remedy is provided u/s 153C. Thus we hold that the reopening under section 147/148 of the Act is not valid when the proper course of action was only to initiate the proceedings under section 153C/153A - Decided against revenue.
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