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2016 (4) TMI 805 - AT - Income TaxAssessment u/s 153A - disallowance of interest U/s 36 - Held that:- The notices U/s 153A were issued on 15/1/2010 in all the years. Even for A.Y. 2007-08 in both the cases, no notice U/s 143(2) was issued on or before 31/8/2008. It is settled law when no assessment proceedings are abated on the date of search, no notice can be sent U/s 153A of the Act to the assessee in the case of no incriminating documents were found and seized during the course of search. Therefore, we have considered view that notice issued by the Assessing Officer U/s 153A for A.Y. 2004-05, 2005-06 and 2007-08 in the case of Damodar Das Agarwal and for A.Y. 2004-05 and 2007-08 in the case of Nirmal Kumar Agarwal are out of jurisdiction, accordingly we quash the order of the Assessing Officer and confirmed by the ld CIT(A). We do not find any reason to make disallowance of interest U/s 36 of the Act for A.Y. 2009-10 in the case of Damodar Das Agarwal as the assessee has capital ₹ 1.72 crores against the investment of ₹ 1.26 crores and loan and advances of ₹ 42.36 lacs. Capital is more than investment made and loan advance given. The decision of Hon’ble Bombay High court in the case of CIT Vs. Reliance Utilities & power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT ) is squarely applicable in the case of assessee. Further the ld Assessing Officer has not established the nexus between the interest bearing loan with interest free advances given, therefore, we also delete the addition made in the A.Y. 2009-10 in regular assessment. - Decided in favour of assessee
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