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2016 (9) TMI 1043 - AT - Income TaxValidity of the initiation of the proceedings under Section 158BD - Held that:- Taking recourse with the block assessment u/s 158BD/158BG of the Act the preceding conditions are that firstly satisfaction must be recorded by the Assessing Officer of the searched person that any undisclosed income belongs to any person other than the person who has been searched u/s 132 of the Act and secondly documents or assets or books of accounts seized in relation to such other persons have been handed over to the Assessing Officer having jurisdiction over such other person. Examining the facts of the case in light of above discussion, we find that there is no dispute to this fact that no such satisfaction note was provided to the assessee which has been specifically mentioned by the Assessing Officer in his assessment order and also Revenue has not placed on record the copy of satisfaction note, if any, made. In all, the juncture at which proceedings u/s 158BD of the Act commenced for block assessment of a person other than the searched person, Assessing Officer completely failed to satisfy the provisions of section 158BD of the Act. We are, therefore, of the view that the impugned assessment order for the block period passed under section 143(3),r.w.s. 254 r.w.s. 158BD of the Act needs to be quashed in the given facts and circumstances of the case wherein no satisfaction has been recorded as per the provisions of section 158BD of the Act before framing the block assessment. We quash the block assessment order.- Decided in favour of assessee Addition u/s 68 - Held that:- Assessee has miserably failed to explain the cash credits appearing in the audited financial statements attached with the original return of income. The later submissions made by assessee that the previous audit report was fictitious (even when signed by independent audit) and the revised balance sheet audited by another auditor is correct, is not convincing. It seems that assessee is indulged into mal practices of fabricating books of accounts and depicting unrealistic financial data with a view to cheat the public and, therefore, deserves no mercy. We find no reason to interfere with the order of ld. CIT(A). The appeal of the assessee is dismissed on this issue. Unaccounted investment in shares - Held that:- Addition has been made in the block assessment of the assessee as well as on protective basis in the case of Renco Gears Ltd. Further Assessee has failed to substantiate with any material evidence which could prove that investment did not flow through the funds of assessee. From going through the facts discussed by ld. CIT(A) in his order, we find that investment in shares of Renco Gears Ltd. have been duly owned by the investor and the source of investment was from FCNR account with Dena Bank, Ambawadi, Ahmedabad and the impugned amount was given towards share application money through banking channel but later on these shares have been transferred to Jashwant Shan and Mrudula Shah. Surprisingly these two persons have denied the ownership of the shares. In such situation complete transaction looks doubtful. From going through the facts we are of the view that addition was rightly made for unaccounted investment - Decided in favour of revenue Investment in machinery - Held that:- Assessing Officer has completely ignored the facts so much so that all necessary details including purchase bills containing invoice no., date and amount, details of payment, which were made in the Financial Year 1993-94 itself and the sale consideration was received against the sale of these machines only. Therefore, when the source of investment in machines is proved, there cannot be any question mark on the sale consideration received against sale of machinery. Ld. CIT(A) has rightly deleted the addition - Decided in favour of assessee
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