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2017 (2) TMI 172 - AT - Income TaxValidity of the additions made in the assessment order under section 143(3) r.w.s. 153A - LTCG treated as Bogus & Commission paid on bogus LTCG - Held that:- It is not disputed that the issue on which the AO made addition in the post search order of assessment passed under section 143(3) r.w.s 153A of the Act for A.Y. 2006-07, i.e. LTCG treated as bogus cash credit has already been accepted by the AO in the regular order of assessment for A.Y. 2006-07 under section 143(1) of the Act on 25.09.2007, prior to the search. The law mandates that only pending assessment proceedings abate and it is only those years in which proceedings have abated that are to be treated as normal assessment proceedings. For other years, where assessment proceedings have not abated the AO is empowered to make additions only on the basis of evidence, material, information or incriminating documents found in the course of search on an assessee. If as on the date of search, no proceedings are pending for any assessment year and the concerned transactions have been disclosed in the regular books of account prior to the search, additions in respect of such transactions are beyond the scope of assessments to be made under section 153A of the Act and the AO is not empowered to do so. Therefore, in our view, the AO in the case on hand was not empowered by law to make the additions of LTCG treated as bogus cash credit and consequent bogus commission, in the post search assessment as the same was already admittedly disclosed in the original return of income filed for A.Y. 2006-07 which was assessed under section 143(1) of the Act on 25.09.2007 before the search took place on 13.10.2010. Thus AO did not have the power to make the impugned additions of (i) LTCG treated as unexplained cash credits and (ii) Bogus commission expenditure in the absence of any incriminating evidence, documents or material found in this regard in the course of search of this assessee and that consequently, both the aforesaid additions are beyond the scope of the provisions of section 153A of the Act. - Decided in favour of assessee
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