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2019 (7) TMI 984 - AT - Income TaxLegality of notice u/s 153C - satisfaction of AO - HELD THAT:- The revenue has not rebutted the contention of the assessee that there is no valid satisfaction as contemplated u/s 153C. The revenue has not brought on record the satisfaction recorded by the assessing officer of the searched person as well as the assessing officer of the assessee. Therefore, respectfully following in the case of CIT Vs. Mechmen [2015 (7) TMI 1291 - MADHYA PRADESH HIGH COURT] hold that the proceedings u/s 153C are not validly initiated. No correlation document sized wise with the relevant assessment year - HELD THAT:- In the present case, search was carried out at the third party’s premises where from the document related to sale by the assessee were recovered but the A.O. has made addition in respect of the land purchased by the assessee. Admittedly, the document related to purchase of land made by the assessee was not recovered. Therefore, the document of sale cannot be related to the year of purchase. As relied by the assessee in the case of Pr. CIT (Central)-2 Vs. Index Securities (P) Ltd. [2017 (9) TMI 585 - DELHI HIGH COURT] the proceedings u/s 153C are not in accordance with law. Income offered in the income tax return - Another objection of the assess is that the income from capital gain from sale of 3 acres of land to Fortune Soumya Housing was already offered in the income tax return for the assessment year 2012-13, hence, the document cannot even be treated as incriminating. This fact is not controverted by the revenue, hence we find force in to the contention of the assessee. Thus, this document seized at the premises of the third party cannot be treated as incriminating. Hence, looking to the totality of the facts, hold that the proceedings initiated u/s 153C and assessment order passed are not in conformity of law and the same is hereby quashed. Unexplained investment - HELD THAT:- We find from the reply furnished to the A.O. enclosed at paper book pages 16 to 19 that assessee had purchased properties in the years 2002 & 2006 even prior to the purchase of the properties in question at a higher consideration. A.O. has not disbelieved this investments and source of investment by the assessee. It is also fact that the assessee also purchased properties subsequent to purchase of the agricultural land in question. Therefore, the cash book as submitted by the assessee could not have been disbelieved and it can be inferred from the same that the assessee was having sufficient source of income to make investment. Hence, the assessee succeeds on this ground as well.
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