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2019 (10) TMI 304 - AT - Income TaxExcess of jurisdiction by framing assessment u/s 153A/143(3) - whether no incriminating documents was found and / or seized during search and he did not adjudicate other grounds of appeal on merit - Addition u/s 68 - HELD THAT:- The penalty u/s 271(1)(c) of the Act were levied for the AYs 2005-06 & 2006-07 on the ground that the additional income was offered in the return filed u/s 153A after the search u/s 132 was conducted. Hon’ble High Court in NEERAJ JINDAL, SHRI NEERAJ JINDAL, SHRI ANKUR AGGARWAL [2017 (2) TMI 1002 - DELHI HIGH COURT] held that for the purposes of application of Explanation 5 to Section 271(1)(c) as was in force at the time of search, gave immunity to the assessee from payment of penalty if in the returns furnished u/s 153A the additional was offered and conditions prescribed therein were satisfied. The observations of the Hon’ble High Court relied upon by the CIT, DR were made in the light of and in the context of the provisions of Section 271(1)(c) read with Explanation 5 thereto and the Hon’ble High Court in the said decision was not called upon to decide or adjudicate the scope and ambit of the assessment to be framed u/s 153A of the Act in the case of the person searched. In the case before the Hon’ble High Court the assessee had admittedly offered additional income with reference to incriminating material found in the course of search and therefore the Hon’ble High Court did not have occasion to go into the question as to whether the income was assessed with reference to incriminating material found in the course of search or not. We therefore find that certain observations in the said decision which are sought to be used by the ld. CIT, DR to buttress his argument is flawed. We find that the specific issue in the present appeal is squarely answered in the favour of the assessee in the M/s Loyalka Farms Pvt Ltd decision [2018 (11) TMI 1001 - ITAT KOLKATA] of this Tribunal. Applying the proposition of law laid down in the above decision to the facts of the case on hand, we find that the only addition made by the AO u/s 68 of the Act in the relevant unabated assessment year was not based on any incriminating material found during the course of search. Appeal of the Revenue is dismissed.
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