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2020 (4) TMI 289 - AT - Income TaxAssessment u/s 153C v/s Reopening of assessment u/s 147 - unexplained income under section 68 - valid approval granted u/s 151 - HELD THAT:- Referring to provisions contained under section 153C it is clear that the A.O. should consider the issue of share capital and share premium based on the documentary evidences seized from Jain Brothers, copies of the seized documents are attached with the assessment order particularly as Annexures B and D. It would, therefore, show that incriminating material was found during the course of search in the case of search operation carried out in the case of Shri S.K. Jain Group of cases. The same seized documents were relied upon by the A.O. while framing the assessment in the case of the assessee and initiating the re-assessment proceedings. It is well settled Law that validity of the re-assessment proceedings is to be determined with reference to the reasons recorded for reopening of the assessment. Reasons for reopening of the assessment shows that during the course of search incriminating material pertaining to assessee-company were found and seized and that M/s. Blue Bell Finance Ltd., has made investment in assessee-company. The A.O. has specifically referred to the seized documents during the course of search as Annexures B & D and also attached various other documents found during the course of search to the assessment order. D.R. also admitted that the aforesaid Annexures were found during the course of search in the case of Jain Group. Therefore, when incriminating documents were found during the course of search, the same have been used in the case of the assessee-company. The proper course the A.O. should have adopted is to proceed against the assessee-company under section 153C of the I.T. Act instead of recording reasons for reopening of the assessment under section 147/148 of the I.T. Act. We are of the view that A.O. was not justified in initiating the re-assessment proceedings under section 147 of the I.T. Act, 1961. The A.O. should have proceeded against the assessee under section 153C -A.O. did not apply his mind to the facts and circumstances of the case and material on record. Therefore, we set aside the Orders of the authorities below and quash the reopening of the assessment in the matter. In the result, additional grounds of appeal of assessee challenging the reopening of the assessment are allowed and resultantly, all additions stand deleted. - Decided in favour of assessee.
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