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2020 (10) TMI 1018 - AT - Income TaxRevision u/s 263 - Short term capital gain computation - CIT-A directing the Assessing Officer to re-compute the income of the assessee after examining in detail, the claim made by the assessee in the form of cost of improvement - assessee in response to notice u/s. 153A filed return of income on 29.08.2013 for A.Y. 2008-09 admitting an income - HELD THAT:- Admittedly in this case no incriminating material was found in the search proceedings leading to disallowance of expenditure incurred on furniture and fittings. When there is no incriminating material found in the course of the search either originally when the search took place on 06.11.2007 or on 18.07.2012 whether addition/disallowance can be made based on the findings of the Ld. CIT in the proceedings u/s. 263 of the Act is the issue to be decided. In the assessee’s case the Assessing Officer proposed to disallow the expenditure claimed by the assessee towards furniture and fittings and the Addl. CIT by order dated 31.12.2009 u/s. 153D accepted the claim of the assessee. From the above order of the Addl. CIT it can be seen that the claim of the assessee was accepted after examining the relevant documents, invoices etc., by making an observation that the claim made by the assessee with regard to allowance for renovation of interior work and furniture and fittings is acceptable based on these directions of the Addl. CIT u/s. 153D/144A the Assessing Officer completed the assessment u/s.143(3)/153A of the Act accepting the claim of the assessee. When once the Assessing Officer passed Assessment Order based on the directions of the Addl. CIT who has examined the issue with reference to the documents and evidences furnished by the assessee such Assessment Order cannot be held to be erroneous. The commissioner while passing the order u/s. 263 of the Act in fact made an observation that “it can be inferred that the Range Head had failed to cause any enquiry in this regard” blaming the Range Head for not conducting proper enquiry. CIT is inferring that Addl. CIT has not conducted proper enquiry. This is only an inference. The order passed by the Ld. Addl. CIT u/s. 153D clearly states that he has looked into the documents and annexures thereon and on satisfying himself of the evidences directed the Assessing Officer that the claim of the assessee is acceptable. Therefore, when the view taken by the Addl. CIT and the Assessing Officer can be accepted as one of the possible views, Assessment Order cannot be treated as erroneous even though some prejudice caused to the revenue. When the assessment order passed by the Assessing Officer u/s. 143(3)/153A is not erroneous, the findings of the Ld.CIT(Central) in his order passed u/s. 263 has no relevance and such order of the Ld.CIT is not sustainable in law. Assessment u/s 153A - Legal proposition that addition/disallowance should be made based only on the materials seized/unearthed during the course of search proceedings. Thus, we direct the Assessing Officer to delete the disallowance of expenditure incurred towards furniture and fittings and compute the income accordingly.
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