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2020 (10) TMI 1127 - AT - Income TaxRejection of books of accounts - HELD THAT:- In the instant case, the two observations made by the Assessing Officer cannot be said to be justifiable reasons to reject the books of accounts. Further, in case where the books of accounts are rejected u/s 145(3) then the assessment ought to have been completed u/s 144 of the Act. Section 144 provides for best judgment method of assessment by Assessing Officer and to complete the assessment u/s 144(1), the Assessing Officer has to afford an opportunity to the assessee to that extent. Since, the amounts have been duly reflected in the books of accounts and the reasons specified by the Assessing Officer are not justifiable and since the assessment has not been completed following the due procedure as mentioned u/s 144, we hereby hold that no addition in the case of the assessee is called for. Addition u/s.69A r/w Sec. 115BBE - unexplained cash found during search - search and seizure operation u/s 132 - Old currency notes which had zero intrinsic value as on the date of operation of locker No. 487 - HELD THAT:- The amount has been added as unexplained money u/s 69 A for the assessment year 2017-18. Hence, it needs to be considered as to whether for the period between 01.04.2016 to 25.04.2016, possession of these notes have any intrinsic value or not. On this issue, we are guided by the judgment of Hon’ ble High Court of Karnataka in the case of CIT Vs Andhra Pradesh Yarns Combines Pvt. Ltd. [2006 (1) TMI 66 - KARNATAKA HIGH COURT] Locker was last operated on 29.10.2015. The fact that the locker has not been operated in the assessment year 2017 -18 is before the revenue authorities. Hence, the amount deemed to have been undisclosed income for the assessment year 2016-17 whereas the amount has been brought to tax for the assessment year 2017 -18. Hence, the addition made in the AY 2017-18 cannot be upheld. Appeal of the assessee is allowed.
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