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2022 (2) TMI 26 - AT - Income TaxAssessment u/s 153A - Undisclosed sales from Silicon City Project - Proof of incriminating material found in search - Search and Seizure operations u/s 132 were carried out on the business as well as residential premises of the Jhaveri Group, Indore including the assessee along with other concerns/business associates - HELD THAT:- We find that out of four persons whose statements were relied upon by the Assessing Officer, two have discredited the statement and retracted from the same via affidavits as submitted by the assessee during first appellate proceedings. It is worthy to mention that the said affidavits cannot be said to be additional evidences but the same are supporting documents in respect of the assessee’s contention as the affidavits submitted were not like any old document which existed during the assessment/search proceedings but was produced later before the appellate authorities because those were actually acquired by the assessee later from those people looking to the requirement of the matter. An additional evidence will be something that was already in existence previously but was submitted later, and this was not so in the present mater. Therefore, it cannot be termed as an additional evidence but as a supporting document. Further, we find that during the course of assessment proceedings, the assessee was not provided with the opportunity of cross-examination with the concerned persons on whose statements reliance was placed by the Assessing Officer. We also find that during the search proceedings no incriminating material was found from the assessee’s premises relevant to the project Silicon City, therefore, the Assessing Officer wrongly presumed on the basis of some letters received from four persons that the assessee accepted large portion of Sale Consideration on sale of land in cash and the same was not accounted for by them. Thus, the additions were made by the Assessing Officer without appreciating the fact that neither any cash was found or seized nor any document relating to cash receipts was found or seized during the search proceedings. CIT(A) had made detailed discussion on facts and recorded the finding that no incriminating evidence material was found during the course of search operation and also the contention of the learned Counsel for the assessee that letters relied upon by Assessing Officer were not made available to assessee during the course of assessment proceedings and to the CIT(A) during the course of appeal hearings as such on that basis, ld. CIT(A) should have also deleted the addition of undisclosed sales - Decided in favour of assessee. Deemed dividend u/s 2(22)(e) - unsecured loan to another company in which directors have substantial interest - in the nature of business receipt or not - HELD THAT:- We find that the additions on account of deemed dividend u/s 2(22)(e) were not valid as the provisions of Section 2(22)(e) did not apply in the assessee’s case as specifically recorded by the ld. CIT(A) in the appellate order in the light of the decision of the ITAT, Indore in case of Makhija Construction Co. [2011 (10) TMI 177 - ITAT, INDORE] wherein relying upon several decisions of Hon’ble Supreme Court and Special Bench, it was held that if the assessee co. is not a registered holder of shares, the provisions of Section 2(22)(w) would not be applicable. In the instant case, since the assessee co. is not a registered holder of shares of M/s Ajitnath Reality Pvt. Ltd., we are of the view that ld. CIT(A) has rightly deleted the additions following the relevant judicial pronouncement - Decided in favour of assessee.
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