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2022 (2) TMI 808 - AT - Income TaxValidity of Assessment u/s 153C - Assessment in case of search or requisition - HELD THAT:- As noted except for the statement of Shri Abhinandan Lodha, there is no material whatsoever, that the cash seized at the premises which did not belong to the assessee belong to the assessee. In such circumstances, the said cash account cannot be said to be material found under the proceedings of section 153C giving jurisdiction to the AO to frame the assessment. Same is a situation of the material found relating to receipt of on money. These are also based upon materials found in the case of search of Lodha group and the statement of other employees of Lodha group and the statement of Abhinandan Lodha. There is no material whatsoever specifying the material pertaining to the assessment year found belonging to the assessee company. In this view of the matter, there is a jurisdictional defect in the assessment framed under section 153C and the same is liable to be set aside on the account itself. Addition of on money received and the cash found relating to undeclared sale of parking space and flats - The assessee is a separate legal entity. There is no mention whatsoever regarding the nature of particular material belonging to the assessee company, which gives rise to the inference of on money receipt. This is based upon statement of other employees of Lodha group and that of Shri Abhianndan Lodha. As pointed out by us above, assessee has already disputed that assessee is a distinct legal entity and the term Lodha group cannot be used to incriminate the assessee and that Shri Abhinandan Lodha is not at all related to the assessee company. Hence, the material referred are not germane and hence, the addition on merits is also not sustainable. None of the statement referred here are identified to be belonging to the assessee company. In these circumstances, we note that none of the case laws referred by ld.CIT(A) expound that statement of persons not belonging to the assessee company can be an evidence against the assessee and which can be the basis of addition of undisclosed income. CIT(A) has elaborately dealt with evidences and evidences act, his order is conspicuously silent on the evidences of electronic data referred in this case and the compliance with the above exposition of law. We are conscious that this issue has not been raised, but then it is also settled that there is no estoppel as to law. In the background of aforesaid discussion and precedents in our considered an addition of merits also is not sustainable. - Decided in favour of assessee.
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