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2022 (9) TMI 156 - AT - Income TaxAssessment u/s 153A - Additions of contract income not offered for taxation - HELD THAT:- As in the case of Pr. CIT v. Jaypee financial services [2021 (2) TMI 1186 - DELHI HIGH COURT] held that where AO during the course of post search proceedings under section 153A against assessee-share trader found certain evidences showing client code modification done by assessee which were not for genuine reasons and, accordingly, made addition on account of such client code modification, since impugned addition was not made by AO based on any incriminating material found during search against assessee and assessment was not pending on date of search, impugned addition was unjustified and same was to be deleted. Department has not been able to produce any material to suggest / substantiate that the assessment order was passed on the basis of any incriminating material found during the course of search. In view of well settled proposition of law that completed assessment can be interfered by the Assessing Officer while making assessment u/s. 153A only on the basis of some incriminating material unearthed during the course of search documents or undisclosed income or property discovered in the course of search, which were not produced or not already disclosed or made in the course of original assessment, we are of the considered view that in the instant facts, CIT(A) has not erred in facts and in law in deleting the additions for assessment year 2007-08. Even on merits of the case, we find no infirmity in the observations made by the Ld. CIT(Appeals) in the appeal order. The Department has not been able to bring anything on record to point out any error in the factual findings of the CIT(Appeals) in the appeal order, while deciding the issue on merits. Accordingly, in our considered view, CIT(Appeals) has not erred in facts and in law in deleting the additions made on account of contract income not offered for taxation. Addition u/s 41(1) - CIT(Appeals) erred in facts and law in confirming the addition on the ground that the assessee has not been able to prove that the liability was actually subsisting at the end of the financial year.- Decided in favour of assessee.
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