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2023 (9) TMI 373 - AT - Income TaxAssessment u/s 153A - Addition u/s 68 - unexplained cash credits in the books of the assessee - retracted statement - AO had primarily relied on the statement of Shri Rajesh Bhagat who was the Director in of the predecessor entity of the assessee - CIT(A) deleted the addition as nothing has been found during search to substantiate that the appellant has taken bogus entries and routed its fund - HELD THAT:- The Bench is of the considered opinion that Ld. AO had fallen in error in relying the retracted statement of Shri Brijesh Bhagat. If at all the statement of Shri Brijesh Bhagat was relevant the same should have been corroborated by some material evidences from the enquiry the Ld. AO had conducted with regard to creditworthiness of the parties. Shri Bhagat had denied all the facts of statement dated 16.03.2016 given by him before DDIT(Inv.), Kolkata and an affidavit dated 29.03.2016 of retraction was also filed before Ld. AO. Ld. AO had sought the comments of DDIT(Inv.), Kolkata on the retraction which made the submission that it was an afterthought effort. Thus, the Bench has no hesitation but to accept the observation of the coordinate bench in regard to the assessments completed u/s 153A of the Act that the retracted statement of Shri Bhagat was not reliable piece of evidence and like making addition u/s 153A the same could not have been the sole basis of reopening also. There is no error in finding of CIT(A). The grounds raised have no substance. Non-disposal of the objections of assessee against the validity of jurisdiction exercised by Ld. AO in passing the re-assessment order u/s 148 - CIT(A) seems to have not taken cognizance of the fact that specific ground was raised before him that AO had not followed the procedure for issuing notice u/s 148 of the Act as Ld. CIT(A) considered to be a superfluous in the light of earlier proceedings u/s 264 of the Act. CIT(A) has appreciated the matter before him only on the merits. A discussion hereinabove has established that Ld. AO had fallen in error in exercise of jurisdiction beyond the scope of Section 147/148 of the Act as there was absence of independent opinion as basis in his reasons to re-open and there was no tangible material except retracted statement of a witness Mr. Bhagat. Thus, the cross objection deserved to be sustained. Consequently, the appeal of Revenue is dismissed and Cross objection stand allowed.
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