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2024 (1) TMI 416 - AT - Income TaxAssessment u/s 153C - incriminating documents seized or any material was found indicating any undisclosed income of assessee or not? - addition u/s 68 - HELD THAT:- We note that additions made by the Assessing Officer, while passing the assessment order u/s 153C of the Act, were without mentioning of any incriminating material found during the course of search, therefore addition made by the assessing officer is not justified. The assessee filed regular return of income on 31.03.2014 and on the date of search, no proceedings were pending. Once completed assessments cannot be interfered, if no incriminating material was found, during the course of search. The assessee cited several case laws before ld CIT(A). The assessee also submitted the judgment of jurisdictional High Court of Gujarat in the case of PCIT Vs. Saumya Construction P. Ltd [2016 (7) TMI 911 - GUJARAT HIGH COURT] During the year consideration, AO has made additions considering loan as non-genuine by applying section 68 of the Act, however, these loans were examined by the assessing officer during regular assessment proceedings, hence these loans were not incriminating material, therefore, ld CIT(A) deleted the addition. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the ground raised by the revenue. Addition considering the agricultural income as bogus - CIT(A) held that keeping in view of facts that additions made by the Assessing Officer were not based on any incriminating material found during the course of search, even at the third party premises, and the binding judgement of Hon'ble High Court of Gujarat, as mentioned above, the additions made by the Assessing Officer were not found justified, hence, ld CIT(A) deleted the addition. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. Addition of unsecured loans - HELD THAT:- We note that partial additions made by the assessing officer (AO) considering loan taken from the following creditors as non-genuine, were deleted by ld CIT(A), as the assessee has discharged onus to prove identify of the creditors, genuineness of the transactions and creditworthiness of the creditors For part therof since, additional evidences filed before the Tribunal first time and these have not been examined by the Assessing Officer, hence we are of the view that these evidences should be remitted back to the file of Assessing Officer for his examination. Therefore, out of total addition of Rs. 3,34,40,000/- sustained by ld CIT(A), we remit the various creditors mentioned in para (xxxi) of ld CIT(A) order, at Rs. 1,86,65,000/- to the file of the assessing officer for his examination and to adjudicate the issue in accordance with law and balance addition of Rs. 1,47,75,000/- (Rs.3,34,40,000- Rs. 1,86,65,000) is hereby deleted. Thus, ground no.1 raised by the assessee is partly allowed in above terms. Bogus agricultural income - CIT(A) deleted addition - HELD THAT:- CIT(A) noted that assessee was subjected to search on 27.12.2012 and assessment of 6 years was made u/s 153A - During the course of search, no evidence was found which shows that the assessee is inflating the agricultural income, reopening in view the above documents, the addition made by the AO was not found justified by ld CIT(A), hence, ld CIT(A) deleted the addition. We have gone through the above findings of ld CIT(A) and noted that there is no infirmity in the order of ld CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. Exemption u/s 54B - assessee submitted the sale deed of the property sold and purchased, however, no details in relation to agricultural activity being carried out on that land sold, are submitted by the assessee and assessee simply submitted the computation of income showing the agricultural income - HELD THAT:- We note that CIT(A) has himself admitted that assessee is owning agricultural land which was used for agricultural purpose during past two years before the date of transfer. Ongoing through the facts of the case, the assessee's contentions have been found factually correct that assessee is owning agricultural land which was used for agricultural purpose during past 2 years before the date of transfer, as seen from 7/12 and 8A form, return of income filed by the assessee and assessment made by the AO for various assessment years u/s 153A of the Act, after search was conducted upon the assessee, on 27.12.2012. Thus, the assessee has satisfied the conditions prescribed about the land sold, despite this fact ld CIT(A) denied exemption under section 54B of the Act. We note that assessee is regularly showing agricultural income for several years in the income tax returns filed and the same was accepted by the department even in the assessment under passed u/s 153A of the Act after search was conducted upon assessee on 27.12.2012. Therefore, we note that assessee has satisfied the condition prescribed u/s 54B of the Act, therefore exemption should be granted to the assessee u/s 54B of the Act, hence, we allow exemption under section 54B.
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