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2015 (9) TMI 127 - ITAT HYDERABADAssessment U/s. 153C - Addition towards low withdrawals - Held that:- Even though, the AO did mention that there was some incriminating material, there is no satisfaction recorded about the explanation of the income from the person who was searched and how the document is relevant in assessee’s case. The order sheet entry only indicate that ‘during the course of search incriminating material regarding undisclosed income of the assessee was found’. This statement is common for both assessees. This blank statement can not be considered as satisfaction for initiation of proceedings u/s 153C as it does not indicate the nature of seized material and how income is assessable in assessee hands. As seen from the orders also, there is no discussion about any incriminating material or incomes to be assessed under the provisions of Section 153C. Thus as there is neither any satisfaction recorded by the AO nor there is any incriminating material relevant for making assessments in this case. Therefore, the initiation of proceedings U/s. 153C itself is bad in law. Therefore, consequential proceedings are bad in law and orders are to be cancelled. Even on merits, there is no justification for estimating the low withdrawals on assumptions and presumptions, without there being any basis. In view of that also, the addition made in all the years about the low withdrawals cannot be sustained. Addition on amount received from friend - Held that:- As submitted that assessee was working as software engineer in United Kingdom (UK) during the period September 2000 to October 2001 and before he left for UK, he handed over his personal belongings to his friend for sale and the amount of ₹ 74,980/- sent by his friend was shown in the capital account and treated as ‘income of assessee’. As can be seen from the order of AO, and CIT(A), they only disbelieved assessee’s version. Since this issue does not arise out of any incriminating material and as assessee has shown the amount as a receipt in 2002-03 itself in the capital account, we are of the opinion that addition cannot be made in the proceedings U/s. 153C, without any evidence to contrary to disbelieve assessee’s contentions. Be that as it may, as we have already held that initiation of proceedings U/s. 153C are itself bad in law, these issues become academic in nature. - Decided in favour of assessee.
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