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2020 (1) TMI 620 - AT - Income TaxReopening of assessment us 147 - addition u/s 68 - proceedings u/s 153A have been initiated against assessee - HELD THAT:- It is an admitted fact that in the present case the agreement in question was found during the course of search in the case of Shri Naresh Sabharwal and proceedings u/s 153A have been initiated against him. Therefore, the agreement in question have been transferred by A.O. of the person searched to the A.O. of the assessee for the purpose of taking remedial action in the matter. It is well settled Law that in the case of assessment made on assessee consequent to the search in another case, A.O. is bound to issue notice under section 153C and thereafter proceed to assess the income under section 153C and if A.O. had proceeded with re-assessment under section 147/148 and passed the Order under section 143(3)/148 the same would be illegal and arbitrary and without jurisdiction. It is clear that loan agreement was found during the course of search in the case of Shri Naresh Sabharwal which is handed-over to the A.O. of the assessee and addition is made only on that basis. Therefore, there was no justification for the A.O. to have been initiated proceedings under section 147/148. The correct course of action would have been to proceed against the assessee under section 153C. Therefore, initiation of re-assessment proceedings under section 147/148 is wholly invalid, void and bad in Law. Since the correct procedure have not been adopted by the A.O. and there is no justification to initiate the re-assessment proceedings against the assessee, we set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stands deleted. Appeal of Assessee allowed.
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