TMI Blog2012 (11) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... is the subject matter of regular assessment. - in absence of any incriminating material found as a result of search, the addition made u/s 153A cannot be sustained - Decided in favor of assessee. - ITA No. 1419 & 1420/Hyd/2010 - - - Dated:- 27-7-2012 - SHRI CHANDRA POOJARI AND SHRI SAKTIJIT DAY, JJ. Appellant by : Shri A.V. Raghu Ram Respondent by : Shri V. Srinivas ORDER PER SAKTIJIT DEY, J.M.: These two appeals filed by the assessee are directed against common order dated 15-9-2010 of CIT (A)-VII, Hyderabad and they relate to the assessment years 2004-05 and 2005-06. Since common issues are involved in these two appeals, these are clubbed together and disposed of by this combined order for the sake of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Briefly, the facts are the assessee is engaged in the business of executing contract work. A search and seizure operation u/s 132 was conducted on 6-11-2007 in the case of the assessee and other group cases. As a consequence of the search and seizure operation, a notice u/s 153A was issued to the assessee calling for returns of income for the assessment year 2002-03 to 2007-08. The assessee in response to notice filed its return of income on 13-10-2009 declaring total income of Rs.10,73,92,990. In course of assessment proceedings, u/s 143(3) read with section 153A the AO found that the assessee has claimed an amount of Rs.78,48,471 as loss on sale of investment/asset under the head repairs and maintenance and debited the sae to the P L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of repaying the amounts to its creditors, suppliers, sold the Bonds in market at a loss of Rs.77,50,000/-. The learned AR further submitted before us that the department has not recovered any incriminating material as a result of search and seizure operation and the assessment has been completed u/s 153A on the basis of books of account maintained in regular course. It was further contended that the loss claimed by the assessee was reflected in the books of account maintained by the assessee and also in the return filed by the assessee which was subject matter of regular assessment u/s 143(3) of the Act. The learned AR therefore contended that the assessment having not been based on any incriminating material found as a result of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egular assessment and it is not a substitute for regular assessment. In case of a search assessment, the AO has to determine the undisclosed income on the basis of incriminating material found as a result of search and seizure operation. The AO cannot rely upon the books of accounts maintained in regular course of business and which were subject matter of regular assessment for the purpose of making search assessment unless incriminating material were found as a result of search which disclosed income earned by the assessee which were not reflected in the books of accounts or declared by the assessee. In the case on hand, on perusal of materials on record, it is clear that there is no incriminating material found as a result of search on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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