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2015 (8) TMI 1266

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..... uphold the orders of the lower authorities for assessment years 2006-07 and 2007-08. Therefore, the orders of the lower authorities for the assessment years 2006-07 and 2007-08 are set aside and the addition made by the Assessing Officer is deleted. Assessment year 2011-12, from the orders of the lower authorities it appears that no return of income was filed u/s 139. The return was filed only consequent to the notice issued u/s 153C of the Act. Therefore, this Tribunal is of the considered opinion that even though there was no search material and the proceedings were not pending on the basis of the return filed, the Assessing Officer has to pass a composite order for the undisclosed income and the normal income. In other words, one ord .....

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..... there was a search operation in the business premises of the assessee on 28.12.2010. During the course of search operation, according to the ld. Counsel, no material was found and seized. However, on the basis of the statement recorded during the course of search operation from one of the partners of the assessee-firm, the addition was made. According to the ld. Counsel, in the absence of any material found during the course of search operation, there cannot be any addition u/s 153C of the Act. 3. On the contrary, Dr. B. Nischal, ld. Departmental Representative submitted that initially a survey was conducted u/s 133A of the Act on 9.12.2010 in the business premises of the assessee-firm. On the basis of incriminating material found indict .....

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..... ar 2007-08, the return of income was filed on 31.10.2007. For the assessment year 2011-12, the return of income was filed on 28.6.2012. The time limit for issuing notice u/s 143(2) expired for the assessment year 2006-07 on 30.7.2007. For the assessment year 2007-08, the time limit for issuing notice u/s 143(2) expired on 30.9.2008. Admittedly, the search was conducted on 28.12.2010. Therefore, the assessment proceedings on the basis of the return filed u/s 139(1) was terminated by operation of law. Therefore, the Assessing Officer has to make assessment u/s 153C in the case of persons other than the searched person on the basis of the material found during the course of search operation. In other words, the assessment proceedings on the ba .....

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..... rds, one order has to be passed for the block period computing the taxable income including the undisclosed income. Therefore, the Assessing Officer has to compute the total taxable income on the basis of the material available on record. Since the assessee itself admitted that the weaving charges and staff salary were inflated to the extent of 20% and calendaring and washing charges to the extent of 10%, this Tribunal is of the considered opinion that the Assessing Officer has rightly made the addition for the assessment year 2011-12. The CIT(A), on the basis of the admission made by the partner of the assessee-firm, has rightly confirmed the addition. This Tribunal do not find any infirmity in the order of the CIT(A) for the assessment ye .....

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