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TMI Blog2023 (5) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961 (the Act). 2. The ld. DR submits that there was a search and seizure operation on 8.07.2015 under section 132/133A of the Act in the case of the assessee along with other cases of K.R. Pulp & Papers Ltd. group. Notice under section 153A of the Act was issued to the assessee on 26.09.2016 and in response to the notice the assessee filed return of income declaring income of Rs.20,17,910/- on 24.10.2016. The ld. Dr submits that in the course of search copy of agreement between the assessee and Mahagauri Estates Pvt. Ltd., to sell the property was found according to which property No. 1531 and J EPIP Kundli Sonepat, Haryana was agreed to sell for a consideration of Rs.16.55 crores and an advance of Rs.2,50,00,000/- was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions perused the orders of the authorities below. The Assessing Officer treated the amount of Rs.2,50,00,000/-, which was forfeited by the assessee as unexplained income of the assessee under section 68 of the Act as the assessee neither furnished any explanation nor the party to the agreement Mahagauri Estates Pvt. Ltd. responded to the summons issued by the Assessing Officer. The ld. CIT (Appeals) deleted the addition on the ground that the transaction of forfeited amount of Rs.2,50,00,000/- was accounted for by the assessee in the books of accounts and the agreement referred to by the Assessing Officer is not incriminating material found during search operation observing as under:- "5.2 Ld. AO in the assessment order makes referenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment in that year is a completed assessment, has been dealt with and answered by Hon'ble Jurisdictional High Court in the case CIT vs. Kabul Chawla. Hon'ble Court has taken a view in such cases that although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. As per Hon'ble Court, such assessment has to be made under the section 153A/153C only on the basis of the seized material. It is further opined by Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an abated assessment as appears from the assessment order and confirmed in the submission of the appellant. Therefore, in this-AY, additions on account of forfeiture of advance received against sale of property could have been made by AO only on the basis of incriminating material/evidence found during the search proceedings. However, in view of the para 7.2, reference to the agreement to sell and agreement to cancel can not be considered as reference to incriminating material found during search operation. 5.5 In view of above, since the assessment year under consideration is a completed assessment year, any addition/disallowance ought to have been made by AO on the basis of /evidence as such incriminating material/evidence as found du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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