The Tax Publishers2020 TaxPub(DT) 4377 (Bang-Trib) : (2021) 186 ITD 0695

INCOME TAX ACT, 1961

Section 153C

Since no incriminating material belonging to assessee was found during search in case of third party, assessment which remained unabated as on date of search could not be interfered with while framing assessment under section 153C.

Search and seizure - Assessment under section 153C - No incriminating material belonging to assessee found during search in case of searched person - Unabated assessment

AO based on search conducted in case of certain third party, initiated proceedings under section 153C in assessee's case and made addition. Assessee challenged this on the ground of the incriminating material found during search. Held: Satisfaction note recorded by AO must speak on how such a satisfaction was arrived at by AO. In the instant case, satisfaction recorded by AO did not conform to the requirements of a valid satisfaction for invoking provisions of section 153C because there was no such application of mind as to what was the material based on which AO concluded that seized material in case of searched party belonged to other person, i.e., assessee or as to how such material was incriminating in nature, As regular assessment for the year under condieration in assessee's case remained unabated as on date on which AO of searched person handed over seized material to AO of other person, i.e., assessee, therefore, scope of making assessment of total income under section 153C in an unabated assessment proceedings was limited and could be only of income that was not disclosed which was detected or which emanated from material found in the course of search of some other person and which related to assessee. Since impugned addition was not based on any incriminating material found during search, additions were deleted.

Relied:IBC Knowledge Park (2016) 385 ITR 346 (Karn) : 2016 TaxPub(DT) 243 (Karn-HC), CIT v. Sinhgad Technical Education Society, (2017) 397 ITR 344 (SC) : 2017 TaxPub(DT) 3941 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09 to 2010-11



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