Appeals allowed, penalties deleted, revenue's appeals dismissed, cross-objections mostly dismissed, profit share addition allowed.

The Tribunal allowed the assessee's appeals for the assessment years 2006-07 and 2007-08, deleted penalties under Section 271(1)(c), and dismissed the revenue's appeals for the assessment years 2007-08 to 2012-13. The Tribunal also dismissed most cross-objections of the assessee as infructuous, except for the one related to the addition on account of profit share, which was allowed.

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Issues Involved:
1. Limitation under Section 153B.
2. Non-issue of notice under Section 143(2).
3. No incriminating material seized during the search.
4. Statement under Section 132(4).
5. Addition on account of unexplained investments.
6. Disallowance under Section 14A and Section 36(1)(iii).
7. Addition on account of unexplained cash credit under Section 68.
8. Addition on account of profit share.
9. Addition on account of sale of unlisted shares.
10. Addition on account of interest on foreign deposits.
11. Addition on account of capital introduced.

Detailed Analysis:

1. Limitation under Section 153B:
The assessment order passed by the AO was challenged on the grounds that it was barred by limitation, as it was passed beyond the statutory limit prescribed under Section 153B. The AO contended that the limitation period was extended due to a reference made for exchange of information under DTAA. The Tribunal held that the extension of the period of limitation by one year was applicable as the reference was made before the initiation of assessment proceedings under Section 153A.

2. Non-issue of notice under Section 143(2):
The assessee argued that the assessment was invalid as no notice under Section 143(2) was issued post filing of the return in response to notice under Section 153A. The Tribunal upheld the CIT(A)'s decision that issuance of notice under Section 143(2) is not mandatory for assessments under Section 153A, relying on the jurisdictional High Court's decision in Ashok Chadha Vs ITO.

3. No incriminating material seized during the search:
The Tribunal held that no addition could be made in the absence of incriminating material found during the search for non-abated assessments. The 6-page document received from the French Competent Authority was available before the search and did not constitute incriminating material. The Tribunal relied on the judgments in CIT Vs Kabul Chawla and other similar cases.

4. Statement under Section 132(4):
The Tribunal noted that the statement recorded during the search was retracted and could not be used against the assessee. It held that the statement alone, without any corroborative material, does not constitute incriminating material. The Tribunal emphasized that the addition under Section 69 could only be made in the year in which the investment was made, and the statement did not indicate any investment during the year under consideration.

5. Addition on account of unexplained investments:
The Tribunal deleted the additions made on account of unexplained investments in foreign bank accounts, holding that the 6-page document was not a bank statement and its authenticity was not established. The Tribunal also noted that no incriminating material was found during the search, and the statement recorded during the search did not indicate any investment during the year under consideration.

6. Disallowance under Section 14A and Section 36(1)(iii):
The Tribunal upheld the CIT(A)'s decision to delete the disallowance under Section 14A and Section 36(1)(iii), holding that the entire interest expenditure was for business purposes and there was no basis for making disallowance. The Tribunal noted that the AO did not establish any nexus between the borrowed funds and the amount invested in equity shares.

7. Addition on account of unexplained cash credit under Section 68:
The Tribunal upheld the CIT(A)'s decision to delete the addition on account of unexplained cash credit, holding that the amounts received during the year were duly explained and there was no evidence to support the AO's contention.

8. Addition on account of profit share:
The Tribunal deleted the addition on account of profit share, holding that the seized document pertained to the net worth of the company and not the half-yearly profit. The Tribunal noted that the assessee was not a shareholder but only a director in the company.

9. Addition on account of sale of unlisted shares:
The Tribunal upheld the CIT(A)'s decision to delete the addition on account of sale of unlisted shares, holding that there was no evidence to support the AO's contention that the assessee paid back the extra differential amount in cash to the investors.

10. Addition on account of interest on foreign deposits:
The Tribunal deleted the addition on account of notional interest on foreign deposits, holding that there was no evidence to support the AO's contention that the assessee earned interest on the alleged foreign bank account.

11. Addition on account of capital introduced:
The Tribunal upheld the CIT(A)'s decision to delete the addition on account of capital introduced, holding that the capital balance was duly explained and there was no basis for making the addition.

Conclusion:
The Tribunal allowed the appeals of the assessee for the assessment years 2006-07 and 2007-08, deleted the penalties under Section 271(1)(c), and dismissed the appeals of the revenue for the assessment years 2007-08 to 2012-13. The Tribunal also dismissed the cross-objections of the assessee as infructuous, except for the cross-objection related to the addition on account of profit share, which was allowed.

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