TaxTMI 
TaxTMI 
2015 (10) TMI 1266
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....A) erred in deleting unexplained cash credits and the disallowance of personal expenditure made by the Assessing Officer (AO). Assessee is aggrieved that Ld. CIT(A) upheld the proceedings u/s. 153C of the Income Tax Act [Act]. 2. Briefly stated, there were search and seizure operations u/s. 132 of the Act conducted in the case of assessee Shri Ch. Raja Gopal and others on 12-02-2009. Assessee happened to be son of Shri Raja Gopal. Notices u/s. 153C dt. 24-09-2009 were issued by the AO in respect of these assessment years. Assessee filed the return of income originally filed for the assessment years upto AY. 2008-09 and in AY. 2009-10, being post search period filed the regular return of income, consequent to the notice u/s. 142(1) issued o....
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....not valid. With reference ex-parte assessment, it was submitted that Shri S. Ram Mohan Rao who is engaged as assessee's Counsel did not appear before the AO and assessee does not know how he has not represented. It is further submitted that assessee was not aware till the order was received that the assessment was made ex-parte. Therefore, he was deprived of explaining the issues on which additions were made. It was submitted before the Ld. CIT(A) that assessee has maintained Ledger, Books of Accounts and they can be produced for verification. Since AO has not seen the Books of Account and resorted the various additions, assessee requested the Ld. CIT(A) to consider the issue on facts. Assessee also explained individual additions made befor....
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....h credit in AY. 2009-10. 6. We have heard the Ld. DR and Ld. Counsel and perused their rival contentions. As far as Revenue's grounds are concerned, we do not see any merit in Revenue's grounds in AYs. 2004-05, 2005-06 and 2008-09. There is no incriminating material as far as assessee is concerned. Nothing was brought on record either in the assessment order or before the CIT(A) or during the proceedings before us that there is any incriminating material identified as belonging to assessee. Therefore, the proceedings per se u/s. 153C should not arise. Even if for the sake of argument consider that proceedings u/s. 153C are appropriate, the AO cannot make any routine disallowance in the search assessments in the absence of any incriminating....
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.... before the AO and before CIT(A), there seems to be no enquiry made by any of the authorities to come to the said conclusion. In view of this, we are not in a position to uphold the order of CIT(A) in AY. 2009-10 and therefore the Revenue's grounds on disallowance of personal expenditure are to be considered as allowed for statistical purposes. Similar issue also came up in cross-objection in this year, therefore for the limited purpose of Revenue appeal in AY. 2009-10, we uphold the grounds as the issue require fresh examination. Therefore, the appeal in AY 2009-10 is considered allowed for statistical purposes. 8. Coming to the Cross Objections in AY. 2004-05, 2005-06 and 2008-09, the only issue is with reference to sustaining proceeding....
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.... However, at the same time additions were deleted stating that there is no incriminating material. The fact is that there is no incriminating material at all belonging to assessee. Therefore, the proceedings u/s. 153C itself are not warranted. Just because assessee happened to be son of Shri Raja Gopal, without there being any satisfaction of AO and incriminating material belonging to assessee, proceedings u/s. 153C cannot be initiated in assessee's case. Therefore, there is merit in assessee's contentions that the proceedings are not validly initiated. For these reasons, we uphold the Cross Objections of assessee in the impugned three assessment years. 9. As far as AY. 2009-10 is concerned, assessee's Cross Objection is with reference to ....