Sree Lakshmi Vs DCIT (ITAT Bangalore)
We have already examined the legal position with regard to validity of initiation of proceedings u/s. 153C of the Act de hors incriminating material found in the course of search which belong or relate to the assessee. Admittedly, no such incriminating material was found in respect of any of the additions made by the AO which has nexus to the assessee. The Assessment for AY 2008-09 to 2010-11 were already completed in the case of the Assessee prior to the date of search. Therefore the scope of making assessment of total income u/s.153C of the Act is limited and can be only of assessing income that is not disclosed which is detected or which emanates from material found in the course of search of some other person and which relate to the Assessee. Since the impugned addition of disallowance of expenses are not based on any incriminating material found during the course of search, the additions are liable to be deleted. As far as the addition made on protective basis for AY 2008-09 to 2010-11 are concerned, the said addition was made not on the basis of any incriminating material found in the search of K.Mahesh Kumar which relate to the Assessee and therefore the said addition can also not be sustained as it is contrary to the provisions of Sec.153C of the Act.
In these circumstances, we are of the view that the additions made by the AO in the proceedings u/s. 153C also cannot be sustained.
