Tribunal rules notice under section 158BD unjustified, deletes undisclosed income addition.

The Tribunal upheld the first appellate order, ruling that the notice issued under section 158BD against the assessee was unjustified. The addition of Rs. 29,04,350/- as undisclosed income was deleted as the Tribunal found that the A.O. did not have proper satisfaction to initiate proceedings under section 158BD based on contradictory stands and insufficient evidence. The appeal was dismissed, affirming the deletion of the undisclosed income addition.

---

---

Issues Involved:
1. Validity of notice issued u/s 158BD.
2. Deletion of addition of Rs. 29,04,350/- as undisclosed income.

Summary:

1. Validity of Notice Issued u/s 158BD:
The Revenue questioned the first appellate order where Ld CIT(A) held that the notice issued u/s 158BD to the assessee was unjustified. The A.O. issued the notice based on entries regarding cash payments found during the block assessment proceedings of M/s. Rishiraj Builders & Developers. The Ld CIT(A) concluded that the Development Agreement of Plot No. 42 and 33 was between M/s. Rishiraj Builders & Developers and Shri Paraji Abaji Karanjkar, and thus the assessee did not fall under the purview of the word "other" as per the Act. Consequently, the addition of Rs. 29,04,350/- as undisclosed income was deleted. The Tribunal affirmed this action, noting that the A.O. took a contradictory stand in respect of the person searched and the "other person" on the same set of facts and evidence, which does not amount to proper satisfaction to initiate proceedings u/s 158BD.

2. Deletion of Addition of Rs. 29,04,350/- as Undisclosed Income:
The A.O. determined the undisclosed income based on entries in seized documents found during the search of M/s. Rishiraj Builders & Developers and statements of Shri Y.P. Trivedi. The assessee denied the contents of the seized documents and the receipt of any cash amount. The Ld CIT(A) directed the A.O. to grant the opportunity of cross-examination of Shri Y.P. Trivedi to the assessee, which revealed that the entries in the seized diary were based on unconfirmed information supplied by Shri Amulya Shastri. The Tribunal found that there was no valid reason for M/s. Rishiraj Builders & Developers to make any payment to the assessee against the property transactions of Plot No. 33 or 42. The Tribunal agreed with the Ld CIT(A) that mere reliance on the seized documents alone was not enough for making an addition of undisclosed income in the hands of the assessee. The Tribunal upheld the first appellate order, rejecting the grounds questioning the action of Ld CIT(A) and dismissing the appeal.

Conclusion:
The Tribunal upheld the first appellate order, holding the notice issued u/s 158BD against the assessee as unjustified and confirming the deletion of the addition of Rs. 29,04,350/- as undisclosed income. The appeal was dismissed.

---