Tribunal nullifies reassessment order under section 148, deems section 153C proceedings proper. Alleged "on money" not adjudicated.

The Tribunal allowed the appeal, holding the reassessment order under section 148 null and void. The assessment framed by the AO was set aside as the initiation of proceedings under section 153C was deemed appropriate based on documents found during a search, not under sections 147/148. The addition of Rs. 6,65,000 for alleged "on money" against flat purchase was not adjudicated due to the nullification of the assessment.

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Issues Involved:
1. Validity of the assessment framed under section 143(3) read with section 147 of the Income Tax Act.
2. Addition of Rs. 6,65,000 on account of alleged "on money" against the purchase of a flat.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Framed Under Section 143(3) Read with Section 147 of the Income Tax Act:

The assessee originally filed a return of income for the assessment year 2005-06 on 29.07.2005, declaring a total income of Rs. 2,35,420. The case was reopened by issuing a notice under section 148 of the Act on 19.03.2012, and the assessment was framed under section 143(3) read with section 147 on 15.03.2013, determining the total income at Rs. 9,00,420. The reopening was based on documents found during a search and seizure action under section 132 in the case of "Marvel Group," where a partner admitted to collecting "on money" from various flat purchasers. The assessee contended that the correct course of action should have been under section 153C, not sections 147/148, as the proceedings were initiated based on documents found during the search. The Tribunal referred to the decision in the case of V.L. Khandge and others, where it was held that the AO should have initiated proceedings under section 153C when documents pertaining to the assessee were found during a search. The Tribunal concluded that the reassessment proceedings under section 148 were not warranted and held the assessment framed by the AO to be null and void.

2. Addition of Rs. 6,65,000 on Account of Alleged "On Money" Against the Purchase of a Flat:

The addition of Rs. 6,65,000 was made based on documents found during the search at Marvel Group, indicating that the assessee had paid "on money" for the purchase of a flat. The assessee challenged this addition, arguing that the proceedings should have been initiated under section 153C. The Tribunal, having held that the reassessment proceedings under section 148 were not warranted, did not adjudicate the issue on merits, rendering it academic in nature.

Conclusion:

The Tribunal allowed the appeal of the assessee, holding that the reassessment order passed under section 148 was null and void. Consequently, the issues raised on merits became academic and were not adjudicated. The appeal of the assessee was allowed, and the assessment framed by the AO was set aside.

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