Assessee's appeal partly allowed, additions under Section 69B deleted due to lack of evidence. Validity of notice under Section 148 upheld based on tangible material. Section 153C not applicable.

The Tribunal partly allowed the assessee's appeal by deleting the additions under Section 69B due to insufficient corroborative evidence. The notice issued under Section 148 was deemed valid based on tangible material obtained during a search operation on a third party, indicating On-money payments. The Tribunal rejected the application of Section 153C instead of Section 148, as the search fell outside the relevant assessment year period.

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Issues Involved:
1. Validity of notice issued under Section 148.
2. Application of Section 153C instead of Section 148.
3. Merits of the addition made under Section 69B for alleged payment of On-money.

Summary:

1. Validity of Notice Issued Under Section 148:
The assessee challenged the validity of the notice issued under Section 148. The Tribunal found that the reasons recorded for reopening the assessment were based on tangible material obtained during a search operation on the Hiranandani Group, which indicated that the assessee paid On-money in cash for purchasing flats. The Tribunal held that this information provided prima facie reasons to believe that income had escaped assessment, thereby justifying the issuance of notice under Section 148.

2. Application of Section 153C Instead of Section 148:
The assessee argued that the assessment should have been made under Section 153C, not Section 148, as the documents were found during a search on a third party (Hiranandani Group). The Tribunal rejected this plea, noting that the search took place on 11/03/2014, and the relevant assessment year (2007-08) fell beyond the six-year period stipulated in Section 153A. The amendment extending the abatement period to ten years came into effect on 01/04/2017 and was not applicable to this case.

3. Merits of the Addition Made Under Section 69B:
The Tribunal examined the merits of the addition made under Section 69B for the alleged payment of On-money. The Assessing Officer (AO) relied on a pen drive seized from the Hiranandani Group, which contained entries of On-money receipts. The AO also referred to a statement by Shri Ranjan Hiranandani admitting receipt of On-money. However, the assessee denied making any cash payments and provided evidence of payments made through a home loan from ICICI Bank.

The Tribunal noted that the AO did not conduct further inquiries to substantiate the claim of On-money payment by the assessee. The AO failed to corroborate the information from the pen drive with independent evidence or cross-examine Shri Ranjan Hiranandani. The Tribunal emphasized that uncorroborated information from a third party cannot lead to an addition in the assessee's hands without material evidence. Consequently, the Tribunal found no justification for the addition under Section 69B and deleted it.

Conclusion:
The appeal of the assessee was partly allowed, with the Tribunal deleting the additions made under Section 69B due to the lack of corroborative evidence. The notice issued under Section 148 was upheld as valid, and the argument for applying Section 153C was rejected.

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