TaxTMI 
TaxTMI 
2025 (6) TMI 74
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.... filed its return of income for the year under consideration on 26.09.2015. Therefore, the time limit to issue notice under Section 143(2) expired on 30.09.2016. As on the date of search the assessment for the concerned assessment year has attained finality and as the time limit for adjudication under Section 132 of the Act has already expired the completed assessment could not be disturbed by invoking the provision of Section 153A of the Act in the absence of any incriminating material found/unearthed during the course of search as was the crux of the case made out by the assessee before us. However, assessment was finalized upon making addition of Rs. 45,16,407/- on account of unexplained income from other sources. 3. Heard both the sides and perused the material on record. The case of other assessee namely Sh. Gopal Dass Garg was taken up in Coordinate Bench the nature of allegation wherein was exactly identical. In fact the assessment of the assessee before us was made under Section 68 of the Act on account of loan received from one M/s Rajat Fincap Private Limited by the AO computing total addition of Rs. 64,50,000/- and allocating 50% each both the brothers amounting to Rs....
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....4.00 6,669,000.00 876,556.00 Total 16,898,979.00 19,456,300.00 2,557,321.00 Therefore, there is a small difference of Rs 2,557,321/- in the cost of construction as per assessee and estimated by the DVO. Sir, the valuation made by the DVO is only an estimated cost of construction and difference between estimation (according to DVO report) is only Rs. 25,57,321/- and marginal difference which is acceptable. The report is only an estimation and variation is bound to there for various reason/ factor as held by various judicial authorities. Sir, during the course of search there is no incriminating documents/ paper/ material were found or seized which shows that there is a unexplained or excess expenditure incurred by the assessee in construction of the house. Apart from the above consideration, the question of valuation of expenses is the subject of binding decisions of this court. The Supreme Court had, in Smt. Amiya Bala Paul v. CIT (2003) 262 ITR 407 (of course dealing with powers of the AO to refer the question of valuation, pre-Section 142-A, but in the context of the then prevailing Section 55-A and Section 142 (2)) held that no additi....
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....its reply but it was not found satisfactory. The replies of the assessee were considered and it is observed that the assessee has not discharged its onus. The creditworthiness of M/s Rajat Fincap Pvt Ltd was not proved by the assessee and therefore, the reply of the assessee is not acceptable on the basis of following facts and grounds: 1. The search action was initiated on SRS Group on 06.06.2018 and finally concluded on 02.08.2018. During the course of pre-search, search and post-search investigation proceedings, it came to notice that SRS Group accepted huge cash from public and has earned huge unaccounted income in last 6-7 years and the same have been routed back in the companies/concerns of the group in form of capital and loan from shell entities. After depositing the cash, funds were transferred by layering of funds to SRS Limited or other sister concerns. During the course of enquiries by the Investigation wing, following 71 shell concerns were identified to be used by the SRS group to route its funds. M/s Rajat Fincap Pvt. Ltd. has also been established a shell/paper entity during investigation proceedings. Sr. No. Company Name 1. Aakash Infratrade Pv....
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....ndia Limited 60 Swami Hitech Projects Limited 61 Swami Sweets and Namkeens Pvt. Ltd. 62 Three Brothers Entertainment Ltd. 63 Top line Traders Ld. 64 Topchoice Computech Limited 65 Trustworthy Gems and Jewellery Pvt. Ltd. 66 Trustworthy Sales Agencies Pvt. Ltd. 67 Upfront Trading Co. Ltd. 68 Upright Enterprises ltd. 69 Vardan Sales Agencies Pvt. Ltd. 70 Vision Jewellers Private Limited 71 Wellknown Jewellers Private Limited 4. The case of the other assessee namely Sh. Gopal Garg was taken up by the Hon'ble Tribunal and the following observations were made on the identical facts: "6. We have heard both the parties and perused the material available on record. In the present case, original return was filed on 26/09/2015 for Assessment Year 2015-16 and the time limit to issue the notice u/s 143(2) of the Act has already been expired therefore the assessment year under consideration being completed, assessment could not be disturbed in the assessment made u/s 153A of the Act in the absence of any incriminating material found during the course of the search. As could be seen from the order of the Ld. CIT(....
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....s can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfillment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved." 8. By respectfully following the ratio laid down by the Hon'ble Supreme Court in the case of Abhisar Buildwell (supra), considering the fact that no incriminating materials/documents or any other evidence was found or seized during the course of search proceedings which resulted in additions against the Assessee, we find merit in Ground No. 3 of the appeal of the Assessee. Accordingly, we quash the assessment order and the order of the Ld. CIT(A). Since, we have allowed the Ground No. 3 and quash the assessment, other Grounds of appeal requires no adjudication. 9. In the result, appeal of the Assessee is partly allowed." 5. Mainly case of the assessee is this that since no material/documents or any evidence was found or seized during the course of search addition under Section 153A of the Act is not sustainable in the eyes of law. In this regard reliance is placed on the judgment passed by the Hon'ble Apex Court in the case of PCIT Vs. Abhishar Bui....