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2025 (6) TMI 385

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....le to the Income declared and assessed as Business Income. 3) That the learned Principal Commissioner ought to have appreciated the fact that the matter was thoroughly examined by the Assessing Officer in the course of Assessment proceedings and there was no error in law or facts in the Order passed u/s 143(3). 4) That the learned Principal Commissioner without giving any finding that correct rate of tax was not applied could not set aside the Order passed u/s 143(3) by the Assessing Officer and the approval accorded by the Additional Commissioner of Income Tax for the purpose of taxing Income surrendered in search. 5) That without prejudice to above, the Order passed u/s 263 is bad in law as the same was passed without disposing the legal objection of Appellant that provision of section 263 cannot be invoked to revise an Order passed after obtaining approval u/s 153D of the Act. 6) The Appellant craves leave to take any other Ground or to amend /alter/delete any of the Grounds of Appeal. 3. The assessee has also raised additional grounds reads as under: PETITION FILED UNDER RULE 11 OF INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963 1. The above mentioned Appeal has been f....

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.... The learned AR of the assessee has submitted that the approval granted u/s 153D is without any DIN and therefore, it is contrary to the CBDT Circular No.19/2019 whereby the Document Identification Number (DIN) is mandatory for any communication. Another contention of the learned DR challenging the assessment order is that, the approval granted u/s 153D is mechanical and without application of mind. The 3rd contention to challenge the impugned order passed u/s 263 as raised in the additional ground is that, once the assessment order is passed after taking approval u/s 153D, then the said order cannot be subject to revision u/s 263 of the I.T. Act, 1961. In support of his contention, the learned AR of the assessee has relied upon various decisions as under: i) Finesse International Design (P) Ltd vs. DCIT (2023) 204 ITD 594 (Delhi Trib.) ii) Bawa Float Glass Ltd VS. DCIT in ITA No. 1437/Del/2023 dated 2/1/2024 iii) Smt. Abha Bansal vs. Pr.CIT (2021) 132 Taxmann.com 231 (Delhi Trib.) iv) Gyan Infrabuild (P) Ltd vs. Pr.CIT in ITA No.175 to 178/PAT/2023 dated 13/05/2024 v) Ramamoorthy Vasudevan vs. Pr.CIT (Central) in Ita No.967 & 968/PUN/2016, dated 29/11/2018. 4.1 He has a....

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....assed by the Pr. CIT is not sustainable in law and liable to be set aside. 5. On the other hand, the learned DR has submitted that, this is an appeal against the order passed u/s 263 of the Act and therefore, the validity of the assessment order cannot be challenged in these proceedings as raised by the assessee in the additional grounds of appeal. He has further contented that, even otherwise, the approval granted u/s 153D of the Act is not a communication or order issued to the assessee and therefore, it does not require a DIN as per CBDT Circular No.19/2019. The learned DR has further contented that it is a communication between one tax authority and another tax authority and therefore, it cannot be compared with the order issued u/s 144A of the Act on which the assessee has relied some case law. He has further contended that. when the Assessing Officer has not conducted any inquiry and applied his mind on this issue and accepted the claim of the assessee which is completely contrary to the explanation as given at the time of search & seizure action while recording a statement u/s 132(4) of the I.T. Act, 1961. The learned DR has pointed out that at the time of recording the sta....

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....sessee has not produced any record to show that the said approval was given by the Addl. CIT without application of mine or before passing the impugned order by the Assessing Officer u/s 153(3) of the Act. Once the impugned approval itself is not placed before us, the question of validity of the approval cannot be decided. Therefore, in the absence of any material and the impugned approval itself u/s 153D, we cannot analyze the relevant aspects of the approval and give a finding whether the same is valid or invalid. Hence, in the facts and circumstances of the case, the additional ground raised by the assessee are rejected and stand dismissed. 7. As regards the contention of the assessee that the Assessing Officer has taken a possible view while accepting the business income of the assessee to the tune of Rs. 62.00 lakhs on account of the cash found and seized during the course of search & seizure action, it is pertinent to note that the Assessing Officer while passing the impugned order has simply accepted the contention of the assessee without deliberating or even discussing the crucial relevant facts about the cash of Rs. 62.00 lakhs found and seized during the course of search....

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....ssessing Officer has issued notices u/s 142(1), however, in reply to those notices, the assessee has not produced any record or material in support of this stand of doing the business of real estate and the cash of Rs. 62.00 lakhs found during the search is generated from the business of real estate. Therefore, accepting the claim of the assessee while passing a non-speaking order which is rather subsilentio on the very issue and subject matter of the assessment is definitely falls in the category of lack of inquiry on the part of the Assessing Officer. The order passed by the Assessing Officer without application of mind and contrary to the stand of the assessee taken at the time of search & seizure action is erroneous due to non-application of mind as well as lack of inquiry and therefore, the learned Pr. CIT has rightly invoked the provisions of section 263 of the I.T. Act, 1961 by issuing the show cause notice u/s 263 of the Act, dated 11/12/2023 as under: GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT PCIT (Central), Hyderabad To. MOHD RIYAZUDDIN 12-2-717/1/72, SAPTHAGIRI COLONY MEHDIPATNAM HYDERABAD 500028, Andhra Pradesh India     PAN/TAN:....

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.... claim of income from real estate business and accepted the income returned by you. 3. In view of the above mentioned facts noticed from the record, the assessment order passed by the assessing officer u/s 143(3) of the Act passed on 17.09.2021 for A.Y.2019-20- is erroneous in so far it is prejudicial to the interest of revenue as the AO had failed to apply the correct rate of tax u/s.115BBE i.e. 60% in respect of the above unexplained cash of Rs. 62,00,000/-. The assessing officer's failure in not seeking the details of the cash seized nor examining the sources there of and consequently in not applying the correct rate of tax, u/s 115BBE of the Act and also absence of invoking of relevant penal consequences has rendered the assessment order erroneous in so far as it is prejudicial to the interest of the revenue. For the same reasons, the Order u/s. 153D of the Act dt.07-09-2021 passed by the Additional Commissioner of Income Tax, Central Range-2, Hyderabad according approval to the above mentioned Assessment Order can be said to be erroneous and prejudicial to the interest of Revenue. 4. Hence, it is proposed to revise the assessment order dated 17.09.2021 for the A.Y.2019....

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....mounting to Rs. 62,00,000/- for which assessee made a bald claim of it being income earned through real estate business. However, assessee failed to explain nature and sources of the above seized cash with contemporaneous demonstrable evidence and hence the Assessing Officer ought to have deemed the above amount as unexplained money u/s.69A of the Act. e) The assessee in his letter dt.30-12-2023 simply reiterated the claim made before Assessing Officer without adducing any evidence whatsoever in support of his claim. Further, the assessee did not maintain any books of account in respect of the impugned income. f) In his sworn deposition recorded u/s.132(4) of the Act on 17-10-2018, the assessee submitted that cash to the extent of Rs. 15,00,000/- belongs to himself and his son, while the balance cash of Rs. 45,00,000/- belongs to his relatives. However, no supporting evidences were furnished neither at the time of search nor during assessment proceedings to substantiate the above claim. g) In sheer contradiction to the above claim of assessee at point (f), the assessee admitted income from real estate business while filing ITR for A.Y.2019-20 filed on 31-12-2019. Also, assess....