TaxTMI 
TaxTMI 
2025 (6) TMI 1212
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....3A of the Act dated 05.08.2019 was issued upon the assessee asking him to file a return of income within 15 days from the date of receipt of the said notice. The return of income was filed on 03.10.2019 declaring income at Rs. 43,60,580/-. Upon issuing notice under Section 143(2) along with notice under Section 142(1) of the Act both dated 06.11.2019 along with the questionnaire were served upon the assessee. The assessment was ultimately finalized upon making addition of Rs. 346,75,000/-. Facts remains that during the course of search documents were seized and from those documents it revealed that the assessee purchased 4 Bigha 16 Biswa land of Khasra No. 1384/02 and 1389 at village Chhattarpur by and under the agreement dated 18.12.2009 for a consideration of Rs. 54 lakhs from one Sh. Satish Verma. Further that the assessee purchased 12 Bigha 6 Biswa farm land of Khasra No. 1384/02 and 1385/02, 1388 & 1389 at Village Chhattarpur for a consideration of Rs. 75 lakhs by and under the agreement dated 02.09.2009 from one Smt. Seema Sethi. Apart from that the search conducted under Section 132 of the Act at the resident of Sh. Punit Gupta and Sh. Amit Gupta at farm house No.4 & 5, Gupt....
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.... purchased land in the same locality and on the same road from Pristine Gupta Group as well as from Sh. Yog Raj Arora (M/s Aarone Infrastructure Pvt. Ltd). Further assessee is saying that the document seized from the residence of Sh. Punit Gupta is not related to assessee and is a third party document and from the perusal of said sheet (Page no. 92) it may also be observed that in this sheet projections / budget is mentioned and the nothings mentioned in the sheet has nothing to do with the actual. However, such reply of the assessee cannot be accepted as the documents contains actual value of the land and seized from the residence of Sh. Punit Gupta who is a property dealer and the working was done as per actual the market rates. Accordingly as per the sheet wherein Rs. 60,000/- to Rs. 70,000/- per acre rate was mentioned the total value of the property comes to Rs. 74,71,75,000/- However, the registered value of the property is Rs. 1,25,00,000/- 10. In view of the evidence found during the course of search and the discussion made in this order, it is clear that the assessee had made payment in cash of Rs. 73,46,75,000/- for purchase of farm house at village Chha....
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.... and circumstances of the matter, the Ld. Senior Counsel Mr. Salil Agarwal submitted before us that the date of search was 05.10.2017 and the notice under Section 153A of the Act was issued to the assessee on 05.08.2019. The Assessment Year 2010-11 is beyond the period of six assessment years from the relevant assessment year i.e. AY: 2018-19. The date of assessment order is 20.04.2021 addition whereof was made alleging unexplained cash payment. It was further pointed out by him that the Ld. CIT(A) allowed the appeal on the point of maintainability; incriminating material, having not been found during the course of assessment in the case of the assessee before us. It was argued by him that annexure A of page 92 as referred was found from the residence of Sh. Punit Gupta and not from the assessee on the basis of which the addition was made by the AO as it is evident from the paragraph 9.1 of the AO's order. Such document having no date, no name of the assessee neither any transaction pertaining to the assessee cannot be presumed to be correct. Furthermore, Assessment Year 2018- 19 having no relevance with the year under consideration i.e. Assessment Year 2010-11 which is also taken ....
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....reement to sale dated 02/09/2009 and agreement to sale dated 18/12/2009 are not Incriminating in nature. c) An undated loose sheet noting being page no -92, Annexure A- 2 found during search from the residence of Shri Punit Gupta and Shri Amit Gupta at Farm house no 4 & 5 Gupta Farms, Church Road, Vasant Kunj, New Delhi. d) This loose sheet is an estimate of cost of land and other costs such as registry, boundary wall etc. which cannot be said to be incriminating since no such transactions has been found to be happen either in the case of Shri Punit Gupta and Shri Amit Gupta or in the case of Smt. Neelam Arya. e) Further, the agreement of purchase was done in Sept.2009 by Smt. Neelam Arya, however, the date of search is 05.10.2017. Therefore, in case no date is mentioned on the loose document found, it is presumed that it pertains to the search year. Thus, the price of the land cannot be treated as same for the year 2009 and 2017. f) It has been admitted by AO that this noting contains the working of the flat on the plot of land situated in Gadaipur, Bandh Road, Mehraull, New Delhi and it has also been mentioned by AO that the land of 2900 sq. ya....
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....t as the AO has mentioned that DVO has applied scientific method of construction and estimated rates of construction. However, this ground for rejecting the report of DVO is contrary to facts as valuation is with regard to fair market value of the land and is not related to construction. k) Further apart from rough noting there is no other evidence like MOU, cash receipt etc. pertaining to the appellant to substantlate the unaccounted investment by the appellant. Thus, there is no corroborative or direct evidence to presume that the appellant made unaccounted investment. l) From the Satisfaction Note recorded by the AO for assuming jurisdiction U/s153A, it has been observed that the AO has not mentioned any document which can be said to be pertaining to the assessee. The AQ has formed opinion only on the basis of an undated rough estimate about a project which was found from the premises of a third person Sh. Punit Gupta. m) Hence, admittedly there is no document of whatsoever nature in respect of alleged unaccounted payment in respect of purchase of land has been found during search. The addition was done by estimating unaccounted investment on the basis....
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....ncriminating material pertaining to those completed assessment years were found during search. Hon'ble Court held that invocation of section 153A / 153C for those years was invalid. Most Importantly, the Hon'ble Supreme Court of India in the case of in the case of Principal Commissioner of Income Tax, Central-3 Vs. Abhisar Buildwell P. Ltd. (CIVIL APPEAL NO. 6580 OF 2021) (2023) Hon'ble Supreme Court has held that no addition can be made in the case of completed / unabated assessment if no Incriminating material is found/unearthed during search, the relevant Para of the same has been reproduced below: "13, For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under Section 132 or requisition under Section132A, th....
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....us that there has not been any Incriminating document related to the appellant was found during search, relevant to the AY 2010-11. The AO has assumed the jurisdiction u/s 153A of the Income Tax Act on the basis of a rough noting found from the premise of third person (Mr. Punit Gupta) which does not relate to the appellant. In the case of the appellant no other evidence was found which can be said to be Incriminating in nature and hence no adverse inference can be drawn on the basis of such rough noting found from the premise of third person. Therefore, considering the above facts and current judicial position as laid down by the Hon'ble Supreme Court In the case of Principal Commissioner of Income Tax, Central-3 Vs. Abhisar Buildwell P. Ltd. [2023] 150 taxmann.com 257 (SC) and Hon'ble Delhi High court in the case of PCIT (Central) - 3 vs. Anand Kumar Jain (HUF) ITA no 23/2021, the assumption of jurisdiction U/s 153A and subsequently the addition made by the AO is found to be unsustainable, hence it is held that the proceedings initiated U/s 153A was invalid and thus the addition made by the AO is deleted. Accordingly, the grounds raised by the Appellant are allowed." 8....