TaxTMI 
TaxTMI 
2025 (7) TMI 292
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....ad sold Transferable Development Rights (TDR) to Mr. Akshay Doshi and received payment in cash to the tune of Rs. 3,24,55,000/- for FY 2008- 09 Rs. 1,98,43,000 for FY 2010-11 Rs. 38,15,000 for FY 2011-12 & Rs. 37,29,700 for FY 2014-15. The AO based on the above information reopened the assessment of the assessee under section 147 of the Act. The assessee in response filed a return on 23.09.2016 declaring Nil Income for the reason that the assessee has been dormant from inception. The AO was of the view that though the assessee did not do any business, it is in existence to receive unaccounted cash on sale of TDR owned by M.K. Shelters-JV having PAN AAMFM2671H. The AO based on the statement recorded came to the conclusion that the assessee has received cash from Bhoomi Group through Mr. Mehfus Bhai who is a partner in assessee firm and accordingly treated the amount of Rs. 3,24,55,000/- as business income in the hands of the assessee. The AO made similar additions of Rs. 1,98,43,000 for AY 2011-12 Rs. 38,15,000 for AY 2012-13 & Rs. 37,29,700 for AY 2015-16 on protective basis in the hands of the assessee stating that the substantive addition is made in the hands of M/s.M K Shelters-....
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....ned CIT(A)/NFAC failed to appreciate that reopening of assessment u/s 147 is bad in law as reopening is without jurisdiction as in the present case assessment is sought to be made on the basis of information received w.r.to Assessee from third party search and as such Assessment can be made u/s 153A r.w. 153C and hence reopening u/s 147 is bad in law and liable to be quashed. 5) The Learned CIT(A)/NFAC failed to appreciate that reopening of assessment u/s 147 is bad in law as AO failed to issue notice u/s 148 dated 30/3/2016 for reopening assessment and as no notice u/s 148 is issued, reopening is bad in law and liable to be quashed. Violation of principles of natural Justice 6) The Learned CTT(A)/NFAC erred in confirming addition of Rs. 3,24,55,000/- as business income being alleged cash received by Assessee from Bhoomi group on sale of TDR without appreciating that such addition is made on the basis of statement of Mr Akshay Doshi and Assessee is not provided opportunity of cross-examination thereby resulting in violation of principles of natural justice and hence the addition of Rs 3,24,55,000/- may be deleted. Merits 7) The Learned CIT(A)/NFAC erred in confirming addi....
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....ed that the digital records in the form of excel sheet relied on by the AO do not contain any evidence that the assessee has received the cash. Therefore, the ld AR submitted that the entire addition is based on surmises, conjecture and presumptions. 6. The ld. DR on the other hand relied on the order of the lower authorities. 7. We heard the parties and perused the material on record. There was a search and seizure operation in the case of M/s. Ekta & Bhoomi Group wherein statement is recorded from one Mr. Akshay Doshi. The AO of the assessee issued a show- cause notice based on the statement recorded in assessee's case stating that why a sum of Rs. 3,24,55,000/- received in cash by Mr. Mehfus Bhai in the capacity as partner of the assessee cannot be added as undisclosed income. The main contention of the assessee is that the seized material does not mentioned the name of the assessee and that the ledger account seized is named "Mehfus Bhai TDR A/c". It is also submitted by the assessee that neither in the statement recorded and nor in the ledger account assessee's name is mentioned. It is further argued that the assessee is not in operation since 2003 and the alleged ca....
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.... account is being used for routing the cash. The letters received from the investigation wing as well the Central Circle mentions that the Mr. Mehfusbhai has allegedly received cash but no evidence is brought on record to evidence that the cash is received in his capacity as partner in the assessee firm and that the cash is routed through assessee. The AO in the order of assessment has merely relied on the statement of Shri Akshay Doshi director of M/s.Bhoomi group, and the seized documents received. The AO in our considered view has not carried out any independent enquiry or has not brought any material on record in support of the addition made in the hands of the assessee. The finding of the AO that the assessee firm is in existence for routing the cash transaction on sale of TDR is not substantiated by any evidence. It is relevant to note that the Memorandum of Understanding for the sale of TDR is entered into with M K Shelters-JV. It is a settled position that an addition made merely based on a third party statement under section 131 of the Act without bringing any corroborative evidence cannot be sustained. Considering the merits of the case, we are of the view that the additi....
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....nal ground relied on the decision of the Hon'ble Supreme Court in the case of GKN Driveshaft (India) Ltd. vs. ITO [2003] 259 ITR 19 (SC) and the decisions of various High Courts where the above decision of the Hon'ble Supreme Court have been followed. The ld. AR also brought to our attention that the Co-ordinate Bench in the following cases have held that the assessment order passed without disposing of the objections by a separate order is void ab-initio: (i) General Electric Company vs. ADIT (ITA No. 82/Mum/2011 dated 23.12.2022). (ii) Soham Estates vs. DCIT (ITA No. 690-692/Mum/2023 dated 20.09.2023) 12. We heard the parties and perused the material on record. From the perusal of records we notice that the assessee has raised objections dated 04.12.2018 for reopening the assessment and that the AO in the order has not stated anything with regard to the objections disposing the said objections. In this regard we notice that the Hon'ble Bmbay High Court in the case of M/s.Kesar Terminal & Infrastructure Ltd vs DCIT (WP No.3248 of 2022 dated 27.01.2025) has considered similar issue of AO passing an order of reassessment without disposing off the objections raised b....