TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1231
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....2. That the Ld. CIT(A) has erred in placing reliance on electronic data, which is an inadmissible evidence and is contrary to the CBDT Digital Evidence Investigation Manual, which governs procedure for collecting digital evidence. 3. a). That the Ld. CIT(A) has erred in sustaining the addition of Rs. 2,05,00,000/- on account of certain alleged payment made to Sh. Gurmeet Singh & Others for purchase of property as per para (x) of Para 5.4.3, page 105 of his order. b). That the said addition is not sustainable as the so called alleged evidence have been found from the premises of third party namely Sh. Ajay Prabhakar. c). That the Ld. CIT(A) while sustaining the addition has relied upon on certain presumptions and, thus, the addition have been sustained on surmises and conjectures. 3. That the Ld. CIT(A) has erred in sustaining the addition of Rs. 1,41,50,000/- on account of unexplained expenditure in respect of certain documents seized from the premises of third party, namely Sh. Ravi Kapoor, who has been working as a broker independently and confirming addition by applying the provisions of section 115BBE. 4. a). That the Ld. CIT(A) has erred in sustaining the addition of....
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....ical & rational extrapolation based on evidences collected during the search and post search enquiries? 5. Whether upon facts and circumstances of the case and in law, the Ld.CIT (A)was justified in restricting the addition to Rs. 2,05,00,000/-instead ofRs.71,08,87,130/- made by the A.O on account of unexplained investment madefor the purchase of agriculture lands on the basis of seized documents? 6. Whether upon facts and circumstances of the case and in law, the Ld.CIT (A) has failed to appreciate the facts of the case as well as seized documents of Sh. Gurmeet Singh C/o Ajay Prabhakar which establish that the rate of the agriculture lands is much higher than their registered sale value? 7. The appellant craves leave to add, amend, modify, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of appeal." 5. The assessee has raised additional ground of appeal by way of letter, dated 20.05.2025 which read as under:- "1. That the Ld.AO has erred in law and on facts in framing the assessment under section 143(3) of the Income Tax Act, 1961, without fulfilling the mandatory conditions prescribed under Section 148, read wi....
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....ground of appeal. The facts, in brief, are that there was a search and seizure operations conducted on the assessee on 16.11.2021. The assessee is engaged in the business of 'real estate'. The modus operandi of business of the assessee is that the assessee buys land and develops the same by leaving sufficient margin for Roads, Parks and for other infrastructure. He carves out plots and sells the same to different parties. Even, some of the SCOs were built by the assessee and they were sold. The assessee is maintaining the regular books of accounts in respect of above said activity, which have been duly audited. The assessee has been filing the returns on the basis of such audited books of accounts. This business is being carried on by the assessee since financial year 2007-08 and the regular assessments have taken place. 9. The facts leading to the above said issue are that there was a search and seizure operation conducted on the assessee's business premises and residential premises of the directors on 16.11.2021. Till that time, no return of income for Asstt. Year 2021- 22 had been filed since as per CBDT Notification, dated 11th January 2022, the due date for furnishing the ret....
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....O has heavily relied upon material seized from third parties and not from material found in the premises of the applicant. It is contended that such reliance, in the absence of a proper satisfaction note recorded by the AO under section 147, establishing that the material belongs to the appellant, and without obtaining prior approval from the Ld. Pr. CIT, renders the assessment legally untenable. The Ld. Counsel submitted a chart as reproduced below to substantiate his argument of using the material as seized from third parties for making the addition in the hands of the assessee as under:- Name of searched person along with the premises from whom such data was recovered Name of Digital Device Nature of data recovered from Relevant the digital device and alleged as of incriminating material Relevant Page of assessment order Ajay Kumar Prabhakar. VPO ayalikalan, Ludhiana Pen Drive Unsigned copy of Agreement between Mini Jain and Asha Garg in connection with Plot No.51measuring600Yards, Sunview Enclave, Ludhiana. 11 & 12 What's app chat found from Mobile Phone Random what's app chat between Sh. Aiay Kumar Prabhakar and some unknown 30 Loose Sheet referred as Ledger An....
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....rincipal Commissioner of Income Tax (PCIT), as required under section 147. Hence, the AR argued that the assessment framed under section 143(3) is without jurisdiction as in the given circumstances, the AO ought to have invoked section 147 following the due process of law. 14. The Ld.AR draws our kind attention towards the provisions of section 147 as amended by Finance Act, 2021 read with explanation 2 of section 148 thereto. The relevant extract of explanation 2 is reproduced below "Explanation 2.-For the purposes of this section, where, - (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) or sub-section (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case....
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.....2022. It is advised that you should gather all the information, documents, evidences, etc. in respect of various financial transactions, you have entered during the Assessment Year under consideration, which may be relevant for the scrutiny proceedings. Detailed questionnaire(s) or communication may be issued during the course of assessment proceedings. As and when questionnaire(s) or communication is issued, you are required to provide specific point-wise response within the time specified." It was contended by the Ld. Counsel that notice was only limited to the issue with regard to the return of income as it is apparent from the above language of the notice and referred to the proviso of section 148B, which reads as under:- Prior approval for assessment, reassessment or recompilation in certain cass. 148B. No order of assessment or reassessment or recompilation under this Act shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an assessment year to which clause (i) or clause (ii) or clause (iii) or clause (iv) of Explanation 2 to section 148 apply except with the prior approval of the Additional Commissioner or Additional Director o....
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....g reasons: (ii) Where a specific provision for assessment is available, the general provision of law cannot be applied. i. The provisions of Section 143(2) and 143(3) are general in nature, applicable when an Assessing Officer seeks to verify a return of income to ensure no understatement of income, excessive loss, or underpayment of tax such opinion is formed only on the basis of ITR filed by the assessee. ii. Prior to the amendment by FA 2021, assessments in search cases were mandatorily carried out under Section 153A. By way of amendment in FA 2021, this specific procedure was subsumed into the provisions of Section 148 of the Act, and not Section 143(2), as explicitly clarified in the Memorandum Explaining Finance Bill 2021. iii. Since the specific provisions of Section 153A& 153C have been subsumed under Explanation 2 of Section 148 of the Act due to the FA 2021 amendments, the general provision of Section 143(2) of the Act cannot be applied in the instant case. (iii). A brief overview of the legislative history and amendments concerning Search Assessments is provided: * A. Finance Act 1995: Introduced Chapter XIV-B as a special mechanism for search assessments under....
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....arch initiated prior to 31/05/2003 In respect of search initiated after 31/05/2003 and before 01/04/2021 In respect of search initiated after 01/04/2021 till 31/08/2024 In respect of search initiated after 01/09/2024 Filing of Return of Income afresh. 158BC(a) 153A(1)(a) 148 158BC(1)(a) Approval from Superior Authority before passing assessment order. Approval before passing of an order required u/s 158BG of the Act Approval before passing of an order required u/s 153D of the Act Approval before passing of an order required u/s 148B of the Act Approval before passing of an order required under proviso to section 158BG. Approval before issuing notice.* NA NA Approval before initiation of assessment applying Explanation 2 of Section 148 is required as per Proviso to Section 148 read with Section 151 (now second proviso to section 148 after amendment by FA No 2 of 2024) Approval before issuance of notice is required u/s 158BC(3) of the Act. * The Approvals in these sections are statuary approvals and not administrative. As it is evident from the foregoing, the legislature has consistently maintained a distinct parity in the provisions related to assessments condu....
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....edings are initiated merely under section 143(2), bypassing the essential preconditions and approvals under section 147, it would result in a complete circumvention of the legislative safeguards. Such an approach would defeat the very purpose and intent of the provisions laid down in the Act. The assessment under section 143(3) without complying with the jurisdictional requirements, rendering the assessment bad in law and without authority. The requirement is to first complete the assessment under section 143(3) on the basis of the returned income, and thereafter, for utilizing the material found from a third-party search or from the assessee's own search pertaining to the years immediately preceding the search year, the procedure under section 147 is mandatorily to be followed. Therefore, the assessment is required to be initiated under section 147, which has been made mandatory pursuant to the amendment effective from 01.04.2021 Hence, from the above, it is unequivocally clear that the provisions of Section 143(3) of the Act are not designed or meant for years immediately ending before search Year. In the present proceedings, the assessment should have been mandatorily made u....
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....een followed in the present case. 22. The core question before the Bench is whether, in the facts and circumstances of the case, the assessment ought to have been framed under section 143(3) or under section 147 of the Income-tax Act, 1961. From the plain reading of the statutory provisions and in light of Explanation 2 to section 148, it becomes abundantly clear that the legislature has widened the scope of reassessment, particularly through the Finance Act, 2021, which introduced significant changes to the reassessment regime. These amendments explicitly include instances involving third-party search material and make it incumbent upon the Assessing Officer (AO) to follow the procedure under section 148, including obtaining prior approval from the Principal Commissioner of Income Tax (PCIT). 23. In the present case, the AO proceeded to frame the assessment under section 143(3) despite relying heavily on material found during searches conducted on third parties. The AO, instead of complying with the jurisdictional preconditions laid down under the reassessment provisions, proceeded without recording the mandatory satisfaction and without obtaining prior sanction from the compete....
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....initiated under section 132 or requisition is made under 132A, after 31st March 2021, shall be under the new procedure. (VI) Further, in search, survey or requisition cases initiated or made or conducted, on or after 1st April, 2021, it shall be deemed that the Assessing officer has information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year, in which, the search is initiated or requisition is made or any material is seized or requisitioned or survey is conducted." 27. The notice issued under section 143(2) was also produced by the AR. Upon perusal of the said notice, it is evident that the assessment under section 143(3) was initiated solely for the purpose of verifying the return of income filed by the assessee. In such circumstances, the importing and reliance upon material seized from third-party searches, namely, those conducted on Sh. Ajay Kumar Prabhakar and Sh. Ravi Kapoor, goes beyond the jurisdiction conferred under section 143(3). Particularly, where the applicable law- Explanation 2 to section 148 (as amended by th....
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....provisions, approval under section 148B is now required in all cases where proceedings are initiated pursuant to a search, requisition, or survey, or where asset/material/documents found during such search pertain to or relate to another person. In such cases, the Assessing Officer must take the approval under section 148B from the specified higher authority. Aspect Section 153D Section 148B (with Explanation 2 to Section 148) Applicable Period Search initiated between 01.06.2003 to 31.03.2021 Search/survey initiated on or after 01.04.2021 but before 01.09.24 Context Search assessment under Section 153A/153C All cases where assessment/reassessment is based in respect of an assessment year to which clause (i) or clause (ii) or clause (iii) or clause (iv) of Explanation 2 to section 148 Triggering Event Search or requisition on the assessee under Sections 132/132A or material is used against assessee from third party search 1. Search/requisition on assessee 2. Survey (except under 133A(2A)) on assessee 3. Search/requisition on another person, but assets/documents relate to assessee Purpose of Approval Supervisory check in search assessments to ensure fairness and oversi....
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....proval merely states that the appraisal report was considered, without any reference to the original documents seized or to the statutory procedure outlined under section 148B. It is pertinent to refer to the Manual of Office Procedure in February 2003, which lays down a mandatory protocol: that in all search cases, especially where material pertains to persons other than the one searched, such material is to be forwarded in original to the approving authority, and a draft order is required to be submitted for approval at least 30 days in advance. In the present case, the approval letter was issued by the DCIT only on 22nd August 2023, which clearly contravenes this procedural requirement. This procedural lapse is further compounded by the judgment of the Hon'ble Supreme Court in Serajuddin and Co. case, [2024] 163 taxmann.com 118 (SC) wherein it was held that in search cases, strict adherence to the approval protocol as laid down in the departmental Manual of Office Procedure in February 2003 and law is essential to uphold the validity of the assessment. 34. Thus, from the above, it is quite evident from the approval granted by the Addl.CIT(Central), there is no mention or c....
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....ade to one unsigned agreement, as found, from the premises of 'third person' from the office of Sh. Ajay Prabhakar (Deed Writer), which was unexecuted and unsigned. In it the rate of particular plot in the colony had been mentioned at Rs. 55,500/- per sq. yard. Similarly, there was statement of one associates of Sh.Ajay Prabhakar, namely Sh. Raj Kumar Sachdeva, who was also searched, in which, he stated that the market rate in the 'Homeland Buildcon Pvt. Ltd.' is 30,000/- to 50,000/- per sq. yard. Further, to that, it has also been mentioned that from the premises of Sh. Ravi Kapoor, one of the independent broker in 'real estate', dealing in real estate, a digital evidence in the shape of 'slip' was found from the digital data of the Mobile of Sh. Ravi Kapoor. In this slip, certain cash payment appears to have been made for the plot No. 286 & 287. It was alleged by the AO that signatures of one of the director, namely Sh. Manu Gupta were also there, but, it was denied by Sh. Manu Gupta& Sh. Ravi Kapoor and that copy has been placed at page 14 of the assessment order. 37. Besides that, it was argued by Ld. Counsel that certain parties, who had purchased the plots from the assessee ....
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....cense No.118 issued by the ADC, Ludhiana. Further, Sh. Ajay Kumar Prabhakar retracted from his statement before the AO and has even stated in his statement recorded on 05.12.2022 by the AO that, he is merely a stamp vendor. Beside writing registration deeds in respect of sales executed by the Homeland Buildcon Pvt.Ltd., the same profession he is doing in respect of various other parties A duly sworn affidavit was filed before the AO by Sh. Ajay Prabhakar, copy of which have been placed in the Paper Book, Part-III, in which, he has retracted from his earlier statement about the rates of plot lateron, after going through the statement recorded during search on 16.11.2021, which was recorded late at night and he clarified that he never stated about the rates of plots at Rs. 30,000/- to 40,000/- and that was recorded under pressure/ coercion and duress and further, he had nothing to do with the sale and purchase of the plots of Homelife Buildcon Pvt. Ltd. It was further stated by the Ld. Counsel that even in respect of Sh. Ravi Kapoor, with regard to certain notings found from his mobile, wherein, there is reference to certain plot Nos. 286 & 287, he categorically stated during the sea....
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....eport was obtained to support the transaction by the assessee within 'Aayali Kalan Co-operative Agricultural Multiple Society. The valuation was purposely enhanced so as to make the deal lucrative for the 'exchange of land' with the said society and, thus, under such circumstances, no money had passed on. This fact is further supported by the actual transaction of land executed between the assessee and said society and the documentary evidence had been furnished supporting the above said claim of the assessee. It was further argued that not any single evidence connected with the assessee can be linked to the assessee concerned. No cross examination of Sh. Ajay Prabhakar or Sh. Raj Kumar Sachdeva had been given and there is complete lack of corroborated evidence to support the conclusion drawn by the Assessing Officer. The extrapolation made by Assessing of the entire 70 plots by applying a rate of Rs. 38,500/- per sq. yard, is totally against the facts and circumstances of the case and to which, the Ld. CIT(A) has rightly deleted the addition as per finding given by him from pages 80 to 93 of his order. It was further argued that in respect of two plots on the basis of digital data....
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....d 06.03.2025. ii). Judgement of Chandigarh Bench of the ITAT in the case of ITO Vs. Sh. Ashwani Kumar Jain in ITA No.1083/Chd/2024, dated 12.03.2025. 42. Regarding the digital evidence, reliance was placed on the judgment of Madras High Court in the case of Saravana Selvarathnam Retails (P) Ltd. Vs CIT, reported in [2024] 160 taxmann.com 28, in which, by referring to the Instruction of CBDT, wherein mandatory instruction have been laid as per digital evidence Investigation Mannual issued by CBDT while conducting search and the same have not been followed in the present case. No reliance could be placed on such digital evidence as found from the residence of Sh. Ravi Kapoor/Sh. Ajay Prabhakar. 43. It was further argued that the huge addition has been made but books of account have not been rejected. The assessee relied upon the following judgments for the preposition that no addition could be made without rejecting the books of accounts:- i). CIT Vs Anil Kumar & Co., reported in ITA No. 200001 & 200002 vide order, dated 25.02.2016 ( Karnataka High Court) ii). ITO Vs Amit Verma as reported in ITA No.4558/Del/2011 vide order, dated 19.12.2012 (Del. Bench). iii). ITO Vs M/s R....
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....was argued that the whole basis of addition made by the AO have been discussed in his order and again the reliance has been placed on the statement of Sh. Raj Kumar Sachdeva. No corroborative evidence or any other incriminating material was found from the premises of assessee for any 'on money' in respect of SCO. It was argued that the statement of Sh. Raj Kumar Sachdeva has no evidentiary value. Regarding the valuation report, it was not found from the premises of the assessee and during the course of assessment proceedings, the AO obtained the said valuation report of SCO, which was owned by Smt. Hardeep Kaur and Others and the said valuation report was given by them to their banker for obtaining the loan and this is not reliable as per arguments given above and such valuation was not from DVO but from Consultant Engineers and Valuer etc. The valuation report has been made as the basis by the AO for determining the sale price of five SCOs sold during the year and calculated the value of one SCO as sold for Rs. 1.25 crore, thus, the addition of Rs. 4,54,00,000/- was made. 47. The Ld. Counsel of the assessee argued that the basis is the same as per the arguments, while arg....
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....h. Baldev Singh and not from Sh. Gurmeet C/o Sh. Ajay Prabhakar. 49. It was argued that it is third party evidence and assessee does not know, who is Gurmeet Singh. The AO may enquire from Sh. Ajay Prabhakar. It was further argued that the assessee had purchased land from Sh. Gurmit Singh Bhangu and produced the copy of the purchase deed. Further, that they have no link or connection with the document recovered from third party. The Counsel also argued that statement of Sh. Gurmit Singh Bhangu by issuing the notice u/s 131 was recorded by the AO, which has been placed at page 862 to 864 of Paper Book, in which, he stated that he inherited the property from his father by will and denied all such digital record, which were recovered from the premises of Sh. Ajay Prabhakar, denying the alleged cash payment made to him. However, the AO found that the total number of parties from whom, the land has been purchased were 19 and on all such purchases which were made by the assessee company, applied a rate of 2.60 crore per acre as per data from Sh. Ajay of Sh. Gurmeet Singh and made an addition of Rs. 71,08,87,130/-. 50. The assessee made detailed submissions before the CIT(A) and challen....
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.... The assessee had purchased land from Sh. Gurmit Singh Bhangu. So, addition as sustained by the CIT(A) to the tune of Rs. 2,05,00,000/- as having been paid to Gurmit Singh is not proper. Further, it was argued that even the extrapolation was made on the basis of such document is without any valid consideration. It was pointed out that, though, the CIT (A) has deleted the addition as no incriminating evidence has been found during the course of search regarding any cash payment paid in respect of other purchases of land during the year. So, no extrapolation could be made, but it was also argued that even part addition as sustained by the CIT(A) to the tune of Rs. 2,05,00,000/- is not sustainable, since nothing was recovered from the assessee relating to such issue. 52. In assessee's appeal, there are ground of appeal No. 3 & 4 (a)(b), which are on account of certain evidences found from the premises of Sh. Ravi Kapoor and from one Sh. Devinder Ghai. The Ld. Counsel argued that this issue has been discussed by the AO. As regards, the addition sustained to the tune of Rs. 1,41,50,000/- from the 'digital data', found from the premises of Sh. Ravi Kapoor, an independent broker, certain....
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....rgued that Sh. Ravi Kapoor has been disclosing brokerage income in his returns filed prior to search from real estate and since the data was found from the digital record of Sh. Ravi Kapoor, the presumption u/s 132(4) is that the document belong to Sh. Ravi Kapoor only and no addition could be made in the hands of assessee. The confirmation of this addition in the hands of assessee, is therefore, highly unjustified. The Ld. CIT(A) has ignored that the document has to be read as a whole and without any corroborative evidence found from the premises of assessee, the addition in the hand of assessee is misconceived, being third party evidence as per the case laws cited above. 55. The last ground of appeal in the assessee's case bearing Ground No. 4 (a) (b) is on the basis of document found from Sh. Devinder Ghai as per page 99 to 103 of the order of Assessing Officer. It was stated by the Ld. Counsel that the said document has been reproduced at page 99 of the order and it is an account of Sh. Davinder Ghai in the books of JBK India, where one payment by cheque has been mentioned, besides cash. During the course of assessment proceedings on the basis of certain information in respect....
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....onsideration. Ld. DR further argued that the CIT(A) has wrongly deleted the addition on account of extrapolation. He justified the addition of Rs. 5,50 crores in respect of plots sold to SurbhiBhanda and Praveen Bhanda as per digital data from the Mobile of Sh. Ravi Kapoor. He also emphasized that the addition by the CIT (A) has wrongly been restricted in respect of purchase of land from Sh. Gurmit Singh as per evidence found from the digital data of Sh.Ajay Kumar Praphakar. Since the other land was also in the same vicinity, the CIT (A) has wrongly deleted the other addition. He sought the confirmation of addition as sustained by the CIT(A) on the basis of email.id of Sh. Ravi Kapoor and on account of document found from the premises of Sh. Devinder Ghai. 59. We have considered the arguments on merits of the Ld. Counsel and CIT (DR) and we have also gone through the Brief Synopsis, the paper books in three Volumes, judgment set as filed by the assessee's counsel. We have also gone through the order of AO and CIT(A). The facts are not disputed and as highlighted, while dealing with the legal grounds of appeal of the assessee, that all the additions as made by the AO are on the bas....
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....of difference between the rate of residential and commercial proper. Further, we find that the CIT (A) has dealt this issue at page 89 in his order as under:- "vii I have also gone through the above said valuation report reproduced at page 6 to 8 of the assessment order and I find that even otherwise this valuation report is of a commercial property as mentioned in the said report and whereas the estimation has been made by the A0 in respect of residential properties. It is a fact that there is a vast difference between the prices of the residential and commercial properties. This fact has been mentioned and admitted by the AO as well in the assessment order. Further, the said Valuer has not given any basis of the value arrived at by him @Rs. 30,000/ per sq. yards. Thus, the said valuation cannot form the basis for adopting the value of Rs. 38,500/- per sq. yards. Thus, I am of athe firm opinion that firstly the valuation reports in the names of third parties, as obtained by the Assessing Officer from the different banks have no evidentiary value since they were neither found from the premises of the assessee and not related to the assessee. As regards, the valuation report of Sh....
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....sions furnished by the assessee. It has been held in many cases that cross examination is not required in the case of each & every person if the facts are supported by the documents. The AO has mentioned that Sh. Ajay Kumar Prabhakar and Sh. Raj Kumar Sachdeva have been de-facto working for the appellant as they were the deed writers associated with the plots sold by the appellant. The AR has submitted that these are independent persons doing independent activities. Another important aspect of valuing the land by the Assessing Officer on the basis of statements of Sh. Ajay Kumar Prabhakar(independent Stamp Vendor and Deed Writer) and of Sh. Raj Kumar Sachdeva who is a partner in Prabhakar Associates and working with Sh. Ajay Kumar Prabhakar is that both the above persons are independently self-employed are not occupying any post in the assessee company. They are carrying on independent business of Stamp Vendor and working since 1996 much prior to the coming in existence of the assessee which company was formed in 15th June, 2005 and such persons are engaged in the profession and rendering their professional services to the private parties and they are not the officials of the asses....
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....o link with the said plot during the year under assessment. This agreement relied upon by the AO does not have evidentiary value in the case of the appellant as it is between two independent parties, executed only after one of the party, has already purchased it from the appellant. Thus, the terms & conditions of the agreement of this party cannot be said to have binding effect on the appellant, as the appellant is neither in the picture nor have any say in this transaction. 63. Further, we find that the reliance by the CIT(A) on the judgment of Punjab & Haryana High Court in the case of Sh. C.S. Atwal reported in [2015] 59 taxman.com 359, judgement of Apex Court in the case of 'Nishant Construction Pvt. Ltd'., reported in 101 taxmann.com 180 and of the Delhi High Court in the case of CIT Vs Sant Lal, reported in 118 taxmann.com 432 are quite relevant to the issue. Besides, the judgment of Apex Court in the case of K.P. Varghese, as cited supra. We also find that the rates of plot in the colony, are dependent on a number of factors like, location, East Phase, Road side view and many other considerations and it is a fact that no evidence of 'on money' have been found during the cou....
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....e of Rs. 44 lacs and which has been accepted by AO and even for Asstt. Year 2022-23, he has disclosed an income of Rs. 60 lacs and all such income has been accepted by the department. Copies of such evidence has been placed in the Paper Book. We also find that Sh. Ravi Kapoor has accepted that the said 'digital data' belongs to him only in respect of his property business and even he has denied about any signatures of Sh. Manu Gupta as per 'digital data'. Sh. Manu Gupta has also denied his signatures on the same. Further, there is nothing on record about the enquiries or statements of Smt. Praveen Bhanda and Surbhi Bhanda and no adverse view have been taken in their cases. Since these evidences having been recovered from the third party, namely Sh. Ravi Kapoor and no satisfaction have also been recorded by the AO before relying upon such material in the case of assessee on which assessment has been framed u/s 143(3). Even the section 132(4) clearly states that the document has to be considered in the hands of person, from whom, such document has been found. No corroborative evidence has been found from the assessee. Various judgments as relied upon by the Ld. Counsel as cited 'supr....
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.... 3 (a) (b) (c) of the assessee's appeal, we have considered the arguments of both parties and the order of authorities below and find that the addition has solely been based on the basis of 'digital data' found from the search carried out on Sh. Ajay Prabhakar, a deed writer. No corroborated or linking evidence has been found from the assessee company or from the premises of directors Sh. Jagjeet Singh Grewal or Sh. Manu Gupta. 69. We also find that no opportunity of cross examination have been afforded to the assessee on the basis of such digital data recovered from Sh. Ajay Prabhakar. Merely on the basis of some entries of payment through banking channels being made to Sh. Gurmit Singh by the assessee company on certain dates, the addition u/s 69 have been made in the hands of assessee company and it has been sustained by the CIT(A) to the extent of on money allegedly being paid to one Sh. Gurmit Singh, from whom, the land had been purchased. No corroborating or any other evidence has been found from the premises of assessee. Even Sh. Gurmit Singh had appeared before the AO and copy of his statement has been filed before us. He has completely denied any dealings with Sh. Ajay Pr....
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....e. Besides that no cross examination has been allowed of Sh. Ajay Prabhakar and further Sh. Gurmit Singh have also not agreed to any 'on money' having been received by him, thus, on the basis of finding given by the AO and the CIT(A) and the evidence possessed by revenue has hardly any worth of credence and on that basis, no addition can be made in the hands of assessee both on legal and on facts of the case, thus, the ground of appeal as taken by the department by way of Ground No. 5 & 6 are dismissed and while ground as raised by the assessee bearing 3 (a),(b) & (c) are allowed as per above. 71. The last ground of appeal No. 3, 4 (a) (b) are again on the fact that recovery of certain documents found from Sh. Ravi Kapoor and Sh. Devinder Ghai. There is no linking of the evidence found from the premises of Sh. Ravi Kapoor and Sh. Devinder Ghai with the business of the assessee. Even, Sh. Ravi Kapoor and Sh. Devinder Ghai have, nowhere, stated that the contents of the documents as mentioned in the seized belong to the assessee company. The seized data from the residence of Sh. Ravi Kapoor was found from his 'email.id' should belong to Sh. Ravi Kapoor only and merely on the basis of....