TaxTMI 
TaxTMI 
2025 (7) TMI 1426
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....ng documents were found and seized which also include certain documents which contain information relating to the assessee. In response to the notice u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), the assessee filed his return of income on 26.05.2021 declaring Nil income. The Assessing Officer thereafter issued statutory notices u/s 143(2) and 142(1) of the Act in response to which there was no response from the side of the assessee. Therefore, the Assessing Officer issued a summon u/s 131 of the Act on 07.12.2021 requiring physical attendance of the assessee along with requisite submissions by 10.12.2021. Through this summon, the assessee was also provided an opportunity to inspect the seized material relevant for his case. Since there was no proper compliance from the side of the assessee, the Assessing Officer proceeded to complete the assessment on the basis of material available on record. 3. The Assessing Officer noted that during the course of search and seizure action u/s 132 of the Act in the case of Yuvraj Dhamale Group on 26.09.2017, the residential premises of Shri Pravin Gawali being one of the directors in M/s. Wellbuild Merchants Pvt.....
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.... M/s. GM Rajdhan Buildcon. He noted that subsequently M/s. Wellbuild Merchant Pvt. Ltd. and Shri Yuvraj Dhamale have approached before the Settlement Commission and claimed that the entire amount as mentioned on pages 36 to 38 of Bundle No.55 seized from the residence of Shri Pravin Gawali has been received by cheque. Rejecting the various explanations given by the assessee and observing that the assessee has received interest of Rs. 2,11,00,000/- in assessment year 2017-18. The Assessing Officer made substantive addition of Rs. 1,05,50,000/- in the hands of assessee as 'income from other sources' and also another addition of Rs. 1,05,50,000/- on protective basis by observing as under: "09. To sum up the things, the seized documents vide Page Nos.38 of Bundle No.55 found at the Pravin Gawali residence contains the names of (1) Subhash Jain and (2) Ajit Jain. As mentioned in the preceding paras Shri. Yuvraj Dhamale had submitted the details of investments made by the parties mentioned on these pages in the project "Rajgruhi Residency" developed by M/s. Wellbuild Merchants Pvt Ltd. as per Annexure-4 (being part of his statement) and had stated that though 23 investors appear....
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....7-18 Sr. No. Name of the Assessee Amount of Investment as per seized documents (in Rs.) % of Total (Appro.) Returns on investment as per the evidences found. Total 1 Subhash Jain 1,49,89,295 50 1,05,50,000/- 2,11,00,000/- 2 Ajit Jain 1,49,89,395 50 1,05,50,000/- 2,99,78,790 100 2,11,00,000/- 2,11,00,000/- 11. Hence, out of the total interest earned in cash of Rs. 2,11,00,000/- in A.Y. 2017-18, Substantive addition of Rs. 1,05,50,000/- is hereby made in the hands of Shri. Subhash Jivraj Jain as income from other sources. However, if the appellate authorities decide that, the interest received in cash by Shri. Ramesh Ghanshyam Shah from the Yuvraj Dhamale group on behalf of other persons i.e.. Ajit Jain has not been passed on to him as mentioned in the table above, then so as to protect the interest of revenue, Protective Addition of Rs. 1,05,50,000/- is hereby made in the hands of Shri. Subhash Jivraj Jain. 12. Thus, in the absence of any supporting evidences as well as any satisfactory explanation furnished thereto, the amount i.e. Rs. 1,05,50,000/- is treated to be the in....
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....ant's appeal and deleted similar additions. The Hon'ble ITAT held in favor of the appellants as under: "15. As discussed above, as it was also argued by the id. AR, the assessments made in the hands of the assessee regarding alleged payment of interest in cash was based on the seized documents found during the course of search basing on which Shri Yuvraj Dhamale claimed interest expenditure in Income Tax Settlement Commission, we find the AO considering the proceedings before the Income Tax Settlement Commission made addition in the hands of the assessee on account of interest payment in cash, In view of the same, we directed the ld. DR to furnish a copy of order of the Income Tax Settlement Commission regarding M/s Wellbuild Merchants Pvt. Ltd of the Dhamale Group, ld. DR furnished the same which is on record by way of covering letter dated 15/01/2021. On an examination of the same, we note that the said Dhamale Group representing 04 applicants filed applications u/sec 245C before the ITSC. In turn, the ITSC sought reports from PCIT as required u/sec, 245D (28) of the Act and also under Rule 9 of the Income Tax Settlement Commission Procedure Rule 1997. Since the ....
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....ry failing which the addition made in the hands of the assessee fails and is not justified. Thus, the addition of Rs. 34,00,000/- (substantive addition of Rs. 17,00,000/- and protective addition of Rs. 17,00,000/-) made by the AO is reversed and AO is directed to delete the impugned addition. The grounds no. 3 & 4 raised by the appellant are hereby allowed." 6. While adjudicating the appeal for assessment year 2017-18, the Ld. CIT(A) had observed as under: "11.1 Vide these grounds of appeal, the appellant contended that the AO has erred in making addition of Rs. 1,05,50,000/- on account of alleged cash receipt from the builder in connection with the providing of the funds is without any evidence found with the appellant and therefore the additions so made be deleted. The appellant also contended that the additions made on protective basis of Rs. 1,05,50,000/- is also not in accordance with the provisions of the Act and the facts and circumstances prevailing in the case. The additions so made be deleted. These grounds raised by the appellant are identical to the grounds no.3 to 4 for A.Y. 2016-17 and the facts mentioned for these grounds are also similar. Therefore, the ....
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.... been prepared for A.Y. 2012-13 to 2018-19 and as the consolidated satisfaction note is not in accordance with the provisions of the law, the asst. order passed u/s 153C r.w.s. 143(3) be declared null and void. 2] The respondent submits that the learned A.O. had no jurisdiction to issue notice u/s 153C to the assessee since the conditions mentioned therein have not been fulfilled and accordingly, the notice issued u/s 153C and the consequential asst. order passed u/s 153C r.w.s. 143(3) be declared null and void. 3] The respondent submits that in the present case, no addition has been made in respect of the seized paper referred in the satisfaction note and accordingly, the asst. order passed u/s 153C r.w.s. 143(3) be declared null and void. 4] The respondent craves leave to add, alter, amend or delete any of the above cross objections. 9. The Ld. Counsel for the assessee at the outset referring to the satisfaction note by the JCIT (OSD), Central Circle 2(3), Pune on 30.04.2021, copy of which is placed at pages 1 to 2 of the paper book submitted that the Assessing Officer has passed a consolidated satisfaction note for various assessment years. 10. R....
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....TR 431 (Del), he submitted that the Hon'ble High Court in the said decision has held that satisfaction note merely forms foundation for initiation of action which would enable to evaluate whether an opinion has been validly formed and as long as it rests on incriminating material, which pertains to assessment years in question, same would qualify requirement of section 153C. 16. As regards the issue of reliance on the decision favourable to the assessee when two conflicting decisions on the same issue are available is concerned, he submitted that the Hon'ble jurisdictional High Court in the case of CIT vs. Thana Electricity Supply Ltd., reported in 206 ITR 727 (Bom) has held that it is satisfaction of the Court interpreting the law, in that the language of the taxing provision is ambiguous or reasonably capable of more meanings than one which is material. If the court does not think so, the fact that two different opinions have been expressed by the parties or accepted by some Tribunal or High Court by itself will not be sufficient to attract the principle of beneficiary interpretation. 17. Referring to the decision of the Hon'ble Supreme Court in the case of M/s. A.P. El....
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....Shivajirao Kadam nagar, Ambegaon pathar, near Raje chowk, Pune. During the search proceedings, several incriminating materials and documents were seized. While examining the documents and seized material at the time of finalizing the assessment in case of Shri Yuvraj Sitaram Dhamale and M/s Wellbuild Merchants Pvt Ltd, it was noted that the certain documents/loose papers pertain to or the information contained in papers/documents related to Assessee i.e. Shri Subhash Jivraj Jain. B. A satisfaction note was drawn by the AO during the proceeding's u/s 153A in case of Shri Yuvraj Sitaram Dhamale and M/s Wellbuild Merchants Pvt Ltd that Information contained in documents/papers/ materials relates to Shri Subhash Jivraj Jain. The details of seized documents are as below: The loose papers containing noting regarding the investment, interest and total amount against the name of some persons has been seized as per page no 38 to 40 of Bundle no 55. As per entry on page no 38, Shri Subhash Jivraj Jain has given loan (directly or indirectly through his partnership firm M/s GM Rajdhan buildcon) of Rs. 1,49,89,395/- in cheque and received interest of Rs. 31,06,879/- in cas....
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....hlal Gugale vs. PCIT vide ITA No.1676/PUN/2024 for assessment year 2017-18, order dated 30.12.2024 has quashed the assessment proceedings by observing as under: "8.7. Since in the instant case a consolidated satisfaction note has been prepared for assessment years 2012-2013 to 2018-2019, therefore, the consolidation satisfaction note being not in accordance with law, therefore, the entire assessment proceedings is liable to be quashed. We hold accordingly and quash the assessment." 23. So far as the decision of the Hon'ble Delhi High Court in the case of Indian National Congress vs. DCIT (supra) relied on by Ld. DR is concerned, we find no doubt there is a favourable decision in favour of the Revenue on the issue of combined satisfaction. However, it has been held in various decisions that when there are two views possible on an issue and there is no decision of the jurisdictional High Court on that issue, then the view which is favourable to the assessee has to be adopted. We find the Hon'ble Supreme Court in the case of CIT vs. Naga Hills Tea Co. Ltd. (1973) 89 ITR 236 (SC) at page 240 has observed as under: "If a provision of a taxing statute can be reas....