TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 38
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....o 2022-23, and involve both the assessee's as well as the Revenue, each aggrieved in part by the respective orders of the learned Commissioner of Income Tax (Appeals)-50, Mumbai. For the sake of convenience, the appeal for the A.Y.2015-16 i.e. ITA No. No.3228/Mum/2025 is taken up first and most of our finding given herein will apply mutatis mutandis in the appeals for other assessment years also. This appeal arises against order of ld. CIT(A) dated 04/03/2025. Finding of the Assessing Officer 2. The controversy, in essence, centres upon additions made on the basis of certain diaries and loose papers found during the course of search, the evidentiary worth of the statements recorded under section 132(4), and the consequential additions under various heads, particularly capital gains on alleged NOC receipts and unexplained money under section 69A of the Act. 3. Brief facts as culled out from the records are that the assessee, The Estate Investment Company Pvt. Ltd., is a private limited company incorporated as early as 3rd February, 1945 under the Companies Act, 1913. Over the decades, the company's principal objects have been the acquisition of immovable properties, investm....
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.... of these documents and the statements of Mr. Pawan Kumar Sharma (PKS) and Mr. Nandkumar Kudilal Seksaria (NKS) which was recorded during the search operation and post conclusion of search observed that assessee was engaged in the business of release of rights in Eksali land situated at Mira-Bhayandar and adjoining areas and from which confirmation was received from various parties. The diaries bore the initials "KB" which, according to the Assessing Officer, denoted cash received by Mr. Kamal Bubna, the Estate Manager, on behalf of the assessee for facilitating such transactions. Other notings those not bearing the "KB" marking were interpreted as representing unexplained cash receipts or unaccounted dealings unrelated to the NOC transactions. On this basis, the Assessing Officer bifurcated the entries into two broad categories those treated as capital receipts exigible to capital gains tax and others treated as unexplained money under section 69A. Accordingly, ld. AO made following additions:- i. Rs. 5,97,13,000 treated as unaccounted capital gains on account of NOC amount received for release of rights in Eksali land. ii. Rs. 23,000 added as unaccounted income ....
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....ve details of the source of cash In response to the same, he stated that KB should know the source of cash and he has never asked the source of cash. Statement of PKS was thereafter continued to be recorded directly on October 11, 2021 under Section 132(4) of the Act at 2.30 p.m. at office. i. In Q.35, PKS was directed to explain page no.89 of loose diary no.8, wherein on the left hand side of the diary "10:KB" was mentioned. In response to the same, PKS stated that it is Rs. 10 lakhs received by him from KB. ii. Similarly, PKS was directed to explain in Q.37 the entries mentioned on June 1, in the yellow colour diary of 2014. In response to the same, PKS stated that it is the account of Danded property in Murud village, Alibaug. The entries are cash entries made by him on the instructions of TNS iii. Most importantly, in response to Q.44, PKS clarified that he is making this statement to buy peace of mind and hoping that any discrepancies if found at a later date in writing the statements shall be addressed. He further stated that he is hoping that no penal action or prosecution shall be initiated against him and his family members and that he i....
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....many of which pertains to old period and thus, if any discrepancy is found as per the books of accounts at a later stage, then he shall intimate and correct his statement. Analysis of the above statements One crucial point to be noted from the perusal of the statement is that in case he has not made any statement claiming the entries in the seized diaries to be completely accurate and has clarified that his statements are subject to alterations on the basis of actual position as per the books of accounts. Further, nowhere, in his statement or at any point of time he has stated that these diaries are maintained at the instance of the assessee or any group companies or any of the directors. Another important fact which is also borne out from the assessment order PKS has retracted all of his statements by filing letter dated 22/12/2022 before the ld. AO, the copy of which has also been placed at the paper book at pages 29-33. The said retraction has been rejected by the ld. AO and also confirmed by the ld. CIT(A) on the ground of delay. It was stated that the retraction was filed only when PKS came to know that the department is intending to use his statement against assessee....
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.... pertain to very old period from FY 2014-2015 onwards. I shall verify our records in our office and give explanation on the same wherever applicable" (ii) In Q.7, NKS was asked to offer his comments on the statement recorded by PKS wherein he has stated that the contents of the diary are the details of payments received and payments disbursed in cash and banking channel by him on the direction of NKS, In response to the same, NKS stated that "it must be noted that PKS has been handling the petty cash and bank accounts of all entities. Further, PKS used to take my directions for office related work. However, 1 feel that there is a lot of duplication of these entries as cash return from the bank, petty cash and the receipts used to be deposited in our personal safe or sent home for safekeeping and returned later when required. Prima facie it seems that the payments and receipts have been recorded multiple times under different initials every time the amounts were sent for safe keeping by PKS and were subsequently brought back to the office and handed over to PKS. As these diaries pertain to very old period from 2014 -2015 onwards, therefore, I shall verify our records and gi....
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.... crores, dividing them into three distinct heads first, those considered as capital receipts subject to tax under the head "Capital Gains"; second, notional interest allegedly earned on such receipts; and third, cash transactions categorised as unexplained under section 69A. These additions were founded almost exclusively on the notings in the seized diaries and the accompanying statements of the employees. No independent verification was made from the counterparties purportedly reflected in the diaries, nor were any corroborative documents or contemporaneous records unearthed to substantiate the alleged cash inflows. The Assessing Officer, nevertheless, inferred a pattern of systematic receipt of cash for release of Eksali land rights and proceeded to tax the same accordingly. Findings of CIT(A) 11. When the matter travelled in appeal before the learned Commissioner of Income Tax (Appeals) ["CIT(A)"], the assessee vehemently contested both the factual premise and the legal tenability of the additions. It was submitted that the entire edifice of the assessment rested upon a diary maintained by an employee for his personal reference, without any direction or authorization from....
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....ins KB 69A Total AY 2014-2015 1,15,96,000 - 1,15,96,000 AY 2015-2016 4,96,95,000 2,50,000 4,99,45,000 AY 2016-2017 2,98,20,000 - 2,98,20,000 AY 2017-2018 1,79,63,000 - 1,79,63,000 AY 2018-2019 59,05,000 - 59,05,000 AY 2019-2020 2,27,40,000 - 2,27,40,000 AY 2020-2021 4,86,51,000 - 4,86,51,000 AY 2021-2022 1,25,00,000 - 1,25,00,000 AY 2022-2023 1,89,50,000 4,20,000 1,93,70,000 16. Apart from the aforesaid grounds on merits of the addition, the Assessee has also raised legal grounds regarding the validity of the Notice under section 148 & validity of DIN on the Assessment Order. Submissions of the A.R: 17. The matter was argued at length before us. The Assessee's have also filed detailed written synopsis covering the facts and various arguments made before us and a paper book containing a copy of pages of the diary and the statement of PKS, NKS and KB, MIS Sheet as also other relevant documents, which were relied upon during the hearing. 18. Before us, the learned Authorised Representative (AR) for the assessee opened his arguments with characteristic precision....
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....r entry in the diaries containing the initials "KB," without KB being confronted with those entries or his statement being extended to cover them. This, according to the AR, was a blatant misapplication of evidence. The AR added that even NKS, the principal person in charge of the company, in his statement dated 11th October, 2021 and again on 4th April, 2022, had stated unequivocally that the diaries were not coherent; that they contained rough notings, duplications, and personal annotations of PKS; and that he was not in a position to explain their contents. Importantly, NKS had not confirmed or adopted the statements of PKS or KB in any manner whatsoever. 21. The AR then highlighted that both PKS and NKS had formally retracted their statements during the course of assessment proceedings, through written communications dated 22nd December, 2022 and 7th February, 2023 respectively, giving cogent reasons for such retraction. Despite this, the Assessing Officer had summarily brushed aside these retractions, branding them as "afterthoughts," without affording either individual an opportunity for cross-examination or further clarification. This, he contended, amounted to a flagrant....
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....ng cash or valuables had been discovered in the course of search; yet, the Assessing Officer had proceeded as though the diary entries were self-proving instruments of truth. Such an approach, he argued, stood condemned by judicial authority. 24. The learned counsel further fortified his argument by citing the judgment of the Hon'ble Gujarat High Court in Kailashben Chokshi v. CIT [(2010) 328 ITR 411 (Guj.)], where it was held that an admission recorded under section 132(4), if retracted, cannot form the sole basis for addition unless supported by corroborative material. The High Court noted that statements extracted under stressful or coercive circumstances, particularly during search at odd hours, often lack voluntariness and hence must be treated with circumspection. The learned AR submitted that this principle had been reiterated in several later pronouncements, including by the coordinate benches of the Tribunal, and represents the settled position of law that mere confessional statements, in the absence of corroboration, are insufficient to sustain additions. He also drew our attention to the Mahadhan Agritech Ltd. v. ACIT (ITA No. 2227/Mum/2024) decision, wherein this ver....
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....ssessee's instruction or supervision. 27. In support of this proposition, the learned AR drew strength from the celebrated decision of the Hon'ble Supreme Court in Central Bureau of Investigation v. V.C. Shukla & Ors. [Criminal Appeal Nos. 247-256 of 1998], wherein it was held that loose sheets or diaries, not being books of account regularly kept in the course of business, are not admissible evidence under section 34 of the Indian Evidence Act. The Court observed that entries made by one person in such documents, unless corroborated by independent evidence, cannot fasten liability on another. This, the AR submitted, was directly applicable to the present case, where the Assessing Officer sought to tax the assessee company on the strength of the personal notings of PKS, without establishing authorship, authenticity, or relevance. He also placed reliance on the judgment of the Hon'ble Supreme Court in Common Cause (A Registered Society) v. Union of India [(2017) 394 ITR 220 (SC)] the celebrated "Birla-Sahara Diaries" case wherein the Court had categorically held that uncorroborated third-party records found in the course of search have no evidentiary value whatsoever. 28. The ....
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.... allowed the relief in respect of Rs. 4,50,000 on the ground that Ramesh Babu has no business connection with the Assessee's etc. However, the CIT(A) noted that the entry of Rs. 2,50,000 was not in the name of Ramesh Babu but was in the name of NKS. Based on said observation, the CIT(A) confirmed the addition of Rs. 2,50,000 in the hands of the Assessee's under section 69A. (iii) The AR pointed out that as per the noting in the diaries the aggregate of entries in the name of Ramesh Babu was to Rs. 7,00,000/- (Rs. 2,50,000/- + Rs. 4,50,000/-). (iv) The AR further pointed out that in one entry of Rs. 4,50,000/- in the name of Ramesh Babu, a sum of Rs. 2,00,000/- was allegedly allocated to RKS and balance Rs. 2,50,000/- was allocated to NKS. The learned CIT(A), however, erred in fact in presuming that since Rs. 2,50,000/- was mentioned against the name of NKS and, the said amount was received by the Assessee's from NKS. This presumption is factually incorrect and is contrary to the entries recorded in the diaries. The AR has taken us through the diaries to buttress his argument. (v) The AR made a without prejudice submission, that in case the diary entry of ....
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.... the date of assessment order i.e. 27-03-2023. (iii) The AR accordingly argued that the manual DIN in the impugned reassessment orders is not in accordance with CBDT Circular No. 19/2019 dated August 14, 2019. (iv) The AR pointed out that the CBDT Circular has mandated that all communications shall be issued through ITBA portal for maintaining proper audit trail and the communication shall be treated as Non est unless a computer-generated DIN has been allotted and duly quoted in the body of such communication. The Circular further mandates that only in exceptional circumstances, as provided in the Circular, such communication may be manually issued. It further provides specific procedure to be followed for issuing such manual communication. The Circular also states that any communication issued in contravention of the above stated procedure, shall be treated as invalid and shall be deemed to never have been issued. (v) The AR pointed out that The AO has not made out any exceptional circumstances, which enables him to bye- pass this notification, which is binding on him. (vi) The AR further argued that the DIN has been generated on date subsequent....
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...., according to revenue, a DIN in fact was generated for DRP proceedings, written by hand and subsequently communicated on 21-12-2022 and therefore, the conditions prescribed in paragraph No.3 of the circular have been complied with. Admittedly, the reason for writing the DIN number by hand and the reason for not generating the DIN electronically have not been specified in the format prescribed in paragraph No.3 of the circular. Even prior written approval of the Chief Commissioner/Director General of Income-Tax, as prescribed in Clause (3) of the Circular, was not brought to notice. If such prior permission has not been taken, that will also be another ground to make the communication to be treated as invalid and having never been issued. Therefore, the communication or the proceedings of the DRP, is not in conformity with paragraph Nos.2 and 3 of the circular and are invalid and deemed to have never been issued. Consequently, the assessment orders under section 144C(13), which are passed on those directions of DRP, cannot be sustainable. d) DCIT, Central Circle - 7(2) vs Shubhkanchi Trading Pvt Ltd (1600/Mum/2022) (Mumbai Trib) Relying on the binding decision of ....
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....G LP V. ACIT (writ Petition (L) No. 15289 of 2024) (Bombay HC) ii) Abhin Anil Kumar Shah v. ITO reported in [2024] 468 ITR 350 (Bombay HC) iii) Ganesh Nivrutti Jagtap vs ACIT [2024] 166 taxmann.com 168 (Bombay) b. The Supreme Court in the case of Deepanjan Roy v. ADIT ([SLP (C) No. 18753/2025] (SC) has dismissed the SLP filed against the decision of Telangana High Court (Writ Petition No. 23573 of 2024) regarding the validity of notice issued under section 148 by the JAO. 32. The Assessee further submit that none of the above decisions have been stayed by Hon' Supreme Court and therefore the same has the binding force on the lower appellate authorities. In this connection the Assessee relies on the decision of Jurisdictional Bombay High Court in the case of Bank of India vs ACIT [2025] 170 taxmann.com 422 (Bombay). 33. The learned Departmental Representative (DR), on his part, sought to defend the orders of the Assessing Officer and the learned CIT(A) with considerable fervour. He submitted that the seized diaries, though not part of the statutory books of account, constituted contemporaneous records maintained by a responsible employee of the group....
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....on. He emphasised that the Assessing Officer, by collating the diaries, the MIS sheet, and the statements of key employees, had constructed a cogent evidentiary mosaic pointing to unaccounted transactions. The DR urged that the Tribunal should not substitute its own appreciation of evidence in place of the Assessing Officer's considered view, unless such view is perverse or devoid of rational basis. In his submission, the order of the CIT(A), which had already granted substantial relief, represented a fair equilibrium between departmental interest and taxpayer's grievance, and no further deletion was warranted. DECISION 36. We have heard rival contentions, perused the voluminous records and relevant finding given in the impugned orders. In so far as the issue relating to taxability of capital gains, it is seen that the entire premise of the ld. AO is based on the statements of PKS and NKS who have alleged to have explained entries in the diary found during the search. From deep scrutiny of the statements it is discerned that PKS in his statement has not identified the nature of entries noted in the diaries and left it for NKS to provide the clarification. NKS on the other han....
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....but rough and unverified notings, incapable of explaining the underlying transactions without resort to the statements of P.K.S. 38. Another important fact is that both P.K.S. and N.K.S. have retracted their statements before the learned Assessing Officer. The reasons for such retraction were that they were not even aware that their statements would be used against the assessee company, particularly when the seized diaries were not found from the premises of any director or of the assessee company itself. When statements have been retracted with cogent and plausible reasons, the law casts a corresponding duty on the Assessing Officer to summon those persons, confront them with their earlier statements, and subject them to cross-examination. Such procedural safeguard, as repeatedly emphasised by the Hon'ble Supreme Court in several decisions cited before us by learned counsel, is not a matter of indulgence but a sine qua non of natural and fair adjudication. 39. The mere discovery of loose papers or personal diaries, which are not even maintained by the directors of the assessee company and remain uncorroborated by any external evidence, cannot, by itself, form the sole basis ....
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....have retracted their statements and no further examination or cross-verification has been undertaken. In light of these circumstances, the very evidentiary substratum of the additions evaporates, leaving behind nothing but suspicion. The Assessing Officer's approach of brushing aside the retractions as afterthoughts, without testing their veracity through examination or cross-questioning, constitutes a serious procedural infirmity. 40.1. This infirmity is all the more pronounced in the present case because the seized material is neither self-explanatory nor independently corroborated. The Assessing Officer's duty extends beyond mere reproduction of search findings; he must verify the surrounding facts and determine whether any such statements or diary notings are supported by independent evidence. Yet, in this case, he did not examine any of the persons purportedly involved in the alleged NOC transactions, nor did he summon the supposed payers of cash whose names appeared in the diaries. 40.2. At the very least, there should have been some independent corroborative material such as bank statements, agreements, receipts, or documents evidencing any actual cash transaction or c....
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....celess unit, the jurisdiction of the local officer stands eclipsed. The scheme does not contemplate a concurrent or overlapping authority. Any notice issued dehors the faceless framework is coram non judice and the proceeding is void at inception. The exposition laid down by the Hon'ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT has since been consistently followed by the same Court in Capital G LP v. ACIT, Abhin Anil Kumar Shah v. ITO [(2024) 468 ITR 350 (Bom)], and Ganesh Nivrutti Jagtap v. ACIT [(2024) 166 Taxmann.com 168 (Bom)], thereby fortifying the principle that the faceless assessment regime under section 151A is not a matter of administrative convenience but a jurisdictional imperative. The High Court in these decisions has unambiguously held that once jurisdiction is statutorily vested in the Faceless Assessing Officer, any notice issued by the Jurisdictional Assessing Officer is coram non judice and consequently void ab initio. 42.1. This view now stands further affirmed by the Hon'ble Supreme Court in Deepanjan Roy v. ADIT [SLP (C) No. 18753 of 2025], wherein the Special Leave Petition filed by the Revenue against the decision of the Hon'ble Telangana H....
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....fied in the present case. On the contrary, the generation of DIN after nearly three weeks from the date of assessment belies any claim of technical exigency. The omission, therefore, is not a mere procedural irregularity but a substantive breach that goes to the root of jurisdiction. The Hon'ble Bombay High Court in Ashok Commercial Enterprises v. ACIT [(2023) 154 Taxmann.com 144 (Bom)] has authoritatively held that failure to issue an order through the designated ITBA portal, or issuance of an order without a valid pre-existing DIN, renders such order invalid and non est in the eyes of law. The Court rejected the argument that subsequent intimation of DIN could cure the defect, holding that such post-dated compliance defeats the purpose of the Circular, which is to ensure transparency, traceability, and audit trail of every communication issued by the Department. 45. The same principle was reaffirmed by the Hon'ble Madras High Court in CIT v. Laserwords US Inc. [(2025) 175 Taxmann.com 920 (Mad)], where it was held that an assessment order and DRP proceedings issued without a valid DIN were void ab initio. The Court observed that the procedural mandate under Circular No. 19 of 2....
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....the decision of the Hon'ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT (supra), which has been consistently followed in Capital G LP v. ACIT (Writ Petition No. 15289 of 2024), Abhin Anil Kumar Shah v. ITO [(2024) 468 ITR 350 (Bom)], and Ganesh Nivrutti Jagtap v. ACIT [(2024) 166 Taxmann.com 168 (Bom)]. The dismissal of the Special Leave Petition by the Hon'ble Supreme Court in Deepanjan Roy v. ADIT [SLP (C) No. 18753/2025] lends further imprimatur to this legal position. Thus, we have no hesitation in holding that the reassessment orders impugned before us are void ab initio, both for want of jurisdiction and for breach of mandatory procedural require. 48. The cumulative effect of our findings leads inexorably to the conclusion that both the reassessment proceedings and the resultant assessment orders are unsustainable. The notice under section 148, issued by an authority bereft of jurisdiction under the Faceless Assessment Scheme, is void ab initio. The assessment order, bereft of a valid, pre-generated DIN, stands condemned by the express stipulations of CBDT Circular No. 19 of 2019, as interpreted by the binding judgments of the jurisdictional and other High Cour....
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....ncome tax (Appeals) - 50, Mumbai (herein referred to as CIT (A) erred in holding that the DCIT, Central Circle 8(1) (herein referred to as AO) was right in reopening the assessment under section 148 of the Act. The Appellants submit that the conditions precedent to reopening of the assessment are not compiled with and the Order passed by the AO is without jurisdiction and therefore the reopening of assessment is bad in law and void ab-initio and the Appellants pray that the Order be quashed. 2. Without prejudice to the above, the CIT erred in holding that AO was right in making an addition of Rs. 1,15,96,000 as capital gains purely on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 3. The Ld. AO erred in levying interest under section 234B and 234C of the Act. The Appellant prays that the interest under section 234B and 234C of the Act be deleted or consequentially reduced 4. The Appellants craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (B) AY 2016-17 (ITA 3013/MUM/2025) - ....
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....ddition of Rs. 29,17,000/- when the assessee had accepted during the assessment proceedings that the receipts pertained to cash received on release of lands at Eksali and no valid documents and reconciliation for claiming the relief had been filed; 4. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 10,00,000/- holding the same to be belonging to Veda Real Estate Corporation when the assessee has not filed any valid document or reconciliation to prove the same; 5. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 22,50,000/- while relying on the statement filed by the assessee to state that the said sum of Rs. 22,50,000/- was the excess amount of cash paid to late Shri Pratap Gambir without any supporting evidences to substantiate the statement; 6. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 47,50,000/- while relying on the statement filed by the assessee to state that the said sum of Rs. 47,50,000/- belonged to Rajkumar Seksaria (RKS) on the basis of a not....
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....on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 4. The Ld. AO erred in levying interest under sections 234B of the Act. The Appellants prays that the interest under sections 234B of the Act be deleted or consequentially reduced. 5. The Appellants craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (E) AY 2017-18 (ITA 3936/MUM/2025) - Department's Appeal Grounds raised by the Department: 1. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee without giving opportunity to the Assessing Officer to verify the documents filed before him during the appellate proceedings by calling for a remand report under rule 46A of the Income-tax Rules, 1962; 2. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 26,03,000/- when the assessee had accepted the receipts to belong to the assessee and no valid documents and reconciliation for claiming the relie....
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....er passed by the AO is without jurisdiction and therefore the reopening of assessment is bad in law and void ab-initio and the Appellants pray that the Order be quashed. 2. Without prejudice to the above, the Appellants submit that the Assessment Order passed by the AO under section 143(3) /148 has been issued without DIN and therefore this Order passed by the AO is a nullity in law and the Appellants pray that the same be quashed. 3. Without prejudice to the above, the CIT erred in holding that AO was right in making addition of Rs. 2,27,40,000 as capital gains purely on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 4. The appellant craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (G) ITA No.3224/Mum/2025 - AY 2020-21 (Assessee's Appeal) Grounds raised by the Assessee's: 1. The Commissioner of Income tax (Appeals) - 50, Mumbai (herein referred to as CIT (A)) erred in holding that the DCIT, Central Circle 8(1) (herein referred to as AO) was right in reopening th....
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....hich has not been legally procured under the provisions of the Act and purely based on surmises and conjectures and pray that the same be deleted. 2. Without prejudice to the above, the Appellants submit that the Assessment Order passed by the AO under section 143(3) /148 has been issued without DIN and therefore this Order passed by the AO is a nullity in law and the Appellants pray that the same be quashed. 3. Without prejudice to the above, the CIT erred in holding that AO was right in making addition of Rs. 4,20,000 relating to other receipts in diaries found during the course of search proceedings under section 69A/69B of the Act. The Appellants submit that the said addition pertaining to an entry is un corroborated and as such the conditions precedent for making an addition under section 69A/69B do not exist. The Appellants therefore pray that the addition of Rs. 4,20,000 made by the AO under section 69A be quashed. 4. The Ld.AO erred in levying interest under sections 234B and 234C of the Act. The Appellants pray that the interest under sections 234B and 234C of the Act be deleted or consequently reduced. 5. The appellant craves leave to a....
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.... sum of Rs. 23.000/- in respect of which there was discrepancy in matching the entries appearing in the MIS Sheet and the entries in the diaries: The appellant craves leave to add to, alter, amend, modify and / or delete any or all of the above said grounds of appeal, the appellant reserves its right to file further submissions in the appeal." 52. From a careful perusal of the grounds raised by the assessee in the connected assessment years, it emerges that the challenge revolves primarily around two distinct yet interrelated facets, first, the very validity of the reassessment proceedings initiated under section 148 of the Act; and second, the substantive additions made on account of alleged capital gains, based on the same set of seized diaries and materials. The legal challenge to the reopening rests on the contention that the notice under section 148 was issued by the Jurisdictional Assessing Officer in contravention of the Faceless Assessment Scheme framed under section 151A of the Act, and is therefore void ab initio. The assessee has further assailed the consequential assessment orders on the ground that they were passed without a valid Document Identification Nu....
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....ineering Works (P) Ltd. [(1992) 198 ITR 297 (SC)] held that reopening under section 147 cannot be used as a ploy for roving verification or fishing enquiry into completed matters. The Assessing Officer's act of extrapolating entries found in one year to reopen other years is precisely the mischief which the Court sought to prevent. On this count too, the reassessments lack legal sanctity. 56. For completeness, we also record that certain minor computational adjustments made by the CIT(A) in respect of arithmetic reconciliations, while not impugned on merits, stand rendered academic in view of our decision to annul the substantive assessments themselves. Once the foundational assessment is quashed, all ancillary determinations such as depreciation recomputation, interest levies, or carry-forward adjustments lose their footing. In consequence, these incidental matters need no separate adjudication and are rendered infructuous. 57. Coming now to the appeals preferred by the Revenue, we find that the Department has assailed the relief granted by the learned CIT(A) in respect of certain portions of the seized material which, according to the Department, ought to have been sustaine....
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.....CIT(A) in violation of Rule 46A. Even at the time of hearing, ld. DR has not indicated what were the additional evidences which have been entertained by the ld. CIT(A). Thus, these grounds raised by the department in various years are dismissed. 60. In view of the foregoing discussion, all the appeals preferred by the Revenue are dismissed. The orders of the learned CIT(A) granting partial relief to the assessee's are upheld to the extent they survive our annulment of the assessments themselves. The assessee's appeals, being meritorious both on factual and legal grounds, stand allowed as indicated in our operative findings. The Revenue's grounds, being devoid of substance, are dismissed. We accordingly confirm that the deletions and relief granted by the CIT(A) were wholly justified and call for no interference. 61. Accordingly, for the assessment years from 2012-13 to 2022-23, wherever reassessment orders were framed pursuant to notices under section 148 or 153A of the Act based on the same set of seized diaries, statements, and MIS sheets, such assessments stand annulled for want of jurisdiction, procedural legitimacy, and evidentiary support. All consequential additions m....