TaxTMI 
TaxTMI 
2025 (9) TMI 1714
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....ote of the issues agitated in the Cross Objections. In assessment year 2016-17, 2017-18 and 2019-20, the assessee has taken three preliminary jurisdictional issues in the Cross Objection, namely, that no search u/s 132 of the Income Tax Act was carried out on the Registered Office of the assessee company, therefore, assessment u/s 153A ought to have not been framed upon the assessee. Accordingly, this assessment is ab-initio void. 4. The second ground taken by the assessee is that since no search was carried out upon the assessee and no incriminating material was seized, therefore, assessment ought to have not been framed u/s 153A. According to the assessee, AO has been using the digital data found in the search carried out upon M/s Homeland Buildwell Pvt. Ltd., then assessment ought to have been passed u/s 153C and not u/s 153A of the Act. The last common ground in all four assessment years taken by the assessee is that approval required to be granted by the Addl. CIT, Ludhiana u/s 153D has not been granted in accordance with the guidelines laid down for granting such approvals. In other words, the approval is a mechanical approval and hence, assessment orders are not sustainab....
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....rily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice o....
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....occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss". 10. In the light of above, if we examine the facts of present case, then it would reveal that assessee is agitating jurisdictional issues in its Cross Objections in each assessment year. On all such issues, its Tax Consultant initially opined for not litigating further with the Revenue. It was a bonafide error at the end of the assessee because already relief was granted to the assessee by the ld. First Appellate Authority. It might have been though by the assessee not to litigate with the Department. However, when Revenue has filed the appeals, then it came to its notice to take all preliminary issues which can support the impugned order. Therefore, we condone the delay in filing Cross Objection because the....
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....h less incriminating documents belongs to and/or pertaining to the assessee were -found and or seized." 13. That no Panchnama regarding search u/s 132, was drawn in the name of the assessee company, in respect of any premises. 14. Date-wise synopsis of the events are as under: S. No. Date Particulars of Event 1. 26.02.2020 Survey u/s 133A conducted at registered office of the assessee situated at 154 1st Floor, Aggarwal Cyber Plaza-1, Plot No. 3,4,5,6, Netaji Subhash Place, Pitampura, Delhi-110034 2. 26/02/2020 Warrant of authorization in the name of M/s Homeland Buildwell Pvt. Ltd. in respect of site office of the appellant situated at CP-67, Sector 67, Airport road, Mohali 3. 26/02/2020 Warrant of authorization in the name of Sh. Ajay Bindal & Smt. Sunita Bindal, director of the assessee at their residence situated at Kothi No. 140, Deepali Enclave, Pitampura, New Delhi -110034. 4. 28.02.2020 Panchnama drawn in the name of M/s Homeland Buildwell Pvt. Ltd. in respect of premises bearing no. CP-67, Sector-67, Airport road, Mohali 5. 28.02.2020 Panchnama drawn in the name of Sh. Ajay Bindal & Smt. Sunita ....
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.... sustainable. The ld. counsel for the assessee has filed a Paper Book running into 10 pages wherein he has pointed out that the AO has sent a letter to Addl. CIT for granting approval in these cases on 29.09.2021. Copy of this letter has been placed on page 1 of the Paper Book and the approving authority, namely, Shri B. K. Singh, Addl. Commissioner of Income Tax has granted the approval on 30.09.2021. Copy of this letter is placed on page 2. Thereafter, ld. counsel for the assessee has made reference to a letter dated 29.09.2021 vide which Assessing Officer has sought approval in the case of Homeland Group. In this list, there are 15 assessees and there were 6 assessment years. Thus, in total, 90 assessment orders of this group were also sent to the Addl. Commissioner who has granted the approval on same day i.e. 29.09.2021. The ld. counsel for the assessee, thereafter, made reference to the letter of the Assessing Officer dated 29.09.2021 vide which approval was sought in the case of Shri Rajinder Singh Gujral, Shri Kewal Krishan Chhabra for assessment years 2009-10 to 2012-13. These approvals have also been granted on 30.09.2021. Similarly, approval has been granted to two mo....
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....nt of the Hon'ble Allahabad (HC) in the case of PCIT vs. Siddarth Gupta as reported in [2023] 147 taxmann.com 305 (Allahabad). 9. Judgement of the Hon'ble Allahabad (HC) in the case of PCIT vs. Subodh Aggarwal as reported in [2023] 149 taxmann.com 373 (Allahabad). 10. Judgement of the Hon'ble ITAT Bench 'F', Mumbai in the case of Smt Shreelekha Damani vs. DCIT (OSD-1), CR-7, Mumbai [2017] 88 taxmann.com 383 (Mumbai). 11. Judgement of the Hon'ble ITAT Bench 'F\ Mumbai in the case of Vrushali Sanjay Shinde v. DCIT [2023] 154 taxmann.com 324 (Mumbai-Trib.). 12. Judgement of the Hon'ble ITAT Bench 'B', Pune in the case of SMW Ispat (P.) Ltd. v. ACIT [2024] 163 taxmann.com 119 (Pune-Trib.). 13. Judgement of the Hon'ble ITAT Bench 'A', Chandigarh in the case of M/s Ganesh Builders v. DCIT in ITA No. 452/CHD/2022 dated 16.05.2024. 14. Judgement of the Hon'ble ITAT Bench 'A', Delhi in the case of Apple Commodities Limited vs. DCIT, Noida as reported in ITA no. 1510/DEL/2022. 15. Judgement of the Hon'ble ITAT Bench 'E', Delhi in the case of Mainee Steel Works Pvt Ltd. ....
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....ssible to go through all the documents and approval has been granted on the last day only for the mere fulfilment of the procedure, then it is not a proper approval required to be granted by the competent authority u/s 153D. If it is being demonstrated that such approval has been granted in a mechanical manner, then the assessments are not sustainable. We find that these issues have been examined very elaborately, more particularly by the ITAT Chandigarh Bench in ITA No. 140/CHD/2024 wherein number of judgements have been referred. We take note of the finding of the ITAT in the case of S.P. Singla Construction & others ITA No. 140/CHD/2024 to 145/CHD/2024. The relevant discussion made by the Tribunal reads as under: "9. The ld. Counsel for the Assessee stated that the CIT(A) erred in pointing out that the Addl. CIT has applied his mind by supervising and monitoring all the search and seizure case periodically. The ld. counsel argued that the approval under section 153D of the Act starts from the day of drafting of assessment order. He pointed out the relevant provision of section 153D, which reads as under: - "Prior approval necessary for assessment in cases of se....
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....at the approval granted by JCIT u/s 153D of the Act is after application of mind for the reason that the JCIT being Range Head and all search and seizure assessments are regularly supervised and monitored by the Range Heads as well as concerned PCIT. She argued that the Assessing Officer as well as the Range Head, both, has to follow the instructions for completing assessment in search cases as per instructions of CBDT canvassed by the ld. Counsel for the Assessee. The ld. CIT DR pointed out from the letter written by DCIT, Central Circle-1, Chandigarh dated 15.06.2021 that the draft assessment order in the case of Assessee was sent and enclosures were assessment records. She argued that JCIT vide approval dated 19.06.2021 has gone into the assessment records and that is part of the approval granted by the JCIT that the concerned assessment record in Volume I without pagination is returned herewith. She argued that once the approval is granted by the JCIT after examining the assessment record, it is the proper compliance of provisions of section 153D of the Act. In the present case, she stated that approval u/s 153D of the Act is after due examination of records including seized ma....
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....authority. From the very provision of section 153A of the Act, it is clear that the assessment is a domain of only the Assessing Officer and not any other authority under the Income Tax Act. Now, on facts, whether in the present case the JCIT can interfere in the regular assessment. We noted that this issue is dealt by Delhi Tribunal in ITA No. 2503 & 2693/Del/2017 and C.O. No. 9/Del/2022 in the case of SEH Realtors Pvt. Ltd., Order dated 23rd July, 2024, wherein the entire scheme is discussed in paragraph Nos. 8 to 10, as under :- "8. We find as per the scheme of the Act, for framing search assessments, the Ld. AO can pass the search assessment order u/s 153A or u/s 153C of the Act only after obtaining prior approval of the draft assessment order and the conclusions reached thereon from the ld. JCIT, in terms of section 153D of the Act. This is a mandatory requirement of law. The said approval granting proceedings by the ld. JCIT is a quasi judicial proceeding requiring application of mind by the ld. JCIT judiciously. In order to ensure smooth implementation of the aforesaid provisions, in consonance with the true spirit of the scheme of the Act, it is the bounden duty of....
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....isal report by the Investigation Wing, both the Ld. AO and the ld. JCIT are supposed to independently apply their mind in a judicious way before drawing any conclusions on the contents of the seized documents while framing the search assessments. As far as the argument of the Ld. CIT DR that the details were normally filed by the assessee at the last moment is concerned, the ld. AO has got every right to reject the said replies if not filed within the stipulated time. It is not the case of the revenue that the details were filed by the assessee in the instant case at the last moment. Even if it is so, as stated above, it is the prerogative of the ld. AO to accept the said letter containing details or reject the same as it was not filed within the stipulated time. On the contrary, if the ld. AO himself grants time to the assessee to furnish the details till the last moment, then no fault could be attributed to the assessee. In such circumstances, the only irresistible conclusion that could be drawn is that the ld. AO is not serious about the statutory deadlines provided in the Act. In our considered opinion, if the arguments of the Ld. CIT DR are to be appreciated that the ld. JCIT ....
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....words, it was emphasised that the approval was granted without examining the assessment record or the search material. The relevant observations made in this behalf by the Tribunal in the impugned order are extracted hereafter: "17.1 However, in the present case, we have no hesitation in stating that there is complete non-application of mind by the Learned Addl. CIT before granting the approval. Had there been application of mind, he would not have approved the draft assessment order, where the returned income of Rs. 87,20,580/-, Similarly, when the total assessed income as per the AO comes to Rs. 16,69,42,560/-, the Addl. CIT could not have approved the assessed income at Rs. 1,65,07,560/- had he applied his mind. The addition of Rs. 15,04,35,000/- made by the AO in the instant case is completely out of the scene in the final assessed income shows volumes. 17.2 Even the factual situation is much worse than the facts decided by the Tribunal in the case of Sanjay Duggal (supra). In that case, at least the assessment folders were sent whereas in the instant case, as appears from the letter of the Assessing Officer seeking approval, he has sent only the draft assessm....
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....hile perusing the assessment records, seized records, replies of assessee and issues raised by the AO and the procedure followed for framing of assessment order. The act of granting approval under Section 153D of the Act is not a mere internal process relating to administrative functioning but is a quasi-judicial function mandated by specific provisions of the Act with an underlying requirement of it being based on due application of mind. This being the situation, the approval to be granted under Section 153D of the Act for passing of the assessment order by the JCIT is reflective of the Act of confirming, rectifying, sanctioning or convention to an act or thing done by another authority in exercise of the statutory mandate and is not an internal administrative process of the Department but the exercise of a quasi-judicial function. As in the present case, the assessee filed set of assessment orders, demand notice and the computation sheet issued by the same Assessing Officer and the approval granted by the JCIT under Section 153D of the Act, which clearly remarks as "......................" 17. From the above noting (which are in Hindi), means that simplicitor approval o....
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.... Report, has no substance. Thus, this argument has duly been dealt with by the ITAT Delhi Bench and we concur with the finding of the ITAT Delhi on this aspect. The ITAT, across India has followed this proposition and Hon'ble Delhi High Court, Allahabad High Court, Bombay High Court, Orissa High Court has affirmed the conclusions drawn by the ITAT that if it was not humanly possible to go through all the assessment orders alongwith the seized material, then it is to be construed that approval granted by the Addl. CIT/JCIT is not in consonance with the scheme of Income Tax, rather it is being granted in a mechanical way which would render the assessment order unsustainable in the eyes of law. Accordingly, we allow this ground of appeal and quash all the assessment orders for A.Y. 2016-17, 2017-18 and 2019-20. As far as A.Y. 2020-21 is concerned, the assessment order has been passed u/s 143(3). It is a normal scrutiny assessment and no approval was required u/s 153D of the Income Tax Act. Therefore, this issue is not involved in this year, though assessee has raised this issue in its Cross Objection. Accordingly, this ground of Cross Objection in assessment year 2020-21 is reject....
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.... sheet be supplied to both the parties. Ld. CIT DR would apprise the ld. CIT (Administration.) having territorial jurisdiction over the AO for ensuring the compliance. 7. Appeals are treated as partly heard." 14.1 The ld. CIT DR has placed on record a communication received from the AO dated 23.05.2025. The ld. CIT DR has submitted that though copy of the Panchnama drawn in a search in the name of the assessee is not available with the Revenue, but a Warrant of Authorization for carrying out the search is available. He placed on record copy of this Warrant of Search and submitted that a valid search was carried out at the premises of the assessee. On the other hand, ld. counsel for the assessee has filed a detailed written submission, which reads as under: Submission to additional ground No. 1 on the issue, if no search conducted then section 153A cannot be invoked:- 1.1 It is submitted that the case was heard by the Hon'ble Bench on 05.05.2025 and on that date in order to adjudicate the grounds of appeal in the cross objections of the assessee with regard to the fact that there was no search warrant in the name of assessee and, as such, the ....
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....a Panchnama was drawn at the above said premises, in the name of Homeland Buildwell Pvt. Ltd., which has no link or connection with the said company. Copy of the Panchnama in the name of other company is placed at pages 161 to 170 of Paper Book-II. The search started at the above premises at 4.40 PM and where the search conducted at the premises at Delhi started at 8.30AM. 1.5 We objected to the proceedings u/s 153A before the AO vide our letter, dated 01.03.2021, placed in Paper Book at pages 173 to 174 and another letter, dated 10.09.2021 placed at pages 176 to 177 and asked for copy of the search warrant and the Panchnama coupled with the satisfaction note in the case of assessee company. 1.6 The Ld. Assessing Officer vide letter, dated 24.09.2021, copy placed at pages 171 to 172, mentioned that the search was initiated on the basis of warrant of authorization issued by the Principal Director of Investigation on 24.02.2020 as the books of accounts and other documents were suspected to be found at the premises of the director of the company, Kothi No. 140, Deepawali Enclave, New Delhi and stated that, the selection of the case of AB Alcobev Pvt. Ltd. u/s 153A is....
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....onduct of search. (i) Period of limitation u/s 153B for completion of assessment cannot be determined without execution of authorization of Warrant. Therefore, under the scheme of search related assessment, actual conduct of search or execution of warrant of authorization is mandatory otherwise scheme of assessment in search related matter would not work. It is a well settled law as well as evident from plain reading of section 153 B of I.T. Act, that actual conduct of search or execution of warrant of authorization can be ascertained from the Panchnama drawn during the course of search. However, in the present case, warrant of authorization of search/Panchnama has not been executed. Therefore, no assessment order u/s 153 A can be made by the A.O., hence initiation of assessment proceeding u/s 153 A is invalid, bad in law & without jurisdiction." 1.12. Reliance is being made on the following judgments on the above issue: - (i) J.M. Trading Corpn. Vs ACIT, as reported in [20081 20 SOT 489 (MUM) as per copy of order is placed in Judgement Set at serial no 1. (Refer page no. 1-9 of case law index book) "Section 153A, read wit....
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.... search being conducted against the assessee, the period of operation to which the provisions of section 153 A of the Act would apply, cannot be determined and the invoking of provisions of section 153A of the Act is baseless. It. was also held that the provisions of section 153A of the Act are only applicable in case valid search is conducted against the assessee under section 132 of the Act and ITAT also held that proceedings under section 143(3) r.w.s. 153A of the Act are null and void and the same are cancelled." v) Similarly, reliance is made on the judgment of Ahmedabad "D" Bench in the case of Dr. Mansukh Kanjibhai Shahi Vs ACIT, in which, it has been held as under:- (Refer page no. 19-31 of case law index book) "Section 153 A, read with section 132, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of - Assessment years 2002- 03 to 2004-05 Whether in view of provisions of section 153 A, once warrant of authorization or requisition is issued and search is actually conducted, panchnama is drawn, completed assessments for all relevant years would get reopened, irrespective of whether any incriminating material has been found or not in rela....
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.... be initiate in the case of the assessee accordingly the notice issued us 153 A is hereby quashed. Appeal of the assessee is allowed. vii) 2022 (12). TMI 1357 - ITAT AMRITSAR SMT. KSRISHNA DEVI EDUCATIONAL CHARITABLE SOCIETY VERSUS DY. COMMISSIONER OF INCOME TAX. CENTRAL CIRCLE-II, JALANDHAR. (Refer page no. 93-96 of case law index book) Assessment u/s 153 A - Incriminating materials found during the search - HELD THAT:- In the entire proceeding, the revenue authority was unable to prove that the search was conducted against the assessee. In Panchnama, there is no assessee's name. The revenue was unable to bring any such incriminating materials on basis of the addition was made U/s 153 A. AO had wrongly applied the jurisdiction for assessment u/s 153 A of the Act. Also, there is no reference of incriminating documents in the assessment order. The order passed by the Id. AO is itself nullity. The addition which was made by the Id. AO is quashed. viii) 2022 (8) TMI 1065 - ITAT NAGPUR M/S NEW VIRAJ HOUSING AGENCY VERSUS ACIT CENTRAL CIRCLE 1 (1), NAGPUR (Refer page no. 50-60 of case law index book) Assessment u/s 153A - only survey operation und....
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....ners of the assessee firm Revenue could have initiated action against the assessee firm only u/s 153C had any document pertaining to the firm were seized from the residential premises. Since no material was seized, the revenue could not have initiated proceedings against the assessee firm u/s 153C. in these circumstances in our considered opinion the revenue cannot take shelter of provisions of section 153A for initiating action against the assessee which we have found to be not a valid one qua the assessee firm. DR cannot be a reasoning to hold that by means of an invalid search Revenue can take recourse to provisions of section 153 A. Hence we hold that since the warrant of search was not executed at the business premises of the assessee firm and from the place of search no material whatsoever relating to the firm was found nor any submission was recorded from the partners of the firm nor the search notice was served upon the partners of the firm, the search conducted qua the assessee firm was not a valid search. In such circumstances, proceedings initiated u/s 153a in the case of the assessee firm are invalid. Accordingly we do not find any infirmity in the order of the learned ....
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....Apex court and jurisdictional bench of Chandigarh. 1.15. Even otherwise, on the issue of merits the addition have been made on the basis of the documents recovered from the Laptop of Sh. Monu, and that issue had come up before the Hon'ble ITAT Chandigarh bench in the case of Sh. Paramjit Singh Mogla, in ITA No. 853/CHANDI/2024 vide order dated 25.03.2025, the addition as made by the department on the basis of material FOUND FROM Shri Monu have been deleted and the copy of said judgement is placed in the judgement set filed on 28.04.2025 at pages 399-406." 15. We have duly considered the rival contentions and gone through the record carefully. A conjoint reading of Section 153A alongwith 153B of the Act would reveal that in a case where search has been initiated u/s 132 or books of accounts or other documents or any asset are requisitioned u/s 132A, then assessment u/s 153A would be made in respect of each assessment year falling within six assessment years from the end of the financial year in which the last of authorization for search u/s 132 or for requisition u/s 132A was executed, meaning thereby that Section 153A has start with a non obstante clause and it has ....
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....ve been kept and are to be found in Kothi No. 140, Deepali Enclave, Pitampura, New Delhi (specify particulars of the building, place, vessel, vehicle, aircraft) : This is to authorize and require you as specified overleaf [name of the Deputy Director or of the Deputy Commissioner or of the Assistant Director or of the Assistant Commissioner or the Income-tax Officer] ................." 15.2 A perusal of this Form would reveal that in 3rd paragraph, it would contemplate if a summon u/s 142(1) is being issued to (four names including assessee) to produce or caused to produce books of accounts, other documents, which will be useful for relevant to the proceedings under the Income Tax Act, 1961. 15.3 In the next paragraph, it again made reference to all the four persons mentioned in the earlier paragraph and then exhibit the evidence on which search is to be carried out i.e. 'Kothi No. 140, Deepali Enclave, Peetampura, New Delhi'. The above residence is not the registered office of the assessee. It is a residential address of one of the Directors. The Registered Office of the assessee is at '154, First Floor, Aggarwal Plaza, Shakarpur, New Delhi'. No search was carried o....
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....hat assessee has received excess cash on account of sale of property in the project CP-67. In this way, ld. AO has made an addition of Rs. 5,86,03,526/- 18. Dissatisfied with the assessment order, assessee carried the matter in appeal before the CIT (Appeals). It has raised two-fold of submissions, namely; (a) That the material recovered during the course of search at a third party could have not been used against the assessee in a regular assessment u/s 143(3). The AO should have passed the assessment order u/s 153C of the Income Tax Act, (b) That additions made by the AO are not based on any incriminating material pertaining to the assessee discovered during the course of search at the premises of M/s Homeland Buildwell, hence, it is not sustainable. 18.1 The ld. CIT (Appeals) has accepted the contention of the assessee on merit and deleted the addition, however, did not adjudicate the legal issue whether these additions could be made u/s 143(3) or not. 19. The ld. counsel for the assessee, at the very outset submitted that Section 153C starts with a non obstante clause (not-withstanding anything) therefore, it has an over-riding effect on other Section....
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....her person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A :" 22. A bare perusal of this Section would reveal that if during the course of a search, any money, bullion, jewellery or books of account pertains to any person other than the searched person, then AO of the searched person would record his satisfaction exhibiting the fact that income pertaining to other assessee has escaped assessment. Thereafter, he would transmit that seized material alongwith his satisfaction note to the AO having territorial jurisdiction over such other person, the AO of the other person would also record his satisfaction and issue notice under Section 153C of the Income Tax Act. In the present case, the AO of M/s Homeland Buildwell has not recorded any satisfaction that....
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....arch when certain incriminating materials are detected, notice could be issued. 50. Chapter XIV-B which deals with special procedure for assessment of search cases deals with undisclosed income as a result of search, the computation thereof and such other provisions. Undisclosed income is defined in Clause (b) of Section 153B. Undisclosed income includes money, bullion or other valuable assets. It is only when the concerned officer has information about the same and has reason to believe that the said valuable assets has not been or would not be disclosed would give jurisdiction to the officer authorized to conduct a search operation. Therefore, the object and purpose of a search is to detect undisclosed income. As defined under Clause (b) of Section 158B of the Act, it is only when the undisclosed income is detected in a search operation that there would be assessment or reassessment, under the provisions of Chapter XIV-B of the Act, of the person who is presumed to be in possession of the undisclosed income. If during the course of search, any valuable assets belongs to or any books of account or document seized or requisitioned pertains to or any information contained t....
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....h the Assessing Officer having jurisdiction over such third party would issue notice under Section 153C. On receipt of the aforesaid material, the Assessing Officer having jurisdiction over such third party would proceed against the said third party. Thus, where no material belonging to a third party is found during a search, but only an inference of an undisclosed income is drawn during the course of enquiry, during search or during post-search enquiry, Section 153C* would have no application. Thus, the detection of incriminating material leading to an inference of undisclosed income is a sine qua non for invocation of Section f 53C of the Act. 51. Before considering the decisions cited at the Bar, it is necessary to refer to a decision of the Hon'ble Supreme Court in Manish Maheshwah v. Asst. CIT [2007] 289 ITR 341/158 Taxman 258. In that case, search was conducted on one of the directors of the assessee-company M/s. Indore Construction (Pvt.) Ltd. When the search was conducted in the premises of the director Sri. Manish Maheshwari and his wife several incriminating documents relating to the company were seized. While dealing with Section 158BD of the Act, the Hon....
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....aragraph No. 33 of the Hon'ble High Court's decision, no interference is called for. The brief facts of the case before Hon'ble High Court were that a search & seizure operation was carried out at the premises of M3M (India) Ltd. situated at Paras Twin Tower-B, 6th Floor, Golf Course Road, Sector 54, Gurgaon. The Registered Office of the assessee was situated at Shop No. 4/36, DDA Market, Dakshin Puri Extension, New Delhi. According to the Revenue, while preparing Panchnama drawn at the Paras Twin Tower, Gurgaon, name of the assessee company was also added, though no search was carried out at the premises of the assessee. The AO has issued notice under Section 153A and ultimately passed the assessment order. The assessee had challenged this assessment order by way of a Writ Petition bearing No. 5139 of 2024. The Hon'ble High Court has allowed the writ petition and held that no search was carried out at the premises of the assessee, therefore, no notice ought to have been issued under Section 153A. Hon'ble High Court took cognizance of Section 153C of the Income Tax Act and recorded that the procedure contemplated in 153C is a mandatory procedure. The Hon'ble Cou....
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....s the Panchanama does not list the appellant under the heading 'Warrant in the Case of,' but only names the directors, Shri Ajay Kumar Bindal and Smt. Sunita Bindal. 2. It is a matter of record that the search warrant was issued for premises at Kothi No. 140, Deepali Enclave, Pitampura, New Delhi-an address belonging to the directors. It is further noted that no search was conducted at the business premises or any other premises of the appellant. Only a survey operation was carried out by the department at the assessee's premises as per copy placed at page 159, 160 of the PB-II 3. Additionally, a separate search was conducted on M/s Homeland Buildwell Pvt. Ltd., at Sector 67, Airport Road, Mohali, Punjab. (The copy of Panchanama is enclosed at page no. 161 to 163 of PB.) During search at Homeland buildwell Pvt. Ltd., certain annexures were found, based on which the Assessing Officer alleged that both Homeland Buildwell Pvt. Ltd. and the appellant were in receipt of unaccounted cash. The AO further noted that while the assessee was executing the project 'CP-67', Homeland Buildwell was engaged in the project 'Homeland Heights'. 4. It is, evident that the do....
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....ll pvt. Ltd. Please refer Panchnama along with list inventory Page 161 to 170 of the PB. Page 4 para 4(Vi) 2019-20 Annexure A-3 Premise J3- Sanjeev garg Please refer Page no, 3 Copy of excel sheet H. No.-3126, Sec-71, Mohali, Eerstwhile employee of M/s homleland buildwell pvt. Ltd. Panchnama enclosed. Para 4 (iii) 7. That the addition was made on the basis of seized documents found during the course of search action u/s 132 of the Act carried out at the premises of third person and hence, outside the scope of proceedings u/s 153A of the Act. Furthermore, the Assessing Officer has not made any addition based on the documents seized from the premises of the directors located at Kothi No. 140, Deepali Enclave, Pitampura, New Delhi. It is a matter of record that all the documents found at the said premises pertain exclusively to the directors themselves. Accordingly, the addition made under section 153A of the Income Tax Act is bad in law, as no incriminating material relating to the assessee was found during the course of the search. Hence, the assessment framed under section 153A deserves to be quashed. 8. In this reg....
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....ed in the search assessment framed in the hands of the assessee u/s 153A of the Act. ii) [2024] 111 ITR (Trib) 262 (ITAT [Ranchi]) ACIT, CENTRAL CIRCLE, DHANBAD VERSUS KRISHNA MURARI CHOUDHARY AND (VICE-VERSA) (Refer page no. 79-86 of case law index book) Assessment u/s 153A/153C - Addition u/s 68 - unexplained unsecured loan - assessee had not discharged his onus - additions made are in reference to material found and seized from the premises of the third persons in their respective search operations - CIT(A) deleted addition - HELD THAT:- It will be important to note that section 292C of the Act provides for a presumption that the documents, assets, books of account, etc found at the time of search in the premises of a person is always presumed to be belonging to him/them unless proved otherwise. The presumption derived under this section is a rebuttable presumption. Thus, the person on whom such a presumption is drawn, has got every right to state that the said document does not belong to him/them. AO, if he is satisfied with such explanation, has got recourse to proceed on such a person in terms of section 153C of the Act. In the present case, the seized docum....
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....IM PVT. LTD. C/O. KAPIL GOEL, ADV., RENU JAIN C/O. KAPIL GOEL, ADV., NISHA JAIN C/O. KAPIL GOEL, ADV. VERSUS DCIT CENTRAL CIRCLE - 25 NEW DELHI viii) 2020 (12) TMI 8 - ITAT CUTTACK KOTHAKOTA RAMA RAO VERSUS ACIT, CENTRAL CIRCLE-1, BHUBANESWAR ix) 2019 (2) TMI 639 - ITAT DELHI DY. CIT, DEHRADUN VERSUS KOHLI REALTORS (P) LTD. x) 2019 (9) TMI 95 - ITAT DELHI MR. TRILOK CHAND CHAUDHARY VERSUS ACIT, CENTRAL CIRCLE-26, NEW DELHI 26. With the assistance of ld. Representative, we have gone through the record carefully. The ld. First Appellate Authority has made a lucid analysis of each and every minute details in the impugned well-reasoned order running in 104 pages. For re-appraising ourselves, we deem it appropriate to take note of the finding of the CIT (Appeals) from para No. 5 page 78 to page 104 of the order, which read as under : FINDINGS : OBSERVATIONS & DECISION 5. in the light of the above submissions, documents submitted by the AR, the various grounds of appeal are adjudicated, as below: 5.1 Summary of the facts highlighted by the AO in assessment order and during appellate proceeding. (i) There was a valid author....
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....nsigned, unnamed and without bearing any signatures of the assessee. (vii) The actual agreements to sell and documents seized from the premises of the assessee do not have any mention or corroboration with the data recovered from the employees of the assessee and thus the Department has adopted a pick and choose policy and the statements alone have been used against the assessee without confronting the same to the assessee. (viii) The assessee is the owner of project named CP-67 which was started in FY 2016-17 and at the time of search operations, the said project was on its initial stages. No booking of revenue was made in the case of the assessee and the title of the property was with the assessee at the time of search operations as no transfers took place. (ix) The audited books of accounts of the assessee were prepared on the basis of guidance note on accounting for real estate transactions and the books have been rejected without any defects found it them. (x) The replies filed by the assessee during the course of assessment proceeding were not considered at all and addition has been made without rejecting the replies filed by the assessee. ....
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.... (a) There is some mixing of facts. There are two separate entities- one is Homeland Buildwell Pvt Ltd which is engaged in development of residential project namely Homeland Heights and other is the appellant i.e. AB Alcobev Pvt Ltd., which is engaged in development of commercial project CP-67. These two are separate and independent entities. The projects are in a nearby area. In the assessment order it has been mentioned that the appellant is part of Homeland Group, which is not true, as both are independent entities having no common director. (b) Since both are independent entities, the facts of one entity i.e. M/s. Homeland Buildwell Pvt Ltd. Can not be applied to the appellant company. Whereas the AO has applied these facts to the appellant company. (c) Business activities of both entities are independent and mutually exclusive. (ii). Facts in assessment order: As per assessment order there is no mention of any document which suggests that these entities are in same business or have some common director or common interest. (iii) Finding on this issue: I have carefully considered all the submissions and facts. It is indeed a fact the....
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....d entity and persons and used the same as evidence against M/s AB Alcobev Private Limited and interestingly none of these allegations have been attempted to be verified from the directors of the assessee company who were the actual authorised persons even though the Directors of the company were duly covered under search. Therefore, the assessment has been framed purely on the basis of misbelieves and misconceptions of the AO which have no standing in the eyes of the law. The relevant extracts of the statement of Sh. Monu clearly explain the modus operandi followed by the M/ s Homeland Build well Private Limited in the Project "Homeland Heights" and M/s AB Alcobev Private Limited in project "CP-67" have been produced in the order by Ld. AO and these particulars relates to the sale of the residential flats of any other project. It is submitted that the project of the assessee is a commercial project wherein shops etc. are to be constructed and sold by the assessee. However, for making alleged addition, the Ld. AO is taking backup from the sale of some residential flats not related to the assessee. Therefore, the allegation of the Ld. AO is totally incorrect and ba....
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....ted expenditure. It is a settled law that the statement alone is not sufficient unless supported by corroborative evidence. Therefore, I am of the considered view that the statements of Sh Monu and Sh Sanjeev does not have much of evidentiary value for the current year. 5.3.7 Ratio of disclosed amount to excess cash or 'on-money' (i) This issue has been discussed in the appellant's own cases for the AV 2016-17 and AY 2017-18, and it was observed that ratio of 'discount' i.e. alleged excess cash as per this document and cheque amount was approximately 21 and 47 respectively. (ii) Finding on this issue: From this perspective also, I am of the considered view that chances of any person giving huge cash amount, that too in an ongoing project (not ready to move) are negligible. 5.3.8 Issue of interpretation of seized/impounded documents: (i) The appellant has submitted in detail that similar units have been booked at almost similar price, whereas as per assessment order some of the units were accepted while addition on account of excess cash over and above this rate was made by the AO. The relevant part o....
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....at the rate of Rs. 6,450/per SFI' was accepted by the A. 0. Therefore, without any fresh documentary evidence booking value of unit/ shop no. 624 cannot be disturbed. It may be noted that the A. 0. has not pointed out any corroborated evidence which was found and seized during search action/ post search operation which could prove that booking value of unit no. 624 was suppressed. It may also be noted that the A. 0. has accepted the booking of unit no. 621 at the rate of Rs. 6,450/- per SFI' in the assessment proceedings for the A. Y. 2020-21. 4. It may be noted that the booking of unit/ shop no. 822 at the rate of Rs. 7,059/- per SFT was accepted by, the A.O. Therefore, without any fresh documentary evidence booking value of unit/ shop no. 825, 826 and 827 cannot be disturbed. I may be rioted that the A:O; has not pointed out any corroborated evidence which was found and seized during search action, post search operation which could prove that booking value of unit no. 825. 826 and 827 were suppressed. If may also be noted that the A. 0. has accepted the booking of unit no. 822 at the rate of Rs. 7, 059/ - per SFI' in the assessment proceedings for the A. Y. 2....
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.... 919 an C: 920 were suppressed. It may be noted that the A. 0. has accepted the booking of unit no. 921 at the rate of Rs. 7,200/ - per SFI' in the assessment proceedings for the A. Y. 20-21. 9. It may be noted that the booking of unit/ shop no. 921 at the rate of Rs. 7200/ -per SFI' was accepted by the A. 0. Therefore, without any fresh documentary evidence booking value of unit/ shop no. 927 cannot be disturbed. It may be noted that the A. 0. has not pointed out any corroborated evidence which was found and seized during search action/ post search operation which could prove that booking value of unit no. 927 were suppressed. It may also be noted that the A.O. has accepted the booking of unit no. 921 at the rate of Rs. 7,200/ - per SFI' in the assessment proceedings for the A. Y. 2020-21. 10. It may be noted that the booking of unit/ shop no. 621 at the rate of Rs. 6,450/ -per SFI' was accepted by the A. 0. Therefore, without any fresh documentary evidence booki.ng value of unit/ shop no. 618 cannot be disturbed. It may be noted that the A.O. has not pointed out any corroborated evidence which was found 62 and seized during search action/ post se....
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....ole and it is not permissible to pick and choose or make further estimates therefrom unless and until there is cogent material in support of undertaking such an exercise Held, yes' (b) Further in the judgment of Hon'ble High Court of Gujarat in the case of Glass Lines Equipment Co. Ltd. v. CIT reported at 253 ITR 454, it has been held: ''In the present case it was found that the Commissioner (Appeals) while dealing with the affidavit, had conveniently chosen to accept only one part of the statement which was in favor of the revenue and against the assessee while ignoring the rest of the portion wherein specific averments were made in relation to the balance items of expenditure. In view of the settled legal position, it was not open to either the Commissioner (Appeals) or the Tribunal to ignore a part of the contents of the affidavit The findings recorded by the Commissioner (Appeals) and the Tribunal were concurrent as:--regards the facts and evidence on record and but for the averments made in the affidavit which had been ignored, the said findings would not have been interfered with. It is well-settled cannon of interpretation that a do....
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....ct, these have been booked by the same persons. Thus, taking two different approaches in the assessment by accepting rate of first floor and not accepting same rate of ground floor is not a correct approach. If the addition is considered, then the rate of ground floor would work out as under: S. No. Shop No. Super Area Rate per sq ft (Rs) BP Price (Rs.) Discount Total price (BSP + discount) Rate on the basis of total price (Rs.) 8 G-016 2721.67 10000 27216667 33686000 60902667 22377 9 G-017 2721.67 10000 27216667 26968750 54185417 19909 10 G-018 2901.67 10000 29016667 29224000 58240667 20071 5.3.9.4 Thus, the rate works out to over Rs. 20,000/- per square feet. Thus, treating three shops @Rs. 10, 0001- per sq ft and the other three shops @20, 0001- plus, is not logical. From this perspective also, I am of the considered view that the chances of any person giving excess cash, which will result in more than double rate, that too in a project in which even land has not been allotted, are negligible. Unquote Relevant part of discussion in appellate order for the AY....
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....espect of "Discount" is not a reliable document. On perusal of above entries, it is observed as under: v) At s.no. 7 above, booking of shop no. G-015 booked by Mr. R.K. Nagpal, the following facts has been observed: a. That the booking rate is Rs. 0 b. That the BSP of the shop is 0 c. That the discount given is Rs. 2,94,03,000 / - d. That the agreement price is Rs. (2,94,03,000/-) e. That the ST/GST is Rs. (35,28,360/-) f. That the Total price with ST/GST is Rs. (3,29,31,360) g. That the cheque received is Rs. 0 h. That the balance amount is Rs. (3,29,31,360) On perusal of above details, following questions has arise: h. How can the booking rate be 0 i. How can the BSP of the shop be 0 j. How can discount of Rs. 2,94,03,000/- be given to customer as against the BSP of Rs. 0 k. How can the agreement price of the shop be Rs. (2,94,03,000/-) l. How can ST/GST payable be Rs. (35,28,360/-) m. How can total price with ST/GST be (Rs. 3,29,31,360/-) n. How can the balance amount payable to Mr. R.K. Nagpal be Rs. (3,29,31,360/-) in case no ....
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.... t. How can the balance amount payable to Mrs. Amarjeet kaur be Rs. (1,17,42,333/-) in case amount of only Rs. 1,15,35,000/being received from her. F. 4 On perusal of the aforesaid details, it can be contended that the details mentioned in the above annexure on the basis of which addition has been made by the Ld. A.O. is not reliable. When the abovementioned entries contains non reliable and unfactual details, then how other details of the aforesaid annexure can be considered while making addition. On the basis of above facts, it can be contended that addition made by the Ld. A.O. without application of mind and without verifying details of the aforesaid annexure and on the basis of surmises and pre notion. Unquote The appellant has further submitted that the sale deed have been executed in these cases and filed copy of the same. (ii) Further the AR has also submitted the copy of ledger account of these persons in its books of account, which are being reproduced as under: Ledger for the unit G-016 (iii) This issue has not been discussed in assessment order. (iv) Finding on this issue: I have careful....
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.... is that in many cases, figure of alleged excess cash are not round figures but odd figure . e.g. in case of Rajinder Kaur it is Rs. 43,27,062/-, in case of Sh Sarabjit Singh it is Rs. 19,97,000/-, in case of Sh Prem Sharma it is Rs. 2,33, 13,805/-. If these are figures of unaccounted cash, these should be in round figure. From this perspective also, I am of the considered view that this document as per Ann A-3, is full of inconsistencies and no logical conclusions can be drawn from this document. Besides, as per assessment order no enquiry has been done form the buyers. Therefore, the addition on the basis of this document is not sustainable. 5.3.10 Issue of the cancellation of the units (i) The AR has further submitted that out these units, several units have been cancelled and filed cancellation requests and copy of the ledger accounts. Relevant part of the submission of the appellant is reproduced as under: Quote F.6.3 It may be noted that the Shop/unit no. 715, 716, 717, 718, 719, 720, 1024, 710, 826, 724 and 1103 has been booked, however the same has been subsequently cancelled by them. Therefore, in the present case, alleged cash ....
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....roject CP-67 T2 is the Tower No. i.e. Tower-2, 22 is the Flat No. Total cost of Rs. 1,51,85,0001- is the total sales consideration from sale of flat Sale price of Rs. 90, 00, 0001- is the agreement in sale deed price from sale of Rs. TDS @ 1 % of Rs. 90, 0001- is the TDS deducted on the registered of TDS from 90, 00, 000/- 'After TDS' of Rs. 89, 10, 000/- is the amount left after deduction registered value of the flat. customer for sale (1) the Total Due of Rs. 89, 10,0001- is the total amount due from a of flat. the customers (h) Payment Recd. of Rs. 89, 10,0001- is the payment received from as per registered deed. customer. Recd. of Rs. 90,000/- is the TDS' amount received from the TDS 'DISCOUNT' of Rs. 61,85,000I- is the 'CASH' received from the customer against sale of flat. (i) (i) Balance of Rs. 1, 99, 200/- is the excess cash received from the customer. Refund of Rs. 1, 99, 200/- is the amount payable to the customer. The relevant extract of the statement of Sh. Monu recorded on oath during the course of search proceedings uls 132(4) of the Income tax Act, 19....
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....tter of Homeland Buildwell Pvt Ltd only. Therefore, his statement may be of relevance in the case of Homeland Buildwell Pvt Ltd but not in the case of the appellant. Further, in the assessment order, there is no mention or discussion on excess cash for sale of shops/commercial property. There is mention of commercial property booked by AP Charitable Society in the project of the appellant company but there is no further discussion whether it is disclosed or undisclosed or modus operandi in respect of this commercial project. From this perspective also, I am of the considered view that modus operandi of one entity for earning unaccounted cash, cannot be applied to the modus operandi in the case of another independent entity having independent and separate nature of business. Material in respect of the appellant has to be available and discussed for making addition in its case. Besides, it is also a fact that no receipt or agreement or allotment letter has been received which indicates transaction of 'on-money'. Further there is no unaccounted asset/unaccounted cash. Thus, the addition is not found sustainable from this point of view. 5.3.12 Issue of no unaccounted c....
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.... above discussion, I am of the considered view that the addition of Rs. 5,86,03,526/- on account of excess cash received on account of sale of property in project CP-67 is not sustainable on the facts of the case. Therefore, this addition is deleted. Accordingly, these grounds of appeal no. 7 to 11 are allowed. 5.4 Other Grounds of Appeal: Since the addition has been deleted on factual grounds, other grounds of appeal no. 1 to 6 and additional ground Which are legal in nature become infructuous and academic In nature. Hence, require no further adjudication. Ground no 12 and 13 are general in nature and require no specific adjudication. 6. In the result the appeal is allowed. 27. In the light of the above, we have re-appraised ourselves with the material possessed by the AO, irrespective of the fact that present assessment order is not sustainable for want of following mandatory procedure contemplated u/s 153C of the Income Tax Act. The statement of Shri Monu and Shri Sanjiv Garg are being placed on record from page No. 11 to 141. It contains complete statement in hand-written as well as typed copy. A perusal of the statement of Shri Monu would....
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....s made the sales by accepting cash over and above the amount stated. The ld. CIT (Appeals), in the above finding has made analysis of each and every detail of the shops booked by customer. It has been appreciated, what was the base price, how much consideration in terms of percentage has been received by the assessee. Therefore, we are of the view that First Appellate Authority has examined the issue analytically in details and no interference is called for. Accordingly, the five grounds raised by the Revenue, which are involving a single issue, are rejected. 29. In the result, appeals of Revenue are dismissed, Cross Objections of the assessee for assessment year 2016-17, 2017-18 and 2019-20 are allowed whereas Cross Objection for assessment year 2020-21 is partly allowed. Order pronounced on 01.09.2025. ============= Document 1 SA. NO SHOP NO. -- Bereket -- 1043.06 17871200 7114344 1120000 51,40.0000 11100 77512147 10011000 4 10914 4824411 6 412 11100000 F331ST2000 0-414 10000 2721147 5-5261008 27216661 1991.47 25121000 18004 1000000 100000 2500000 ....
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.... 27216 33686 6469333 0 (64693 2557 (3204 016 Satwant 667 000 1 33) 7000 6333) Singh 9 G-017 2721.67 04/03/2 Mr. 10000 27216 26968 247917 0 247917 2386 (2361 016 Kulwinder 667 750 6687 8770) Singh 10 G-018 2901.67 05/03/2 Mrs. 10000 29016 29224 (207333) 0 (20733 1153 (1174 016 Amarjeet 667 000 3 5000 2333) Kaur Document 8 Kaur, the following facts has been observed: a.in That the booking rate is Rs. 10000 b. That the BSP of the shop is Rs. 2,90,16,667/- c .. That the discount given is Rs. 2,92,24,000/- do That the agreement price is Rs. (2,07,333/-) e. That the ST/GST is Rs. 0 आयकर f. That the Total price with ST/GST is Rs. (2,07,333) g. That the cheque received is Rs. 1,15,35,000/- h. That the balance amount is Rs. (1,17,42,333) Document 9 AB Alcobev Pvt. Ltd. (F.Y .- 2012-16) 18, CHANDERLOK ENCLAVE PITAMPURA DELHI RCC-14A Harinder Singh- S/o Attar Singh Ledger Account अपील Tax Car (Appeals). 1-Apr-15 to 31-Mar-16 (Appeals). Page 1 Date Particulars Vch Type Vch No. Debit Credit Mar-16 Dr HDFC Bank Mohall CH NO 00012 Receipt 8 11,00,000.00 Cr Serv....