TaxTMI 
TaxTMI 
2026 (2) TMI 798
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....justified in not considering the fact that there are clear notings on the seized documents where details of cash payment of Rs. 86,63,700/- are mentioned against Plot No. 367. Makhmalabad that is sold by the assessee to Kokani family. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in not considering the fact that Mr. Fakhruddin Kokani has admitted and accepted that the entries on seized documents were written in his own handwriting and that he has confirmed on oath that he alongwith his sister have purchased said land at 367. Makhmalabad from assessee. 4. Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in not considering the fact that since the notings of cash amount of Rs. 86,63,700/- in cash correspond with notings of Rs. 81,33,000/- in cheque amount, the same ratio of cash amount to amount received through banking channel must have been followed for sale of other plots by assessee to members of Kokani family. 5. Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in not considering the fact that by not disclosing details of cash transactions, assessee had fa....
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....malabad". On both these seized documents name of the assessee is not appearing and only "367 Makhmalabad" is mentioned. Ld. Assessing Officer based on this information show caused the assessee stating that only single transaction pertaining to assessee is mentioned in the seized material but the assessee has sold various other properties to the Kokani Group for a total consideration of Rs. 8,26,37,030/- and therefore based on the alleged cash payment appearing in the seized document at page 17 ld. AO extrapolated the figure and observed that assessee has received cash of Rs. 8,80,26,071 from the Kokani family members over and above the registered sale consideration. 4. The assessee filed reply before the ld. AO on 04.07.2017 stating that the assessee had never had any connection with the Kokani Group. Assessee entered into agreement to sell the properties in question to M/s.Dhananjay Marketing Private Limited of Thakkar Group but thereafter on the directions of Thakkar Group, the agreements to sell with Dhananjay Marketing Private Limited were cancelled and the plots were registered in the name of Kokani family and sale consideration is duly disclosed in the Books of Accounts. I....
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....n Kokani in his own handwriting written the details how he utilised the entire amount Shri Fakruddin Kokani has also in his own hand writing mentioned that Rs. 8,58,19,700/- in white and Rs. 8,58,19,700/- in black. xxxxxxxxx xxxxxxxxx 9.4 Also on verification of all registered sale deeds executed between the assessee and kokani family it is found that the assessee has paid total Rs 8,26,37,030/- through different cheques to kokani family for 44 plots. Hence, it is clear that the assessee has received Rs. 8,26,37,030/- through cheques which were dully reflected in the registered deed. It has been established that the same ratio of cash to the cheque amount must have been present for transaction of these plots like Rs. 86.63 lacs in cash for Rs 81.31 by cheque. The total registered consideration of purchase by Kokani family members at S. No. 367 is of Rs. 8,26,37,030/- for which the cash of Rs. 8,80,26,071/- must have been given by the Kokani family members to the sellers in cash over and above registered sale consideration. 9.5 It is also seen that these amounts are neither reflected in registered documents nor in the books of the assessee. Also f....
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....opportunity of cross examination. Assessee also filed detailed written submission. Ld.CIT(A) after considering the same firstly dealt with the legal issue raised by the assessee in Ground No.3 that ld. AO was required to carry out assessment proceedings u/s.153C and not u/s.147 and ld.CIT(A) held that the impugned assessment should have been framed u/s.153C of the Act since incriminating material was found during the course of search u/s. 132 of the Act in the case of Kokani Group and the information contained in the incriminating material pertained to the assessee and hence assessment u/s.147 of the Act stands quashed. So far as the second legal issue regarding the validity of the reopening u/s. 147 of the Act ld. CIT(A) did not adjudicate the same since the assessment was quashed dealing with the issue of section 153C vis-a-vis 147 of the Act. Further, on merits of the case ld. CIT(A) has referred to the statement given by Fakruddin Kokani and came to conclusion that ld. AO has not made any confirmation or enquiry from the Kokani Group about the person who has been paid towards on money for purchase of land and no corroborative evidence has been brought on record by ld. AO affirm....
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....f account of the searched person), to the Assessing Officer of that other person. The Assessing Officer of that other person is empowered to proceed against such other person for evading tax on such undisclosed income. 1.3 The said provision u/s 153C of the Act has been enacted for the purpose of simplifying the procedure in search cases. Thus, the import of such provisions cannot be to oust the recourse to the normal provisions, which in any event are available for assessment / reassessment of an income of an assessee. However, it is to be submitted that the jurisdiction under Section 147 will stand barred when the AO decides to proceed under Section 153C. It is to reason that the Act does not contemplate parallel assessment proceedings. 1.4 In a case where pursuant to search conducted under Section 132 of the Act or requisition made under Section 132A of the Act in respect of another person (searched person), assets, documents or books of account, which either belong to the assessee or contain information pertaining to the said assessee, are found and the same are handed over to the AO of the assessee; he would subject to satisfaction of the other jurisdictional....
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....diction in respect of the other person.' It is to submit that further jurisdictional conditions as follows are required to be fulfilled : (d) the AO of the non-searched person being satisfied that the material information received has a bearing on the determination of the total income; (e) the AO of such non-searched person issuing a notice to commence assessment / reassessment proceedings. It is to state and submit that, if any of the aforesaid conditions are not satisfied, then the income of such other person cannot be assessed or reassessed under Section 153C of the Act for want of the necessary jurisdiction by the AO of the non-searched person. 3.3 It is to humbly submit that, the non obstante clause, kicks-in only on the AO assuming the jurisdiction under Section 153C of the Act, to make an assessment/ reassessment. The non obstante provisions cannot come into play, if the AO does not take recourse to provision of Section 153C of the Act. 3.4 A non obstante clause is generally appended to section with a view to give the connecting part of the section, in case of conflict, an overriding effect over the provision in the s....
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....it starts with a non obstante clause relating to the normal assessment procedure which is covered by sections 139, 147, 148, 149, 151 and 153 respectively in respect of searches made after 31-5-2003. Under the provisions of section 153A, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this section is that the Assessing Officer is empowered to assess or reassess the "total income" of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under section 153A, however, the Assessing Officer has been given the power to assess or reassess the "total income" of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both th....
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....he search or other post-search material or information available with the Assessing Officer which can be related to the evidence found. Therefore, it is to humbly submit that even assessments that have been undertaken u/s 153A can also be reopened u/s 147 provided the ingredients required for its trigger are available. Accordingly, to say that the assessment undertaken under section 153A can never be reopened under section 147, would be an incorrect statement of law and therefore assessments that have not been undertaken u/s 153A can always be reopened u/s 147/148. To hold otherwise, would not be in consonance with the legislative intention behind the enactment of section 153A and the statutory position as on date. 3.6 It is to humbly submit that, by its very nature, Section 153C of the Act is an enabling provision, which enables the Assessing Officer to assume jurisdiction to assess/reassess the income of the Assessee, in cases where the jurisdictional conditions as set out in Section 153C are satisfied. The non obstante provision as contained in Section 153C(1) of the Act must necessarily be construed in the aforesaid context. The non obstante provision....
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....rt decision in Shyam Sunder Khandelwal v. Asstt. CIT [2024] 161 taxmann.com 255/ 471 ITR 45 (Rajasthan) [ref para 62] & the Karnataka High Court decision in Pr. CIT v. VSL Mining Company (P.) Ltd. [2024] 167 taxmann.com 373 (Karnataka) [ref para 64]. 2. Amar Jewellers Ltd vs ACIT (2022) 444 ITR 97 (Guj) dtd 31-01-2022 Paras 46, 47, 48, 49, 52, 53, 55, 76 & 84. Even assessments completed u/s 153A were reopened u/s 147/148 holding therefore that the non obstante clause in section 153A did not exclude the applicability of section 147/ 148. 3. CIT vs Anil Kumar Bhatia 24 taxmann.com 98(Delhi) (2012) Paras 18, 19, 21 & 22. 4. Sejal Jewellery & Anr vs UoI : WP No. 3057 of 2019 alongwith 12 other WPs Para 4 on page 4 indicates that the petitioner was searched along with its associate concerns as well as the key individuals of the group. 5. Saloni Prakash Kumar v. ITO [2023] 155 taxmann.com 432 (Madras) Para 20. Section 153C of the IT Act is only an enabling provision to issue a notice notwithstanding anything contained in Sections 139, 147, 148 etc of the IT Act. However, it does not preclude the Department from issuing notice for reopening the assessme....
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.... of 2019 is the oft repeated decision that is quoted to be in favour of the proposition that if a search and seizure operation has taken place or there is information available from a search and seizure, then the only resort available to the AO is to invoke the provisions of section 153A/153C and not section 147/ 148. In this connection, it is to mention that firstly the decision is pertaining to a writ petition filed by the assessees therein, which came to be collectively disposed of by the Hon'ble Bombay High Court and accordingly there is no ratio decidendi that follows from the said decision. In the decisions of the Hon'ble Delhi High Court, the Hon'ble Court was asked to decide the question regarding the precluding of sections 153A/ 153C on one hand to sections 147/ 148 on the other i.e the interplay between sections 153A/153C and sections 147/148. There were 13 Writ Petitions that were clubbed and decided by the Hon'ble Bombay High Court taking writ petition No. 3057 of 2019 i.e Sejal Jewellery vs Union of India& Ors as the lead writ petition. 4.1 The facts of the case very clearly indicate that the petitioner was searched (para-4 on page 4 of the sai....
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....ining properties transferred by the assessee to the other family members of Kokani Group. 9. On the other hand, ld. Counsel for the assessee vehemently argued referring to the following written submissions : "1. Brief facts: 1.1 The respondent is a partnership firm engaged in the business of land development at Nashik. The return of income for the year under appeal was filed on 17.11.2014, declaring a total income of Rs. NIL. 1.2 Search and seizure action u/s. 132 was carried out by the Investigation Wing of the Income Tax Department on Kokani Group of Nashik on 08.09.2015. Incriminating documents (marked as page no. 16 & page no. 17 of item no. 7 of Annexure A, reproduced at page 2 and 3 of the asst. order) were seized from the searched premises. An English copy of the above-mentioned seized documents appears enclosed at page nos. 15 of the paper book. It is the case of the Id AO that the information contained in the said seized papers relates to the respondent. Simultaneously, a Survey action under Section 133A was carried out on M/s. P.H. Infrastructure (a group concern of the respondent). 1.3 Originally, assessment u/s 143(3) was ....
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....ts of the claim that the assessment should be as provided by section 153C [ground allowed by the Hon. CIT(A)] are supported with the following arguments. The provision of section 153C reads as under. "Assessment of income of any other person. 153C. (1) Notwithstanding anything contained in section 119, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that. (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, * As is recorded by the Id. AO in the asst. order, a search and seizure action u/s 132 was carried out on Kokani Group on 08.09.2015. In the course of said search action, apparently incriminating documents marked as page no. 16 & page no. 17 of item no. 07 of Annexure A, containing incriminating information relating to the respondent, were seized. The said seized papers allegedly recorded unaccounted cash transactions of the respondent with Kokani Group, with regard to alleg....
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....o". (Relevant paragraph 23 onwards). * A similar view is also taken in the case of Sri Dinakara Suvarna vs. DCIT, 143 taxmann.com 362 (Karnataka) (2022/ SLP dismissed in DCIT vs. Sri Dinakara Suvarna, 151 taxmann.com 489 (SC) [2023] * The same view is taken in the under mentioned decisions. (i) Pr. CIT vs. VSL Mining Company (P.) Ltd., 167 taxmann.com 373 (Kar.) [2024] (ii) Tirupati Construction Company vs. ITO, 165 taxmann.com 176 (Raj.) [2024] (iii) Ashok Dhanraj Chordia vs. PCIT, Pune-1, ITA No.977/PUN/2024, Hon. Members, "A" Bench, ITAT, Pune dt. 30.07.2025 (Copies of the above decisions are submitted as part of the legal compendium on 28.10.2025) * The decision of the Hon. Bombay High Court in Sejal Jewellery- vs-UOI, 171 taxmann.com 846 (Bom) (2025) is further followed in the under mentioned decisions. (iv) Atul Vijay Madan-vs-DCIT, ITA No. 1529/Pun/2024, Hon. Members, "A" Bench, ITAT Pune dt. 07/05/2025 (v) Vidarbha Mining Private Limited-vs-DCIT, ITA No. 1265/Mum/2024, Hon. Members, "F" Bench, ITAT Mumbai dt. 30.07.2025 (vi) Parshwa Investment-vs-DCIT, ITA No. 1429/Mum/ 2025, Hon. Memb....
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....ce to this effect can be found on seized page no. 17, third line, where a note about Thakkar not giving an account is mentioned. The respondent is not named on the seized paper nor by Mr. Fakruddin Kokani in his statement recorded by the department to have received any cash consideration. One of the entries noted on the seized page no. 17 record payment of Rs. 86,63,700/- against the noting (367, Makhmalabad) (1.7.2013). The Id. AO assumed the said amount to be paid to the respondent in cash for the purchase of Makhmalabad land, and in view of the other plots sold by the respondent to other family members of the Kokani family (details at pg no. 04 of the asst. order and also at pg no. 44 of the paper book), the Id. AO extrapolated this information to further presume receipt of unaccounted cash sale consideration of Rs. 7,93,62,371/- (on a proportionate basis), thereby making the total addition of Rs. 8,80,26,071/- (86,63,700/- plus 7,93,62,371/-) as unaccounted sales. 3.2 Addition made by the Id AO is not justified for the following reasons :- The relevant seized paper no. 17 (reproduced on pg no. 03 of the AO order) does not in any manner indicate that a....
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....e searched party. An addition has been made in the hands of the respondent, without any verification of the relevant facts/identity of the person to whom the amount is paid by Mr. Fakruddin Kokani. * A survey action us/ 133A was carried out on the partner of the respondent firm. No documents implicating the respondent in any wrongdoing were found during such action. * The Id.AO further extrapolated the information about alleged cash consideration in the sale of one plot Rs. 86,63,700/-, to further presume unaccounted sales of Rs. 7,93,62,371/- based upon the sale of balance plots to members of the Kokani family. Discussion about the addition is at para no. 2.3/pg no. 4 of the asst. order, and it is clear that the Id AO has made the addition based on an unsupported presumption that such cash must have been given. The addition of Rs. 86,63,700/- as well as the extrapolation made thereafter for the addition of Rs. 7,93,62,371/-, is without an iota of evidence. Such unjustified extrapolation is unjustified for the simple reason that Mr. Fakruddin Kokani has kept a detailed cash account of the entire receipt as well as application of cash funds. The extrapolated figure....
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.... 10 Pg no. 19 4.1 The Id. AO did not grant the respondent any opportunity to cross-examine the person giving adverse information, i.e Mr. Fakruddin Kokani, even though an adverse inference is drawn from the said information and is the only source relied upon to make the addition in the hands of the respondent. The respondent had specifically requested cross-examination vide letter dt. 18.09.2017 (copy enclosed at pages 226 to 229 of paperbook), which could not be organised by the Id. AO. 4.2 On the claim for cross-examination, your respondent relies upon the under-mentioned decisions wherein the principle that information collected behind the back of the assessee and not tested by cross-examination has no evidentiary value is laid down. (i) M/s. Andaman Timber Industries-vs-Comm. of Central Excise Kolkata 281 CTR 241 (SC) (2015). (ii) H.R. Mehta-vs- ACIT, 72 taxmann.com 110 (Bom) (iii) M/s R.W. Promotions P. Ltd. - Vs-ACIT, 376 ITR 342 (Bom) (2015) 5. The respondent prays that the appeal may kindly be allowed." 10. Ld. Counsel for the assessee referred to the documents placed in the paper book and the case various case law....
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.... Yes We certify that above referred documents were available before Hon. CIT(A)/ld. AO as marked above. Sd/- SHREE SAI PROPERTIES PARTNER (RESPONDENT) LEGAL COMPENDIUM Sr. no. Decisions Enclosed at Page No's I In support of the proposition that where incriminating documents contain information relating to the assessee, the proceedings lie u/s 153C 1 Sejal Jewellery -vs- UOI, 171 taxmann.com 846 (Bom)(2025) 01 to 14 2 Shyam Sunder Khandelwal -vs- ACIT, 161 taxmann.com 255 (Rajasthan) [2024] 15 to 24 3 DCIT, Circle 42(1)(1), Mumbai -vs- Ghanshyam Rasiklal Shah, ITA No.4707/MUM/2024 & CO No. 208/MUM/2024, Hon. Members "G" Bench, ITAT Mumbai dt. 21/04/2025 25 to 39 4 Sri Dinakara Suvarna -vs- DCIT, 143 taxmann.com 362 (Karnataka) [2022] SLP dismissed in DCIT-vs-Sri Dinakara Suvarna, 151 taxmann.com 489 (SC) [2023] 40 to 46 5 Pr CIT-vs-VSL Mining Company (P.) Ltd, 167 taxmann.com 373 (Karnataka) [2024] 116 to 121 6 Tirupati Construction Company-vs-ITO, 165 taxmann.com 176 (Rajasthan) [2024] 122 to 127 7 Ashok Dhanraj Chordia-vs- PCIT, Pune-1, ITA No.977/PUN/2024, Hon. Members, "A", Be....
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.... issue raised by the Revenue in Ground No.5 stating that the case of the assessee's case comes under the ambit of provisions of section 147 and ld. AO has carried out valid reassessment proceedings after forming reason to believe about alleged escapement of income on the basis of information received from Investigation Wing, Nashik including the incriminating documents found and seized during the course of search in the case of Kokani Group on 08.09.2015. We observe that the assessee which is a partnership firm is engaged in the business of land development at Nashik. Regular assessment proceedings u/s.143(3) stands completed on 16.12.2016 for the year under appeal accepting the returned income. The search on the Kokani Group of Nashik conducted u/s.132 of the Act on 08.09.2015 and various incriminating material were found and seized. The one referred by ld. AO for carrying out the reassessment proceedings in the instant case have been translated in English by the assessee, placed at paper book and is scanned below : 12. Now in the above seized material, ld. AO referred to the entry appearing with a particular "367 Makhmalabad" and that on page 16 it is mentioned 'White&....
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....nd 3 of the assessment order of the Ld. AO, the said seized papers reflected unaccounted cash transactions of the appellant with the searched group. Hence, this is a case of the assessment of the appellant to be framed as per the provisions of section 153C of the Act which clearly mentions that if the documents seized or requisitioned belong to a person other than the person referred under section 153A of the Act, then the documents shall be handed over to the assessing officer having jurisdiction over such person and the assessment shall framed in accordance with provisions of section 153A of the Act. Thus, if the seized documents contain incriminating material with regards to a person other than the searched person, then the procedure to tax any undisclosed income from the incriminating documents is by the way of issue of notice u/s 153C of the Act and not u/s 148 of the Act It is pertinent to mention no fresh information was collected by the Ld. AO or no information has come to the notice of Ld. AO in normal course, other than information collected as a result of search u/s 132 of the Act on Kokani Group. Hence, the provisions of section 147 are not applicable ....
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....d that the books of account or document or assets seized or requisitioned have a bearing on the determination of the total income of such person for a period as specified in the said provision and after compliance of other provisions as mandated. On the other hand, Section 147 provides for "Income escaping assessment", can be invoked when any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year. In such situation, the Assessing Officer may subject to the provisions of Sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year and for which a prior notice under Section 148 would be required to be issued. Section 147 does not contemplate an eventuality which Section 153A or Section 153C contemplates, the basis of which is inter alia a search action under Section 132 being resorted as noted hereinabove. Thus, both these provisions are quite compartmentalized although the deeming effect of both the provisions, may be the same. However, the situations in which such provisions operate are required to be invoked are completely different.....
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....statements recorded during proceedings. From the information received the AO noticed that the loan advanced and interest earned thereon were unaccounted. In other words the basis for initiation of Section 148 proceedings is the material seized relating to or belonging to the petitioner, during the search conducted of Manihar Group. 24. In the case where search or requisition is made, the AO under Section 153A mandatorily is required to issue notices to the assessee for filing of income tax return for the relevant preceding years. The AO assumes jurisdiction to assess/reassess 'total income' by passing separate order for each assessment. 25. In cases of the person other than on whom search was conducted but material belonging or relating such person was seized or requisition, the AO has to proceed under Section 153C. The two pre-requisites are that the AO dealing with the assessee on whom search was conducted or requisition made, being satisfied that seized material belongs or relates to other assessee shall hand over it to AO having jurisdiction of such assessee. Thereafter, the satisfaction of AO receiving the seized material that the material handed over....
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....igh Court in Shyam Sunder Khandelwal (supra). 23. Insofar as Mr. Suresh Kumar's contention supporting the proceedings under Section 147 and 148 of I.T. Act are concerned, for the aforesaid reasons, such contention would in fact go contrary to the intention of the legislature as depicted by the provisions of Section 153A and 153C of the IT. Act. There would not be any difficulty in accepting the proposition as canvassed by Mr. Suresh Kumar, referring to the decision of the Supreme Court in Phool Chand Bajrang Lal (supra), however, the facts in the present case are distinct. There cannot be any doubt on the position in law when the Revenue intends to proceed purely on materials relevant for an action under Section 148 read with Section 147. We have already observed that the provisions of Sections 147, 148 vis-a-vis Section 153A and Section 153 are quite compartmentalized. To avoid any overlapping of these provisions, the legislature in its wisdom has thought it appropriate to provide for an independent effect, to be given under Section 153A read with Section 153C by incorporating the "non-obstante" clause, in these provisions, which carves out an exception to any normal/....
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....f the Act. 18. Based on the above referred settled judicial precedents, we are inclined to hold that where during the course of search any incriminating material is found for the person other than the searched person then the only course of action left with AO is to proceed u/s.153C of the Act as the said section started with non obstinate clause and therefore in the instant case ld. AO erred in assuming jurisdiction u/s. 147 of the Act and the same is not in accordance with law. Under these facts and circumstances, we hold that ld.CIT(A) has rightly quashed the impugned proceedings u/s. 147 of the Act and the same needs no interference. Ground No.5 raised by the Revenue is dismissed. 19. So far as the merits of the case are concerned, Revenue has raised Ground Nos. 1,2 and 4 against the deletion of addition of Rs. 86,63,700/- and Rs. 7,93,62,371/- made by the Assessing Officer. We observe that the information contained in the alleged seized material is only having a reference of the words "367 Makhmalabad" and that referring to sale consideration received through cheque at Rs. 81,33,300/- and the alleged on money payment of Rs. 86,63,700/-. We note that during the course of ....
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....s in respect of plots at survey no. 367/3, Makhmalabad, Nashik. The assessment order of the Ld. AO and the submissions of the appellant have been perused. From the facts, it is evident that the appellant had sold plots of land bearing survey no. 367/3 at Makhmalabad, Nashik to members of the Kokani Family vide 11 separate agreements. It is seen that prior to the sale of these plots to Kokani Family, these were agreed to be sold to M/s Dhananjay Marketing Put. Ltd. Of Thakkar Group vide agreement dated 25.04.2013. However, on the request of Thakkar Group, the appellant cancelled the agreement to sell on 04.07.2013 and the appellant registered the sale agreement with Kokani Family. As per the submissions of the appellant, the appellant's partners and Kokani Family had met each other for the first time on the date of registration of sale agreement. The same has been stated by Shri Fakhruddin Kokani in his statement recorded u/s 132(4) of the Act on 08.09.2015 and by Shri Shashikant Shivchand Parakh, partner of the appellant firm in his statement recorded u/s 133A of the Act. Shri Fakhruddin Kokani in his statement in respect of transaction recorded on page no. 13....
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.... payment of cash to the appellant. Nothing adverse or any cogent evidence has been brought on record by the Ld. AO in form of any material or any statement to hold that cash been received by the appellant. Further, the Ld. AO has wrongly made the addition on account of presumption of unaccounted sales of Rs. 7,93,62,371/- without any tangible evidence and solely on the basis of estimates and extrapolation. It is pertinent to mention that the impugned paper do not contain recordings of any on money receipt by the appellant, hence, the extrapolation of on money receipt without any independent and corroborative evidence is based on surmises and needs to be deleted. In absence of any direct evidence demonstrating receipt of cash payments, no addition can be made on estimate basis. In view of the facts and circumstances, the impugned addition of Rs. 86,63,700/- and Rs 7,93,62,371/- by the Ld. AO on account of on money receipt in cash are hereby directed to be deleted. The grounds of appeal no. 4 and 5 are allowed." 20. The above finding of ld.CIT(A) that ld.AO has merely extrapolated the figures without having any concrete evidence remains uncontroverted at....
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....igh Court in the case of CIT Vs. Dr. MKE Memon (2000) 112 Taxman 96 (Bombay) note that Hon'ble Court held that Assessing Officer cannot estimate undisclosed income under Chapter XIVB on arbitrary basis. Para 8 of the order of Hon'ble Court reads as under : "8. In conclusion, we would also like to mention that Chapter XIV-B lays down a special procedure for the assessment of search cases and provides for assessment of undisclosed income as a result of the search. Under section 158BB, read with 158BC of the Act, what is assessed is the undisclosed income of the block period and not the total income or loss of the previous year required to be assessed under the regular assessment vide section 143(3). This exercise under section 143(3) of the Act for regular assessment stands on a different footing in contrast to the exercise undertaken by the Assessing Officer under Chapter XIV-B where the Assessing Officer has to assess only the undisclosed income. Therefore, the scope of regular assessment is quite different from the scope of assessment under Chapter XIV-B. The regular assessment is to ensure that the assessee had not understated the income or has not computed exces....
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.... in the hands of assessee as undisclosed investment on purchase of lands. 49. It is also important to significant note that even the vendors of the land in the statement u/s 132(4) of the Act had only confirmed the receipt of the on-money to the extent of Rs. 11,94,19,700/- altogether. They nowhere stated that they received on-money consideration from the respondent assessee or its group companies on sale of the land. Even on cross-examination also, they had denied to have received any on-money on sale of the subject land from respondent assessee. On the mere fact that the Department has found certain evidence in the form of loose sheets indicating incurring of certain expenditure on household items and development of lands and purchase of lands etc does not lead to conclusion that the respondent assessee or its group companies had paid on-money consideration, also considering the fact that the seized material indicates incurring of such expenditure much before the date of agreement of purchase i.e. July, 2013, no prudent person would have paid the on-money consideration much before i.e. 2 and 2/ 1 years before date of agreement of sale. 50. It is settled position....
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....m vs. CIT (1959) 37 ITR 288 (SC) held that no addition can be made taking into account notorious practice prevalent in the similar trade. The relevant findings vide para 14 and 15 are as under: "........... 14. In Lalchand Bhagat Ambica Ram Vs. Commissioner of Income Tax, Bihar and Orissa (1959) 37 ITR 288, the Supreme Court disapproved the practice of making additions in the assessments on mere suspicion and surmise or by taking note of the notorious practices prevailing in trade circles. At page 299 of the report, it was observed as follows : "Adverting to the various probabilities which weighed with the Income-tax Officer we may observe that the notoriety for smuggling food grains and other commodities to Bengal by country boats acquired by Sahibgunj and the notoriety achieved by Dhulian as a great receiving centre for such commodities were merely a background of suspicion and the appellant could not be tarred with the same brush as every arhatdar and grain merchant who might have been indulging in smuggling operations, without an iota of evidence in that behalf. " 15. This takes care of the argument of Mr. Sabharwal that judicial notice can b....