TaxTMI 
TaxTMI 
2026 (5) TMI 175
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....essee and the Revenue have more or less raised common grounds of appeal in all their respective captioned appeals. Therefore, for the sake of brevity, the grounds of appeal filed by the assessee (Bharath Kumar Kondareddy) in ITA No.310/Hyd/2025 for the assessment year 2020-21 and the grounds of appeal filed by the Revenue in ITA No.940/Hyd/2026 for the assessment year 2021-22 are reproduced as under: "1. The order of the Ld. CIT(Appeals) is erroneous on the facts of the case and contrary to the provisions of law. 2. On the facts and circumstances of the case and in law, the assessment order passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 is void ab initio, as the reassessment proceedings initiated by issue of notice u/s. 148 without due compliance with the requirements of sections 148 and 148A is without jurisdiction and unsustainable in law. 3. On the facts and circumstances of the case and in law, the assessment order passed u/s. 143(3) r.w.s. 147 of the Act is void ab initio, as the prior approval for issue of notice u/s. 148 was accorded by the specified authority u/s. 151 in a mechanical manner without proper application of mind. 4....
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....perty by M/s. M.R. Estates, in which the appellant's spouse is a partner and minor son is admitted to the benefits of partnership. 12. Any other legal or factual grounds that may be urged at the time of hearing of the appeal." GROUNDS RAISED BY REVENUE in ITA No.940/Hyd/2026 "The Ld. CIT(A) erred in deleting the protective addition of Rs. 3,00,00,000/- in the hands of the assessee towards unexplained money u/s. 69A before the corresponding substantive addition made in the hands of the M/s. M.R. Estates reached finality" 3. The brief facts of the case are that the assessee, who is an individual, is deriving income from salary and interest income from bank deposits and filed his return of income for the assessment year 2020-21 on 07.01.2021 declaring total income of Rs. 11,82,460/-. Subsequently, a search and seizure operation under section 132 of the Income Tax Act, 1961 (for short "the Act") was conducted in the case of M/s. Vamsiram Group and other related parties on 06.12.2022 and as a part of the said search proceedings, warrant under section 132 of the Act, was also executed in the case of the assessee. During the course of search and post-search i....
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....payments towards such purchase were duly recorded in the books of account. The assessee also contended that the documents relied upon by the A.O. were found from the premises of a third party and the same do not belong to the assessee, nor do they bear his signature or handwriting. It was further submitted that, the entries in the loose sheets are dumb documents and in the absence of any corroborative evidence, no adverse inference can be drawn against the assessee. The A.O., however, was not convinced with the explanation furnished by the assessee and according to the A.O., the incriminating material found during the course of search clearly established that the assessee had made cash payments towards purchase of commercial property, which were not recorded in the regular books of account. The A.O. further observed that the entries found in the seized material, coupled with the statements recorded from the employees of M/s. Vamsiram Group, clearly indicate that the transactions were recorded by suppressing the last two digits and therefore, the actual amount of cash payments has to be computed by adding two zeros to the figures recorded in the seized documents. Accordingly, the A.....
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....ncriminating material in the form of loose sheets, diary and digital evidence was found, which contains details of cash transactions relating to various persons, including the assessee. The Ld. CIT(A) further observed that the entries recorded in the seized material clearly indicate cash payments made by the assessee towards purchase of commercial space in Jyothi Tech Park and the same were recorded by suppressing the last two digits. The Ld. CIT(A) also took note of the fact that the key employees of M/s. Vamsiram Group, in their statements recorded during the course of search, have admitted that the group was indulged in unaccounted cash transactions and the entries were recorded by truncating the last two digits. The Ld. CIT(A) further observed that, the entries found in the seized material contain specific details such as date, particulars and amounts of transactions and therefore, the same cannot be considered as dumb documents without evidentiary value. The Ld. CIT(A) was of the view that the seized material clearly establishes that the assessee had made cash payments towards purchase of commercial property and merely because the documents were found from the premises of a th....
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.... but fact remains that the A.O. has relied upon the information found in the search proceedings of M/s. Vamsiram Builders, but not in the case of the assessee, and therefore, the reasons recorded by the A.O. on the basis of search conducted in the case of the assessee by invoking Explanation 2, clause (i) is incorrect. The learned counsel for the assessee further submitted that, if the A.O. reopened the assessment under section 148 of the Act, on the basis of material found from the premises of third party, then clause (iii) of Explanation 2 is applicable, where it states that if the A.O. is satisfied with the prior approval of Principal CIT, that any books of account and documents seized under section 132 or requisitioned under section 132A of the Act, in the case of any other person on or after 01.04.2021, then the A.O. must obtain approval from Principal CIT under clause (iii) of Explanation 2 of section 148 of the Act, for recording reasons. 8. The learned Counsel for the assessee further referring to the reasons recorded by the A.O submitted that, the A.O invoked explanation (2) clause (i) of section 148 of the Act on the presumption that once a search is initiated under se....
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....r of Income Tax (TS-5518-HC- 2022(DELHI)-O). The assessee had also relied upon the decision of the Hon'ble Karnataka High Court in the case of Smt. Vasanthi Ramdas Pai vs. Income Tax Officer (TS-5059-HC-2024(Karnataka)-O). The assessee also relied upon the decision of the Hyderabad Benches in the case of ACE Tyres (P) Ltd vs. Assistant Commissioner of Income Tax in ITA Nos. 1084 to 1088 and 1027/Hyd/20252. 9. The learned CIT-DR. for the Revenue, Dr. Narendra Kumar Naik and the learned Sr. A.R. for the Revenue, Dr. Sachin Kumar, on the other hand, submitted that, there is no merit in the legal ground taken by the assessee challenging the validity of the assessment order passed by the A.O., because as per the new scheme of assessment under section 148 of the Act, where there is a search and seizure operation under section 132 of the Act, in the case of the assessee, then the A.O. shall be deemed to have information to suggest that income chargeable to tax has escaped assessment in the case of the assessee. In the present case, a separate warrant of authorization was issued in the name of the assessee under section 132 of the Act, and therefore, the A.O. has rightly invoked cla....
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.... Explanation 2 to section 148 of the Act, that the A.O. shall be deemed to have information which suggests that income chargeable to tax has escaped assessment in the case of the assessee for the assessment year under consideration. From the reasons recorded by the A.O., it is very clear that there is a separate and simultaneous search action in the case of M/s. Vamsiram Builders and the assessee. However, for the purpose of recording reasons for reopening of the assessment, the A.O. has referred to the information or incriminating material found in the case of search at the premises of M/s. Vamsiram Builders on 06.12.2022, which is evident from para 3.1 of the assessment order, wherein the A.O. refers to certain seized material like loose sheets, diary and Excel sheets in pen drive which contain details of cash payments made by the assessee group for purchase of commercial space from M/s. Vamsiram Builders. Therefore, it is necessary for us to examine the legal ground taken by the assessee challenging the validity of notice issued under section 148 of the Act and the consequent assessment order passed by the A.O. under section 143(3) r.w.s. 147 of the Act in light of the provision....
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....ince the A.O. has not followed due procedure provided under section 151 of the Act, for issuance of notice under section 148 of the Act, the entire assessment proceedings become invalid and void ab initio. 12. There is no dispute with regard to the fact that the additions made by the A.O. towards alleged on-money payment for purchase of commercial space by M/s. M.R. Estates is only on the basis of information found in the premises of M/s. Vamsiram Builders and not based on the information found from the premises of the assessee during the course of search proceedings conducted under section 132 of the Act, which is evident from para 3.1 of the assessment order. Going by the observation of the A.O. in para 3.1 of the assessment order and material considered for the purpose of assessment, in our considered view, invocation of Explanation 2(i) of section 148 of the Act, for the impugned assessment year is completely bad in law, as the notings in the seized material found in the premises of a third party with a presumption that M/s. M.R. Estates has purchased commercial space of 76,032 Sq. Ft., for which alleged on-money payment has been paid by the assessee is totally on suspicion ....
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....ice, a return of income or income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant Asst. Year. The 1st proviso to section 148 of the Act, provides that, no notice under section 148 shall be issued unless, there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation (2) to section 148 deals with a deeming fiction where a search is initiated under section 132 or books of account are requisitioned under section 132A of the Act in the case of the assessee, the A.O shall be deemed to have information which suggests that the income chargeable to tax has escaped the assessment in the case of the assessee where the search is initiated or books of account or other documents are requisitioned in the case of any other person. In the present case, the A.O invoked clause (i) of Exp. (2) for recording reasons and issuance of notice under section 148 of the Act. But, it was the contention ....
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....of the assessment, the A.O. neither considered any material found during the course of search proceedings in the case of the assessee, nor any information to suggest escapement of income. Further, the A.O. has relied on the information found from the premises of M/s. Vamsiram Builders during the course of search proceedings under section 132 of the Act, and therefore, in our considered view, issuance of notice under section 148 of the Act, by invoking clause (i) of Explanation 2, is totally incorrect and contrary to the scheme of reassessment. 16. The harmonious interpretation of the deeming fiction created in respect of the person searched under Exp. (2) and the proviso to section 148 may be that notice under section 148 can be issued only when there is material for the relevant A.Y found during the course of search which suggests that income chargeable to tax has escaped assessment. Mere factum of search itself cannot be a reason for issuing notice for re-assessment. In the absence of income has escaped the assessment for the relevant A.Y, it may not be possible for the A.O to obtain prior approval from the specified authority for the relevant A.Y for which notice under sectio....
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....e A.O under section 148 of the Act without fulfilling the conditions provided therein is invalid and consequently, the assessment order passed by the A.O is bad in law and liable to be quashed. Admittedly, there was a search proceeding under section 132 of the Income Tax Act, 1961 in Excel Group of Companies on 04/01/2023 and as part of the search, the assessee company was also searched on 04/01/2023. Consequent to the search, the assessment for the A.Y 2020-21 has been reopened by recording a reason dated 7/2/2024 which is available in page No.12 of the paper book filed by the assessee. Upon perusal of relevant reasons, we find that the A.O has recorded reasons for reopening of the assessment in light of search & seizure operation conducted under section 132 of the Act and consequent quantification of un disclosed income of Rs. 6,42,24,650/- for the A.Y 2020-21 and has formed a reasonable belief of escapement of income by virtue of clause (i) of Exp. (2) of section 132 of the I.T. Act and observed that, the A.O shall be deemed to have information which suggests that the income chargeable to tax has escaped the assessment in the case of the assessee for the A.Y 2020-21. Therefore, ....
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....essee, it is necessary for us to examine the reasons recorded for reopening of the assessment for issuance of notice under section 148 of the Act, in light of provisions of section 148 of the Act. Therefore, for better understanding, we reproduce the provisions of section 148 of the Act, as applicable for the Asst. Year 2020-21 which read as under: "148. Before making the assessment, reassessment or re-computation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no....
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....sfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee 98[where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3.-For the purposes of this section, specified authority means the specified authority referred to in section 151.]". 12. The provisions of section 148 of the Act, deals with the assessment, re-assessment or re-computation under section 147 and subject to the provisions of section 148A of the Act, the A.O serves on the assessee a notice requiring him to furnish within such p....
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....Pr. CIT that the books of account or other documents found during the course of search under section 132 in case of any other person belongs to the assessee or relates to the assessee. Only after recording satisfaction with the prior approval of the Pr. CIT, the A.O can record reasons for issuance of notice and then such satisfaction should be forwarded to the specified authority for obtaining approval under section 151 of the Act. In the present case on hand, the A.O has not recorded any satisfaction, nor had taken any prior approval from the Pr. CIT for recording satisfaction for issuance of notice under section 148 of the Act. Therefore, in our view, notice issued by the A.O under section 148 of the Act, without mandatory procedure provided under section 148 and explanation provided thereon is bad in law and vitiate the entire proceedings. 14. The A.O has recorded reasons for issuance of notice under section 148 of the Act on 21/11/2023. Upon perusal of the relevant reasons recorded for reopening of the assessment which is available in page 12 of the paper book filed by the assessee, we find that the A.O has considered information received in pursuant to the search & se....
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.... the information discovered/obtained during the search suggest that income has escaped assessment for the relevant A.Y for which notice under section 148 is issued. Further, the satisfaction of the A.O can be demonstrated from the reasons recorded. However, in the present case, going by the reasons recorded, there is no such demonstration by the A.O which is evident from the relevant reasons where the A.O simply relied upon the information submitted by the ADIT (Inv.), quantifying the undisclosed of Rs. 6,42,24,650/- for the A.Y 2020-21 which is once again based on the material found in the possession of any other person. Therefore, in the absence of any satisfaction from the A.O, on the basis of information that income escaped the assessment for the relevant A.Y, issuance of notice under section 148 of the Act by considering clause (i) of Exp (2) of section 148 is contrary to the scheme of assessment as provided under section 148 of the Act, in pursuant to the search u/s. 132 or requisition u/s. 132A of the Act. Therefore, in our considered view, despite the deeming fiction provided under section 148, even in the case of searched person, the A.O may still be required to demonstrat....
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....l pre-conditions laid down under the re-assessment proceedings, proceeded without recording the mandatory satisfaction and without obtaining prior sanction from the competent authority. This conduct not only violates the express mandate of law, but also renders the assessment a jurisdictional error. The AO has in fact, gone a step further by bypassing the legal safeguards embedded in Section 147 of the Act, thereby vitiating the assessment proceedings ab initio. The relevant findings of the Tribunal in para Nos. 21 to 24 are as under: "21. We have gone through the additional ground of appeal as taken before us and also the assessment order, order of the CIT(A), written brief synopsis of the assessee on the issue of additional ground of appeal and also the arguments of the Ld. CIT DR. The facts are not in dispute viz-a-viz the facts that the search was conducted on the assessee on 16.11.2021 and also the fact that separate search was conducted on Sh. Ajay Prabhakar (Deed Writer) and Sh. Ravi Kapoor (Broker in real estate) and distinct and different Panchanama was drawn in their respective names in their cases. In so far as, the first issue regarding the passing of order u/s....
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....section 147, thereby vitiating the assessment proceedings ab initio 24. Furthermore, a plain reading of the Finance Act, 2021 and the Explanatory Memorandum to the Finance Bill clearly indicates that the legislative intent was to bring all searches conducted on or after 1st April 2021 within the ambit of the new reassessment regime under section 147 of the Income-tax Act, 1961. This new regime was introduced through significant amendments to section 147 and section 148, along with the insertion of Explanations 1 and 2, and the concept of "information suggesting escapement of income" was explicitly defined. From the reading of Explanation 2 to Section 147, it is evident that in cases where a search is initiated on or after 1st April 2021, the Assessing Officer shall be deemed to have information, which suggests that income chargeable to tax has escaped assessment for three assessment years immediately preceding the assessment year relevant to the previous year, in which, the search is initiated, provided that books of account, documents, assets, bullion, jewellery, or other valuable articles are seized or requisitioned in the course of the search. This deeming provision is ....
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.... the same manner, when the AO has found the material which was seized in the premise of the other person which pertains to the appellant, he has to write satisfaction and take approval from the Pr. CIT for acquiring jurisdiction. Since, the AO has proceeded on the basis that search is conducted in the case of the assessee and clause (i) of Exp. (2) of Section 148 is applicable and recorded reasons, in our considered view, the reasons recorded by the AO for issue of notice u/s. 148 is not in accordance with provisions of Section 148 of the Act and consequently, the notice issued by the AO u/s. 148 of the Act and consequent assessment order is without any jurisdiction and ;liable to be quashed. 18. In the instant case, the A.O has made 2 additions, i.e. one addition by relying on the material seized from the residential premises of Shri Ramesh Kumar Sanaka, Sr. Accounts Manager i.e. FOCUS 5.5 software and the other addition by relying on the Pen Drive seized from the factory premises. On observation of the reasons recorded, the A.O has not demonstrated escapement of income as envisaged in the 1st proviso to section 148 of the Act. The A.O failed to prove any nexus between th....
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....int reading of provisions of section 147 and 148 of the Act, escapement of income is a sine qua non for initiating proceedings under section 147 of the Act." 18. In this view of the matter and considering the facts and circumstances of this case and also by following the ratios of the case laws discussed herein above, we are of the considered view that the notice issued under section 148 of the Act, on the basis of reasons recorded for reopening in light of search action conducted under section 132 of the Act, is bad in law, because the A.O. has considered the material found in the search proceedings conducted in the case of M/s. Vamsiram Group for making additions in the hands of the assessee, even though there was a separate and simultaneous search in the case of the assessee. Further, when the A.O. relied upon the material found in the search proceedings of another person on or after the 1st day of April, 2021 which belongs to or relates to the assessee, then the A.O. is required to record reasons for reopening of the assessment in light of Clause (iii) or (iv) of Explanation 2 to section 148 of the Act, by following due procedure under the Act before issuing notice under sec....
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....ents found in the premises of M/s. Vamsiram Group, even though it is a settled principle of law as held by various Courts that the provisions of section 132(4A) and section 292C of the Act, is not applicable in respect of documents found from the premises of a third party. In the present case, the A.O. made addition on the basis of diary and pen drive found from the premises of M/s. Vamsiram Group and alleged that there are certain cash payments made by the assessee for purchase of commercial space and the same has been recorded after truncating last two zeros, but fact remains that the above documents are not in the handwriting of the assessee and were not found from the premises of the assessee. Therefore, once a document is not found in the premises of the assessee, the contents recorded therein are not required to be explained by the assessee and the rebuttable presumption contained under section 132(4A) r.w.s. section 292C of the Act is not applicable. In this regard, he relied on the decision of the Hon'ble Gujarat High Court in the case of PCIT Vs. Gaurang Bhai Pramod Chandra Upadhyay (R/Tax Appeal No.98 of 2020 and others dated 25.02.2020). The Ld. counsel for the assessee ....
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....CIT Vs. Umesh Ishrani (2019) 108 taxmann.com 437 (Bom). He also relied on the following case laws : • Gavireddygari Aparna Kalyani and Others Vs. ACIT reported in ITA Nos. 3-26/Hyd/2023 and others dated 28.02.2023. • ACIT Vs. Katrina Rosemary Turcotte reported in (2017) 190 TTJ 681 (ITAT Mumbai Bench). • ACIT Vs. Anand Jaikumar Jain reported in (2023) 147 taxmann.com 125 (ITAT Mumbai) • Naren Premchand Nagda Vs. ITO reported in IT Appeal No. 3265 (Mum.) of 2015, dated 8-7-2016 (ITAT Mumbai) • MM Financiers (P) Ltd. Vs. DCIT reported in (2007) 107 TTJ 200 (ITAT Chennai) • Pradeep Amrutlal Runwal Vs. TRO reported in [2014] 47 taxmann.com 293 (ITAT Pune) • Prarthana Construction (P) Ltd. Vs. DCIT reported in (2001) 118 Taxman 112 (ITAT Ahmedabad) (Mag). • ACIT Vs. Prabhat Oil Mills reported in [1995] 52 TTJ 533 (ITAT Ahmedabad). • P. Koteshwara Rao Vs. DCIT in ITA Nos.251 and 252/Viz/2012 dated 12.08.2016. 24. The Ld. counsel for the assessee further submitted that, the additions made by the A.O. towards unexplained cash payments are purely on the basis of documents ....
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.... commercial space and treated the same as unexplained cash payments. The learned CIT-DR although accepted the reasons given by the A.O. to treat the cash payments on the basis of documents found during the course of search, but observed that the A.O. erred in treating the above cash payments as unexplained without any basis and also without giving any valid reasons. The documents found during the course of search only contain details of the cash payments made by the assessee. However, it does not show any evidence regarding source of such payments. Therefore, they submitted that the additions made by the A.O. should be upheld. 26. We have heard both parties, perused the material available on record and had gone through the orders passed by the authorities below. We have also carefully considered the relevant evidences considered by the A.O. for making additions towards unexplained cash payments. Admittedly, during the course of search proceedings under section 132 of the Act, in the case of M/s. Vamsiram Group, incriminating evidence in the form of diary and pen drive was found and seized which contains various cash transactions. It is also an admitted fact that during the cours....
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....und or recovered from the premises of the assessee, no presumption under section 132(4A) r.w.s. section 292C of the Act, could be drawn against the assessee in such circumstances. A similar view has been taken by the Hon'ble High Court of Patna in the case of Dharmaraj Prasad Bibhuti Vs. ITAT, Patna reported in (2019) 109 taxmann.com 388 (Patna), wherein it was held that the presumption under section 292C of the Act, can only be drawn against such person from whose possession or control any books of accounts or other documents, money, etc. are found during the course of search. The sum and substance of the ratio laid down by various Courts is that the rebuttable presumption under section 132(4A) r.w.s. section 292C of the Act, cannot be pressed into service against the assessee with regard to material seized during the course of search from the premises of a third party, unless there is corroborative evidence. Therefore, in our considered view, the addition made by the A.O. on the basis of third party evidence without any corroborative evidence cannot be sustained. 28. Further, the documents found during the course of search are claimed to have been recorded by M/s. Vamsiram....
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....os. However, the A.O. has not made any attempt to examine the assessee with reference to the entries recorded in his name so as to ascertain whether the payments made by the assessee are exactly what is recorded in the Excel sheet after truncating two zeros. Since the A.O. has not examined the assessee with reference to the said entries and solely relied upon the enquiry conducted in the case of the third party, in our considered view, the conclusion drawn by the A.O. on the basis of third party enquiries that the assessee has also received the amount from M/s. Vamsiram Group and the same has been recorded after truncating two zeros is only a suspicion and is not backed by any evidence and cannot be accepted. Further, the A.O. sought to rely upon the statements of the employees of M/s. Vamsiram Group as corroborative oral evidence, but said statements lack any evidentiary value, because these statements were retracted subsequently. Further, there is no specific question about the payment made by the assessee was put to the Managing Director of M/s. Vamsiram Group or to the employees of M/s. Vamsiram Group Builders, therefore, the generalized statements recorded from the employees c....
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.... addition is the documents found from the premises of M/s. Vamsiram Group. The A.O. has not referred to any independent corroborative documentary evidence in support of his conclusions in the assessment order. The Hon'ble Bombay High Court in the case of PCIT Vs. Umesh Ishrani (supra) considered an identical issue and held that the additions made by the A.O. on the basis of entries found in loose sheets without any corroborative evidence are not sustainable. In the present case, it is an admitted fact that the A.O. during the course of assessment proceedings neither carried out any further enquiries to ascertain the nature of entries contained in the diary nor brought on record any independent corroborative evidence like cash receipts or bills submitted by the assessee so as to conclude that M/s. Vamsiram Builders has received cash payments for purchase of commercial space. The A.O. has not brought on record any evidence to prove that there is exchange of cash between the parties. It is very important for the A.O. to bring further evidence, including cash receipts, to support the entries contained in the seized documents, as held by the Hon'ble Bombay High Court in the case of CIT ....
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....ourse of search show clear transactions between the assessee and M/s. Vamsiram Group. Further, the Ld. CIT(A) has relied upon the statements of Shri Chandrasekhar Atla and Shri Regu Venkata Vara Prasad, but fact remains that the above two persons have retracted their statements and filed retraction statements before the Investigating Officer. Once the initial statements recorded have been subsequently retracted by filing affidavits, then there is no evidentiary value for the initial statements unless the statements recorded at the time of search are further corroborated by any independent evidence. Since there is no corroborative evidence before the A.O. and the Ld. CIT(A) to support the finding of cash payments by the assessee, in our considered view, the conclusion drawn by the Ld. CIT(A) that there is clear evidence of cash payments is contrary to the material available on record and cannot be accepted. Therefore, for the above reasons, addition made by the A.O. for cash payments canot be sustained. 32. The next leg of the argument of the learned counsel for the assessee, in light of Grounds Nos. 5 and 11 of the assessee's appeal, is with regard to addition made by the A.O. t....
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....e property and thus, the addition made by the A.O. should be upheld. 35. We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. We have also carefully considered the relevant provisions of section 69A of the Act, along with the various case laws referred to by the learned counsel for the assessee. The provisions of section 69A deals with unexplained money, etc., and as per the said provision, where, in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income and the assessee offers no explanation about the nature and source of acquisition of such money, bullion, jewellery, etc., or the explanation offered by him, is not in the opinion of the A.O., satisfactory, then the money and the value of bullion or jewellery or any other valuable article may be deemed to be the income of the assessee for such financial year. The plain reading of section 69A of the Act, it is very clear that in order to invoke section ....
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....ty on the basis of which the findings recorded by the Tribunal could be said to be perverse. Therefore, the findings recorded by the Tribunal were not perverse. [Para 10]" 37. The assessee has also relied upon the decision of ITAT, Hyderabad Bench in the case of R.K. Infracorp Private Limited Vs. DCIT (supra). The Coordinate Bench of the Tribunal, under identical set of facts, has held as under : "Coming to the facts of the present case, we find that it is the claim of the revenue that they had during the course of the search proceedings conducted on the assessee company seized certain loose sheets, viz., Annexure A-1/Pages 01-02, which revealed that certain expenses that were debited by the assessee company and claimed as a deduction either during the year under consideration or in the immediately preceding year were received back in cash from the concerned parties. However, we concur with the CIT(A) that as during the course of the search proceedings, no corroborative evidence based on the notings of the seized loose sheets, viz. Annexure A-1/Pages 01-02 was found which would reveal that the assessee company was the owner of any unaccounted cash, unaccounted jewellery....
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....led to take cognizance of the fact that the basic conditions required for triggering the provisions of section 69A of the Act in the case of the assessee company had not been satisfied, therefore, there could have been no justification for him to have made the impugned additions qua the alleged bogus or inflated expenses in the hands of the assessee company under the said statutory provision". The Ground of appeal No.3 raised by the revenue is dismissed." 38. The assessee has also relied upon the decision of Hon'ble Supreme Court, in the case of D.N. Singh Vs. CIT, Central reported in (2023) 150 taxmann.com 301 (SC) and the Hon'ble Supreme Court on the issue of difference between section 69 and section 69A of the Act, held as under : "Section 69 and section 69A, apart from being close neighbours, do bear resemblance with one another. Section 69 deals with unexplained investment. Section 69A deals with unexplained money, bullion, jewellery or other valuable articles. Section 69A was inserted by Amending Act 5 of 1964 and it came into effect with effect from 1-4-1964. Both sections require that the subject matter of the provisions, viz., investments in the case of section....
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..../Hyd/2026 for A.Y. 2021-22 and 2022-23 42. The facts and issues involved in these two appeals are identical to the facts and issues which we had considered in the assessee's own case in ITA No.310/Hyd/2026 for A.Y. 2020-21. The only difference in these two appeals filed by the assessee is that the Ld. CIT(A) confirmed the additions made by the A.O. towards alleged on-money payment made for purchase of the property in the hands of the assessee wherever the A.O. has made substantive additions. Further, the Ld. CIT(A) deleted the protective additions made by the A.O. towards alleged on-money payment made for purchase of the property for both the assessment years, because the substantive additions made in the hands of M/s. M.R. Estates have been confirmed. Except for the above changes, there is no change in facts for both the assessment years. The A.O. made addition towards alleged on- money payment made for purchase of commercial space by M/s. M.R. Estates in the hands of the assessee on the basis of excel sheets found during the course of search in a pen drive in the case of Vamsiram Builders. We had considered an identical issue of additions made towards alleged on-money payment ....