TaxTMI 
TaxTMI 
2026 (5) TMI 310
X X X X Extracts X X X X
X X X X Extracts X X X X
....er is without jurisdiction. Legal Grounds 3. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing officer if at all could have initiated proceedings only by issue of notice u/s. 153A read with Section 153C and not u/s. 148 of the Income tax Act. 4. For that without prejudice to the above, the reopening is bad in law. 5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that there is no failure to fully and truly disclose all material facts on part of the appellant. 6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the reassessment is based on borrowed satisfaction which is bad in law. 7. For that the Commissioner of Income Tax (Appeals) failed to appreciate that there is no independent enquiry or application of mind by the Assessing officer to reopen the assessment of the appellant. 8. For that the reassessment was completed without complying with the statutory requirements of law. Addition on account of purported Undisclosed Investment 9. For that the Commissioner of Income Tax (Appeals) erred in upholding Rs. 50,00....
X X X X Extracts X X X X
X X X X Extracts X X X X
....out prejudice to the above, the reopening is bad in law. 5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the reassessment is based on borrowed satisfaction which is bad in law. 6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that there is no independent enquiry or application of mind by the Assessing officer to reopen the assessment of the appellant. 7. For that the reassessment was completed without complying with the statutory requirements of law. Addition on account of Short Term Capital Gain 8. For that the Commissioner of Income Tax (Appeals) erred in upholding Rs. 22,85,000/- as Short Term Capital Gain. 9. For that the Commissioner of Income Tax (Appeals) failed to appreciate that loose sheet without any corroborative evidence have no evidentiary value. 10. For that the Commissioner of Income Tax (Appeals) erred in sustaining the addition merely based on sworn statements which were recorded under tremendous stress and duress without any corroborative evidence. 11 For that the Commissioner of Income Tax (Appeals) erred in not considering the retracti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der CASS, and an assessment under Section 143(3) was completed through an order dated 04.11.2011, determining the appellant's income at Rs. 10,00,770 as against the declared income of Rs. 7,07,980/-. 5. The ld.AR for the assessee submitted that the assessment should have been made under Section 153A read with Section 153C, and not under Section 148 (Ground No. 3). Reference is invited to the recorded reasons for reopening, which clearly indicate that the proposed addition is based on information pertaining to the appellant that was discovered during a search conducted under Section 132 in the case of M/s. Sree Annapoorna Sree Gowrishankar Hotels Pvt. Ltd. and its group entities. It is contended that where an assessment is founded on information or material relating to the assessee that is unearthed during a search carried out on another person, such assessment can only be initiated under Section 153A read with Section 153C, and not under Section 148. In the present case, the reassessment of the appellant appears to have been made solely on the basis of material seized during a third-party search, as is evident from the recorded reasons for reopening (copy of reasons enclosed; se....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Shri John Antony, Shri C.R. Vasudevan, Shri Gunasekaran, Shri S.A.Anandhakumar, Shri Senthilkumar and Shri R.K.Palanisamy were obtained. 2.1 In the above documents, it is seen that on behalf of all the above persons, Shri D Srinivasan of Hotel SreeAnnapooma Group Coimbatore, had entered into sale agreements with Shri D Rajmohan and others for Rs. 640.17 lakhs on 03-07-2008 (Before doing so, all the seven members have signed a Memorandum of Understanding towards investing jointly in a landed property and authorized Shri D Srinivasan to do the transaction). The amount of Rs. 640.17 lakhs was paid by way of cheque during the FY 2008-09. Instead of registering the sale deed Shri Rajmohan gave Power of Attorney in favour of Shri D Srinivasan. 3. It is evident from the loose sheet seized that Shri John Antony and six others jointly made investment of Rs. 814 lakhs in the land situated at Peelamedu (i.e.. Rs. 640.17 lakhs by way of cheque and Rs. 173.83 lakhs by way of cash). On behalf of all the above persons, Shri. D. Srinivasan had paid Rs. 814 lakhs to Shri. Rajmohan after getting the Power of Attorney in respect of the said land. 4. As per the tabulated d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tation, as it has been initiated beyond four years from the end of the relevant Assessment Year 2009-10, and there was no failure on the part of the appellant to make a full and true disclosure of material facts. In the present case, the notice under Section 148 was issued on 14.03.2016 (copy enclosed; see page 2 of the paper book), whereas the four-year period from the end of Assessment Year 2009-10 expired on 31.03.2014. Even assuming, without admitting, that the Assessing Officer had reason to believe that income had escaped assessment, no material has been brought on record to demonstrate any failure by the appellant to disclose fully and truly all relevant facts during the original assessment proceedings completed under Section 143(3). Reliance is placed on the judgment of the Madras High Court in CIT v. Schwing Stetter India Pvt. Ltd. [2015] 378 ITR 380 (Mad), wherein it has been clearly held that the recorded reasons must specifically indicate the omission or failure on the part of the assessee to disclose material facts. In the appellant's case, such a requirement has not been satisfied (refer Serial No. 4, Para 22, Page 64 of the Index of Case Laws). Further, the rea....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... From these facts, it is evident that the Revenue has not applied the principle of equality in dealing with the appellant and the other co-owners concerning the purchase and sale of the Peelamedu property. In light of the above, it is respectfully submitted before this Hon'ble Tribunal that the appellant has not been treated on par with the other co-owners under similar circumstances. It is further contended that imposing a higher tax burden on one co-owner, when others similarly placed have been treated differently, is unjustified. Reliance in this regard is placed on the following judicial decisions: CIT v KumararaniSmt.Meenakshi Achi [2007] 292 ITR 624 (Mad) Attention is drawn to S.No. 5 Para 5 & 6 Page 67 of Index of Caselaws-2 Attention is drawn to Ashok Jain v ITO in ITA No.2736/CHNY/2018 S.No.6-Para 10 page 82 & 83 of Index of Caselaws - 2 14.On Merits: The appellant, along with six associates Shri D. Srinivasan, Shri V.R. Gunasekaran, Shri V.R. Vasudevan, Shri S.A. Anandakumar, Shri R.K. Palanisamy, and Shri D. Senthilkumarjointly decided to invest in a property situated at Peelamedu. On 30.06.2008, these individuals entered into a Memorandum of Un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssing Officer constitutes a "dumb document," as it merely reflects differences in cheque components and does not logically explain why such entries would be recorded after the completion of the transaction. In view of the above, it is submitted that the addition is based solely on an uncorroborated loose sheet, which lacks evidentiary value and cannot form the sole basis for making additions. Reliance is placed on the following judicial precedents: * Common Cause v. Union of India [2017] 394 ITR 220 (SC) * DCIT v. Sunil Kumar Sharma [2024] 469 ITR 271 (SC) * Sunil Kumar Sharma v. DCIT (2022) 448 ITR 485 (Kar) * CBI v. V.C. Shukla [1998] 3 SCC 410 In light of the above submissions and judicial authorities, he contended that, in the absence of any independent corroborative evidence, the additions of Rs. 50 lakhs for Assessment Year 2009- 10 and Rs. 22.85 lakhs for Assessment Year 2011-12 are unsustainable, arbitrary, and liable to be deleted. 15. The ld.DR for the revenue ground wise submitted as below: Ground relating to reopening of assessment: i. The appellant has contended that the reassessment was initiated without prop....
X X X X Extracts X X X X
X X X X Extracts X X X X
....co-owners' cases were not selected for scrutiny. Hence, the claim that they were treated differently is not tenable. iv. It is further submitted that the appellant's case must be adjudicated based on the material available on record and the findings of the Assessing Officer. 4. Ground relating to addition on account of unaccounted investment: i. The appellant has challenged the addition made on the basis of a loose sheet, describing it as a "dumb document"; however, the Revenue submits that the document is supported by independent evidence obtained during the search proceedings. ii. The Assessing Officer corroborated the contents of the loose sheet with multiple evidences and relied upon statements recorded during the search. iii. The appellant himself, in a statement recorded under Section 131, admitted the correctness of certain columns (Nos. 2, 5, and 8) in the document, as noted by the Assessing Officer in point (iv) on page 6 of the assessment order. iv. The Assessing Officer reasoned that if certain entries are accepted as genuine, the remaining entries cannot be dismissed as fictitious. v. Further, as noted in po....
X X X X Extracts X X X X
X X X X Extracts X X X X
....search. In the present case, the Assessing Officer has referred to specific seized materials, statements and documents and recorded independent reasons for reopening. Therefore, it cannot be held that the reopening suffers from lack of jurisdiction merely on the ground that Section 153C could have been invoked. Accordingly, the legal challenge to reopening is rejected. B. REOPENING BEYOND FOUR YEARS - FULL AND TRUE DISCLOSURE: For AY 2009-10, the reassessment notice under Section 148 was issued on 14.03.2016, beyond four years from the end of the relevant assessment year. In such cases, the proviso to Section 147 requires the Revenue to establish failure on the part of the assessee to disclose fully and truly all material facts. We observe that the reasons recorded refer to information received from the Investigation Wing pursuant to search proceedings, indicating alleged cash investment of Rs. 50 lakhs. However, the reasons do not explicitly demonstrate or record any specific failure of disclosure by the assessee in the original assessment proceedings under Section 143(3). The mere reference to information received post-search is not sufficient, in absence of a clear find....