TaxTMI 
TaxTMI 
2026 (5) TMI 734
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....llegal, without jurisdiction and barred by limitation and, therefore, the said notice u/s 148 along: with assessment order passed on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the reassessment proceedings initiated are contrary to the provisions of law including the specific provisions of section 147 to section 151 of Income Tax Act, 1961 and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the order passed by the learned assessing officer and the addition made therein is bad-in-law and CIT(A) erred in not holding so. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the Ld. Assessing Officer to the extent of Rs. 31,70,000/- on account of alleged unexplained money u/s 69A of the Act. 5. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is contrary to the provisions of section....
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....he Assessing Officer, there is clear mention of cash payments. Although in some of the WhatsApp chats, cash payment has apparently not been made and to that extent the claim of the assessee that there were only proposal can be admitted. Further, he observed that on the analysis and perusal of the WhatsApp chat, payments made by the assessee to Sachin Modi, Tapan Maychh and Tapan Maychh for Rs. 13,95,000 Rs. 16,50,000/- and Rs. 1,25,000/- respectively totaling to Rs. 31,70,000/-. Accordingly, out of the total addition of Rs. 82,10,000/-, addition of Rs. 31,70,000/- was confirmed and balance addition of Rs. 50,40,000/- is directed at being deleted and hence, partly allowed the appeal. 8. Aggrieved, assessee is in appeal before us. 9. At the time of hearing, ld. AR of the assessee submitted that the addition of alleged jewelry purchased has been made u/s 69A of the Act. The addition has been made on the basis of some WhatsApp chat. The AO has observed that during the course of search, mobile phone of the assessee and his wife Jaishree Aggarwal were checked and screen shots of these chats were taken. He submitted that according to the AO, as per these chats, the assessee has purc....
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....llery or other valuable article may be deemed to be the income of the assessee for such financial year.] 9.3 He submitted that from the bare perusal of aforesaid provisions, it is evident that for applicability of provision of section 69A of the Act, the first requirement is that the assessee must be found to be owner of any money, bullion, jewelry or other valuable articles. He further submitted that in the present case, the assessee has not been found to be owner of any such alleged jewelry or cash for which the addition has been made and no such alleged jewelry or cash has been found during the course of search. It is submitted that the AO has not even recorded any satisfaction/ observation that the assessee is the owner of any such alleged jewelry/ cash. 9.4 Ld. AR further submitted that the provisions of section 69A contain deeming fiction whereby certain unexplained money, bullion, jewelry etc. is deemed to be the income of the assessee. However, the provision of section 69A does not provide for deeming of ownership. In this regard, he relied on the following case laws :- (i) CIT Vs. Mother India Refrigeration Industries, [155 ITR 711 SC] [1985] 9.5 He furth....
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.... the excess or shortage of the jewelry by the assessee. Merely on the basis of the Whatsapp chat, they came to the conclusion that the assessee must have purchased the same in cash. There is not corroborative evidence in the possession of the AO to even proceed to making the addition. Based on the same reasons, the Ld CIT(A) had also sustained the partial addition. 12. On careful consideration, there is not excess jewelry or any material at the possession of the lower authorities to sustain the addition in the present case. Even there is no evidence of making any payment or any invoice at the possession of the authorities below. As brought to our notice, all the jewelry and Gold were reconciled and disclosed, there is no trace of the jewelry alleged to have purchased by the assessee matching to the WhatsApp chats were found with the assessee. It clearly shows that it is only suspicion and the addition was also made uls 69. The issue raised by the assessee is also that the AO cannot make addition invoking the provisions of section 69 when the AO does not have any jewelry or any material to show that the assessee had in fact purchased or in his possession any excess stock. In abse....