TaxTMI 
TaxTMI 
2025 (3) TMI 1692
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....AY) 2014-15 ITA No.351/Agr/2024 which arises out of an order of learned Commissioner of Income Tax (Appeals), Kanpur [CIT(A)] dated 10-07-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 153A of the Act on 10-04-2021. The assessee challenges assessment proceedings on legal grounds and quantum additions on merits. The Ld. AR has filed written submissions also. The Ld. CIT-DR made vehement arguments and controverted the arguments of Ld. AR. 1.2 The Ld. AR advanced arguments and raised various pertinent legal grounds. It has been submitted that no search was conducted by the department at the assessee's premises and therefore, the assumption of jurisdiction u/s 153A was bad-in-law. 1.3 Another issue raised by Ld. AR is that each of the assessments have been framed by taking cognizance of search material in the shape of note books seized vide Annexure BK-14, BK-16 and BK-17 containing plot wise details of plot sold which was seized from third- party premises. It has been stated that no other material has been relied upon to make the impugned additions. The assessee explained in the first appeal that the addition has been made on the basi....
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.... heard rival submissions and upon perusal of case records, our adjudication would be as under. Assessment Proceedings 2.1 The assessee firm came into existence on 15-01-2014 and it was constituted by two partners namely Shri Deepak Purshwani and Shri Aman Madaan. The assessee carried out real estate projects. The return of income for this year was processed u/s 143(1). The assessee group was searched u/s 132 on 07-02-2018 and apparently, on the date of search, no assessment proceedings were pending in the case of the assessee and this was a case of unabated assessment year. The Ld. AO referred to various documents and loose papers as found during the course of search on assessee group. The partners of the firm were confronted with the seized material during the course of assessment proceedings and their combined statements were recorded u/s 131(1) wherein they admitted to have received on-money on sale of plots. 2.2 In this background, a notice u/s 153A was issued to the assessee on 13-05-2019 and the assessee filed return of income declaring nil income. The Ld. AO referred to incriminating material in the shape of notebooks marked as Annexure BK-14, BK-16 and BK-17 contai....
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....ra 6.7 and 6.8 of the impugned order. The Ld. CIT(A) took note of the fact that search proceedings were conducted in the case of the assessee group as follows: - Name of the Entity Address Documents Seized Shri Aman Madaan, M/s Sanskar Nagar, M/s Sanskar Greens & M/s SG Commercial 452/2A, CP Mission Compound, Jhansi Three Loose Paper sets marked as LP- 1 to LP-3, one hard disk and one pen drive Shri Deepak Pursuhwani 496, Rajghat Colony, Capri Bazar, Jhansi One loose paper set marked as LP-1 Sh. Jagdish Prasad Sahu 792/5, Shakti Nagar, Civil Lines, Jhansi One loose paper set marked as LP-1 Shri Ramakant Verma 372/18-A, Civil Lines, Near Kunj Bihari Temple, Jhansi 25 loose paper sets marked as LP-1 to LP-25 and 25 registers marked as BK-1 to BK-25 The statement was recorded u/s 132(4) from Shri Ramakant Verma on 07-02-2018 wherein he stared that the documents as found from his premise pertain to the partners of the assessee-firm. He also stated that these transactions related to property transactions which are part in cheque and part in cash. He explained that the partners requested him to give one room of his residential premise and t....
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.... the course of search (tabulated above) and rejected the said legal plea. 3.9 Lastly, Ld. CIT(A) considered the issue on merits and allowed partial relief against quantum additions. Aggrieved, the assessee is in further appeal before us. Our findings and adjudication 4. We find that impugned issue, on identical facts, has been adjudicated by us in the case of M/s Sanskar Greens, ITA Nos.355/Agr/2024 & ors. as under: - 4. From the facts, it emerges that the assessee firm is constituted by the three partners i.e., Sh. Deepak Pursuhwani, Shri Jagdish Prasad Sahu and Shri Aman Madaan. The assessee carried out real estate projects. The assessee group was searched u/s 132 on 07-02-2018 and apparently, on the date of search no assessment proceedings were pending in the case of the assessee and this was a case of unabated assessment year. Upon perusal of assessment order, it could be ascertained that Ld. AO has referred to various documents and loose papers as found during the course of search on assessee group. In post search proceedings, a combined statement was recorded from the three partners wherein they admitted to have received on-money on sale of plots. We find th....
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.... in the case of the assessee. The decision of Hon'ble Apex Court has overruled the decision of Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora (367 ITR 517) as cited by lower authorities. Similar proposition has been laid down in various judicial decisions as cited by Ld. AR and placed on record. Since the same has laid down similar ratio, the same are not being discussed at length for want of brevity. Respectfully following all these decisions, we would hold that the impugned assessment is liable to be quashed. The assessee succeeds on this foremost legal ground. To use third-party material against the assessee, proceedings u/s 153C could be initiated for which recording of satisfaction is a mandatory requirement which is not shown to have been fulfilled. 5. Another pertinent legal ground as raised by Ld. AR is that approval u/s 153D was given in a mechanical manner. To support the same, Ld. AR has stated that approval has been granted by Addl. CIT through common communication i.e., F. No. Addl CIT (CR) KNP/Approval u/s 153D/2020-21/17 dated 06-04-2021. The Ld. AR drew attention to the remand report as extracted in the impugned order on Page Nos.43 and....
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....clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner." Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the [Principal Commissioner or] Commissioner under sub-section (12) of section 144BA. 12. The Tribunal while quashing the assessment order had relied upon its earlier decision in Navin Jain (supra) wherein a detailed discussion has been made with regard to the requirement of prior approval of superior authority on the draft assessment order under section 153D, before passing the assessment order by the Assessing Officer. It was noted that the word 'approval' though has not been defined in the Income-tax Act but the general meaning of the word 'approval' in Black's Law Dictionary, 6th Edition was to be seen. The decision of the Apex Court in Vijayadevi Navalkishore Bhartia v. Land Acquisition Officer [2003] 5 SCC 83 wherein the distinction between Approving Authority and Appellate Authority was drawn, had been noted. The decision of the High Co....
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....5. The Tribunal has further noted that the provisions contained in sections 153A to section 153D provide for separate notice to be given to assessee for assessment for each year as specified in section 153A of the Act; the assessee has to file separate ITR for each year as specified in section 153A of the Act; separate assessment orders are to be passed for each year as specified in section 153A of the Act. 16. It was observed that this is an important concept mentioned in Section 153A of the Act, which is peculiar to the scheme of the said Section. Keeping in view of this basic fundamental features of Section 153A, if Section 153D is scrutinized, then, it would become manifest that an important phrase is employed in the text of Section 153D, which is "each assessment year". The reading of the provisions in Section 153A and 153D conjointly makes it clear that separate approval of draft assessment order for each year is to be obtained under section 153D of the Income-tax Act. In its erudite judgement with the discussion on the legislative intent of Section 153A to 153D and the meaning of the "approval" as defined in Black's Law Dictionary as also the decisions of the Ap....
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....ppreciate on factual and legal aspects to ascertain that the entire material has been examined by the Assessing Authority before preparing the draft assessment order. It is trite in law that the approval must be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case. The requirement of approval under section 153D is pre-requisite to pass an order of assessment or re assessment. Section 153D requires that the Assessing Officer shall obtain prior approval of the Joint Commissioner in respect of "each assessment year" referred to in clause (b) of sub-section (1) of section 153A which provides for assessment in case of search under section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of "each assessment year" falling within six assessment years (and for the relevant assessment year or years), referred to in clause (b) of sub-section (1) of section 153A. The proviso to section 153A further provides for assessment of the total income in respect of each assessment year falling within....
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....f the Joint Commissioner in respect of "each assessment year" referred to in clause 153A(1)(b) which provides for assessment in case of search u/s 132. Section 153A(1)(a) requires that the assessee would be required to furnish the return of income in respect of "each assessment year" falling within six assessment years (and for the relevant assessment year or years), referred to in Sec.153A(1)(b). The proviso to section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). The conjoint reading of Sec.153A(1) and section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order u/s 153A. Similar view has been taken in various other judicial decisions, the copies of which have been placed on record. 6. We find that similar facts exist before us. The approval has been given in similar mechanical manner. The approval is combined approval for different years and that too for different assessees. This being the case, drawi....