TaxTMI 
TaxTMI 
2026 (7) TMI 800
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....see is a company, engaged in the business of civil construction and housing projects. The return of income was filed on 30.09.2014, declaring total income at NIL and assessment was taken up for scrutiny and in terms of the order passed u/s 143(3) dated 25.11.2016, returned income was accepted. Thereafter, based on the search and seizure action carried out u/s 132 of the Act in the case of M/s. Proform Interiors Pvt. Ltd. on 09.02.2022, the information was received that the assessee has made cash payments to the extent of INR 16.50 Lakhs, the source of which remained unexplained therefore, by treating the same as unexplained expenditure u/s 69C of the Act and further invoked the provision of section 115BBE of the Act and made the addition for the same amount. Accordingly, the total income was assessed at INR 16.50 Lakhs. 5. Against the said order, assessee filed an appeal before Ld. CIT(A) wherein assessee has challenged the validity of the assessment order and the additions without providing opportunity of the cross-examination of the persons from whose possession, the said Excel Sheets were found and seized. However, Ld. CIT(A) dismissed the appeal of the assessee vide order da....
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....quiries. 8) That Ld. CIT(A) and Assessing Officer has erred in not affording an opportunity to the appellant for cross examination of the person who had authored OR maintained the said excel sheet, which has prejudicially been relied and applied against the appellant company, in complete violation of the principle of natural justice, inspite of various requests made during the course of assessment proceedings. 9) That Ld. CIT(A) and Assessing Officer erred in making the addition merely on the basis of assumptions, presumptions, whims and fancies by disregarding the clear evidence/ confirmation of M/s Proform Interiors Private Limited that no cash has been received from the appellant company. 10) That Ld. CIT(A) and Assessing Officer erred in making the assumption, presumption drawn against the appellant company U/s 132(4A) in respect of excel sheet recovered from M/s Proform Interiors Pvt. Ltd, which was neither the extracts from the books of accounts of M/s Proform Interiors Pvt. Ltd nor bear any signature, stamp, attestation, confirmation from the appellant company. 11. That Ld. CIT(A) and Assessing Officer erred in invoking section 69C r.w.s. 115BBE of....
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....e provision of section 148 of the Act. For this, he referred para 8 at page 10 of the assessment order wherein AO has recorded the satisfaction note. Ld. CIT DR thus, requested that the aggregate value of escaped income as discovered during the search exceeds Rs. 50.00 lacs and thus extended period u/s 149(1)(b) of the Act is applicable and therefore, the AO has rightly initiated the reassessment proceedings in the case of the assessee and he prayed accordingly. 10. Heard the contentions of both parties at length and perused the material available on record. Before going further, we first examine the provisions of section 149 of the Act in particular which is extracted as under [as existed for the relevant AY applicable for the search conducted on or after 01.04.2021] :- 149. "Time limit for notice- (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his po....
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....; or (b) a search under section 132 for which the last of authorisations is executed; or (c) a requisition made under section 132A, after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A does not exceed seven days, such remaining period shall be extended to seven days and the period of limitation under this sub-section ....
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.... pages 3 to 5, it is observed that payments made in cash was paid for Two different events wherein a sum of INR 12.50 Lakhs was paid (INR 10.00 Lakhs on 03.08.2013 and INR 2.50 lakhs on 17.12.2013) for purchases of furniture which is one Event. Further in terms of picture-1 reproduced at page 3 of the assessment order, a sum of INR 4.00 Lakhs noted as paid on 25.05.2013 towards the interior designing fee which is separate and second event. These two events i.e. First of purchases of furniture and Second payment of fee for Interior designing consultancy are two separate events thus, both the events cannot be clubbed together so as to conclude that cumulative figure of unexplained cash paid can be taken together for the purpose of invoking the provision of section 149(1)(b) r.w.s. 149(1A) of the Act. It is further observed that in none of the Excel Sheet as reproduced in the assessment order, no entry regarding the payment made or outstanding balance for two separate events were mixed and they were separately noted meaning thereby even M/s Proform Interiors Pvt. Ltd. had considered these as two separate transactions carried out by the assessee with M/s Proform Interiors Pvt. Ltd. ....