TaxTMI 
TaxTMI 
2026 (8) TMI 1727
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....or the year under consideration i.e., AY 2023-24 filed its return of income on 19.10.2023 declaring a total income of Rs. 2,02,25,890/-. The case was selected for compulsory scrutiny and notice under Section 143(2) dated 24.06.2024 was issued by the AO and after examining the response addition was made on allegation of assessee receiving 'on money', in sale of immovable property, industrial plots. Same is sustained by ld. CIT(A) and for which assessee is in appeal and has raised following grounds; "1. That on the facts and circumstances of the case, the order passed u/s 250 by the Ld. CIT (A) is without proper opportunity and the same is not sustainable on facts and bad in law. 2.1 That on the facts and circumstances of the case, the Ld. CIT (A) was not justified in upholding the addition of Rs. 11,12,31,740/- made u/s 45 on the ground of additional long term capital gain on sale of plots in total disregard to submission and documentary evidences placed on record. 2.2 That there being no case of any receipt of cash consideration over and above consideration recorded in the registered sale deed, the allegation of under reported consideration is highly arbi....
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.... of the Income Tax Act, 1961 by the Assistant Commissioner Of Income Tax Central Circle 31, Delhi ("Ld. Assessing Officer"), despite the same being without jurisdiction, bad in law, barred by limitation and void ab initio. 2. That the notice dated 24.06.2024 issued under section 143(2) of the Act is without jurisdiction, bad in law, illegal, and consequently liable to be held void ab initio. 3. That on the facts and in the circumstances of the case and in law, the assessment order passed by the Assessing Officer under Section 143(3) of the Act is illegal, void ab initio, without jurisdiction, and contrary to the provisions of the Act, inasmuch as the AO failed to issue any notice under Section 148 of the Act, which is a mandatory precondition for validly assuming jurisdiction to complete the assessment proceedings pursuant to the search. 4. That on the facts and in the circumstances of the present case and in law, the impugned assessment order deserves to be quashed, as the approval accorded by the Ld. Additional Commissioner of Income Tax, Central Range-08, New Delhi vide Letter No. ITBA/COM/F/17/2024-25/1075126749(1) dated 27.03.2025 is mechanical in na....
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....ar under consideration was found. Shri Rajeev Gupta was neither the owner of the project nor authorized to negotiate or finalize the sale consideration. His role was confined to coordinating customer visits and communicating project-related information under the directions of Shri S.C. Goyal. This fact was also confirmed in his statement recorded during search. The rates reflected in the chats pertained to developed plots, whereas the plots actually sold were undeveloped plots. During the course of search itself, the Department seized brochures and marketing material demonstrating that the Appellant was offering purchasers two distinct options, namely developed plots and undeveloped plots, each carrying different pricing structures and development costs. The actual transactions were duly evidenced by registered sale deeds, books of account, purchasers' confirmations, statements recorded under Section 131 of the Act, valuation reports and comparable sale instances and no seized document, WhatsApp chat or image contained any express reference to receipt of cash by the Appellant. 6. Ld. DR has relied the findings of ld. Tax authorities. 7. Appreciating the submissions and ma....
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...., New Delhi, has been part of quasi-judicial proceedings, of assessment. It is as express acknowledgment of the fact that that the directions and inputs received from the superior authority, Addl. Commissioner of Income Tax, Central Range-8, New Delhi, formed basis of the assessment. Such, an approach is not permissible under the Act, which defines the statutory powers and role of 'tax authorities', in the assessment. Administrative guidance and supervisory control by superior authorities may be permissible for ensuring proper conduct of proceedings but the appreciation of incriminating material to reach conclusion and determination of issues arising in assessment proceedings is a quasi-judicial function entrusted exclusively to the AO and such statutory responsibility cannot be abdicated or exercised under the dictates, instructions or influence of any superior authority. It is a settled principle of law that an authority entrusted with a quasi-judicial function must exercise its own discretion and arrive at its own conclusions. An order passed under the dictates of another authority is legally unsustainable as it amounts to a surrender of statutory discretion. The requirement of ....
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....on the bare assumption that figures appearing in such communications represent actual sale consideration received by the Appellant, and that the difference between such figures and the registered sale deed consideration constitutes unaccounted cash receipts. 13. On the contrary ld. Counsel has demonstrated that this assumption is factually erroneous, legally untenable and is demolished by the Department's own seized material. It comes up that the AO has invoked the presumption under Sections 132(4A) and 292C to treat the WhatsApp chats, screenshots and images found on Shri Rajeev Gupta's mobile as establishing receipt of undisclosed consideration. This is rebuttable presumption and more so presumption is only against the person from whom the material is found. The search party itself seized brochures and marketing material for Poysha Industrial Estate [PB Vol. 2, Pages 197-216], which unambiguously establish, two distinct product offerings, undeveloped plots and developed plots with development facilities and separate, higher pricing structures and development charges applicable to developed plots. The existence of varying figures in the chats is entirely and naturally e....
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....which is heavily relied by ld. AO, doesn't indicate that he had any authority to determine sale consideration. He was neither a director nor a shareholder of the Appellant company. His role was limited to coordinating site visits and communicating project information to prospective purchasers. Final negotiations and commercial decisions rested exclusively with Shri S.C. Goyal. Any opinion of Shri Rajeev Gupta on market rates or expected sale prices is therefore the opinion of a peripheral functionary it is not, and cannot be treated as, evidence of actual consideration received by the Appellant. Thus to rely the same assessee needed an opportunity to discredit the veracity of the statement. Specially when purchasers who are contracting party had supported the claim of assessee, that all the more warranted opportunity to cross examine witness, whose uncorroborated statement are sought to be relied by ld. AO. 15. At the same time on behalf of the Appellant, there was evidence in the form of valuation report given by Nagpal Associates, a qualified and registered valuer [PB Vol. 2, Pages 298-303], which specifically values undeveloped industrial plots in Poysha Industrial Estate mat....