TaxTMI 
TaxTMI 
2026 (8) TMI 1834
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.... 6897/M/2024 (Spam Developers vs DCIT in AY 2012-13) is treated as lead case. The Assessee has raised the following grounds of appeal: 1) The Ld. CIT(A) has erred in confirming the order passed by the Assessing Officer u/s 143(3) r.w.s. 153(A) of the Income Tax Act, 1961 ("the Act") which is bad in law, illegal and void. 2) The Ld. CIT(A) has erred in not holding that the assessment order is bad in law for want of approval u/s. 153D of the Act. 3) The Ld. CIT(A) has erred in not holding that the assessment order is bad in law as the DIN was not mentioned on the approval granted u/s. 153D of the Act as per the CBDT Circular No. 19/2019 dated 14 August 2019. 4) The Ld. CIT(A) has erred in not holding that the assessment order is bad in law considering the fact that approval obtained u/s. 153D of the Act is without application of mind. 5) The Ld. CIT(A) erred in upholding the order passed by the AO which is without DIN. 6) The Ld. CIT(A) has erred in confirming addition of Rs. 17,27,629/-, being alleged profit on alleged on-money of Rs. 1,15,17,524/-. 2. Vide application dated 09.07.2025, the assessee has raised following additi....
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....sis being 15% of entire alleged on money of Rs. 1,06,62,267/-. The AO made / estimated such addition on the basis of certain noting on the seized material. Though, the assessee denied of having received such 'on money'. The ld CIT(A) confirmed the action of AO. 5. The ld AR of the assessee submits that the alleged cash transactions of 'on money' do not fall in the definition of 'asset' as provided under Explanation 2 to forth proviso to section 153A(1) of the Act. As per the said explanation, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. The definition of 'asset' is an inclusive definition and it does not include 'cash'. However, the A.O. was not in possession of any document which reveals that the income, represented in the form of 'asset', which has escaped assessment amounts to or is likely to amount to fifty lakhs rupees or more. The rough noting's on the alleged seized material cannot be termed as 'asset'. Thus, the basic conditions for issuing for issuing notice under section 153A/ 153C the Act do not satisfy in the facts of the present case. Thus, the notice dated 22.02.2022 is....
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....falls within ambit of fourth proviso to section 153A and assumption of jurisdiction by AO is in accordance with law. Section 2(14) of Income Tax Act define "capital asst" which mean property of any kind whether connected with the business of profession. Though, in fourth proviso the definition of 'asset' is for limited purpose. The case law of Delhi High Court in Smart Chip (P) Limited Vs ACIT (supra)relied by ld AR of the assessee is entirely misplaced as it is based on peculiar facts on the context of section 148.Similarly, the ratio of other decisions relied by assessee also is not applicable on the specific facts of the present appeals. 7. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We have also deliberated on various case laws relied by ld AR of the assessee. Firstly, we are considering the admission of additional ground of appeal. We find that the additional ground raised by the assessee purely legal in nature and goes to the root of the matter. We also find that before ld CIT(A) the assessee has raised general ground of appeal against validity of assessment completed under section 153A. Cons....
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....itioner had paid certain amounts as expenses for availing contractual manpower services and the AO doubted the genuineness of the said payments. It is clear from the above that there is no allegation that the income which has escaped assessment was represented in the form of an 'asset'. Therefore, the conditions as stipulated in Clause (a) of the fourth proviso to Section 153A(1) of the Act are not satisfied. The AO does not have the possession any books of account, other documents or evidence, which reveals that the petitioner's income that is represented in the form of an asset has escaped assessment. In terms of Explanation 2 to Section 153A(1) of the Act, the term 'asset' is defined to include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank accounts. The AO seeks to disallow expenses on account of doubting the genuineness for the reason that the same were not incurred wholly or exclusively for the purpose of the petitioner's business. In absence of any further material to establish that such expenses had resulted in the acquisition of any asset, the conditions stipulated in the fourth proviso to Sect....
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....nstant case, we notice that the AO has not shown that the alleged income escaped for assessment is represented "in the form of an asset". What is assessed in this year u/s 153A of the Act is the addition towards alleged bogus purchases and disallowance of salary/professional fee u/s 37 of the Act. It is not shown that the income, if any, generated out of these two disallowances is represented in the form of asset. Hence, we are of the view that the AO could not have invoked the fourth proviso to sec. 153A of the Act in order to reopen the assessment of AY 2011-12 and accordingly hold that the said reopening is not in accordance with the law and is liable to be quashed. Accordingly, we quash the orders passed by the tax authorities for AY 2011-12." 10. We further find that Chennai Tribunal in DCIT Vs Midas Golden Distilleries Private Limited (supra) followed the Mumbai Tribunal on similar issue. Similar view was taken by Gauhati bench of Tribunal in Goldstone Cements Ltd Vs ACIT (supra) and Mumbai Tribunal in Shairul Impex Vs ITO (supra). Now again adverting to the facts of the case in hand, we find that the AO in the entire assessment order has nowhere mentioned that any income ....