TaxTMI 
TaxTMI 
2026 (9) TMI 1393
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....ecord. 4. That the addition has been sustained against the facts and circumstances of the case. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off." 3. Briefly, the facts of the case are that the assessee, M/s Home Construction Co., filed its return of Income for A.Y. 2022-23 declaring an income of Rs. 2,68,240 under Section 139(1) of the Income-tax Act, 1961. The case pertains to the Home Life Buildcon Pvt. Ltd. Group, wherein a search and seizure operation under Section 132 was conducted on 16.11.2021. Incriminating documents were found and seized from various business and residential premises of the group. 3.1 The case was selected for compulsory scrutiny after due approval. Statutory notices under Sections 143(2) and 142(1) were issued and served electronically. The assessee did not object to the jurisdiction or validity of notices during proceedings. 3.2 The assessee is engaged in development of flats/apartments and had developed one project named "Sun Apartments" comprising 27 flats, out of which 3 flats were sold during the year under consideration. 3.3 During the search, s....
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....tatement of partner Shri Jagjit Singh Grewal recorded during the search, mentioning a price range of Rs. 40 lakhs to Rs. 1 crore per flat, and (ii) certain digital documents, loose slips, allotment letters, and transaction notes recovered from the mobile/e-mail of Shri Ravi Kapoor (a third-party broker). 4.2 The CIT(A) held that the statement of Shri Jagjit Singh Grewal, being vague and not related to any specific flat or transaction, does not constitute incriminating material and cannot be the sole basis for addition, as it amounts to surmise and conjecture. This view is supported by the Hon'ble Supreme Court in Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151 (SC) and Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC), which prohibit additions based purely on suspicion without reference to evidence. 4.3 With respect to Flat A-1 sold to Karan Kochhar & Pia Wig and Flat D-1 sold to Vishal Sra, the CIT(A) upheld the additions of Rs. 22,00,000/- and Rs. 95,00,000/- respectively. These additions were sustained because specific seized documentary evidence existed, financial transaction details, advance payment records, and allotment letters clearly indicating actual s....
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....ted 07.045.2025, in which, regarding the evidence found from the premises of third party, the following finding have been given by the Hon'ble Bench:- "16. We have duly considered the rival contentions and gone through the record carefully. We have taken note of the finding of the AO. We would appreciate the finding of the CIT(A) in the later part of this order. First let us evaluate quality of evidence possessed by the AO qua the assessee for making addition to his income. The only evidence possessed by the AO is one loose sheet of a paper whose contents are being noted by us while dealing first fold of proposition at page 7 and 8 of this order. This page is neither in the handwriting of the assessee nor was found from his premises. It is a document found at the premises of a third person. The assessee had no control over any other person, what they write in their accounts at their office/residence. He cannot be charged to any liability on the basis of writing made by a third person. This aspect was considered by the Hon'ble Supreme Court in the case of CBI Vs V.C. Shukla and others (1998) 3 SCC page 410 wherein CBI sought to prosecute certain politicians on the b....
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....r the liabilities, but not a third person. We rely upon the judgment of Hon'ble Supreme Court in the case of CBI Vs V.C. Shukla (supra)." 6.2 Reliance was also placed in the another order of Chandigarh Bench in the case of Malbros International Pvt.Ltd. in ITA No.48/Chd/2025, wherein, it has been held as under:- "It was further observed by the bench that assessment u/s 143(3) was initiated solely for the purpose of verifying the return of income as filed by the assessee. In such circumstances, the importing and reliance upon material seized from third-party searches would go beyond the jurisdiction conferred u/s 143(3) particularly, where the applicable law i.e., Explanation-2 to section 148 (as amended by the Finance Act, 2021) mandates prior approval from the Principal Commissioner of Income Tax (PCIT) before initiating reassessment proceedings on the basis of such material. The failure to comply with such requirement would render the assessment legally untenable." 6.3 The Ld. Counsel also relied upon the order of M/s Homelife Buildcon Pvt. Ltd in ITA Nos. 880,1036/Chd/2024, dt. 17.07.2025, which is one of the group concern, where digital data and other evidenc....
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....e orders, that no reliance could be placed on third party evidence. Further, that Sh. Ravi Kapoor is an independent person. We have also gone through the order of ITAT in the main group concern of the assessee namely M/s Homelife Buildcon Pvt. Ltd. in ITA Nos. 880, 1036/Chd/2024, dated 17.07.2025, wherein the similar issue was there and on the basis of certain digital data, certain additions were made in the hands of M/s Homelife Buildcon Pvt. Ltd. which was confirmed by the CIT(A). The assessee had challenged those finding of the CIT(A) and such arguments of the assessee have been recorded in the case of Homelife Buildcon Pvt. Ltd., as cited supra, and finally, the Hon'ble Bench in that case has held that no reliance could be placed on the documents recovered from the 'digital data' and other evidences recovered from his residence of Sh. Ravi Kapoor and gave a finding in the case of M/s Homelife Buildcon Pvt. Ltd., as under. 11. We have considered the arguments on merits of the Ld. Counsel and CIT (DR) and we have also gone through the Brief Synopsis, the paper books in three Volumes, judgment set as filed by the assessee's counsel. We have also gone through the....