TaxTMI 
TaxTMI 
2026 (9) TMI 1683
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....d out in the case of M/s. Blomstrende Buildwell Pvt. Ltd. Group of cases on 15.01.2021 u/s 132 of the Act, certain digital data were found and seized from Shri Amit Chauhan at 105, SPS Residency, Vaibhav Khand, Indirapuram, Ghaziabad which were inventoried as Annexure A-1. According to which there were certain chats between Shri Amit Chauhan and Shri Manish Wadhwa relating to property at W-15, GK-1, Delhi and further with respect to the transaction between Shri Rajeev Channa, partner of assessee firm and Shri Amit Chauhan relating to the loan transaction with M/s. Sunny Chemical. Accordingly, the AO issued a show cause notice on 22.04.2022 wherein the assessee was asked to file the reply on the issue. The assessee stated that it had sold a property situated at basement and ground floor, W-15, G.K.-1, Delhi to Shri Manish Wadhwa and Ms. Mamta Wadhwa for INR 9.00 crores in terms of Sale Deed executed. However, in the statements recorded during the course of search u/s 132(4), Shri Amit Chauhan stated that actual consideration for the said property was INR 13.50 crores and INR 4.00 crores were paid in cash by the buyers to the appellant and he got commission of INR 25.00 Lakhs on this....
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....llion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A. Provided that in case of such other person, the reference to the date of initiation of the search un....
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....rt that application of first proviso to section 153C(1) would not be confined to question of abatement, but also with regard to date from which six year period was to be reckoned in respect of which returns were to be filed by third party and thus, period for which other persons Le assessees were required to file returns, would commence only from date when materials were forwarded to their jurisdictional Assessing Officer" Similar view has also been taken by jurisdictional Delhi High Court and Delhi Tribunal and other tribunals also and the same are enlisted as under: CIT vs. RRJ Securities Ltd. as reported in [2015] 62 taxmann.com 391 (Delhi HC) In terms of proviso to section 153C, a reference to the date of the search under the second proviso to section 153A has to be construed as the date of handing over of assets/documents belonging to the assessee (being the person other than the searched) to the Assessing Officer having jurisdiction to assess the said assessee. Further proceedings, by virtue of section 153C(1) of the Act, would have to be in accordance with section 153A of the Act and the reference to the date of search would have to be construed as....
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....nstance, if the papers are in fact assigned under Section 153C after a period of four years, the third-party assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153C supports the interpretation which this Court adopts. 11. For the foregoing reasons, the Court finds no merit in these appeals; they are accordingly dismissed, without order on costs. Raja Varshney vs. DCIT as reported in ITA No. 1459/Del/2024 From the above discussion the date of recording of the satisfaction will be the deemed date for the possession of the seized documents which is 03-10-2022 and six years would be reckoned from this date. The submission made by Ld AR is tenable that the assessment year relevant for previous year in which search was conducted in the case of the assessee will be AY 2023-24 and six years immediately preceding the assessment year relevant for u/s 153C of the Act will be AY 2018-19 to 2022-23. The assessment for AY 2021-22 should have been carrie....
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....vs. ITO in ITA No. 768/CHD/2024 dated 07.04.2025 wherein it has been held as under: We have taken cognizance of the alleged seized material (extracted supra) as well as the belief formed by the AO while recording the reasons for re-opening of the assessment. According to the Revenue, this paper pertains to the assessee. The information contained in this paper is regarding payment of Rs.13 Cr to the assessee. Thus, this also pertains to the assessee, in such situation, to our mind, the AD ought to have initiated the proceedings under Section 153C. In other words, AO of the searched person le. AQ of Shri Sanjay Bansal or of the Trust should have recorded satisfaction that information contained in loose paper pertains to the assessee and act ion against the assessee deserves to be taken under Section 153C because income has escaped assessment in the hands of the assessee. Such satisfaction ought to have been transmitted to the AO of the assessee and only thereafter, assessment could have been made. No act lon under Section 147/148 could be token against the assessee because Section 153C starts with a non obstante clause namely, notwithstanding anything contained in Section 13....
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....r and had received INR 25.00 Lakhs from one Shri Gagan, therefore his statements has no relevance in absence of any corroborative material. 7. Ld.AR further submits that in the cross-examination, Shri Amit Chauhan further stated that the sale deed was finally registered for INR 8.5 crores as against the agreement to sale for 13.5 crores and further cash of Rs. 4.00 crores was paid in cash. Ld. AR submits that the difference was of 5 crores (13.5-8.5) however, no reconciliation of the same was ever made by the AO. Ld. AR further submits that the AO has not made any enquiry from the buyers who as per the registered sale deed confirmed the payment of Rs. 9.00 crores as recorded in the registered Sale Deed. It is also a matter of fact that the lower authorities have not recorded any statement of the buyer as well as seller and merely on the basis of third-party statement have no locus standi transactions, additions have been made. He therefore, requested for the deletion of the additions made. 8. On the other hand, Ld. CIT DR for the Revenue vehemently supported the orders of lower authorities and submits that in the instant case, the order was passed u/s 143(3) of the Act as the....
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....red on 26.08.2020 for a total sum of INR 9.00 crores. The payment was made through banking channel and duly recorded in the registered Sale Deed which is placed at pages 1 to 22 of the Paper Book. The evidences of the payment of INR 9.00 crores in the shape of bank statement of the assessee are placed at pages 24 to 31 of the Paper Book. The solitary basis for making the addition is the statement of Shri Amit Chauhan recorded u/s 132(4) at the time of search on 15.01.2021 in his own case wherein he stated that actual consideration for property sold by the appellant company was INR 13.5 crores and INR 4.00 crores were paid in cash. 12. Here it is relevant to state that Shri Amit Chauhan in the aforesaid statement had stated that property was sold at INR 13.50 crores and cash of INR 4.00 crores were given and the remaining amount was given through cheque as per registered Sale Deed however, there is a difference of INR 50.00 Lakhs as the Sale Deed got registered for INR 9.00 crores and if alleged cash payment of 4.00 crores is added total consideration comes to INR 13.00 crores whereas Shri Amit Chauhan has stated that the property was sold at INR 13.5 crores and no re-conciliatio....
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.... 15. "We have gone through the relevant arguments of learned counsel for the assessee and we found that, the additions made by the AO are on the basis of documents found from the premises of a third party. It is a wellestablished principle of law by the decisions of various Courts that the documents found from the premises of a third party, the rebuttable presumption as per section 132(4A) and section 292C of the Act, is not applicable. Therefore, it is necessary for the AO to support the addition with further corroborative evidence in cases, where any addition is made on the basis of third party information. In case there is no corroborative evidence, then there is no scope for making addition on the basis of third party evidence, because the presumption under section 132(4A) is not applicable and the assessee is not required to explain the said documents. This principle is supported by the decision of the Hon'ble Gujarat High Court in the case of PCIT Vs. Gaurang Bhai Pramod Chandra Upadhyay (supra), wherein the Hon'ble High Court clearly held that since the documents were not found or recovered from the premises of the assessee, no presumption under section 132(4A) r.w.s 292C ....
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....s or otherwise was unearthed during the course of search and there is no reference to any corroborative evidence in the assessment order. Although the AO sought to rely upon the statements of the employees of M/s. Vamsiram Group as corroborative oral evidence, the said statements lack any evidentiary value, because these statements were retracted subsequently. Further, there is no specific question about the payment made to the assessee company was put to the Managing Director of M/s. Vamsiram Group or to the employees of M/s. Vamsiram Group Builders, therefore, the generalized statements recorded from the employees cannot be considered as conclusive evidence to allege cash payments made to the assessee company by M/s. Vamsiram Group. Therefore, in our considered view, in the absence of any corroborative evidence and merely on the basis of statements of two individuals, additions cannot be made. 17. We further note that, the maker of the statement is answerable to the contents, however, unless the said documents are found in the premises of the assessee, the assessee need not to explain the said documents and is also not answerable to the statements of third parties. In th....
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....he addition". The relevant observations in para 17 & 18 are as under:- 17. "In the present case, the addition has been made by the AO ignoring the documentary evidence in the form of registered sale deed which being a best evidence for finding the actual sale value and in the absence of any other material to show the transactions involved in cash outside the sale consideration mentioned in the sale deed and in the absence of any corroborative documentary or credible oral evidence, the AO should not have made addition. The said view of ours is fortified by the decisions of Apex Court in CIT Vs. Motors & General Stores Pvt. Ltd. (1967) 66 ITR 692 (SC) and those in CIT Vs. K. C. Agnes (2003) 262 ITR 354 (Ker) and Paramjit singh Vs. ITO (2010) 323 ITR 588 (P &H). 18. The addition has been made not based on any document or material which could suggest that cash was earned by the assessee from any source or that any under handed cash payment was involved in the sale of transaction. Further considering the fact that the entire addition made by the AO based on the statements of the 18 ITA No.1509/Del/2018 Maple Destinations and Dreambuild Pvt. Ltd. vs. DCIT witnesses whic....