2021 (7) TMI 1127 - AT - Income Tax

Addition u/s 69B - additions were made by the Revenue alleging that Sh. Kulwinder Singh had paid on money on the purchase of the land from PISCO - HELD THAT - When the additions made in the hand of Kulwinder Singh for allegedly purchasing land from PISCO were deleted by the Tribunal and the finding of the Tribunal were confirmed by the Hon ble High Court. In our considered opinion no additions can be sustained in the hands of the assessee more particularly when the additions made in the hands of seller were deleted by the Tribunal and confirmed by the Hon ble High Court. In fact there is no evidence or document in possession of the Assessing Officer on the basis of which the satisfaction can be withdrawn of the Assessing Officer in respect of escapement of income as record in the order. Once the addition in the hands of Sh. Kulwinder Singh (seller) have been deleted there is no reason upholding the same in the case of the purchaser (in the assessee before us) therefore respectively following the decision in the identical case as referred by the CIT(A) in paragraph 4.2 of the appellate order and also decision of the Hon ble High Court in 2019 (5) TMI 1327 - PUNJAB AND HARYANA HIGH COURT We do not find any merit in the appeal of the Revenue and accordingly the same is dismissed.

Summary

Issues Involved:
1. Deletion of addition made under Section 69B of the Income Tax Act, 1961.
2. Validity of jurisdiction assumed under Section 147/148 versus Section 153C.
3. Legality of multiple notices under Section 148.
4. Service of statutory notice under Section 143(2).
5. Reassessment based on the same document already assessed for another party.

Detailed Analysis:

1. Deletion of Addition Made Under Section 69B:
The Revenue contested the deletion of an addition of ?3,91,71,875/- made under Section 69B by the CIT(A). The CIT(A) had deleted this addition, arguing that the facts were similar to a previously decided case (Pr. CIT v. Kulwinder Singh), where the Tribunal and the High Court had ruled in favor of the assessee. The Tribunal upheld the CIT(A)'s decision, noting that the addition in the hands of the seller (Kulwinder Singh) had already been deleted by higher judicial authorities, and thus, there was no basis for sustaining the addition in the hands of the purchaser (the current assessee).

2. Validity of Jurisdiction Assumed Under Section 147/148 Versus Section 153C:
The assessee argued that the jurisdiction should have been invoked under Section 153C, following the seizure of an agreement in the search of the PISCO Group, which had a direct bearing on the assessee. The Tribunal found that the reassessment proceedings were initiated based on documents seized during a search at PISCO’s premises, which indicated a higher purchase rate for the land than what was recorded in the registered sale deed. However, since the addition in the hands of the seller was deleted, the Tribunal did not find it necessary to delve deeper into this jurisdictional issue.

3. Legality of Multiple Notices Under Section 148:
The assessee contended that multiple notices under Section 148 were issued for the same issue, which was illegal and unwarranted. The Tribunal did not specifically address this issue in detail, as the primary addition itself was found unsustainable.

4. Service of Statutory Notice Under Section 143(2):
The assessee claimed that the statutory notice under Section 143(2) was not served within six months of compliance with the notice under Section 148, rendering the order void. The Tribunal did not find it necessary to adjudicate on this point, as the main addition was already ruled out.

5. Reassessment Based on the Same Document Already Assessed for Another Party:
The assessee argued that the land was purchased from Kulwinder Singh, who had already been assessed based on the seized agreement, and thus, reassessing the assessee on the same document was unfounded. The Tribunal agreed, noting that since the addition in the hands of Kulwinder Singh had been deleted, there was no basis for making the same addition in the hands of the current assessee.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of the addition made under Section 69B. Consequently, the cross-objections raised by the assessee were deemed infructuous and dismissed. The order emphasized that no additions could be sustained in the hands of the purchaser when the same had been deleted for the seller by higher judicial authorities. The Tribunal's decision was pronounced in the open court on 14.07.2021.