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TMI Blog2023 (5) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... dings including CIT Vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] - additions made by AO is not sustainable and deserve to be deleted as the addition had been made during the regular course of assessment proceedings and not on the basis of incriminating material/evidence found during the search proceedings. No infirmity in the order passed by the ld. CIT (Appeals). Decided against revenue. - I.T.A No. 694/Del/2022 - - - Dated:- 25-5-2023 - Shri Shamim Yahya, Accountant Member And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Ved Jain, C. A.; Ms. Supriya Mehta, C. A. Ms. Uma Upadhyay, C.A. For the Department : Shri T. Kipgen, [CIT] - D. R.; ORDER PER C. N. PRASAD, J.M. 1. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of any reply the Assessing Officer treated that the arrangement through this agreement is a sham transaction. Moreover the party to the agreement Mahagauri Estates Pvt. Ltd. also did not respond to the notice issued by the Assessing Officer. Therefore, the genuineness of the transaction could not be verified by the Assessing Officer and in such circumstances the Assessing Officer treated the forfeited sum of Rs.2,50,00,000/- by the assessee as unexplained and unverified income of the assessee under section 68 of the Act. The ld. DR supported the order of the Assessing Officer in making the addition under section 68 of the Act. 3. On the other hand, the ld. Counsel for the assessee relying on the orders of the ld. CIT (Appeals) who de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of noncompliance from seller side, seller was to pay double of this advance i.e Rs. 5 cr. On the other hand non compliance from buyer side will cost him the advance given to seller i.e. seller would be very much in his right to forfeit this amount of Rs. 2.5 cr. Other than these documents, no other evidence was found during search operation which suggests that this transaction was arranged and money has actually gone back to buyer in cash. These transactions were duly recorded in the books of account by the assessee. It is also observed that the amount had been credited in the bank account of the assessee. The appellant has taken the plea that this amount was not offered to tax this year as per the provisions of the section 51 of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has reiterated their aforesaid views. In the case of Pr. CIT vs. Ram Avtar Verma 395 ITR 252, Hon'ble Court has supported the aforesaid view that if the assessments are completed on the date of search and no incriminating material is found during the search, assessment u/s 153A of the Act is invalid. 5.4 Now the facts of the appellant are to be examined in view of this legal position. It is clear from the assessment order as well as submissions of the appellant that search and seizure action u/s 132(1) of the Act was undertaken by the Department in the case of appellant group on 08.07.2015. The status of original return filed is as under:- Asstt. Year. Date of filing of original return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be deleted as the addition had been made during the regular course of assessment proceedings and not on the basis of incriminating material/evidence found during the search proceedings. I, therefore, delete the aforesaid additions made by AO on account of forfeiture of made by the search proceedings. I advance received against sale of property u/s 68 of the IT Act, 1961 for AY 2012-13. However, if in future the ratio-decidendi of the decision of Hon'ble High Court in the case of CIT vs. Kabul Chawla gets reversed, the appeal will revive on these issues. 5. On careful perusal of the observations of the ld. CIT (Appeals) we do not find any infirmity in the order passed by the ld. CIT (Appeals). The decisions relied upon by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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