9911796707
TMI Blog2024 (10) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... nical ground raised by the assessee and before going further on the issue we would like to go through the relevant provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962. Provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962 activate the applicability of provision of Section 153A of the Act will arise - Search warrant can be issued against any person who is falling within the scope of either or more of the conditions as mentioned in clause ( a ),( b ) or ( c ) of section 132(1) and against whom reasons to believe has been formed based on the possession of information. Therefore, the warrant of authorization so issued should specify the name of the person or persons against whom it is issued along with the complete address of the premises to be searched. In other words, if a warrant of authorization has not been issued in case of a person, the provisions of Section 153A cannot be initiated in his case. Whether any material found in the search of any other person than the assessee can be considered in the assessment u/s 153A of the assessee? - As decided in Kabul Chawla [ 2015 (9) TMI 80 - DELH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll payment executed the legal papers in favour of the customers w.r.t. transfer. The assessee was not in the knowledge of excess money, if any received by these people from the customers. However, it is a fact that the assessee did not receive anything over and above the amount showing sale agreement amount. Moreover, the assessee recorded all these transactions in his books of account fairly. There was no any iota of evidence found (showing un-disclosed profit earned by the assessee in the sale transaction if any) at the premises of the assessee except his solitary statement which was given by the assessee with the advice of his associates during the search. In fact, these amounts were also appearing in the documents found and seized from the third-party premises. Based on these observations ground no. 4 raised by the assessee is allowed as the actual profit earned by the assessee has already been taxed. Addition of alleged bogus development expenses - Ignoring the reply of the assessee, the AO finally concluded that the claimed expenditure of Rs 8.50 Cr and the development was never incurred, and it was merely an attempt to reduce the taxable income, it was a claim of bogus expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party document seized suggest the profit of the project @ 26.78 % which is finding of fact by the ld. CIT(A) and in this appeal no contrary material is brough on record and therefore, ground no. 2 raised by the revenue also stands dismissed. - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Sh. Mahendra Gargieya (Adv.) And Sh. Devang Gargieya, (Adv.) For the Revenue : Sh. Anil Dhaka (CIT) ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM Both the present cross appeals are filed because revenue and assessee aggrieved with the order of the ld. Commissioner of Income Tax (Appeals), Udaipur-2 [for short CIT(A) ] dated 16.02.2022 for the Assessment Year 2015-16. The said order of the ld. CIT(A) is passed because the assessee challenged the assessment order passed by DCIT, Central Circle- Kota passed u/s 143 (3) of the Income Tax Act, 1961 [ for short Act ] on 18.12.2018 before him. 2. Since, these cross appeals relate one assessee involving the same assessment year on the separate grounds raised by rival parties in their respective appeal and we have heard both the cases together with the consent of the parties, passing this consolidated order, as the issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch interest. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 8. The appellant prays your honor indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. 2.2 Whereas the grounds appeal raised by the revenue in appeal No. 456/JPR/2024 for assessment year 2015-16 reads as follows: 1 Whether in facts and circumstances of the case, the CIT(A) is justified accepting claim of the assessee that amount of Rs. 3806922/- considered twice while calculating undisclosed amount and allowing its reduction from total undisclosed amount computed, without appreciating the facts that assessee has not raised this issue during the assessment proceedings as well as during the opportunities provided in remand proceedings. 2 Whether in facts and circumstances of the case, the CIT(A) is justified in applying the profit @ 26.78% on receipts of Rs. 18011192/- (Rs. 2,18,18,114/- minus Rs. 38,06,922/-) considering the claim of the assessee that copies of agreements related to booking amount were furnished during assessment proceedings without appreciating the facts that assessee has not submitted agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .no Name of associates Share Holding 1 Surinder Pal Singh Sahni 32% 2 Nawal Kishore Khandelwal 36% 3 Harvinder Singh Kohli 16% 4 Vipin Kumar Lodha 16% Total 100% In the group search incriminating documents were seized. The document related to Bajaj Enclave. The ld. AO noted that as per seized document vide page no. 17, 22 23 of Exhibit- 41 of party A-1 from the residence of Shri Surinder Pal Singh Sahni page no. 62 of Exhibit-3 of party A-4 from the resident of Shri Vipin Kumar Lodha . From those documents it is evident that a sum of Rs. 4,50,00,000/- was earned by above named four persons which remained unaccounted, as detailed below : Bajaj Enclave Particulars Amount Rs. Total Sales Realization (472x356) 1680 Less Road + Payment (30 + 1200) 1230 Total Un-disclosed profit 450 450*.36 Khandelwal Khandelwal 162 AD 72 B 72 R 72 V 72 In his explanation to the above-mentioned seized documents, Shri Vipin Kumar Lodha submitted that Rs. 4.50 Crore is total profit earned from Bajaj Enclave project. When questioned about the abbreviations used, it is submitted by Shri Surinder Pal Singh Sahni that AD R is his own Benami shares, whereas B i.e. Bucchi- nick name of Shri Harvider Singh Kohli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- In this case, the AO noted that the income declare in return filed u/s 153A was less than the income declared in the original return filed u/s 139(1) of the Act. The AO held that in the return filed u/s 153A only additional income based on incriminating documents is required to be shown in addition to the income originally declared in the regular return of income. Income declared in the regular return of income u/s 139 can in no way be under declared in the return u/s 153A. The appellant relied upon the revised computation of Income furnished during the assessment proceedings. However, no clarification is provided with reference to the reduction of income in return filed u/s 153A in comparison to the return filed u/s 139 of the Act. The facts of the case are considered. Any new claim in the return filed u/s 153A of the act is not acceptable as the Search Assessments are for the benefit of the revenue rather than assessee. The returns are filed uls 153A of the act are as a consequence of action taken un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2004] 265 ITR 474 (All). When rules of interpretation are applied it would not allow making of fresh claims as such. Principle of interpretation laid by Hon'ble apex Ccurt in Poppatlal Shah v. State of Madras 1953 AIR 274 (SC) reads as under: It is a settled rule of construction that to ascertain the legislative intent, all the constituent parts of a statute are to be taken together and each word, phrase, or sentence is to be considered in the light of the general purpose and object of the Act itself. The title and preamble, whatever their value might be as aids to the construction of a statute, undoubtedly throw light on the intent and design of the legislature and indicate the scope and purpose of the legislation itself. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. ITO [1981] 131 ITR 597/7 Taxman 13 as under- it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided. If a assessee is allowed to claim a allowance, deduction etc. u/s 153A not claimed earlier than it would mean that even in cases where the appeal arising out of the completed assessment has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice was duly given and rule of principle of natural justice was followed. The AO noted that assessee has voluntarily offered undisclosed income of Rs. 1,62,00,000/- in his post search statement recorded. Shri Nawal Kishore Khandelwal has already surrendered a sum of Rs. 162.00 Lacs as his un- disclosed income for A.Y. 2015-16 vide reply to Q No. 9 of his statement dated 22.09.2016. Further same facts were confirmed in his submission dated 24.10.2018. He submitted that same paper should be read in same context and development expenditure of Rs. 8.50 Crore should not be treated as bogus expenditure. It means, he has no objection of addition of Rs. 1,62,00,000/- as undisclosed receipts from Bajaj Enclave Scheme. The AO further noted that the assessee has not offered above undisclosed income of Rs. 1,62,00,000/- in returned filed u/s 153A of the Act. Shri Naval Kishore Khandelal stated in his statement that he had already disclosed his income for A.Y. 2015-16 at Rs. 7,57,955/- (as per his ITR) whereas he offered for taxation a sum of Rs. 1,54,42,045/- (i.e. 1,62,00,000- 7,57,955/-) only. In this connection it is hereby observed that the returned income of Rs. 7,57,955/- is from his reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be acceptable. There is clear detection of incriminating material during the search proceedings. Incriminating documents was seized from the premises of Shri Surender Pan Singh Sahni Other associates. The search team immediately confronted on the incriminating document during the search conducted at the premise of the appellant. At the premises of the appellant, Mrs. Rajesh Khandelwal was present. In the statement u/s 132(4) she could not explain the incriminating documents. The appellant was not present at the time of search at his residence. However, the assessee later on voluntarily offered undisclosed income of Rs. 1,62,00,000/- in his statement recorded during the course of post search proceedings considering the incriminating document and statement of other partners of the project. While recording the statement of Shri Nawal Kishore himself admitted vide reply to Q. No. 9 of his statement dated 22.09.2016 that he had surrendered a sum of Rs. 162.00 Lacs as his undisclosed income for the A.Y. 2015-16. In these circumstances, it can be said that there were corroborative evidences in the form of statement of other partners of the project, the incriminating document seized d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that how he received the profit. The assessee has not disclosed the manner. Whether, the profit so earned was kept with someone, or given as loan to someone, or invested in some asset or the assessee made expenditure by utilization of the profit so earned. How the AO was required to prove these facts which are in exclusive knowledge of the appellant is not explained by the appellant. Even if proved by the AO, the utilization of such profit might have resulted in further addition in the hands of the assessee as the assessee might have earned further income by utilising this money. However, no such issue is raised by the AO. Therefore, the issue raised by the assessee is not relevant for the taxation of profit which is already earned. The appellant argued that human probabilities support the case. Further the human probability and the surrounding circumstances plays an important role in deciding tax matters. The lack of requisite knowledge and experience of the Real Estate Business by the assessee, which in fact is glaringly evident from the plain reading of his statement and not disputed by the AO, not finding any undisclosed asset or undisclosed expenditure only suggests a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. The two members constituting the majority in the Settlement Commission had also taken the same view. There was no dispute that the amounts were received by the appellant from various race clubs on the basis of winning tickets presented by her. What was disputed was that they were really the winnings of the appellant from the races. This raised the question whether the apparent could be considered as real. Apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. The Chairman of the Settlement Commission, in his dissenting opinion, had laid emphasis on the fact that the appellant had produced evidence in support of the credits in the form of certificates from the racing clubs giving particulars of the crossed cheques for payment of the amounts for winning of jackpots, etc. The Chairman had rejected the contention regarding lack of expertise in respect of the appellant and had observed that the expertise was the last thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above case as held by the Hon'ble Supreme Court, the matter is to be considered in the light of human probabilities. Taking on money on transaction of lands is not an unusual practice but was very much of a usual practice. The transaction of cash takes place in secret and direct evidence about such transaction would be rarely available. In this case the investigation team could gather a direct evidence of actual transaction in cash undertaken by the appellant along with other partners. An inference about cash transaction is to be drawn on the basis of the circumstances available on the record. The AO has clearly brought out these facts in the assessment order. The appellant has failed to prove that the transaction as per the sworn in statement are not true with evidence. In the absence of not furnishing any credible evidence in support of the argument the arguments are not found to be acceptable. In view of the above discussion, the argument of the appellant are not found to be acceptable. 6.5.4 The AO has taxed real income and not hypothetical income It is argued that there was some taxable income in the hands of an assessee, always lay upon the revenue. In the instant cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proof and hence rejected. The appellant placed reliance on the case of CIT VS Shoorji Vallabhdas Co. [1962] 46 ITR 144 (SC), Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a hypothetical income , which does not materialize. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account. This was exactly what had happened in instant case. Here the agreements within the previous year replaced the earlier agreements, and altered the rate in such a way as to make the income different from what had been entered in the books of account. A mere bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act as the case may be but not u/s 153A. Thus, based on the material collected during the search at the place of the third parties, no assessment can be made u/s 153A but for that purpose assessments u/s 153C or u/s 147 only could be made. It is further submitted that the documents found seized (i.e. paper number 17, 22 23 of Exhibit- 41 of Party A-1) from the residence of Sh. Surinder Pal Singh Sahni Pg. No.62 of Exhibit-3 of Party A-4 from the residence of Shri Vipin Kumar Lodha for which they explained that Rs. 4.50 Cr. was total profit earned from Bajaj Enclave Project. Therefore, the AO presumed that the assessee might have earned un-disclosed income of Rs. 1.62 Cr. The AO also took support of income offered by Shri Vipin Kumar Lodha of Rs. 72 Lakh before Hon'ble Settlement Commission and Income offered of Rs. 72 Lakh by Shri Harvinder Singh and Rs. 1.44 Cr by Shri Surendra Pal Sahni for taxation u/s 153A. It is argued that the impugned seized documents did not belong to the assessee and contained rough jotting of other three associates, even though they admitted, the assessee was neither answerable nor legally expected to explain. However, the AO failed to rebut such con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in the search. Therefore, if the incriminating material was found from one of the partners, the same is incriminating material for all the persons who were involved in the business and also covered during the search proceedings simultaneously. The other partners place was also his place of business. It is admitted fact that the business was being run jointly. Therefore, the incriminating document found from the possession of other partners place was virtually from the business place of the assessee. If the arguments of the appellant are accepted than partners of business will keep the unaccounted transactions at one place and if caught the other partners will say it is not found from our possession and only the person who has been caught will pay the taxes. This is not an acceptable situation. The partners in business are partners for profit and loss. The tax liability also has to be shared together by all the partners in the ratio which was decided in the beginning of partnership. The appellant accepted the profit so earned in the statement recorded after search. However, the income so admitted was not offered for taxation in the return filed u/s 153A of the Income Tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... un-accounted/un-disclosed income of Rs. 1.62 Cr. for taxation as his income for A.Y. 2015-16 ie. the residential scheme namely Bajaj Enclave . However, admittedly, there was no evidence/incriminating material found and seized from the premises (control and possession) of the assessee which could show that the assessee earned undisclosed income /profit from Bajaj Enclave Project It is argued that mere admissions is not conclusive proof unless it is corroborated with tangible material and evidence. No doubt, the assessee in answer to Q-8 9 stated the undisclosed income and offered for taxation. As already discussed, it could be said that all the persons who were keeping the details related to the accounted or unaccounted business were virtually having business premises of the assessee jointly. This is not a case, that the appellant was an independent party to other persons involved in the search. Therefore, if the incriminating material was found from one of the partners, the same is incriminating material for all the persons who were involved in the business and also covered during the search proceedings simultaneously. Therefore, the claim of the appellant is incorrect that no inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evancy and evidentiary value of statement obtained under oath during the search proceedings are no longer res integra. In the decision of the Supreme Court in the case of Banalal Jat Constructions (P.) Ltd. v. Asstt. CIT [2019] 106 taxmann.com 128/264 Taxman 5, after referring to the judgment of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 0018, the legal position in relation to a statement under section 132(4) of the Income-tax Act, 1961 was set out as under: a. An admission is an extremely important piece of evidence though it is not conclusive. b. A statement made voluntarily by the appellant could form the basis of assessment. c. The mere fact that the appellant retracted the statement could not make the statement unacceptable. d. The burden lay on the appellant to show that the admission made by him in the statement earlier at the time of survey was wrong. Such retraction, however, should be supported by a strong evidence stating that the earlier statement was recorded under duress and coercion, and this has to have certain definite evidence to come to the conclusion that indicating that there was an element of compulsion for appellant to make such state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has not kept the regular books of accounts as required as per section 44AA of the Income Tax Act as in the return of Income the income was offered u/s 44AD of the Income Tax Act. Therefore on the facts of the appellant the decision relied upon by the appellant is not found to be applicable. 6.5.9 The Reliance Placed by the Appellant on decisions without Explaining Applicability on the facts of the case While going through the reply furnished by the appellant, it is noticed that decisions of various Courts and ITAT have been relied upon without explaining as to how these decisions are applicable on the facts and circumstances of the case. These decisions are ignored while passing the order. On the issue of placing reliance on a particular decision, Hon'ble High Court Of Gujarat in the case of Director of Income-tax (Exemption) V. Shia Dawoodi Bohra Jamat [2012] 25 taxmann.com 90 (Gujarat) observed as under. 11. It is settled legal position, that the decisions of the courts are not to be applied in the abstract, but are to be applied to the facts of the case. Without recording any findings of fact, one fails to understand as to how the Tribunal has come to the conclusion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponse u/s 153A on dated 07.04.2017, declared total income at Rs. 85,320/-only not adhering to his confession, the retraction is deemed to be retraction. This is not an acceptable explanation. The statement recorded under oath is an important piece of evidence which is supported by corroborative evidences like seized documents related to unaccounted profit earned from business by the assessee and also duly corroborated by the statement of other partners in the business. In these facts, the argument of the appellant are not found to be acceptable. It is stated that the alleged admission was not made voluntarily in as much as the assessee was highly tensed and remaining under mental trauma developed hyper tension. Not having faced such a situation, he was unable to take any decision, which is a common phenomenon in every survey and search. It has been held that in the cases of survey and search, the possibility of tension and surcharge atmosphere can't be ruled out in ACIT Vs. Jagdish NaraianRatan Kumar 22 Tax World 573 (JP), since approved by Hon'ble Rajasthan High Court. The so called admission of the assessee was tutored and being influenced by the false promises made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax [2022] 139 taxmann.com 190 (Madras) noted as under - 8. Pertinently, the Triburial after recording the explanations, affidavit and other documents filed by the appellant in support of his case, found that the same were not acceptable as the retraction was in the form of mere assertion and also belated. It was further pointed out by the Tibunal that there was no material evidence let in by the appellant to retract the statementmade under section 132(4) and the affidavits of itis mother-in-law wers unreliable as they were interested and self-serving testimonies. We are of the view that any retraction by the appellant should be made at the earliest point of time with sufficient, credible and corroborative evidence t support his claim and not by mere assertion as done in this case. Therefore, we do not find any reason to differ with the findings s so rendered by the Tribunal. In this case also, affidavit filled by the appellant in support of his retraction is perused and the same is not found to be acceptable as the retraction was in the form of mere assertion and also belated. There was no material evidence let in by the appellant to retract the statement made under during the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les an authorized officer to examine a person on oath and such a swom statement made under section 132(4), thus can be used as an evidence under Act-Held, yes - A search operation was carried out at premises of assessee whereby cash, jewellery, books of account and certain documents were found and seized Assessee on same day had given a statement under section 132(4) whereunder admissions with regard to unaccounted income of Rs. 6.20 lakhs were made - Said unaccounted income consisted of marriage expenditure, unexplained household expenditure, etc. Assessing Officer, made additions in respect of unaccounted income of Rs. 6.20 lakhs admitted under section 132(4)- However, after lapse of about nine months from date of admission, assessee through an affidavit sought to retract from statement made under section 132(4) on ground that (a) when there was no evidence or incriminating material discovered at time of search no addition could have been made merely on basis of statement under section 132(4) and (b) that impugned disclosure under admission was obtained forcefully and, hence, not binding Whether statement recorded under section 132(4) is an evidence by itself and any retraction c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k period 1988-89 to 1998-99 Whether any statement recorded under section 132(4), statutorily deemed to have evidentiary value, cannot be retracted at mere will of party - Held, yes Whether a statement made under oath deemed and permitted to be used in evidence, by express statutory provision, has to be taken as true unless there is contra evidence to dispel such assumption Held, yes Pursuant to a search conducted at residential premises of assessee. Assessing Officer computed undisclosed income on basis of clear admission made by assessee in sworn statement recorded under section 132(4) First addition was with regard to actual money paid by assessee for purchase of four properties Assessee had voluntarily submitted before ITO that amount shown in document with regard to purchase of four properties were not actual amounts and he had paid more than that shown in documents - Second addition was with respect to personal expenses - Last additions was of amount of Rs. 3 lakh which assessee claimed as an NRI loan in his cash flow statement and later in a reply stated to be a loan from his elder brother - Later on, assessee retracted from his statement and contended that admissions were ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat would constitute a good piece of evidence. The appellant has relied upon the decision in case of (2013) Bharat Kumar Azad 50Tax World 33 (JP) to argue that a statement recorded under this section is not conclusive proof. In this regard it is noted that in that case, it is recorded that no incriminating evidence found during search. However, in this case, there is incriminating material found and there are corroborative material in the form of seized documents and also the statement of other partners where such unaccounted profit is admitted. Therefore, the decision is not found to be applicable on the facts of the case. In view of the above discussion, the argument of the appellant are found to be without any merit and the decision of the AO is found to be justified. The addition made by the AO is upheld. This ground of appeal is treated as dismissed. Addition of Rs. 3,06,00,000/- claim of bogus development expenditure 7.7 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of Development Expenses. The assessee only purchased the land and associated with these three people for developing, plotting and marketing the land. All the development expenditure was born by Sh. Surinder Pal Singh Sahni, Shri Vipin Kumar Lodha and Shri Harvinder Singh. The appellant claimed that no such expenditure was incurred. The claim of the AO is same that in fact no such expenditure was incurred. The appellant as well as other partners have accepted the gross receipts from the project on the basis of seized document during search and post search enquiry. Therefore, the appellant has accepted the gross receipts from the project in the statement under oath which is supported by corroborative evidences. In these circumstances, the conclusion drawn by the AO is found to be correct that the actual profit earned by the appellant was more than the computation made on the seized document. The conclusion of the AO is also supported by the fact that one of the partner Shri Vipin Kumar Lodha has admitted in settlement petition that no such expenditure of Rs. 850 Lacs is incurred and therefore, the corresponding share of the applicant of this amount i.e. Rs. 136 Lakhs (850* ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted to have incurred AO comfortably ignored the same because it suited him best. The statement recorded is based based on the interpretation made by the partners at the time of search and post search enquiries. However, the interpretation is required to be corrected considering the facts of the case that one of the partner Shri Vipin Kumar Lodha has admitted in settlement petition that no such expenditure of Rs. 850 Lacs is incurred and therefore, the corresponding share of the applicant of this amount i.e. Rs. 136 Lakhs (850 *16%) is offered as additional income in AY 2015-16. Therefore, the addition of Rs. 1.62 Crores is made on the basis of admission made by the partners and this addition is also based on admission by one of the partners before the settlement commission. Therefore, it cannot be said that there is contradiction in the order of the assessing officer. It is argued that if the addition of the share of profit Rs. 1.62 Cr is sustained, the share of development expenses of Rs. 3.06 Cr must also be allowed following the concept of real income. As discussed, this amount is additional income which is not offered in the statement but claimed as expenditure which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank statements and bank ledger accounts as also from the block wise list of sales proceeds and the respective sales ledger accounts It is argued that all such agreements were already produced vide letter dated 05.11.2018 to the AO It is argued that the AO on one hand added Rs 1.62 Cr. as un-disclosed 36% and has made another addition on account of unexplained credit in the two bank accounts when the assessee explained that the same were deposited out of sale proceeds, which are part of the same transaction. Thus, the addition made by the AO tantamount to be a double addition of same income in the hands of the assessee. Therefore, the approach of the AO is contradictory and hence deserves a complete deletion It is argued that the Correct Amount is Rs. 1,75,31,192 only/-, Alternatively, and without prejudice, further submitted that subjected amount has been wrongly considered at Rs. 2,18,18,114 as against the correct amount Rs 1,75,31,192, which was the total deposits made in the current account with SBI It is clearly evident that Rs. 38,06,922 deposited in the SBI-SB account were transferred during the same previous year itself on 15/10/2014 through banking channel to the current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not found to be acceptable in this regard. The appellant furnished a calculation of profit from the receipts which are shown in cash book. The profit computed by the appellant was Rs. 28,39,000/- in his revised computation filed during assessment proceedings. The AO did not consider the calculation because the agreements were not furnished. However, the appellant furnished documentary evidence that the copy of the agreements were furnished. The AO has not considered the computation made by the appellant. The appellant stated that as per computation, the profit of Rs. 28,39,000/- was earned from the transactions which are appearing in the bank accounts. There is no basis explained for arriving at the profit earned by the assessee. As per the seized document, the profit of Rs. 4,50,00,000/- was earned out of sale consideration of Rs. 16,80,00,000/- as admitted by the partners during the search proceedings. The profit at the rate of 26.78 per cent was earned by these partners on these transactions. The transaction of R. 38,06,922/- is claimed to have been wrongly considered twice in the total of Rs 2,18,18,114/-. The appellant has considered Rs. 1,75,31,192/- as sale receipts. The pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions (e.g. making addition in absence of incriminating material during the course of search at the place of the assessee- following Abhisar Builders (Infra), recording of statement u/s131(1A) etc.), which has rendered the entire proceedings a nullity being without jurisdiction. Hence this Ground. Submissions A. Proceedings u/s 153A without jurisdiction (maybe u/s 153C): 1. The following submission were made before the CIT(A) on this aspect: A. Impugned assessment u/s 153A without jurisdiction: It is submitted that almost all the Hon'ble High Courts are unanimous on the point that assessment under s. 153A is to be framed on the basis of material found during the course of search or requisitioned under s. 132A of the Act at the place of the assessee. Any information/material gathered during the search and survey carried out on third person, cannot be used for the purpose of s. 153A. The AO may frame assessment orders either u/s. 153C or u/s. 147 of the Act as the case may be but not u/s 153A. Thus, based on the material collected during the search at the place of the third parties, no assessment can be made u/s 153A but for that purpose assessments u/s 153C or u/s 147 only co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such provision cannot be used interchangeably to suit one s own requirement. Any interpretation contrary to this, shall result in chaos and undesired anarchy in the working of the department. Further, there is no evidence of there been a partnership between the assessee and other three persons based on some return agreement/ partnership deed. There was no specific document found during search showing the partnership. If the ld. CIT (A) was so sure, he must have also ensured to get the assessee recovered the profit of Rs 1.62 Cr., (assuming the contention of accrual of income is correct though not accepted). Interestingly, search team never raised any specific question as to when and how the share of profit of Rs. 1.62 Cr. was paid to the assessee. 2.2 It is not case of Revenue that there was a partnership of the assessee with the other three persons. Consequently, the act/deed done by other persons should not be treated as act of the firm ( defined under S. 2(a) of the Indian Partnership Act,1932 as an act of a firm means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm. ) and impliedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person can proceed against such other person. However, in the case under appeal before us, admittedly, s. 153C is not invoked in the case of the assessee and the assessment is framed under s. 153A. We, respectfully following the above decisions of Hon'ble jurisdictional High Court, hold that during the course of assessment under s. 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person. 3.3 In the case of Hitesh Ashok v ACIT (2021) 214 TTJ (Ahd) 410, it has been held that: Search and seizure Assessment under s. 153A Scope In an assessment under s. 153A, income has to be assessed only on the basis of material found during the course of search against the assessee Cash book was not found from the premises of the assessee None of the additions, except addition of jewellery in the asst. yr. 2015-16 in the case of D was made on the basis of seized material As far as the case of SM Ltd. is concerned, the additions were made on the basis of certain information gathered during the investigation carried out by Investigation Wing in the case of an unconnected third perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. (Para 39) Accordingly, the initiation of the proceedings and the issuance of notice based thereon u/s 153A is complete nullity, void ab initio and being without jurisdiction and therefore deserves to be quashed. Consequently, the impugned assessment order deserves to be quashed in its entirety. 3.4 Kindly refer ACIT v. Atul Kumar Gupta (2023) 152 taxmann.com 99 (Delhi - Trib.), where it is held that: II. Section 153A, read with section 153C, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Search proceedings) - Assessment year 2011-12 - There was a search upon assessee and during course of search cash, jewellery and some foreign currency was found - Assessing Officer on basis of appraisal report had treated payments made on account of credit card as income of assessee under section 153A - During course of search of 'RG', a document was seized which contained a ledger account of 'D' which showed payment received by assessee during year under consideration in cash - Assessing Officer had stated that such payments had been made out of undisclosed income of assessee and made addition under section 68 - Assessee pleaded that as no docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 to new s. 148 is akin to s. 153A and s. 153C Corollary being that after seizing of operational period of s. 153A to 153D, the cases being dealt thereunder were circumscribed in the scope of newly substituted s. 148 Argument that by enactment of ss. 153A to 153D has not eclipsed s. 148 does not enhance the case of respondent to initiate the proceedings under s. 148 Operating field of ss. 153A to 153D and s. 148 are different Applicability of s. 153C in cases where the seized material related to or belonged to person other than on whom search is conducted or requisition made does not render s. 148 otiose Sec. 148 shall continue to apply to the regular proceedings and also in cases where no incriminating material is seized during the search or requisition Argument that s. 153C can be invoked in case there is incriminating material for all the relevant preceding years and otherwise s. 148 is to be resorted to, is misplaced Once there is incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted s. 153C is to be resorted to Notice under s. 148 is therefore liable to be quashed B. No material found and seized- No valid no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree persons. However, the lower authorities, particularly the ld. CIT(A) at page37-35 in para 6.5.6 has repeatedly stated that the assessee was carrying out the real estate business in partnership with the other three persons and in fact, all the four persons including the assessee, were partners they were bound to share the profit loss arising from the activity of the firm. Assuming what the ld. CIT(A) contented is correct though not admitted, if that is the situation then the search should be considered to have been carried out in the case of firm not in the case of all these four person individually and looking the matter from that aspect, the provisions of S. 153A shall apply on such person i.e. the partnership firm which was being run by the four partner jointly [as contended by CIT(A)] and therefore as per mandate of sec. 153A such initiation of proceedings and notice u/s 153A couldn t should have been issued only in case of the/to the said the firm not to the assessee individually. Pertinently the provisions start with non-obstacle clause and therefore, the said provisions will prevail over any provisions. 2. Needless to say, that person has already been defined u/s 2(31) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings u/s 131(1A) (APB 85-91), which has invalidated the very search carried out his place in as much as once a 'reason to believe' has already been formed as to the existence of the undisclosed income and search operations were carried out therefore, now formation of 'reason to suspect' has established that the competent officers having no reason to believe. Consequently, there was no valid search. 2. Similarly, statement of Surendra Pal Sahani was recorded on dated 01.09.2016 09.09.2016 u/s 131(1A) from whose possession seized documents at Pg-17,22 23 of Exhibit-41 of Party A-1 (PB 8-10) from the residence of one Sh. Surinder Pal Singh Sahni Pg. No. 62 of Exhibit-3 of party A-4 (PB 11-23) from the residence of Sh. Vipin Kumar Lodha allegedly showing that Rs. 4.50 Cr. were earned by launching Bajaj Enclave Scheme by four persons were 3. Reliance is placed in the case of Dr. Mrs. Anita Sahai v. DIT [2004] 136 Taxman 247 (All) (DC ) it was held that where notice is issued u/s 131(1A) after search and seizure, would show that there was neither reason to believe nor material before authorizing officer on basis of which he could issue a warrant u/s 132 and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 132 of the Act on a assessee and thus can t be advantageous for the assessee and moreover the proceedings u/s 153A are analogous to proceedings under Section 147 of the Act to the extent that these are proceedings for the benefit of Revenue and not that of the assessee. The assessee cannot be permitted, to convert these reassessment proceedings as his appeal or revision in disguise and seek relief in respect of items earlier not claimed in the original return of income. Reliance is placed on the judgment rendered by the Hon ble Bombay High Court in K. Sudhakar S. Shanbhag Vs ITO [2000] 161 CTR (Bom) 391 : [2000] 241 1TR 865 (Bom). This decision was rendered by taking notice of the principle laid by the Hon ble apex Court in CIT Vs Sun Engineering Works (P) Ltd. [1992] 107 CTR (SC) 209 : [1992] 198 ITR 297 (SC) to the effect that in reassessment proceedings, an assessee can neither claim nor be allowed a deduction that was not claimed in the original return. As such the assessment proceedings initiated on the basis of an action under Section 132 of the Act also cannot be utilised by the assessee to seek relief not claimed earlier. Hence this ground. Submissions: 1. The following s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alley Transport Company ltd (1970) 77 ITR 518(SC), wherein it was held a return filed under section 139(4) is a valid return filed under section 139(1). This decision was on the provisions of Income Tax Act 1922 which are similar to present Act. 3.3 Tulsidas Gopalji Trust vs CIT (1994) 207 ITR 368 (HC of Bombay) 3.4 CIT vs Rajesh Kumar Jalan [2006] 286 ITR 274 (Gauhati) where also it was held that to fulfill the requirements of section 54 the expiry of one year should be seen as per provisions of section 139 (4). 3.5 Fibrefill Engineers vs ACIT (2016)177 TTJ 556 (ITAT Delhi) In this case it was held that A bare perusal of this section (139(4)) makes it clear that the legislature itself has allowed the assessee to file return belatedly subject to fulfillment of conditions written in the said section. Therefore, once those conditions are met, then return filed by the assessee would for all technical purposes be considered being filed under section 139(1). Thus keeping in view the decisions noted earlier, we do not find any reason to deny the claim of the assessee on the ground of filing the return belatedly. 3.6 Chirakkal Services Cooperative Bank vs CIT (2016) 384 ITR 490 (Kerala) 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t earned from Bajaj Enclave project and have also offered the same for taxation in their respective hands. The AO further referred Q-8 of statement of the assessee recorded u/s 131 on 22.09.2016 (PB 85-91), in which the assessee allegedly admitted un-accounted profit of Rs. 1.62 Cr. from Bajaj Enclave and offered for taxation in the income for A.Y. 2015-16 vide Q-9 of his statement recorded on 22.09.2016 (PB 85-91). When asked, the assessee vide letters dated 24.10.2018 (PB 24) and 05.11.2018 (PB 14), submitted that the actual profit earned by the assessee from real estate activity is only Rs. 28,39,000/- [i.e. Sale Proceeds Rs. 2,06,40,000/- Less Purchase/Registry/Misc Expenses of Rs. 1,78,01,000/-]. He further stated that due to lack of knowledge of real estate, the assessee entered into an oral agreement with the above three persons i.e. Shri Surinder Pal Sahni, Shri Harvinder Singh Kohli and Shri Vipin Kumar Lodha. According to the oral agreement the assessee has to make investment in the purchase of land and these persons will develop the land and also deal with the customers. These persons having made negotiations with the customers, were having direct contact with / approach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 72,00,000/- in return filed u/s 153A of the Act. Shri Surendra Pal Singh Sahni has also offered undisclosed income of Rs. 1,44,00,000/- in his return filed u/s 153A of the Act. They all were partner in this scheme. Therefore, undisclosed income of Rs. 1,62,00,000/- is added in taxable income of the assessee. Hence this ground. Submissions: 1. At the outset it is submitted that the impugned addition is completely without any justified basis, corroborative evidences and merely based on surmises and conjunctures. These so-called admission is also not corroborated by any cogent evidence and on the contrary, was retracted later on therefore has no binding evidentiary value. The impugned addition deserves to be completely deleted for the various reasons detailed herein below: 2. Assessee not dealing with buyers: 2.1 The facts are not denied that the assessee was not having any prior experience of the field of Real Estate business and therefore, he joined hands with other 3 persons who were experts in the field. The assessee in answer to Q-8 clearly stated that he was lacking experience in the field of real estate and hence he made collaboration with other persons for the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssociates out of Rs. 4.50 crores and the same has been surrendered by him. In this connection, the admitted factual background is that the assessee is mainly carrying on the business of running a Kirana and confectionary shop, as stated earlier. The assessee has, neither in the past nor in the Later years, entered into such real estate project and therefore under this background, he had an occasion to meet Shri Harvinder PaL Singh, Surendra PaL Singh and Vipin Kumar Lodha, who are the experts of the field. From this discussion, he came to a conclusion that making investment in the Land and entering into a real estate project may result in a good amount of profit. During the course of further discussion, with reference to the Land he had purchased, these persons made projections and estimations and proposed that they may help the assessee out in developing and effective marketing thereof and if it is done, all of them may be earning a good amount of profits out of which, share of 36% was offered to him. ii) As per further discussions, the responsibility of marketing of the plot was undertaken by these three persons who were supposed to convince the prospective buyers to purchase the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed by her in sworn affidavit as well as other material on record, an inference could reasonably be drawn that winning tickets were purchased by her after race event - Held, yes - Whether, therefore, finding of majority of Settlement Commission that amount in question was not winnings from horse races but income from undisclosed sources was justified - Held, yes 2.5 The CIT(A) objected that assessee did not explain how the decision in Sumathi Dayal (Supra) supported his case. In fact, he wanted to match each and every fact found in that case with the facts of the present case, which is a misreading and which is not a correct manner of reading a Supreme Court decision. The following portion was extracted by himself at page 33 in para 6.5.3 of his order: This raised the question whether the apparent could be considered as real. Apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. As per CIT(A), what was apparent was that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to take it to a logical conclusion, which he completely failed to do. There was no whisper at all on account of such suspected utilization even of the profits if really were earned by the assessee and CIT(A) expected the assessee to do something which is impossible to perform. 3. Income Tax is a tax on real income, but not on hypothetical income. 3.1 No income can be taxed merely on suppositions, presumptions assumptions or on hypothesis. The law is well settled that to prove that there was some taxable income in the hands of an assessee, always lay upon the revenue. In the instant case there is absolutely no evidence at all successfully brought on record beyond doubts that income really accrued and the assessee received the alleged profit of Rs. 1.62 crore. The only and only basis is the admissions made by the third parties and the diaries/papers maintained by them in their handwriting, which itself were suffering from serious infirmities, factual and legal both and the so called admission of the assessee being tutored and influenced was also retracted and not acted upon. Moreover, the fact that there was a dispute between the assessee and the 3 parties who, must have earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount agreed through the Agreement to Sale and to fulfill the necessary formalities of entering into agreement to sale, etc. The assessee accordingly, faithfully and honestly recorded all the transactions of sale of the plots. The sale consideration was received partly by cheques and partly in cash. During the course, of this project, the assessee of course asked and reminded them to share the receipts w.r.t the share of profit they proposed but nothing happened and therefore, a dispute arose between the assessee and those persons. The assessee has not received directly or indirectly single penny over and above the agreement price. In other words, the share of 36% out of the expected net profit was never given to the assessee. In fact, all the activities i.e. marketing contacting with the prospective buyer and receiving the cash over and above the declared sale prices, might have been done off the record and absolutely without knowledge of the assessee. iv) Unfortunately, even up to the stage of the recording of the statements on 22.09.2016, he was given a strong assurance that he is not required to worry and that he shall be given the profits, as agreed, but nothing of this sort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... honestly declared and accounted for all the transactions of the sale of the plots which are supported by agreements to sale under para no 4. The agreements were duly notarized and witnessed, establishing the identity of the buyers. The purchase of the Land was duly supported by agreement. The working of actual resultant profit earned by the assessee of Rs. 28,39,000/- is given in para no 4 above. In considering above we request your good self for not to consider assessee's share of Rs. 1,62,00,000/- in un accounted profit from Baja] Enclave project merely on the basis of seized papers, appear to be deaf and dumb documents on which some rough jottings are mentioned which was found from other associates. The delay which occurred behind making the correct fact before your good self with request for not treating the un-accounted income of Rs. 1,62,00,000/- in the hands of the assessee as he accepted earlier during his statement recorded u/s 131(1A) of the Income Tax Act, 1961 during post search proceedings, is fully justified and under these peculiar facts and circumstances of the case, any other person of a reasonable prudence would have acted in a similar manner. The assessee ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could show that the assessee earned undisclosed income /profit from Bajaj Enclave Project. At the same time, the AO also miserably failed to bring on record any cogent evidence possession of the assessee, which suggest that the assessee earned such a huge income. 4.1.2 Admission not a final word: It is settled that mere admissions is not conclusive proof unless it is corroborated with tangible material and evidence. No doubt, the assessee in answer to Q-8 9 stated the undisclosed income and offered for taxation. However, it is trite law that the person making an admission is not always bound by it but, if shown that it was due to ambiguity, under tension or was against the facts, it can always be retracted. Kindly refer 72 TTJ 323 (Jd), 73 ITD 434 (Chd) 63 TTJ 236 (Del). It has been held in Pullangode Rubber Produce Co. Ltd. vs. State Of Kerala Anr. 91 ITR 18 (SC), Such admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the appellant who made the admission to show that it is incorrect and the appellant should be given a proper opportunity to show that the books of account do not disclose the correct state of facts Also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f evidence and it has to be considered while making assessment. But, no where it is stated in this provision that a statement recorded under this section becomes a conclusive proof or sanctum sanatorium for making addition of the admitted income. This issue has been churned by numerous courts as this issue has arisen every now and then in similar litigations, and the courts have settled the legal position by holding that on the issue that any admission made de hors any incriminating evidence found during search cannot be made a basis for making any addition in the hands of the assessee. On some of the decisions the ld. A.R. has relied and they have been extracted along with their held portion, in the earlier part of our order. Moreover, the assessee has disproved his [their] admission with the help of proof as discussed above. In this regard, following decisions are relied: 1. Pullangode Ruber Produce Co. Ltd. v State of Kerala and Another [1973] 91 ITR 18 [SC]. 2. Chitra Oevi vs ACIT [2002] 77 TTJ 640 JU] 3. Abdul Qayume v CIT [1990] 184 ITR 404 (All) 4. Jagdish Chand Gupta v ACIT [1996] 56 TTJ [Chd] 337 58 ITD 142 [Chd] 5. Krishan Lal Shiv Chand Rai v CIT 88 ITR 293 [P HJ 17) . A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns advanced at the bar and have gone through the impugned judgment and the material available on record. It is not in dispute that the entire case of the appellant Revenue is based on the confession of the assessee which was extracted during the search/seizure and survey proceedings. It is also not in dispute that the assessee retracted the confession on 27.07.2009. It is also an admitted position from the record that the allegation of the Revenue that the assessee had undisclosed income over and above what was mentioned in the return, is based sheerly on the confession and no corroborative material or substantive proof was collected by the Revenue during the search/seizure and survey proceedings. In this background, we are of the firm opinion that the circular No.286/2/2003-IT (Inv.II) dated 10.3.2003 which has been reiterated in circular F.No.286/98/2013-IT (Inv.II) dated 18.12.2014 issued by the Board and the general principles of appreciation of evidence would definitely come into play and while appreciating the rival contentions, the Court would definitely require corroboration of the confessional statement by credible and tangible evidence failing which, it will be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial, which is in the form of documents, cash, gold, etc. It is, obviously to know the source thereof, on the spot. Beyond that, it is not a limited licence, to an authority, to script the financial obituary of an assessee. 19. At the cost of repetition, we observe that if the statement made during the course of search remains the same, it can constitute the basis for proceeding further under the Act even if there is no other material. If, on the other hand, the statement is retracted, the Assessing Officer has to establish his own case. The statement that too, which is retracted from the assessee cannot constitute the basis for an order under section 158BC of the Act. 4.3 Valid reasons behind retraction: The alleged admission was not made voluntarily in as much as the assessee was highly tensed and remaining under mental trauma developed hypertension. Not having faced such a situation, he was unable to take any decision, which is a common phenomenon in every survey and search. It has been held that in the cases of survey and search, the possibility of tension and surcharge atmosphere can t be ruled out in ACIT Vs. Jagdish Naraian Ratan Kumar 22 Tax World 573 (JP), since approved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder other provisions of the Act (PB 85-91). Therefore, in absence of corroborative material found during search at the place of assessee, no addition could be made merely on the basis of statement recorded u/s 132(4) of the Act which did not constitute conclusive evidence and having been given under mental duress and pressure created by the search team and other 3 persons, who had already admitted and offered in their statement in their wisdom to suit their purpose. Moreover, admission was not acted upon by not offering the income in the ROI filed on 07.04.2017 u/s 153A. It is settled rule of evidence that unless a retracted confession is corroborated it cannot be termed prudent to base the decision on the confessional statement alone. 5. No evidence at all: A. Law is well settled that without evidence, no addition can be made whether it is a case of completed /unabetted or abetted assessment. The search took place on dated 01.07.2016 and concluded on the same day, however, nothing was seized as evident from Panchnama (APB ). Consequently, no notice can be issued u/s 153A. 5.1 The assessee repeatedly contended that these documents found and seized from the other three persons and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t power which enables the Revenue to reopen at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under section 132 incriminating material justifying the reopening of the assessments for six previous years is found that the invocation of section 153A qua each of the AYs would be justified. 5.4.3. In the case of Jai Steel (India) v. ACIT [2013] 36 Taxman 523 (Raj), it was held that, Section 153A bears the heading Assessment in case of search or requisition . It is well settled as held by the Supreme Court in a catena of decisions that the heading or the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terated, in case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 5.4.7 The law on the issue involved is no more Res Integra in as much as very recently the Hon ble Apex Court in the case of PCIT vs. Abhisar Builders (2023) 332 CTR (SC) 385 has held as under: 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinates to take note on the said decision and to refer the same before the appellate authorities (CIT (A), ITAT, HC) where the appeal is pending as stated in para 6 7. B. Statement of assessee not an incriminating material : 5.5 In the case AO v. Himalaya Darshan Developers (Gujarat) (P.) Ltd [2021] 128 taxmann.com 435 (Ahmedabad - Trib.) (DC ) held as under: Besides the above, the Assessing Officer has also made reference to the statement of the director of 'SJSL' recorded under section 132(4) and statement of another director under section 131(1A), wherein it was admitted that the company namely 'SJSL' is engaged in providing accommodation entries. Thus the same is a paper company. On perusal of the statement recorded under section 133(4) reproduced by the Assessing Officer in his order there was remarks made by such director to the effect that material/document seized during the search does not belong to the PS i.e. 'SJSL', or belong to the assessee company. In this regard, there were no incriminating material against OP was found in the search. Further, section 153C emphasize that there should be material or document seized which belong to the OP. As su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as has been explained by this Court in Commissioner of Income Tax v. Harjeev Aggarwal (supra). Lastly, as already pointed out hereinbefore, the facts in the present case are different from the facts in Smt. Dayawanti Gupta v. CIT (supra) where the admission by the Assessees themselves on critical aspects, of failure to maintain accounts and admission that the seized documents reflected transactions of unaccounted sales and purchases, is non-existent in the present case. In the said case, there was a factual finding to the effect that the Assessees were habitual offenders, indulging in clandestine operations whereas there is nothing in the present case, whatsoever, to suggest that any statement made by Mr. Anu Aggarwal or Mr. Harjeet Singh contained any such admission. 5.7 The relevant paragraph of the decision of the Hon ble Hon ble Delhi High Court in the case of Harjeev Agrawal (supra) also reproduced as under: 20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words evidence found as a result of search would not take within its sweep statements r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording any statement from them by invoking the powers under section 132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under section 132(4) of the Act, does not have any evidentiary value. This provision embedded in sub- section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement. The finding of the Tribunal was based on the above well settled principle. 6.1 Documents found and seized from the other party premises and not from the assessee: It is further submitted that the documents found seized (i.e. paper number 17, 22 23 of Exhibit- 41 of Party A-1) from the residence of Sh. Surinder Pal Singh Sahni Pg. No.62 of Exhibit-3 of Party A-4 from the residence of Shri Vipin Kumar Lodha for which they explained that Rs. 4.50 Cr. was total profit earned from Bajaj Enclave Project. Therefore, the AO presumed that the assessee might have earned un-disclosed income of Rs. 1.62 Cr. The AO also took support of income offered by Shri Vipin Kumar Lodha of Rs. 72 Lakh b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the figure of 7 lakh shown against the figure of 68 lakh shows the extra expenditure incurred by them jointly of 7 lakh each. (Internal page 33, PB 99) Seized Page 62 (PB 13) shows the figure of 65 plus 57 and 37 i.r.t the other project Salasar Dham for which Shree Surendra Pal Singh Sahani is responsible who managed the site project (internal page 35 and 36 , PB 101 and 102) b. Sunder Pal Singh Sahni (PB 106 and 107) He explains some of the papers related to Salasar Dham and Bajaj Enclave Project. Page 13 is a paper showing rough calculation of Bajaj Enclave Page 13, 17, 19, 22. At the back side 22 some estimated payments made by him. (Internal page 39, PB 106) c. Statement of Harvinder Singh Kohli dt 07.09.2016 (PB 108 to 113) Seized Pages 22 to 40 shows the details of receipt of the allotment of plots in the Bajaj Nagar Colony. (Internal page 2, PB109) d. Statement of Harvinder Singh Kohli dt 09.09.2016 ( PB 114 and 115): Seized Page 73 and 74 shows the details of the instalment received on account of sale of plots in Bajaj Enclave. Seized Page 75 shows estimated profit from Bajaj Enclave. Seized Page 76 shows account settlement between partners relating to Bajaj Enclave. Seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Birla Group and Sahara Group, we are of the opinion that it would not be legally justified, safe, just and proper to direct investigation, keeping in view principles laid down in the cases of Bhajan Lal and V.C. Shukla (supra). 7. No opportunity for cross examination - Addition to be deleted: The law is well settled that the assessee, against whom the evidence/witness are being used, must be given an opportunity for cross examination. In this case however, admittedly the AO has not at all afforded any opportunity to cross examine the other 3 persons, the statements of whom were heavily relied upon by the AO for making the impugned addition/s. Reliance is placed on Andaman Timber Industries Vs. Commissioner of Central Excise (2015) 281 CTR 0241 (SC) /127 DTR 0241 (SC). In the recent case of CIT vs Sunita Dhadda [2018] 100 taxmann.com 525 (Rajasthan), the Hon ble Rajasthan High Court has taken similar view, which has now been affirmed by Hon ble Apex Court also in the case of CIT vs. Sunita Dhadda and SLP no. 9432/2018. of the revenue was rejected vide order dated 28.03.2018. In this case the Hon ble Rajasthan High Court has considered several decisions on this aspect. 8.1 The CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eny that there was no mode prescribed. Hence, it was too much to expect from a poor layman assessee. 8.4. The CIT(A) admitted that the assessee was not present at the time of search at his residence, but later on offered the undisclosed income in the statement recorded during the course of the poor search proceedings , yet however, he attached the same evidentiary value with full legal force with the support of S.132(4), which against the law. Further, the ld. CIT(A), wrongly stated that, there was a clear detection of incriminating material during the search proceedings, of Surendra Pal Singh Sahani and other associates , which is against the express legislative intention. 8.5. As per the mandate of S.153A, in the case of completed/unabated assessment, (or otherwise also) no addition is legally possible unless an incriminating material is found during search from the control possession of the searched person (assessee) only without considering the seized material found (if any) from the control and possession of a third party/s. The later situation of fact may hold good for invoking S. 153C but not for valid initiation of proceedings under S. 153A, (which aspect has been dealt wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When asked, the assessee vide letter dated 05.11.2018 submitted that assessee never incurred any expenditure on account of Development Expenses. The assessee only purchased the land and associated with these 3 persons for developing, plotting and marketing the land. All the expenditure was born by the other 3 persons. However, ignoring the reply of the assessee, the AO finally concluded that the claimed expenditure of Rs 8.50 Cr and the development was never incurred and it was merely an attempt to reduce the taxable income, it was a claim of bogus expenditure made. Further, the AO was of the view that the assessee failed to submit the information/details/ documents in respect of incurring of expenditure for plotting on plain land. Finally, he made the addition of assessee`s share of Rs. 3.06 Cr. (36% of Rs. 8.50 Cr.) on account of bogus expenditure incurred. In the first appeal, the ld. CIT(A) also confirmed the addition, holding as under: 7.7 .As discussed, this amount is additional income which is not offered in the statement but claimed as expenditure which is not real. Therefore, the real income includes this amount also in addition to the amount of Rs. 1.62 Crore already sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, while assessing any income on the basis of incriminating documents, it should be read in entirety. Either this paper is to be considered as rough jotting or otherwise it has to be read in entirety and not in part. Whatsoever mentioned on these papers has to be considered in totality . 3. Document has to be read in its entirety: The facts are not denied that on the seized paper itself, there was entry of the incurring of the expenditure of Rs. 8.05 Crores, based on which the A.O. alleged sale of proceeds and undisclosed income therefrom. Since both the entries of receipt and payment, were made on the seized document, the A.O. could not read a part of it and ignored the other. Law is well settled that an evidence has to read in its entirety, one cannot read the part which suits him best and to ignore the other which does not. Otherwise, following the principal of tax in real income only, the A.O. is bound to reduce the expenditure. 4. Statement supports: Interestingly, in Q-8 (heavily relied upon by the AO), the assessee confirmed the fact of purchasing land as also that he associated with these three persons for doing the development and marketing. However, the AO while making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proach of AO: The learned AO at Pg. 21 of the impugned order although clearly stated the 4 associate persons in their respective posts search statements and their replies have been admitted to incurred of Rs. 850.00 lakhs as development expenses , but at the same time, he doesn t believe the quantum of the expenditure incurred for the suspicion he entertained. Whereas, he could comfortably make addition Rs. 1.62 crore (out of the profit of Rs. 4.50 crore) merely on the basis of the admission made by the other 3 persons and the assessee but at the same time, here when the other 3 parties have again admitted to have incurred Rs. 8.50 Crores, the AO comfortably ignored the same because it suited him best. Thus, there is a clear contradiction and double standard adopted by the AO, which is not permeable in law. Such an inconsistent approach cannot be approved. Therefore, the entire addition deserves to be deleted in full. 6. Alternatively, if the addition of the share of profit Rs. 1.62 Cr is sustained, the share of development expenses of Rs. 3.06 Cr must also be allowed following the concept of real income. Additional Submission: At the outset it is submitted that in the remand repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e can't be any pick and choose theory applied. However, simply because Sh. Vipin Lodha had admitted the income of his share out of Rs. 8.50 crore offered before the Settlement Commission, there is no valid reason why the assessee should also be burdened with this addition. In fact, the assessee right from the beginning has consistently taken a stand that these three persons were involved in the plotting and marketing, negotiating with the customers and even in receiving the agreed sale proceeds from them and even the assessee submitted in so, in response to Q. No. 8 (stated above) vide letter dated 05.11.2018, stated that whether these persons had incurred some expenditure or not, the assessee was not at all concerned with this aspect. If as per the statement of these three persons and the seized document, it is held that some expenditure was incurred, then the net profit being Rs. 4.50 crore only be considered and consequently it is only Rs. 1.62 crore could be considered at the best or at the worst in the hands of the assessee (if assuming so, though not admitting). However, even then it is held, based on the statement of Shir Lodha that no such expenditure was incurred at al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay hold good so far as the other three persons are concerned but the assessee could not have been made liable for this allegedly earned additional income as interpreted by the CIT(A). The CIT(A) therefore, seriously erred in dismissing this grounds appeal which was based purely on surmises, conjectures, assumptions and presumptions, and ignoring that there was no iota of evidence found referring to the assessee in the case of any of the searches nor the assessee admitted of such additional income. A-GOA-6 Impugned addition of Rs. 46,94,853/- u/s 68 of I.T. Act on account of the alleged unexplained credit in the Bank Account: Department s Ground of Appeal (in short D-GOA ) -1-3: Deletion of double addition of Rs. 38,06,922/- (out of total cash deposits Rs. 2,18,18,114/-) wrongly allowed by ld. CIT(A): [(AO Pg. 23-24 Pr 9)/CIT(A) Pg. 66 Pr.8.8] Facts: During the assessment proceedings u/s153A, the AO noted that the assessee deposited Rs. 2,18,18,114/- in two bank accounts (Rs.41,06,922/- in Bank A/c No. 612400009561 and Rs. 1,77,11,192/- in Bank A/c No. 61241432737). When asked to explain the source of the same, the assessee vide letter dated 24.10.2018 submitted that the amount of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le receipts. The profit which must have been earned on the sale transaction of Rs. 1,75,31,192/- at the rate of 26.78 per cent profit should have been declared at Rs. 46,94,853/-. Therefore, the addition is confirmed to the extent of Rs. 46,94,853/- considering it as profit from the transactions credited in the bank accounts. It does not include transactions which are not routed from the bank accounts and the addition made of Rs. 1.62 Crore profit is out of sales completely unrecorded and not routed through bank accounts. In other words, the cash amount which is received as sale consideration but not deposited in bank accounts are not included in this amount of addition. Hence, the amount of addition of Rs. 1.62 Crore upheld while deciding ground no. 1 is completely earned from different transactions which are not done through banking channel. The transactions as reflected in the bank account are considered for confirming addition which is being discussed in this ground of appeal. Accordingly, addition of Rs. 2,18,18,114/- made by the AO is reduced to Rs. 46,94,853/-. The appellant gets a relief of Rs. 1,71,23,261/-. Accordingly, addition made by the AO is confirmed to the extent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to various customers have already been submitted vide letter 24.10.2018 and copies of sale agreement produced herewith for your kind verification. In case your good self-desire, we may submit the copies of all the sale agreement before your good self. Otherwise merely because of non-production of the agreements, such a huge addition could not be made. The assessee is having copies of agreements in each and every case, which were offered to the AO also. Some exemplary agreements are available in the paper book (PB 123-140) and the rest can be submitted if so desired. 1.3. In this regard, the assessee filed a detailed written reply on 24.10.2018 (PB 24-25). The extract of the submission is as under: As regards explanation of sum of Rs. 2,18,18,114/- credited in two bank account (Rs.41,06,922 in bank account no. 61240009561 Rs. 1,77,11,192 in bank account no. 61241432737). In this respect we submit that during above year assessee has received Rs. 2,06,40,200/- in cash/cheque towards sale of various plots situated at Bajaj Enclave and deposit/credited the same in his bank account. Copy of bank statement, bank Ledger account and detail of plot wise sale enclosed herewith. (Page no.1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t legal and factual allegations. 5. Correct Amount- Rs. 1,75,31,192 only/-: Alternatively, and without prejudice, further submitted that the impugned addition has been made u/s 68 on account of the deposits made in the two bank accounts of the assessee. Without prejudice to our other submissions explaining the source of the subjected amount, otherwise the subjected amount has been wrongly considered at Rs. 2,18,18,114 as against the correct amount Rs 1,75,31,192, which was the total deposits made in the current account with SBI. It is clearly evident that Rs. 38,06,922 deposited in the SBI-SB account were transferred during the same previous year itself on 15/10/2014 through banking channel to the current account, which fact is clearly evident from the bank statements [PB (SB 26-28) and (CA 29-36)] as from also from the copies of the bank ledger accounts in the assessee books (PB 44 A Current account ledger) and (PB 37-38 SB account ledger). Thus, to the extent of the Rs 38,06,922 the deposits have been wrongly considered twice in the total of Rs 2,18,18,114 stated by the AO. Therefore, the entire addition kindly be deleted in full. 1.2 Further in response to Remand Report of AO fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Cheque returned entries have also been considered unexplained, which clearly shows non-application by the ld. AO. Hence, alternatively, to the extent of Rs. 41,06,922-/ there was nothing, even remotely, to be considered as unexplained. 2. Complete copy of the Cash Book starting from the very opening day i.e. 01.10.2014 which was the first day of the commencement of the business by the assessee till 31.03.2015 showing opening closing balances as also day to day closing balances of cash in hand is also being submitted (PB 144-148). Pertinently, the entire cash receipts, particularly the entire amount of cash deposited in the aforesaid two bank accounts, under consideration, duly reconciled with the said cash book. ----xxx--------xxx--------xxx--------xxx--------xxx--------xxx---- 4. As told to us, statement of the assessee were not recorded u/s 132(4) but there is no reference to any such statement in the impugned assessment order. 2. Part sustenance of the addition to Profit of Rs. 46,94,853/- completely legally unjustified: 2.1 Firstly, the ld. CIT(A), after due verification of the entire record placed before him, after obtaining the remand report and in the light of the detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed vide letter dt.07.02.2022 (APB 180-181). (his comments on the claim of the assessee of regular maintenance of the accounts vide pg. 36 pr 6.5.5 is being separately commented). The ld. CIT(A) did not find any fault in the cash book, copies of ledger accounts, the sale agreements and the details showing the receipt of the sale proceeds of different schemes in Bajaj Enclave and the specific submission made before the AO for working of the profit of Rs. 28.39 lakh at page 23 Pr. 9 of the AO (and available at APB 15) which shows that the assessee incurred cost of Rs. 1,75,50,000/- towards cost of land along with other ancillary exp. Further, the fact of purchasing the plot by the assessee can't be disputed, which was based on the registered purchase agreement. 2.4 The CIT(A) not having rejected any of the supporting documents which clearly depicted the actual profit earned by the assessee Rs 28.39 lakh out of the declared sale consideration and was also declared in the Revised Computation as admitted by the CIT(A) himself and even by the AO at page 23, there was no reason for the CIT(A) to have applied now higher GP rate of 26.78% as against the declared profit rate of 13.75%. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of Rs. 46,94,853/-. Thus, it can be said that the Revenue is also in agreement (in their D-GOA 2) with the ground A-GOA 6 taken by the assessee. 3.4 However, the allegation that agreements were not submitted is factually incorrect in as much as every time and opportunity, the assessee produced these registered documents before the A.O. and CIT(A) both as is evident from the written submission dated 17.01.2022 para 1.2 (APB 169) also reproduced herein above. Otherwise also, these were the registered agreements and were available in the public domain. Since there were voluminous records hence, they were only produced and if any of the authority so wanted, copies of the selected one or all of them could have been filed before the authorities below. But otherwise also such an allegation is completely irrelevant in the context of the ground taken by the Revenue. 3.5 While explaining the cash deposits of Rs 2,18,18,114/-, the assessee, before the law authorities specifically submitted that AO wrongly considered Rs 2,18,18,114/- as against the correct amount Rs 1,75,31,192/- which was the total deposits made in the current account with SBI. It is clearly evident that Rs. 38,06,922 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 732 to 734/CHNY/2023 17-38 5. Tirupati Construction Company vs. ITO DB CWP No. 17651/2022 65-74 6. Shyam Sunder Khandelwal ors. vs. ACIT (2024) 236 DTR (Raj) 328 75-83 7. Smt. Smrutishuda Nayak vs. UOI (2021) 323CTR 617 84-97 8. Mrs. Anita Sahai vs. DIT (2024) 136 Taxman 247 98-103 9. Bharat Kumar Azad (2013) 50 Tax World 33 (JP) 104-108 10. CIT vs. Naresh Kumar Jain (2014) 3699 ITR 171 109-114 11. CBDT Circular No. 286/2/2003 dated 10.03.2003 115 12. PCIT vs. Abhisar Builders (2023) 332 CTR (SC) 385 116-129 13. PCIT vs. Best Infrastructure Pvt. Ltd. 397 ITR 82 (Del.) 130-145 8. The ld. AR of the assessee drawing our attention to page 12 13 of his paper book wherein the panchanama of the search conducted in the case of the assessee is placed on record from where he draw our attention to date and time of starting of search and completion of search which reads as under:- Thus the ld. AR of the assessee expressed his surprise as to the conduct of the search in the case of the assessee which remained 5 minutes only and nothing has been found incriminating from the premises of the assessee. 9. The contentions made in the case of the assessee are based on the document found at the premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As regards the ground No. 3 raised by the assessee, the ld. AR of the assessee submitted that no addition can be made if there is no incriminating document found no addition can be made. To drive home to this contention he relied upon the decision in the case of Kabul Chawla case [2015] 61 taxmann.com 412/234 Taxman 300/380 ITR 573 (Delhi) and PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC). 11. As regards ground No. 4, the addition of Rs. 1,62,00,000/- being alleged undisclosed profit and Bajaj Enclave. The assessee submitted detailed submissions before lower authorities as to why the said income cannot be added in the hands of the assessee. The assessee is merely landowner had discussion with the other person who are responsible to develop the property and market the same by finding buyer of the property, there is no further role of the assessee in the process. Therefore, the alleged working of undisclosed profit has nothing to do with that of the income of the assessee. The revenue is relying merely on the statement recorded in the case of the assessee submitted at page No. 86 to 91 of the paper book. There is no corroborative evidence alleged to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver incurred any expenditure on account of development expenditure. The assessee only purchased the land and associated and those three persons were to develop, plot and market the land. All the expenditure to be borne by those three persons and the assessee has no role to play. Ignoring that factual aspect of the matter, the AO added a sum of Rs. 3,06,00,000/- (36.5% of 8.5 crores) on account of bogus expenditure incurred. The assessee stands were consistently clear that he is the only landowner partner, he is not involved or acknowledged incurring expenditure in respect of alleged land. The ld. AR of the assessee also submitted that seized document be read as a whole and not in part as it is evidently clear that both the entries of receipt of payments were made recorded in the alleged seized document. The AO should not read it apart of it. On the one hand, the AO taxed profit and taxing the expenditure on the said project is also not correct. Based on that argument, the ld. AR of the assessee stated that addition of Rs. 3,06,00,000/- is required to be deleted. 13. As regards ground No. 6, the addition was made by the AO for Rs. 2,18,18,114/- which have been reduced to Rs. 46,94,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posit made in the bank account. The ld. CIT(A) has, based on written submissions already granted substantial relief to the assessee. So far as to the receipt of sales considerations recorded in the bank account of the assessee and as regards the profit of the project and unexplained expenditure incurred by the assessee on the Bajaj Enclave project the ld. DR relied upon the detailed finding recorded in the order of ld. CIT(A). He also submitted that nowhere assessee dispute the fact that there were four partners in the project and therefore, ld. DR on that aspect of the matter relied upon the order of the ld. CIT(A). Ld. DR thus concluded that when based on the same documents other partners have already adhered to the disclosure made why not in the hands of the assessee. The assessee has willfully given declaration in statement recorded post search and there is no retraction by the assessee from the statement so made. The assessee did not dispute the working of profit at Rs. 4.5 crores thereby consequential share of profit for an amount of Rs. 1.62 crores have rightly been added in the hands of the assessee. The ld. DR similarly also relied upon the finding of ld. CIT(A) on the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aj Group relates to Bajaj Enclave Project wherein the assessee is the owner of the land where that Bajaj Enclave Project being developed. The ld. AO noted that as per seized document vide page no. 17, 22 23 of Exhibit- 41 of party A-1 found from the residence of Shri Surinder Pal Singh Sahni page no. 62 of Exhibit-3 of party A-4 from the resident of Shri Vipin Kumar Lodha. On conjoint reading ld. AO found that a sum of Rs. 4,50,00,000/- was earned by the persons named herein below which remained unaccounted, as detailed below : Bajaj Enclave Particulars Amount Rs. Total Sales Realization (472x356) 1680 Less Road + Payment (30 + 1200) 1230 Total Un-disclosed profit 450 450*.36 Khandelwal Khandelwal 162 AD 72 B 72 R 72 V 72 In his explanation to the above-mentioned seized documents, Shri Vipin Kumar Lodha submitted that Rs. 4.50 Crore is total profit earned from Bajaj Enclave project. When questioned about the abbreviations used, he submitted that for Shri Surinder Pal Singh Sahni short abbreviation is AD R means his own Benami shares, whereas B i.e. Bucchi- nick name of Shri Harvider Singh Kohli and V is Vipin Kumar Lodha. These four associates in their respective post search statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was carried out only for five minutes starting at 2.55 and ended at 3.00. The ld. AO through ld. DR did not place on record the nature of document found at the premises of the assessee which are incriminating in nature. With this basic fact now, to decide the technical ground raised by the assessee and before going further on the issue we would like to go through the relevant provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962, which are reproduced herein under: Relevant part of section 153A of the act Assessment in case of search or requisition 153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 but on or before the 31st day of March, 2021, the Assessing Officer shall ( a ) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then, ( A ) the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or ( B ) such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to ( i ) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; ( ii ) break open the lock of any door, box, locker, safe, almirah or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r issuing the authorisation and shall bear his seal. xxx xxx xxx If we peruse all these provisions together i.e. provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962 activate the applicability of provision of Section 153A of the Act will arise. As it evident that the search is initiated on the strength of warrant of authorization issued by the authorizing officer to the authorized officer in terms of Section 132 of the act read with Rule 112 of the Income-tax Rules'1962. Search warrant can be issued against any person who is falling within the scope of either or more of the conditions as mentioned in clause ( a ),( b ) or ( c ) of section 132(1) and against whom reasons to believe has been formed based on the possession of information. Therefore, the warrant of authorization so issued should specify the name of the person or persons against whom it is issued along with the complete address of the premises to be searched. In other words, if a warrant of authorization has not been issued in case of a person, the provisions of Section 153A cannot be initiated in his case. Having discussed the relevant provision and rules now the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings ( i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. In clause ( iv ) above, the Hon ble Cout held that Obviously an assessment has to be made under this Section only on the basis of seized material . In clause ( v ), the same is reiterated by holding In absence of any incriminating material, the completed assessment can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and ( iv ) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. Based on the discussion so recorded and the fact of the case is that in the search conducted at the premises of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons will develop the land and also deal with the customers. These persons having made negotiations with the customers, were having direct contact with / approach to the customers. The assessee only received the amount from the buyers as per sale agreements and after receiving the full payment executed the legal papers in favour of the customers w.r.t. transfer. The assessee was not in the knowledge of excess money, if any received by these people from the customers. However, it is a fact that the assessee did not receive anything over and above the amount showing sale agreement amount. Moreover, the assessee recorded all these transactions in his books of account fairly. There was no any iota of evidence found (showing un-disclosed profit earned by the assessee in the sale transaction if any) at the premises of the assessee except his solitary statement which was given by the assessee with the advice of his associates during the search. In fact, these amounts were also appearing in the documents found and seized from the third-party premises. Based on these observations ground no. 4 raised by the assessee is allowed as the actual profit earned by the assessee has already been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,18,18,114/- on account of unexplained credit u/s 68. Before the ld. CIT(A) the assessee filed various details in support of the credit made in the bank account. We note that ld. CIT(A) not having rejected any of the supporting documents which clearly depicted the actual profit earned by the assessee Rs 28.39 lakh out of the declared sale consideration and was also declared in the Revised Computation as admitted by the CIT(A) himself and even by the AO at page 23. Thus, there was no reason for the CIT(A) to have applied in the appellate stage to higher GP rate of 26.78% [ derived from the seized material of total estimate of project] as against the declared profit rate of 13.75%. The revenue has not taken any specific ground against the deletion of Rs. 1,71,23,261/- by the ld. CIT(A). Thus, we see no justification behind making a new addition of Rs. 46,94,853/- while deleting the addition of Rs 2.18 crore by him. Based on these observations ground no. 6 raised by the assessee is allowed. 23. Ground no. 7 raised by the assessee is against the charge of interest u/s 234A 234B of the Act which are consequential in nature and the are not required to be adjudicated. 24. Ground no. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Rs. 2,18,18,114/- were found credited in respect of which he could not offer any satisfactory evidence during post search enquiry. He only claimed in reply to Q. No. 7 that the booking amount have been deposited in his bank account. The applicant has filed submission which is reproduced as under: As regards explanation of Rs. 2,18,18,114/- credited in two bank account (Rs. 41,06,922 in bank account number 61240009561 and Rs. 1,77,11,192/- in bank account number 61241432737). In this respect we submit that during the above year assessee has received Rs. 2,06,40,200/- in cash/ cheque towards sale of various plots, situated at Bajaj enclave and deposit / credited the same in his bank account. Copy of bank statement, bank ledger account and details of plot wise sales enclosed here with. (Page no. 1 to 46). Against this the assessee has incurred cost of Rs. 1,75,50,000 towards purchase of land and other expenses also. ( copy of purchase agreement as well as source of payment towards purchased enclosed here with page number 47 to 59 ). In view of above your proposition for treating the entire income of Rs. 2,18,18,114 is not correct The submission of the applicant has been pursued b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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