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TMI Blog2024 (11) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... se and there is no record which shows that the above said property was rented out as per the valuation report found during the search. It is another matter whether the valuation report can be termed as incriminating material without corroborating with the assessee s books of account or return of income. It is settled law that incriminating material found during the course of search is year specific was that addition could be made in the case of unabated assessment. Since the material found/valuation report is dated 08.04.2010 it cannot be considered as an incriminating material. Even the Assessing Officer has not verified and recorded a satisfaction that this valuation report was actual or the same was acted upon by the assessee. Merely because certain documents were found in the premises of third party, the same cannot be utilised to make the addition as incriminating material without there being corroboratory evidence to show that such income was not offered to tax . In this case, we observed that merely based on the availability of valuation report, the Assessing Officer proceeded to make addition without properly giving explanation how it can be treated as incriminating materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of assessment proceedings as perused form the records. Therefore, the ground of the appellant that the initiation of proceedings u/s 153C is bad in law does not hold any merit. 4. With reference to ground no.3, ld. AR submitted that the assessments framed for AYs 2011-12 to 2013-14 u/s 153C of the Act are bad in law, without jurisdiction and barred by limitation, since six years have to be reckoned from the date of recording of satisfaction by the AO of the assessee (AO of searched person and assessee are common) which in the instant case is 18.01.2021 and thus assessment could have been validly framed u/s 153C of the Act for AYs 2014-15 to 2019-20 only. Therefore, he submitted that assessment framed for AYs 2011-12 to 2013-14 are bad in law, without jurisdiction and beyond the scope of assessment framed u/s 153C of the Act and thus, are liable to be quashed as such. In this regard, he placed reliance on the judicial pronouncements i.e. Pr. CIT vs. Karina Airlines International Ltd. (Del.) 165 taxmann.com 421 and CIT vs. Jasjit Singh 458 ITR 437 (SC). 5. On the other hand, ld. DR for the Revenue agreed that the satisfaction was recorded on 18.01.2021, however he also broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition was proposed by the Assessing Officer relating to rental income, we shall discuss only the issue relating to rental income only. We observed from the assessment order that assessee has submitted as under :- C. With reference to your query in respect of estimated monthly rental value of property at Gurgaon of Rs. 1,90,53,692/- reported by the valuer in his valuation report dated 08.04.2010 not shown in the ITR of the assessee we would like to submit that the agreement for letting out the property on rent was never been materialized and hence rent was neither accrued nor received by the assessee company. As no rent was received and hence there is no question of showing rental income in the return of the assessee company. 9. After considering the above submissions, the Assessing Officer observed that in the Valuation Report dated 08.04.2010 which was found and seized during the course of search shows that K.R. Tawlar, Chartered Engineer has valued the monthly rental for the commercial property at Gurgaon was reported at Rs. 1,90,53,692/-. Since the assessee has not shown abovesaid rental income in its return of income, he proceeded to determine the income for the year based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to be deleted 4.1 That having regard to the facts and circumstances of the case, and in law the learned AO while making the above addition arbitrarily and, mechanically rejected the explanation and evidence tendered by the appellant and made the addition by drawing subjective, premeditated and preconceived inferences therefore the same is not sustainable. 12. At the time of hearing, ld. AR for the assessee submitted as under :- 8. That, at this juncture, it is submitted that, the finding of CIT(A) on merits of the addition at page 6, para 7 of his order is extracted as under - It has been recorded by AO in the assessment order that the document regarding valuation report submitted by KR Talwar, government approved valuer dated 8.4.2010 has been found and seized during the course of search. Thus, the ground of the appellant that the notice u/s 153C of the Act has been issued in the absence of incriminating material in case of unabated assessment does not seem to be factually correct and convincing. 9. Furthermore, with respect it is stated that assessments for A Y 2014-15 to 2016-2017 were final/completed on the date of recording of satisfaction by the AO of the assessee i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material placed on record. We observed that a document was found during the search conducted in the case of Harvansh Chawla and valuation report was dated 08.04.2010 seized from the premises of Harvansh Chawla. Since the valuation report was 09.04.2010, the material found in the search pertains to AY 2011-12. Since the valuation report was dated 08.04.2010, we are in agreement with the submission of the ld. AR that it was only a valuation per se and there is no record which shows that the above said property was rented out as per the valuation report found during the search. It is another matter whether the valuation report can be termed as incriminating material without corroborating with the assessee s books of account or return of income. It is settled law that incriminating material found during the course of search is year specific was that addition could be made in the case of unabated assessment. Since the material found/valuation report is dated 08.04.2010 it cannot be considered as an incriminating material. Even the Assessing Officer has not verified and recorded a satisfaction that this valuation report was actual or the same was acted upon by the assessee. Merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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