9911796707
TMI Blog2025 (1) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessment Year 2011-12 for adjudication purpose. 4. The assessee has raised following grounds of appeal:- 1. "That on the facts and circumstances of the case, Assessment Order passed u/s 153A(1)(b) of the Act by the Deputy Commissioner of Income Tax, Central Circle -1, Gurgaon on 31.05.2023 for the assessment year 2011-12, is bad in law and liable to be quashed as no search action u/s 132 of the Act was carried out at the premises of the appellant company and no Panchnama was served to the appellant company. 2. Without prejudice to the Ground of Appeal No. 1, the learned CIT(A) has erred both on facts & in law in sustaining addition to the extent of Rs. 1,05,50,000/-by disregarding the contention of the appellant that the assessment in case of relevant assessment year has already been concluded which could not abate on the date of search as per second proviso of Section 153A of the Act and no such additions were made on the basis of any incriminating material found / seized during search action at the premises of the appellant. 3. Without prejudice to the Ground of Appeal No. 1, the learned CIT(A) has erred both on facts & in law in sustaining addition to the extent of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A(1)(b) rws 143(3) of the Act vide assessment order dated 29.03.2016 wherein additions of INR 6,14,69,315/- were made by the Assessing Officer [AO] to the returned income. The adjustments comprised of additions of INR 4,39,62,275/- towards recognition of accrued income under Percentage of Completion Method ("PoCM") from real estate project. The deemed income accrued was calculated at estimation of 20% of advances received from proposed customers together with amount already declared in P&L account having regard to AS-9 of the Accounting Standard notified by Institute of Chartered Accountants of India ("ICAI"). Another additions of INR 1,75,07,040/- were made on account of Unexplained Income from undisclosed sources relatable to entries allegedly found recorded in loose paper/dairy etc. searched from the residential premise of Shri Rakesh Kumar Yadav. The income returned was accordingly enhanced by such additions. 5. Aggrieved, the assessee preferred appeal before the Ld.CIT(A). 5.1. On analysis of factual matrix, the Ld.CIT(A) found merit in the plea of the assessee towards lack of justification in relation to additions to the extent of INR 4,39,62,275/- under PoCM method and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or discloses name of Colourful Estate. The entries were actually found to be in relation to Golf View -I by the AO himself leading to additions of the same amount in the hands of Antariksh Developers by a separate assessment order. (iii) Notwithstanding, the additions towards undisclosed income suffers from vice of multiple defects and not sustainable in law in the hands of assessee co. even on merits. 7.1 Expounding further, the Ld Counsel submits that the business premises or project site [Golf View -II] of the assessee company was actually not covered in the search at all. Although, the name of the assessee co. is shown to be appearing in the search warrant, neither the search team actually visited the office premises or Golf View II project in the course of search nor any panchnama was served to the assessee co or any of its employees. The action under s. 153A was initiated merely because the director RKY and his other project i.e. Golf View -I handled by Antariksh Developers was covered in search under s. 132 of the Act. The Panchnama was served on one 'Shri Rakesh Kumar' who appears to be a different person than RKY and perhaps was working in the capacity of supervisor / jun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee company alone but contains multiple other companies such as Antariksh Developer and Promoters (P) Ltd. ; Antriksh Engineers Pvt.Ltd. & Perfect Properties Pvt.Ltd. 7.2 The Ld. Counsel for the assessee thus submits that firstly, the premises of the assessee has not been covered under search although the name of the assessee appears in the search warrant and secondly, in an unabated assessment, no addition can be made unless some incriminating documents are found from the premises of the assessee co. and not from third person. No entry in Annexure 12 as tabulated in para 4.1 of the assessment order can be attributed to the assessee co. in the absence of name of the assessee co. except one entry of INR 1,50,000/- for which receipt drawn in the name of Golf View II was issued and the entry was duly recorded in the books. Thus provision of s.153A of the Act are not attracted in the absence of any documents incriminating the assessee. 7.3 The Ld. Counsel for the assessee next pointed out that identical additions based on same very entries have been simultaneously made by the same AO on substantive basis in the hands of 'Antariksh Developer and Promoters (P) Ltd.' for the AY 2011-12 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries found relatable to the assessee co. has already been accounted for in the books prior to search and hence part-additions sustained by the Ld.CIT(A) is not justified both on the point of jurisdiction to assess such entries in the hands of assessee as well as on merits. 8. Per contra, the Ld.CIT DR for the Revenue relied upon the observations made in the first appellate order as well as the assessment order. In furtherance, the Ld.CIT DR submitted that multiple entries of receipts and payments were found recorded in the diary/loose paper etc. seized and marked as Annexure, in the course of search from the residential premises of Shri Rakesh Kumar Yadav [RKY] who happens to be the key person and Director of the assessee company. It is a matter of record that the search warrant has been issued in the name of the assessee company. The premises of the Director/main person has been covered in the search. Hence, the validity of search cannot be questioned before the Tribunal. As per the scheme of the Act, once search is conducted under s. 132 of the Act and panchnama has been found drawn in the name of the Assessee, the provisions of section 153A sufficiently empowers the AO asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriety of additions on merits as well. 11. As transpired in preceding paragraphs, a search and seizure operations were carried out on Antriksh Group including residential premises of Shri Rakesh Kuamr Yadav [RKY] on 05.02.2014. Based on search warrant & Panchnama which also included name of the assessee company herein, the proceedings under s. 153A were initiated against assessee. 11.1. Once search warrant and Panchnama has been drawn in the name of the assessee company, the legality of search under s. 132 of the Act cannot be examined by the Tribunal. 11.2 The plea of the assessee on this score is thus rejected. 12. The assessee claims that the impugned additions towards undisclosed income in question without successfully attributing the so called incriminating material in the form of entries in diary etc. to the assessee co. is outside the legal framework provided under s. 153A of the Act as enunciated and settled in the case of CIT vs. Abhisar Buildwell (P.) Ltd. [2023] 149 taxman.com 399 (SC) and other subsequent judgments of the Hon'ble Supreme Court wherein the ratio of CIT vs. Abhisar Buildwell (P.) Ltd. (supra) was applied. The instant assessment years AY 2011-12 & 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re neither speaking and nor do they indicate any connection with the assessee company herein except one entry of INR 1,50,000/- in the form of receipt for which receipt issued by the assessee was duly found in the course of search. Such receipt found in the course of search cannot be regarded as incriminating document since such entries was duly recorded in the books at the relevant time of transactions. The statement of RKY under s. 132(4) of the Act has not been referred either in the assessment order or in the first appellate order to appreciate the version of Director, Shri Rakesh Kumar Yadav on such entries. In order to appreciate the contents of Statement under s. 132(4) of the deponents RKY or other person bearing evidentiary value, the revenue in the course of hearing before the ITAT was called to produce copy of such statements. In response to the directions of the bench, statement of RKY under s. 132(4) & s. 131 of the Act was filed by the Revenue. On perusal thereof and on enquiry from the department, it emerged that no adverse statement on the impugned entries has been extracted in so far as the assessee herein is concerned. No other corroboration is available either, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entries recorded in the diary include entries relatable to Antariksh Developer and Promoters (P) Ltd. Significantly, it is not a case that the additions in Antariksh Developer and Promoters (P) Ltd. have been made on protective basis. Additions in that case is found to be made on substantive basis on the ground that entries found include entries related to Golf View I project developed by Antriksh Developer and Promoters (P) Ltd. Such stand of the AO in Antariksh Developers assessment is in direct contradiction to the action taken in the hands of the assessee herein and hence blemishes the impugned additions irreversibly. 14. Thus, on conspectus of peculiar facts and law applicable, we are disposed to hold that the entries found recorded in the diary seized from the residential premises of RKY is not capable of incriminating the assessee company per se. The additions made qua such entries thus are not justified within sweep of s. 153A of the Act. 15. On merits also, the impugned addition is not justified in the absence of any culpability established against the assessee company by some irrefutable evidence as noted above. The revenue has failed to tie the contents of impugned e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch addition was made on the basis of seized documents found during the course of search action u/s 132 of the Act carried out at the premises of third person and hence, outside the scope of proceedings u/s 153A of the Act. 4. That on the facts and circumstances of the case, the learned CIT(A) has erred both on facts & in law in sustaining addition to the extent of Rs. 2,40,37,564/- made on the basis of documents seized from the premises of third person without appreciating the fact that entries amounting to Rs. 1,39,47,025/- only pertains to the appellant which was duly explained and substantiated by the appellant with its books of account. 5. That on the facts and circumstances of the case, the learned CIT(A) has erred both on facts & in law in sustaining addition to the extent of Rs. 2,40,37,564/- without appreciating the fact that similar addition was also made in the hands of Antriksh Developers & Promoters Pvt. Ltd. on the basis of same seized documents, which is bad in law and liable to be deleted. 6. That the grounds of appeal are independent and without prejudice to each other." 20. Identical facts as discussed in ITA no. 2204/Del/2023 AY 2011-12 (supra) emerge in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dation and without discharging initial onus which lay upon the Revenue. The Assessee thus seeks to condemn the action of the revenue based on incorrigible infirmities as pointed out for AY 2011-12 and thus seeks reversal of the additions under challenge. 23. Facts being identical to AY 2011-12, the view expressed in ITA No.2204/Del/2023 concerning AY 2011-12 shall apply Mutatis Mutandis. The additions made on account of undisclosed income attributable to alleged unexplained entries are thus not sustainable in the hands of assessee co. herein both on the question of jurisdiction to assess impugned income having regard to the legal framework as well as on merits in the absence corroboration of alleged entries. Without repeating the delineations already made in AY 2011- 12 (supra), we hold that the additions made by the revenue are devoid of legal and factual foundation. Consequently, the additions sustained by the Ld.CIT(A) deserves to be cancelled and set aside. The AO is directed to reverse the additions on this score. 24. In the result, the appeal of the assessee is allowed. 25. In the combined result, both captioned appeals of the assessee are allowed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
