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TMI Blog2025 (2) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the considered view that the AO/CIT(A) have not properly examined the assessee explanation for the source of payment for the HDFC and ICICI credit card. Payment for ICICI credit card, we find that the payments ranges from Rs 1000/- to Rs 35,000/- the source of which is explained as payments out of cash in AY 2013. For AY 2014- 15, he has explained as borrowings, salary, cash in hand, recovery of loan etc. Considering the assessee being a salaried employee, without any books of account or fund flow statement, it was incumbent upon the AO as well as the CIT(A) to examine the explanation of the assessee thoroughly. Thus, we find it expedient to remit the issue back to the file of the AO to examine the assessee explanation for the credit cards payments, with reference to his bank statement, regarding source being borrowings, salary, cash in hand, recovery of loan. Non issue of notice u/s 143(2) - As decided in the case of Ashok Chadda [2011 (7) TMI 252 - DELHI HIGH COURT] has held that there is no requirement of issuing notice u/s 143(2) for finalization of assessment u/s 153A. Addition as undisclosed income under the provision of section 292C, on the basis of seized mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or anyone of these pre-conditions stood satisfied in the instant case, with the result that the execution of warrant of authorization against the "appellant" is wholly illegal. 2. BECAUSE there being no incriminating material found during the course of search and seizure action that illegally took place under section 132(1) in the case of the "appellant" on the basis of illegal warrant of authorization, variation between the returned income and assessed income as made up of credit card payment of Rs. 4,55,495/- is wholly illegal and beyond the jurisdiction conferred on the ACIT, under section 153A r.w.s. 143(3) of the Act, in the instant case. 3 BECAUSE in view of the attended facts and circumstances of the case that search under section 132 being carried out against the "appellant" on 07.03.2014, no proceedings under section 153A for the assessment year 2013-14 could have been initiated as also concluded vide order dated 29.03.2016 under section 153A r.w.s. 143(3) of the Act, against the "appellant". 4. BECAUSE no notice under section 143(2) of the Act having been issued after filing of the return' on 16.02.2016, assessment order dated 29.03.2016 passed by ACIT is bad, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In absence of explanation from the assessee, the amount of Rs. 4,55,495/- was treated as unexplained expenditure and added to the total income of the assessee from undisclosed sources. Penalty proceedings u/s 271(1)(c) were initiated separately. 9. The aggrieved assessee appealed before the ld. CIT(A) who partly confirmed the same. 10. The aggrieved assessee is now before us and vehemently argued that the Assessing Officer did not bother to even cross check the information so gathered from the AIR whether they were a revenue receipt in the form of profit/income fit to be added as income or there were only transactions happened during the course of time. It is the say of the ld. counsel for the assessee that the Assessing Officer was in great haste to add the transaction as income without giving any understandable reasoning. It was further contended by the ld. counsel for the assessee that the Assessing Officer erred in not applying his mind and made the addition which is contrary to the facts of the case and bad in the eyes of law. 11. Per contra, the ld. DR relied upon the orders of the authorities below. The ld DR stated that the year under consideration is an abated AY, henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, recovery of loan etc. Considering the assessee being a salaried employee, without any books of account or fund flow statement, it was incumbent upon the AO as well as the CIT(A) to examine the explanation of the assessee thoroughly. In view of the discussion as above, we find it expedient to remit the issue back to the file of the AO to examine the assessee explanation for the credit cards payments, with reference to his bank statement, regarding source being borrowings, salary, cash in hand, recovery of loan. The ground 5 & 6 is partly allowed. 17. In the result, the appeal of the assessee is allowed for statistical purpose. ITA No. 4565/DEL/2017 [A.Y 2014-15] 18. The grounds raised by the assessee for AY 2014-15 read as under: 1. BECAUSE there did not exist any material before the Joint Director of Income Tax (Inv.) authority concerned which could lead to the formation of "reason to believe" that pre-conditions as mentioned in clauses (a), (b) and (c) under sub-section (1) of section 132 or anyone of these preconditions stood satisfied in the instant case, with the result that the execution of warrant of authorization against the "appellant" is wholly illegal. 2. BECAU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bad in law and the same deserves to be deleted. 8. BECAUSE in any case and without admitting the same, addition of Rs. 18,00,000/- made on the basis of incomplete information as appearing in the name of third person and recorded in the hand writing of Sr. R. K. Mishra, without even cross verifying from the related person, is erroneous much to high and excessive too. 9. BECAUSE the payments made by the "appellant" through credit card(s) were out of duly explained sources filed by him during the course of assessment proceedings as also appellate proceedings, the CIT(A) has erred in law and on facts in confirming the addition of Rs. 7,28,445/- made by the ACIT. 10. BECAUSE the observations made by the CIT(A) in para 11.1 of the impugned order is incorrect as the "appellant" had duly placed before him the source of payments made through credit cards of HDFC Bank and ICICI Bank, addition of Rs. 7,28,445/- sustained by the him is incorrect and the same deserves to be deleted. 11. BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice. 19. The ground no 1,2,3 challenging the validity of search u/s 132 is dismissed as the same is not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination of R.K.Mishra who was another employee of SVIL. The ld AR further argued that the AO did not corroborate the seized documents with any evidence to establish the same related to the assessee. The ld AR further stated that the assessee's statement u/s 132(4) that the document did not belong to him and he has no knowledge of the content of the document, was not controverted by the AO. The ld AR vehemently stated that the addition made only on the basis of presumption drawn u/s 292C is not valid. 26. Per contra, the ld DR relied on the order of the CIT(A). The ld. DR strongly argued that the red bag containing the document was found from the assessee's premises and, therefore, the onus was on the assessee to explain the contents u/s 292C of the Act. The ld. DR contended that the assessee cannot escape merely by saying that he had no knowledge of the contents of the documents. 27. We have heard the rival submissions and have perused the relevant material on record. We find that during the course of search and seizure operation, a 'red bag' was found from the premises of the assessee containing keys of the office of M/s Sarthak Vanijya India Limited [SVIL] where the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the amount being undisclosed income of the assessee. 31. The Revenue has heavily relied on the provisions of section 292C which provides as under : "292C (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 or survey under section 133A, it may, in any proceeding under this Act, be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. (2) Where any book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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