9911796707
TMI Blog2025 (3) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred by the Assessee against the order dated 22.10.2018 passed by the Commissioner of Income Tax (Appeals)-29, New Delhi, (hereinafter referred to as 'Ld. CIT(A)'), for the Assessment Years ('AY') 2010-11 and 2011-12. Since both these appeals are heard together and are being disposed of through this consolidated order for the sake of convenience and brevity. 1.2 The assessee has also raised the revised (abridged) Grounds in both appeals, which are read as under: "1. Jurisdictional ground. That both the assessment orders of Ld AO and first appellate order of Id CIT-A are bad in law as entire asst, is framed without authority of law and ultra vires to provisions of the 1961 Act (income tax act, 1961) being without jurisdiction as it is mainly/chiefly based on stated material as emanating from search action w/s 132 on "other person", so it is framed in violation of mandate of special and specific provision of section 153C of 1961 Act, 2. No incriminating material unearthed from assessee's own search action u/s 132: That both the assessment orders of Ld AO and first appellate order of Id CIT-A are bad in law as entire asst. is framed u/s 153A, without any requisite "incrimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olled managed and run by Sh. Pradeep Kumar Jindal. On completion of said assessment proceedings, the Ld. AO computed the total income of assessee computed for AY 2010-11 Rs. 2,41,24,893/- and for the AY 2011-12 Rs. 2,41,31,432/- vide order dated 29.12.2017. 3. Aggrieved by the above order, assessee /appellant filed appeal, which was partly allowed by the Ld. CIT(A) vide impugned orders. 2. Heard rival submissions and carefully perused the material available on record. 3. Reiterating the grounds of appeal, the Ld. AR expressed the grievances by stating that the both the lower authorities passed the erroneous order and entire assessment order without jurisdiction as it is mainly based on stated material as emanating from search action u/s 132 of the Act on other person and by this reason only it is in violation of provisions of section 153C of the Act. He further submitted that no incriminating material unearthed from assessee's own search action u/s 132 and entire assessment order framed u/s 153A of the Act without requisite incriminating material for unabated year in questioned. The Ld. AR also submitted that non-confrontation of relied upon materials and lack of cross examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on 30.09.2011 and 30.09.2012 respectively and both years are unabated u/s 153A of the Act. He also submitted that as per Panchnama, dated 18.11.2015, no incriminating material unearthed from assessee / appellant's own search action u/s 132 of the Act. 7. The Ld. CIT(A) observed in impugned order that the statement of Sh. Pradeep Kuamr Jindal stands established that the assessee / appellant was one of the beneficiaries and had received share application / premium money from the front of Pradeep Kumar Jindal, solely used for providing accommodation entries. The Ld. AR submitted that during first appellate proceedings, he specifically raised that so called excel sheet referred by the Ld. AO having no relevance with the assessee / appellant company as these excels sheets are inadmissible and these documents /statements were seized / recorded during the course of proceedings of Pradeep Kumar Jindal, but in no case of assessee / appellant company. The Ld. AO used these documents against assessee means the Ld. AO was under belief that these documents belongs to the assessee and hence no ground for assessment u/s 153A of the Act, which should have been u/s 153C of the Act. The Ld. AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of confession obtained is unknown. No cross examination of the witness was provided to the assessee either and consequently, such statement is unworthy of reliance 9. Guided by the principles laid down in Abhisar Buildwell (P.) Ltd. (SC) (supra) and Ananad Kumar Jain (HUF) (Delhi High Court), we find force in the legal plea raised on behalf of the assessee. Hence, in the absence of any incriminating material in an unabated assessment additions/disallowances made by AO in all captioned appeals requires to be quashed. In this view of the matter, we do not consider it necessary to adjudicate other legal and factual aspects concerning additions/disallowances." In this regard, the Ld. DR submitted that above relied orders distinguishable as having different fact because in instant case Sajan Kumar Jain was confronted with incriminating statement on oath and declined opportunity given by the authorised officer to cross examination. The Ld. DR admitted this fact that while controverting with the statements of Pradeep Kumar Jindal, Sajan Kumar Jain gave either vague reply or decline to answer but only giving vague reply or decline to answer does not make ground to form adverse inferenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The quarrel travelled upto the Hon'ble High Court of Delhi and vide order dated 12.02.2021 in ITA No. 23, 26 to 31/2021, the Hon'ble High Court, inter alia, held as under: "10. Now, coming to the aspect viz the invocation of section 153A on the basis of the statement recorded in search action against a third person. We may note that the AO has used this statement on oath recorded in the course of search conducted in the case of a third party (i.e., search of Pradeep Kumar Jindal) for making the additions in the hands of the assessee. As per the mandate of Section 153C, if this statement was to be construed as on incriminating material belonging to or pertaining to a person ether than person searched (as referred to in Section 1534), then the only legal recourse available to the department was to proceed in terms of Section 1530 of the Act by handing ever the some to the AO who has jurisdiction over Such person. Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act). As noted above, the Assessee had no opportunity to cross-examine the said witness, but that apart, the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove, the Assessee had no opportunity to cross-examine the said witness, but that apart, the mandatory procedure under section 153C has not been followed. On this count alone, we find no perversity in the view taken by the ITAT. Therefore, we do not find any substantial question of law that requires our consideration." 13. The Ld. DR specifically pleaded that the statement of Sajan Kumar Jain recorded U/s 132(4) of the Act, during the course of search on 18.11.2015 constitute an incriminating material and revenue relied the statement of Sajan Kumar Jain as incriminating material. In the case of Pavitra Realcon (supra), Hon'ble Delhi High Court held that such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the Ld. AO the authority to make an assessment. Relevant paras 20, 21, 22, and 23 are hereby reproduced as under: "20. However, it is an undisputed fact that the statement recorded under Section 132(4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the Explanation to section 132(4) of the Act. However, such statements on a stand alone basis without reference to any other material discovered during search and seizure operations would not empower the Assessing Officer to make a block assessment merely because any admission was made by the assessee during search operation. [Emphasis supplied] 23. In our opinion, the Act does not contemplate computing of undisclosed income solely on the basis of statements made during a search. However, these statements do constitute information, and if they relate to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under Section 132(4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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