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TMI Blog2025 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the ld. Counsel that even the ld. PCIT while granting the approval u/s.151 has not seen these facts and particularly if the amount has been alleged to have been received or given to the firm Evergreen Enterprises in the impugned assessment years when the firm Evergreen Enterprises did not even exist at that time and how ld. AO could send reopening proposals in the assessment folders of a non-existing assessee. Thus, we hold that the reasons recorded u/s.147 is based on incorrect assumption of facts and therefore, the entire proceedings initiated vide notice u/s.148 is void ab initio and is hereby quashed. For A.Y.2012-13 to 2018-19, it has been pointed out that the entire basis for the addition made by the ld. AO is documents seized during the course of search - addition of interest earned and received in cash to be taxed as unexplained money in the hands of the assessee - From the bare perusal of the seized documents it is seen that the name mentioned as 'S.M. Joglekar‟ with and with contact number. Nowhere this name or contact number pertain to the assessee because assessee is Mahesh N Joglekar and nowhere it has been brought on record whether S.M. Joglekar is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in brief are as below: AY 2011-12 Firstly, confirming the validity of the assessment framed u/s 143(3) r.w.s. 147 of the Act on the basis of an invalid and void ab initio notice u/s 148 of the Act issued on 30/03/2018. Secondly, upholding the action of AO on the basis of a borrowed satisfaction from investigation wing and personal statements on oath. Thirdly, confirming addition of Rs 19,95,800/- alleging non-declaration of salary income in the return of income filed in pursuance to notice u/s 148 of the Act though the same was part of original return filed u/s 139(1) of the Act. Lastly, confirming addition of Rs 33,60,000/- u/s 69A of the Act for alleged unexplained cash loan lent and interest received on unexplained cash loan. AYs 2012-13 to 2018-19 Firstly, addition made in absence of any incriminating material found during the course of search in the premises of the assessee where the material relied was found in income-tax searches with no common search / joint warrant in searches. Secondly, no mandatory DIN on the body of the assessment orders. Thirdly, incompetent and mechanical approval u/s 153D of the Act by the Addl CIT. 4. In so far as appeal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- in the FY 2010-11 3. It is to mention here that assessee had lent cash loan of Rs. 30,00,000/- to /through Shri Nilesh Bharani /M/s Evergreen Enterprises. 5. Further, I have also examined the information vis-à-vis the return of income of the assessee. After appraisal of the material on record, there is enough reason to believe that the assessee prima facie has given cash loan of Rs. 30,00,000/- during the year under consideration and the assessee has clearly failed to disclose all material facts for determination of income. 6. Hence, I have reason to believe that income of Rs. 30,00,000/- chargeable to tax, has escaped assessment by reason of the failure on part of assessee to disclose fully and truly all material facts necessary for its assessment for AY 2011-12 within the meaning of the provisions of section 147 of the Income-tax Act, 1961." 5. Mr Bindal, the learned counsel of the assessee, vehemently stated that the entire proceedings are null and void because there is complete non-application of mind not only by the AO but also by the PCIT while granting approval u/s 151 of the Act to reopen the assessment u/s 147. To support his above averment, the ld. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, yet the said amount fell in the period relevant to the preceding AY 2010-11, because the date of the alleged transaction was 20/01/2010 which is clearly mentioned on page no. 28 of the assessment order, para no. 4.5 as well as a copy of the information relied upon by the Revenue given to the assessee placed at PB page no. 6. 8. He also stated that the fact that there was a complete non-application of mind not only by the AO as above but also by the PCIT granting approval u/s 151 of the Act as is given in the letter dated29/03/2018 given by the PCIT to the Addl. CIT intimating approval in the case of the assessee and also another assessee Evergreen Enterprises from the premises of whom the alleged material was recovered in a search on the said firm clearly shows that it was a borrowed satisfaction on the basis of information sent by the Investigation Unit because Evergreen Enterprises mentioned at Sr. No. 3 on the said letter at PB page no. 38 was not in existence at all during the period relevant to the AY 2011-12 as per copy of the PAN:AADFE8617J of Evergreen Enterprises placed on record. The said firm came into existence on 01/04/2012 and the first assessment year could onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g information found during the course of a search up to 31/03/2021 on some other assessee is illegal and is ab initio as the same can be considered only by taking recourse to the provisions of the section 153C r.w.s. 153A of the Act. Thus, the assessment of the said amount of LTCG, which was claimed to be exempt u/s 10(38) of the Act by the assessee, made u/s 147 of the Act is beyond the scope of section 147, albeit it can be roped in only u/s 153C. 93. If on overall appreciation of the scheme of assessment / reassessment of income after the income-tax searches on the assessee searched and also for the persons not searched based on detection of some incriminating information during the said searches conducted upto 31/03/2021, the following legal course of action is open for the AOs, which can be summed up, in the following manner: (i) It is mandatory for the AO of the person searched to make an assessment / reassessment of income of the said assessee u/s 153A of the Act for the 6 assessment years prior to the date of search and also for the extended 4 relevant assessment years, subject to fulfillment of the prescribed conditions for the same, on the basis of an income-tax searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was given is a letter given approval in a consolidated list of 22 cases. This is a complete violation to the judgment of the Hon'ble Delhi High Court in the case of Sabh Infrastructure Ltd vs ACIT [2018] 99 taxmann.com 409 (SC) (DoD: 25/09/2017) approved by the Hon'ble Supreme Court in the said case as ACIT vs Sabh Infrastructure Ltd [2024] 159 taxmann.com 184 (SC) (DoD: 01/02/2024). 13. In rebuttal, the Ld. CIT DR did not controvert the facts as above however submitted that once the information was received that assessee has given cash loan to Evergreen Enterprises, based on seized material the AO is justified in reopening the case u/s 147. In so far as certain discrepancy pointed out by the Ld. Counsel for the assessee those are minor and trivial mistakes but fact of the matter is that there was concrete material before the AO to entertain reason to believe that assessee has given cash loan out his unaccounted income. 14. We have heard both the parties, perused the relevant facts and material referred to at the time of hearing. As pointed out by the ld. Counsel from the bare perusal of the reasons recorded it is seen that, there are number of infirmities as highlighted abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diary seized also show alphabet "J""J/ 71/SJ" where the name of assessee is not there. In fact, in respect of the alleged transaction of the assessee, added in the AY 2011-12, no code was there for the assessee but full name "M Joglekar" is mentioned. The learned counsel also mentioned that even if the assessee knew Mr SM Joglekar, in one manner or other, but undisputedly as per the information found during the course of search though denied by the assessee, and even if the contact number of the assessee is mentioned, yet as per the impugned material the same, the assessee was different and no amount could be assessed in respect thereof in his hands. The entire premise of the ld. AO is amount mentioned against such name and code that the cash loan was advanced by the assessee and found recorded from the material seized from the premises of Evergreen Enterprises. For the sake of ready reference table of such amount appeared in the various assessment years is as under:- Assessment year Opening Balance Cash loan given during the year Cash loan received back during the year Balance outstanding cash Loan Amt In '000 Amt In '000 Amt In '000 Amt In '000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the assessee or not? Because neither assessee's name is Ramesh Gala nor S.M. Joglekar. Even in para 5.19 of the AO, telephone diary seized also show alphabet "J""J/ 71/SJ" where the name of assessee is not there. Once there is no name mentioned of the assessee in the seized documents then, it cannot be said that it is an incriminating material to rope in any addition in the name of the assessee. 19. After considering the above facts on record, we are of the firm view that irrespective of the other issues, since the amounts assessed in the hands of the assessee did not pertain to him at all, the additions made for the alleged amount of loan lent in cash and estimated interest earned thereon cannot be sustained and otherwise also for all the assessment years there is no other incriminating material in respect of the assessee is there or referred by the AO. Accordingly, we hold that irrespective of various other issues and contentions raised, once the amount which has been assessed in the hands of the assessee did not pertain to him, consequently addition made on account of alleged amount loan lent in cash and estimated interest and thereon cannot be sustained and same is delete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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