AI Structured Summary
Not yet generated for this judgment
Judgment
PER SUDHIR KUMAR, JM:
These appeals filed by the Assessee are directed against the separate orders dated 24.2.2025 & 25.2.2025 of the Ld. Commissioner of Income Tax (Appeals-30), New Delhi (in short “the Ld. CIT(A)) relevant to assessment years 2018-19 & 2019-20. Since both the appeals related to same assessee and similar facts involved in these appeals, hence, the appeals were heard together and disposed of by this common order for the sake of convenience, by dealing with the facts related toassessment year 2018-19.
The grounds raised in assessment year 2018-19 read as under:-
1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [“CIT(A)”] is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case, learned CIT(A) has erred, both on facts and in law in confirming the action of the Assessing Officer, despite the fact that the assessment order passed under section 153A read with section 143(3) of the Income Tax Act, 1961 (“the Act”) is without jurisdiction, void ab initio, illegal and deserved to be quashed.
3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of the AO despite that the proceedings initiated under section 153A against the assessee and the assessment order passed under section 153A/143(3) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye df law and liable to be quashed.
4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the assessee that the additions made by the AO under Section 153A/143(3) are bad in law in the absence of any incriminating material belonging to the assessee being found during the course of the search.
5. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the action of the AO despite the fact that the order passed by the AO without obtaining valid prior statutory approval under section 153D of the Act.
(ii)That the purported approval under section 153D of the Act is 2 illegal, bad in law and also without application of mind.
6. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 1,78,00,000/- on account of unaccounted cash received from transfer of immovable property under section 69A read with section 115BBE of the Act.
(ii)That the aforesaid addition has been confirmed rejecting the detailed submissions and explanations along with the evidences brought on records in this regard.
7. On the facts and circumstances of the case, the learned AO has erred both on facts and in law in ignoring the contention of the assessee that the document relied upon by the AO is ‘dumb document’ thus, no addition shall be made on the basis of such document.
8. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming the action of AO despite the fact that the same has been made by the AO without conducting any independent enquiry under section 133(6)/131 during the course of assessment proceedings in this regard. /
9. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the assessee that the assessment order under section 153A/143(3) has been passed without there being valid Document Identification Number (DIN) quoted on the body of the assessment order, violating the CBDT Circular No. 19/2019.
10. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the above addition by indulging in surmises and conjectures without bringing on any direct evidence against the assessee, only on the basis of presumption and assumption.
11. The assessee craves leave to add, amend or alter any of the grounds of appeal.
The grounds raised in assessment year 2019-20 read as under:-
1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [‘‘CIT(A)”] is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case, learned CIT(A) has erred, both on facts and in law in confirming the action of the Assessing Officer, despite the fact that the assessment order passed under section 153A read with section 143(3) of the Income Tax Act, 1961 (“the Act") is without jurisdiction, void ab initio, illegal and deserved to be quashed.
3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of the AO despite that the proceedings initiated under section 153A against the assessee and the assessment order passed under section 153A/143(3) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed.
4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the assessee that the additions made by the AO under Section 153A/143(3) are bad in law in the absence of any incriminating material belonging to the assessee being found during the course of the search.
5. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the action of the AO despite the fact that the order passed by the AO without obtaining valid prior statutory approval under section 153D of the Act.
(ii)That the purported approval under section 153D of the Act is illegal, bad in law and also without application of mind.
6. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 84,32,000/- on account of unaccounted cash received from transfer of immovable property under section 69A read with section 115BBE of the Act.
(ii)That the above-said addition has been confirmed rejecting the detailed submissions and explanations along with the evidences brought on records in this regard.
7. On the facts and circumstances of the case, the learned AO has erred both on facts and in law in ignoring the contention of the assessee that the document relied upon by the AO is ‘dumb document’ thus, no addition shall be made on the basis of such document.
8. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 98,00,000/- made by the AO on account of cash received on the basis of seized documents~undersectionT69A read with section 115BBE of the Act.
(ii)That the above-said addition has been confirmed rejecting the detailed submissions and explanations along with the evidences brought on records in this regard.
9. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming the additions despite the fact that the same has been made by the AO misinterpreting the statement of the assessee recorded during the course of search.
10. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming the additions despite the fact that the same has been made by the AO without conducting any independent enquiry under section 133(6)/131 during the course of assessment proceedings in this regard.
11. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the assessee that the assessment order under section 153A/143(3) has been passed without there being valid Document Identification Number (DIN) quoted on the body of the assessment order, violating the CBDT Circular No. 19/2019.
12. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the above addition by indulging in surmises and conjectures without bringing on any direct evidence against the assessee, only on the basis of presumption and assumption.
The assessee craves leave to add, amend or alter any of the grounds of appeal.
ITA No. 1796/Del/2025 (AY 2018-19)
The brief facts of the case are that a search and seizure action under section 132 of the Income Tax Act, 1961 was conducted on 6.1.2021 at the residence/ business premises of Hans Group, including the assessee. During the search conducted in the case of the assessee, a notice u/s. 153A of the Act was issued on 09.11.2021 requiring assessee to furnish the return of income for the year under consideration being one of the six assessment years preceding the assessment year in which search was conducted within 15 days of service of the said notice. In response to the notice u/s. 153A of the Act the assessee filed his e-return of income on 23.11.2021 declaring income of Rs. 1,26,49,860/- for the assessment years in consideration. Accordingly, notices u/s 143(2) and u/s. 142(1) of the Act along with the detailed questionnaires were sent to the assessee. The assessee has filed his replies. Thereafter, the AO has passed the separate assessment orders u/s 153A r.w.s. 143(3) of the Act both dated 29.03.2022 making the additions of Rs. 1,78,00,000 for AY 2018-19, and Rs. 84,32,000 for AY 2019-20. Against the above action of the Assessing Officer, assessee filed the appeals before the Ld. CIT(A), who vide his orders has confirmed the action of the Assessing officer. Aggrieved with the impugned order of the Ld. CIT(A), Assessee is in appeal before us.
In the instant appeal the only effective ground is Ground no. 6, relating to disallowance of Rs. 1,78,00,000/- made by the Assessing Officer on account of unaccounted cash received from the sale of immovable property. During the course of search, page No. 1 of the Annexure 4 has details of transactions related to C-94, Nirman Vihar dated 4.3.2017. Relying solely on this loose sheet (Annexure A-4 Page 1), the AO presumed that total sale consideration of Rs. 9.07 Crores from the aforesaid property and on that basis apportioned the same equally across the four builder floors at Rs. 2.26 crores each and has calculated the addition in the hands of assessee as follows:
| Floor | Date of Sale | Registry Amount | Assumed figure as per slip | Difference | Assessee share | Addition in AY 2018-19 | Addition in AY 2019-20 |
Upper Ground Floor 01.09.2017 65,00,000 2,26,00,000 1,61,00,000 37% 59,57,000 -
First Floor 13.12.2017 65,00,000 2,26,00,000 1,61,00,000 37% 59,57,000 -
Second Floor 03.07.2018 90,00,000 2,26,00,000 1,36,00,000 62% - 84,32,000
Third floor 06.03.2018 65,00,000 2,26,00,000 1,61,00,000 37% 59,57,000 -
| Total Rounded off | 1,78,71,000 | 84,32,000 |
| 1,78,00,000 | 84,32,000 |
The AO, on the basis of the said rough noting, proceeded to make an addition of Rs. 1,78,00,000/- for AY 2018-19 and Rs. 84,32,000/- for AY 2019-20. The CIT(A) has confirmed the action of the AO.
Ld. AR submitted that the addition is unsustainable in law, because the sole basis of the addition is loose sheet dated 4.3.2017 is placed at paper book Page No. 11. Since this loose sheet pertains to FY 2016-17 i.e. AY 2017-18 and therefore, no addition could have been made on the basis of making presumption without there being any other evidence being on record in these two assessment years i.e. AY 2018-19 and AY 2019-20. Learned Counsel for the assessee further stated that the assumption is factually incorrect as alleged. The loose sheet nowhere mentioned any sale consideration. A plain reading of the said sheet shows that it only contains some rough calculation regarding cost of land, construction etc. and there is no iota of evidence of any unaccounted consideration being received as mentioned in this sheet. It is further stated that it is an undisputed fact that this property was originally purchased by the co-owners including the assessee a way back in 2012 and as such there cannot be any allegation of any purchase consideration being paid during the year under consideration. It was also contended by the Ld. AR assessee that CIT(A) has arbitrarily confirmed the order passed by the AO.
Per contra, Ld. DR supported the assessment order passed by the AO by submitting that the AO has rightly computed the sale consideration that assessee would have received on sale of the flats.
We have heard the rival contentions and perused the records. It is noted that sole basis for making the
It is evident that this sheet nowhere mentions any sale consideration being received from any of the buyer as has been made the basis by the AO. Further this sheet is dated 04.03.2017 which pertains to FY 2016-17 i.e. AY 2017-18. Apropos, the AO has not made addition on the basis of this sheet but has obtained data from Sub-Registrar Office and on that basis has assumed that assessee would have received on-money over and above the sale consideration stated in the Sale Deed obtained from Sub-Registrar Office. However, the AO has not brought any material or evidence in support of this assumption and only on the basis of presumption made the addition, and accordingly, the same are legally unsustainable. The seized paper nowhere mentions the sale consideration, hence, the seized noting cannot have any connection with the actual sales. It is undisputed that the property was originally purchased by the co-owners, including the assessee, way back in 2012, therefore, no purchase was made during the year under consideration, and the seized paper has not relevance to AY 2018-19 and 2019-20. Further, this loose sheet is dated 04.03.2017 whereas the four Sale Deeds pertain to AY 2018-19 and 2019-20. Hence, the addition made by the AO on the basis of such loose sheet which pertains to AY 2017-18 cannot be legally sustained in AY 2018-19 and 2019-20, in view of the decision of the Hon’ble Supreme Court in the case of CIT vs. Singhad Technical Education Society 2017 (8) TMI 1298. Further, no incriminating material found during the search during the year under consideration, as this document does not pertain to AY 2018-19 and no other document or evidence whatsoever has been found during the search in respect of transactions relating to the assessment year under consideration. Hence, the addition made by the AO is based on a document of another year and without any incriminating material for AY 2018-19, which is against the law settled by the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC), wherein, it has been held that in abated years, no addition can be made without incriminating material relating to the relevant year. Respectfully following the aforesaid precedents, the addition in dispute is hereby deleted and ground no. 6 raised by the assessee is allowed.
In the result, the appeal for AY 2018-19 is allowed in aforesaid manner.
ITA No. 1797/Del/2025 for AY 2019-20
As regards appeal relating to assessment year 2019-20 is concerned, the issue raised vide Ground No. 6 is relating to addition of Rs. 84,32,000/- on account of unaccounted cash received from transfer of immovable property. Since this issue is exactly same involved in the AY 2018-19, as aforesaid. Hence, our aforesaid decision as taken in assessment year 2018-19 will apply mutatis mutandis to the assessment year 2019-20, accordingly, the addition of Rs. 84,32,000/- stand deleted and ground no. 6 of the appeal for assessment year 2019-20 is allowed.
As regards other Ground No. 8 relating to addition of Rs. 98,00,000/-made by the AO u/s 69A of the Act is concerned, it is submitted by the Ld. AR that during the course of search and seizure proceedings, the mobile phone of the assessee was seized. From the said device, certain images and documents were extracted, which included an “Agreement to Sell” dated 06.07.2018 in respect of property bearing no. C-84, Preet Vihar, Delhi, between Shri Keshav Chawla (seller) and Shri Mukhjit Singh (buyer), as reproduced at Paper Book page 13. It is further submitted that besides the aforesaid Agreement to Sell, certain receipts were also found in respect of the same property i.e., C-84, Preet Vihar, Delhi. Referring to Paper Book pages 14 to 16, he explained the nature and contents of such receipts. At Paper Book page 14, a receipt dated 11.07.2018 was found reflecting payment of Rs. 90,00,000/- in cash and Rs. 10,00,000/- by cheque dated 11.07.2018, signed by Shri Keshav Chawla as seller, evidencing part payment made by Shri Mukhjit Singh towards purchase of the said property. As per Paper Book page 15, wherein multiple receipts were placed on record, namely: a receipt of Rs. 15,00,000/- showing payment made by Shri Mukhjit Singh towards part purchase consideration, which did not bear the signature of the assessee; a receipt of Rs. 36,00,000/- dated 26.11.2018 stating that payment was received from Shri Mukhjit Singh for sale of the said property and which was signed by the assessee in his capacity as a property dealer on behalf of Shri Keshav Chawla, the seller; a receipt of Rs. 33,00,000/- dated 04.01.2019 containing similar narration and likewise signed by the assessee on behalf of the seller; a receipt of Rs. 27,00,000/- dated 27.05.2019 which did not bear the signature of the assessee; and a receipt of Rs. 2,00,000/- dated 19.06.2019 which also did not bear the assessee’s signature. As per Paper Book page 16, the Learned Counsel submitted that the said page contained a rough working relating to property C-84, Preet Vihar, which was found from the mobile phone of Shri Vaibhav Jain, and that the Assessing Officer had sought to link the said rough image with the Agreement to Sell and the above-mentioned receipts. It is further submitted that when the assessee was confronted with the aforesaid seized documents, he denied having any knowledge of the transaction relating to property C-84, Preet Vihar; however, he explained that he might have signed two receipts of Rs. 36,00,000/- and Rs. 33,00,000/- on behalf of the seller in his capacity as a property broker. It was clarified that the assessee was neither the purchaser nor the seller of the said property and that, in the line of brokerage business, it was a common trade practice to sign receipts on behalf of the parties for the purpose of building trust and facilitating transactions. It is submitted that the assessee is a property dealer engaged merely in facilitation of sale and purchase of properties and had no ownership interest in property bearing no. C-84, Preet Vihar, Delhi, being neither the buyer nor the seller therein. It was pointed out that the Agreement to Sell clearly records the names of the actual parties i.e. Shri Keshav Chawla and Shri Manoj Jain as sellers and Shri Mukhjit Singh as purchaser, and the assessee’s name does not appear as a contracting party, his role being limited to that of a broker. It is further submitted that the receipts relied upon by the Assessing Officer were signed by the assessee, wherever appearing, only on behalf of the seller in the ordinary course of brokerage practice and not in his personal capacity, as also explained in the statement recorded during assessment proceedings. It was contended that in absence of any evidence showing the assessee as purchaser or seller, no ownership of alleged cash can be attributed to him. Inviting attention to the Agreement to Sell and earlier receipts placed in the Paper Book, the Learned Counsel submitted that neither the agreement nor the receipt of Rs. 1,00,00,000/- nor the receipt of Rs. 15,00,000/- bears the signature of the assessee and all payments were directly between the actual buyer and sellers, thereby establishing that the assessee was neither a contracting party nor recipient of consideration and his participation was confined only to facilitation for brokerage. The Learned Counsel further submitted that the allegation of benami investment is without any supporting evidence, as no material such as transfer of funds, possession documents or correspondence has been brought on record to show that the assessee had any beneficial interest in the property, and mere signing of certain receipts on behalf of the sellers cannot be construed as evidence of ownership. It was also submitted that the alleged deal with Shri Mukhjit Singh did not materialize and the property was ultimately sold on 06.09.2019 to third parties, namely Shri Samit Patra and Smt. Situ Patra, thereby rendering the inference of receipt of Rs. 98,00,000/- by the assessee factually baseless.
Per contra, Ld. DR relied upon the order passed by the AO and submitted that the AO has made the addition on the basis of seized material found from the mobile phone of the assessee.
We have heard the rival contentions and perused the records. We observed that the primary basis of the addition made by the Assessing Officer is the Agreement to Sell and certain receipts extracted from the mobile phone of the assessee during the course of search proceedings. On careful perusal of the said documents, it is observed that the Agreement to Sell in respect of property bearing no. C-84, Preet Vihar, Delhi clearly records the names of the actual parties to the transaction, namely Shri Keshav Chawla and Shri Manoj Jain as sellers and Shri Mukhjit Singh as purchaser. The assessee’s name does not appear anywhere in the said agreement either as a buyer, seller, confirming party, or beneficiary. Thus, the assessee is not shown to be a contracting party to the transaction. Further, the explanation of the assessee throughout the proceedings has been consistent that he is a property broker by profession and his involvement, if any, in the said transaction was only in the capacity of a facilitator. The receipts relied upon by the Assessing Officer, wherever bearing the signature of the assessee, indicate that such signatures were made on behalf of the seller and not in his individual capacity. This explanation is in consonance with the normal trade practice prevalent in property transactions, where brokers often sign or acknowledge certain documents on behalf of the parties to instill confidence and to facilitate closure of deals. Significantly, the Assessing Officer has not brought any contrary evidence on record to demonstrate that the assessee signed the receipts as an owner of the property. The assessee has given explanation to the AO and the same has been rejected by even without verification. The assessee having acted as a broker and given explanation, the least the AO could have done was to verify from the seller and buyer, identity of whom are clearly visible from the agreement to sell. The AO has simply rejected the explanation of the assessee. It is also pertinent to note that the entire addition has been made merely on the basis of presence of certain digital images and notings without any independent corroboration. No evidence has been brought on record to show flow of funds into the hands of the assessee, nor is there any material to establish that the assessee had any ownership rights, possession, or beneficial interest in the property in question. There is also no statement of the actual buyer or sellers implicating the assessee as a recipient of consideration. In absence of such supporting material, the seized documents by themselves only indicate the existence of a property transaction between third parties. There is merit in the contention of the assessee that the Agreement to Sell is between Shri Keshav Chawla and Shri Manoj Jain as sellers and Shri Mukhjit Singh as purchaser, and not the assessee. The Assessing Officer has not brought any material on record to disprove this factual position or to establish that the assessee was the real owner or beneficiary of the consideration alleged to have been paid. The inference drawn by the Assessing Officer is thus based on presumption rather than cogent evidence. It is an undisputed fact that the assessment year 2019-20 is also unabated assessment year and as per settled law no addition can be made on this count.
In view of the above discussions, it transpires that no other document or evidence whatsoever has been found during the search in respect of transactions relating to the assessment year under consideration. Hence, the addition made by the AO is without any incriminating material for AY 2019-
However, the foundation of the addition based on presumption, which, in the absence of corroborative material linking the assessee with ownership of the property or receipt of cash in his personal capacity, is insufficient to sustain an addition under section 69A of the Act. Accordingly, the addition made by the Assessing Officer is not supported by appropriate evidence and also this action of the AO is contrary to law as laid down by the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC), wherein, it has been held that in unabated years, no addition can be made without incriminating material relating to assessment year. Accordingly, the addition in dispute is hereby deleted and thus, the ground no. 8 raised in this appeal is allowed in the aforesaid manner. In the result, this appeal of the assessee relating to assessment year 2019-20 is allowed.
In the result, both the Assessee’s appeals are allowed in the very terms.