ANIL KUMAR,FARIDABAD V. ITO, WARD- I(1), FARIDABAD

ITA 1040/DEL/2018

AI Insights

The case revolves around an appeal by Anil Kumar against the order of the CIT(Appeals), Faridabad, which confirmed the additions made by the Assessing Officer (AO) under sections 153C and 153A of the Income Tax Act, 1961. The additions were based on a search operation conducted on 10.10.2013 at the premises associated with M/s Urbtech Group, where incriminating documents were seized. The primary legal contention was the validity of the jurisdiction assumed for AY 2013-14, as the satisfaction for such jurisdiction was not recorded for the said assessment year but for AY 2010-11. The Tribunal, after examining the documents and satisfaction notes, concluded that the jurisdiction for AY 2013-14 was improperly assumed, leading to the quashing of the additions made.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31633 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHAUDHARY
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Document seized; Documents seized; Principle of natural justice; Search and seizure
• Section: 153; 153A; 69; 153C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA NO. 1040/Del/2018 A.YR. : 2013-14 ANIL KUMAR C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI – 49 (PAN: AJTPK4471B) VS. ITO, WARD 1(1), FARIDABAD HARYANA (APPELLANT) (RESPONDENT) Appellant by : Dr. Rakesh Gupta, Adv. Respondent by : Ms. Jaya Chaudhary, CIT(DR) Date of hearing : 08.01.2025 Date of pronouncement : 10.01.2025 ORDER PER SHAMIM YAHYA, AM : The assessee filed the present appeal against the order of the Ld. CIT(Appeals), Faridabad dated 18.12.2017 pertaining to assessment year 2013-14 on the following grounds:- 1) That having regard to the fact and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction u/s 153C r.w.s, 153A and passing the impugned order is bad in law and void-ab-initio 2 | P a g e and that too when the jurisdictional conditions under section 153C of the Act were not met. 2) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of the Ld. A.O. in making an addition of Rs. 42,35,000/- on substantive basis, allegedly as investment from undisclosed sources u/s 69 of the Act, and that too in the proceedings u/s 153C r.w.s. 153 A of the Act and more so when there was no incriminating material found as a result of search. 3) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 42,35,000/- is bad in law and against the facts and circumstances of the case. 4) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in passing the impugned order and that too without giving adequate opportunity of hearing and without observing the principle of natural justice. 5) That the appellant craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other. 2. In this case assessment order u/s. 153A(1)(b)/143(3) of the Income Tax Act, 1961 dated 23.12.2016 was passed by the Assessing Officer. In brief, a search was carried out on 10.10.2013 at the residential/ business premises of the persons associated with M/s Urbtech Group. During the course of search ‘Agreement to Sell’ dated 14.01.2010 was found and seized. On the basis of the seized documents, the AO proceeded to make additions and finally the 3 | P a g e assessment was completed at an income of Rs. 48,75,880/- by making addition of Rs. 42,35,000/- on protective basis. 3. Upon assessee’s appeal, Ld. CIT(A) confirmed the AO’s action. 4. Against this order, assessee is in appeal before us. 5. We have heard both the parties and perused the records. At the outset, Ld. Counsel for the assessee raised the jurisdictional issue. He submitted that the jurisdictional issue involved in the present appeal is against the 153C proceedings for AY 2013-14 even though satisfaction recorded by the AO of the searched persons was only for AY 2010-11 and none of the AO recorded any satisfaction for AY 2013-14 which is evident from the Paper Book Pages 12 & 23. He further submitted that even the assessment under appeal makes the addition on protective basis. Therefore, it has been submitted that jurisdiction was not assumed for AY 2013-14 which was essential. 5.1 Per contra, Ld. DR relied upon the orders of the authorities below and she submitted that the sale deed relating to AY 2013-14 was also found during course of search. 6. We have heard both the parties and perused the records. We may gainfully refer the ‘satisfaction note’ at Paper Book Page 12 which reads as under:- “14.03.2016 An information has been received from the DCIT, Central Circle-I, Gurgaon vide his letter dated 11.03.2016. As per the information, search and seizure u/s. 132(1) of the I.T. Act, 1961 was carried out 10.10.2013 at the residential / business premises of the persons associated with M/s Urbtech Group. During the course of search, “Agreement to Sell” dated 14.01.2010 was found and seized which is a part of incriminating documents seized. A 4 | P a g e perusal of this agreement it has come to focus that my assessee Shri Anil Kumar S/o Shri Ram Chander and his brother Shri Sunil Kumar entered into a deal of property with M/s Bhupindra Autotech Industries Pvt. Ltd. has purchased a piece of land measuring 559.02 sq. yards for a total consideration of Rs. 1,78,88,640/- i.e. @ Rs. 32000/- per sq. yards. The initial amount received by the seller was Rs. 43,00,000/- in cash and Rs. 3,50,000/- through cheque at the time of entering into agreement. A cash receipt issued by M/s Bhupinder Autotech Industries Pvt. Ltd. dated 19.02.2013 has also been found and seized. According to this receipt a sum of Rs. 30,00,000/- has been received by M/s Bhpindra Autotech Industries Pvt. Ltd. from Sh. Anil Kumar and Shri Sunil Kumar as part payment of land. The sale deed in respect of the aforesaid land was registered on 22.03.2013 transpires that sold area was increased from 559.02 sq. yds. to 605 sq. yads and in order to suppress the amount of transactions cost decreased from Rs. 32,000/- per sqm. Yards to Rs. 18,000/- per sq. yds. Total sale value has, thus, been declared at Rs. 1,08,90,000/- as against actually settled amount at Rs. 1,93,60,000/- (Sales value has been recalculated by applying the rate settled 5 | P a g e and also keeping in view the increased area as appearing in the sales deed). Therefore, it is clear that a sum of Rs. 42,35,000/- (1/2 share of Rs. 84,70,000/-) has been made as investment out of undisclosed out of undisclosed sources. The DCIT, Circle-I, Faridabad has forwarded a satisfaction recorded by him u/s. 153C of the I.T. Act, 1961 and also sent a copy of agreement dated 14.01.2010 and sale deed dated 22.03.2013. In view of the above, I am satisfied that it is a fit case for initiation of proceedings u/s. 153C of the I.T. Act, 1961 against Shri Anil Kumar S/o Shri Ram Chander, R/o H.No. 561, Sector-31, Faridabad.” 6.1 We also refer here the order sheet dated 07.12.2016 which is at Page no. 23 of the Paper Book, which reads as under:- “Order sheet entry dated 7.12.2016 Sh. Sanjay Garg Advocate-attended and filed part details required to file vide notice u/s 142(1)/131 of the Act. Asked to file remaining details/documents. Also show cause why addition of Rs.42,35,000/- should not be made in the total income for the A.Y. 2010-11 as it is clear from agreement of purchase of land situated at 14/6, Mathura Road, Village-Mewla Maharajpur, Faridabad. This agreement was made on 14.01.2010 by you alongwith your brother Sh. Sunil Kumar with M/s Bhupindra Autotech Industries Pvt. Ltd. which was found & seized at the business premises of M/s Bhupindra Autotech Industries Pvt. Ltd. during the course of 6 | P a g e search and seizure operation conducted at the business/residential premises of various persons associated with M/s Urbtech Group of companies. As per this agreement the land measuring 559.02 Sq. Yard was purchased by you @ Rs.32,000/- per Sq. Yard totaling of Rs.1,78,88,640/- and a cash received of Rs.30,00,000/- paid by you in cash to M/s Bhupindra Autotech Industries Pvt. Ltd. was also found and seized. But in connection of this agreement, the sale deed is made of the above land measuring 605 Sq:Yards @ Rs.18,000/- per Sq. Yards for a total consideration of Rs. 1,08,90,000/- on 22.03.2013. Total sale consideration of the above land should have been Rs.1,93,60,000/- i.e. @ Rs.32,000/- per Sq. Yard as agreed as earlier as per agreement. Therefore, it is clear that a sum of Rs.42,35,000/- (1/2* Share of Rs.84,70,000/-) has been made by you as investment out of undisclosed sources. The case adjourned to 14.12.2016. Please note that this a final opportunity is being provided to you and no further adjournment will be allowed as the case is going to be barred by time limitation on 31.12.2016.” 6.2 A reading of the above makes the plea of the Ld. Counsel for the assessee quite cogent that there is no mention of any of the satisfaction or order sheet entry that the satisfaction pertains to AY 2013-14. Both the documents referred above are only referring AY 2010-11. Hence, it is abundantly clear that no satisfaction was recorded relating to AY 2013-14. In this view of the matter, in the background of the aforesaid discussions, we hold that no satisfaction is recorded for AY 2013-14 by the AO, hence, the jurisdiction assumed is liable to be quashed and the same is hereby quashed as such. Since 7 | P a g e we have already quashed the jurisdiction in the instant case, the other grounds raised have now become academic, and therefore, need not be adjudicated. 7. In the result, the Assessee’s appeal is allowed. Order pronounced on 10/01/2025. SD/- (SUDHIR PAREEK) SD/- (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBHATNAGAR Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "