ASHISH GUPTA MANDI JAWAHAR GANJ, SHAMLI ,UTTAR PRADESH V. THE PR. CIT (CENTRAL) KANP AT MEERUT, UTTAR PRADESH

ITA 3386/DEL/2023

AI Insights

The case involves twin appeals by Mohit Gupta and Ashish Gupta against the orders of the PCIT, which were issued under section 263 of the Income Tax Act, 1961, concerning the assessment year 2016-17. The PCIT had revised the assessments made under sections 143(3) and 153A, claiming they were erroneous and prejudicial to the interests of the revenue. The main issues revolved around the alleged under-assessment of income and unexplained investments related to land purchases by firms associated with the assessees. The ITAT found that the PCIT's orders were contradictory and lacked clarity, leading to the decision to remit the matter back for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38327 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Other Referred Cases: Sir Dorabji Tata Trust vs. DCIT (E), Brahma Center Development (P) Ltd. vs. PCIT, ETT Ltd. vs. CIT, Amira Pure Foods Pvt. Ltd. vs. PCIT, Nilkanth Stone Industries vs. PCIT, CIT vs. International Society for Krishna Consciousness, PCIT vs. Deccan Jewellers Pvt. Ltd., Smt. Abha Bansal vs. PCIT, Kapil Mehta vs. CIT, NIIT Ltd. Vs. Union of India, T.N. Civil Supplies Corpn. Ltd Vs Commissioner of Income-tax, Malabar Ind. Co. Ltd. vs. CIT, Gee Vee Enterprises v. Add/. CIT, Addl. CIT v. Mukur Corpn., Addl. CIT v. Krishna Narayan Naik, CIT v. Precision Finance (P.) Ltd., CIT v. Emery Stone Mfg. Co., Duggal & Co. Vs. CIT, CIT Vs Anand Kumar Jain, CIT Vs South India Shipping Corporation
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KAUSHAL
• Assessee Lawyers: SUDHIR K. SEHGAL
• Keywords: Set aside; Business income; Capital asset; Opportunity of being heard; Retrospective amendment; Unexplained expenditure; Unexplained investment; Sale consideration of property below Jantri Value; Document seized; Documents seized; Search and seizure; Deemed to accrue or arise in india; Revision of order; Prejudicial to interest
• Section: 143(3); 153; 153A; 139(1); 208; 56(2)(vii)(b); 43; 13; 153C; 2; 80C; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member & Sh. Avdhesh Kumar Mishra, Accountant Member ITA No. 3385/Del/2023 : Asstt. Year : 2016-17 Mohit Gupta, S/o Sh. Suresh Chand Goel, Mandi Jawahar Ganj, Shamli, Uttar Pradesh-247776 Vs Pr. CIT(Central), KNP at Meerut, Uttar Pradesh-208001 (APPELLANT) (RESPONDENT) PAN No. AEZPG0976J ITA No. 3386/Del/2023 : Asstt. Year : 2016-17 Ashish Gupta, Mandi Jawahar Ganj, Shamli, Uttar Pradesh-247776 Vs Pr. CIT(Central), KNP at Meerut, Uttar Pradesh-208001 (APPELLANT) (RESPONDENT) PAN No. ACRPG3086D Assessee by : Sh. Sudhir K. Sehgal, AR Revenue by : Sh. Sanjeev Kaushal, CIT DR Date of Hearing: 14.01.2025 Date of Pronouncement: 27.02.2025 ORDER Per Satbeer Singh Godara, Judicial Member: These twin assessees’ as many appeals i.e. ITA No. 3385 & 3386/Del/2023, for A.Y. 2016-17 arise against the PCIT(Central), KNP at Meerut’s DIN & order Nos. ITBA/COM/F/17/2023-24/1057872265(1) and ITBA / COM / F / 17/2023-24/1057874609(1) dated 10.11.2023, in proceedings u/s 263 of the Income Tax Act, 1961 (in short “the Act”), respectively. ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 2 2. Heard both the assessees as well as the department at length. Case files perused. 3. Learned counsel representing the instant twin assessees submits at the outset that all the relevant facts in both these appeals are very much identical. The Revenue’s is equally fair in not disputing the assessees foregoing averments. We thus, treat the former assessee Sh. Mohit Gupta’s appeal ITA No. 3385/Del/2023 as the “lead” case. 4. It is next noticed that the learned PCIT(Central), KNP at Meerut has passed his impugned order assuming his revisional jurisdiction u/s 263 of the Act thereby terming the Assessing Officer’s corresponding section 143(3) r.w.s. 153A assessment framed on 30.12.2019; as an erroneous one causing prejudice to the interest of the Revenue. 5. Both the learned representatives are very much ad-idem during the course of hearing that this is the second round of revision proceedings u/s 263 of the Act since the tribunal’s earlier order in earlier identical twin appeals ITA Nos. 709 & 710/Del/2022 dated 01.11.2022, had restored back the matter to the learned PCIT for his afresh appropriate adjudication as under: ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 3 “2. For the sake of reference, we are referring to the case of Ashish Gupta in ITA No.710/Del/2022. The grounds of appeal read as under:- “1. Under the facts and circumstances of the case, order passed by the Ld. PCIT u/s 263 is illegal & bad in law. He has further erred in exceeding his jurisdiction in passing the order u/s 263 ignoring that an order passed u/s 143(3) r/w sec. 153D cannot be revised without revising the approval of the Addl. CIT. 2. The Ld. PCIT has erred on facts and in law in holding that the order passed by AO is erroneous and prejudicial to the interest of revenue as per clause (a) of Explanation 2 to section 263 as there is non application of mind on part of the AO since he has not made necessary verification of facts/enquiries with reference to:- (i) difference between the stamp duty value of land purchased by the firm M/s Gupta Sons & M/s Agarwal Sons and actual sales consideration with reference to the assessee's share in these firms which is assessable u/s 56(2)(vii)(b) of the Act ignoring that this issue has been examined by the AO in detail in course of assessment proceedings (ii) variation of Rs.1,49,0001- between the return filed u/s 139(1) & 153 A ignoring that the difference is on account of claim of deduction u/s 80C of the Act on account of tuition fees of child duly reflected in the return filed u/s 153A of the Act. 3. The Ld. PCIT has erred on facts and in law in passing the order u/s 263 without rebutting the various contentions raised by the assessee.” 3. Brief facts of the case are that the assessee filed his return of income on 30.08.2016 having total income of Rs.5,52,640/- u/s 139 (1) of the Act. A search and seizure operation was carried out by the Investigation Wing in the case on 30.11.2017 at the residential premises of the assessee at Haveli, Jawahar Ganj, Mandi, Shamli. Thereafter on 19.12.2019, order u/s 143(3) / 153A of the IT Act was passed by ACIT, Central Meerut and two additions on account of unexplained investment of Rs.5,54,000/- and on unexplained expenditure of Rs.2,00,000/- were made in the total return income of Rs.4,03,640/-, assessing it on Rs. 11,57,640/-. 4. Later on order u/s 263 of the Act was passed by PCIT mainly on account of following reasons :- ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 4 a) Firms M/s. Gupta Sons and M/s. Agarwal Sons had purchased land in the F.Y. 2015-16. The said land is part of an orchard which was already in possession of Gupta family (Shri Rahul Gupta & others). Shri Ashish Gupta and other family members of the entire Gupta family have 38% share in the Bagh, and the land has been registered a much below value of the market value as per land registry office. Apart from using these firms to acquire the said bagh, no other business is carried out by these firms till date. The total share of different members of Gupta Family in land deal of Sir Shadi Lal Garden is 38 % of total land area of 40.201 Hect. b) M/s Gupta Sons was created on 15.10.2015 and M/s Agarwal Sons was created on 11.02.2015. c) Total stamp duty value of the land purchased by the firm Gupta Sons is Rs.3,96,95,560/-. Shri Ashish Gupta has 5% share in the said firm, M/s Gupta Sons. Thus, the deemed contribution of Shri Ashish Gupta is Rs.19,84,778/-. Since, it was found that the firms were created for the purpose of only registering the land as no business activities have been carried out, the amount that was received by seller of land may be treated as received by the partner of the firm i.e. the transaction was carried out not between the firm and the individuals but between the two individuals only. Hence, the section 56(2)(vii)(b) is applicable in the case of individual. Total sales consideration is Rs.19,00,000/- and stamp duty value is Rs.3,96,95,560/-. Difference between stamp duty value and sale consideration is Rs.3,77,95,560/-. The 5% of this value of Rs.3,77,99,560/- come to Rs.18,89,778/-. Further, the total stamp duty value of the land purchased by the firm Agarwal Sons is Rs.28,03,94,000/- and total sales consideration is Rs.1,00,00,000/-. Difference between stamp duty value and sale consideration is Rs.27,03,94,000/-. Shri Ashish Gupta has 1% share contribution in M/s Agarwal Sons. The 1% this value of Rs.27,03,94,000/- comes to Rs.27,03,940/-. The total of Rs. 45,93,718/- (1889778+2703940) is deemed income of the assessee as per provision of section 56(2)(vii)(b) of the Act. ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 5 d) The assessment considering the addition u/s 56(2)(vii)(b) of the Act has already been passed by the assessing the officer in the cases of Shri Shashi Bala partner in the firm M/s Agarwal Sons and M/s Goel Sons, Manisha Gupta partner in the firm M/s Gupta Sons and M/s Agarwal sons in the cases of Yogesh Bindal, Sushil Garg, Dr. Anguri Gard & Narandra Kumar Mittal partner in the firm M/s Agarwal Sons. e) Further, on perusal of records difference of income amounting to Rs.1,49,000/- was also left out from assessment as mentioned in the show cause. 4. After the above observation, ld. Pr.CIT invoked the provisions of clause (a) of Explanation 2 to section 263 of the Act and held that there is lack of verification and enquiries which were required to be made. He further observed that the assessee is liable to be taxed as per section 56(2)(vii)(b) in respect of his share of land computed on the basis of his profit sharing ratio in the two firms, namely, M/s. Aggarwal Sons and M/s. Gupta Sons. That Explanation 2 enjoins upon the AO to conduct necessary enquiries and verification before passing an assessment order and the failure to do so, would lead to invocation of provisions of section 263 of the Act. That the failure of AO to do so has rendered the assessment order passed to be erroneous insofar as it is prejudicial to the interest of Revenue. Thereafter, ld. Pr.CIT referred to case laws for the proposition that lack of proper enquiry can give rise to exercise of jurisdiction u/s 263 of the Act. He concluded as under:- “In view of the discussion above, it is clear that there is non-application of mind on the part of the Assessing Officer inasmuch as the necessary verification of facts/enquiries which should have been made, have not been made, making the order erroneous and prejudicial to interest of revenue within the meaning of section 263 read with Clause (a) of Explanation 2 thereunder. I, therefore, under the powers conferred u/s 263 of the Income Tax Act, 1961, hereby set aside the order passed by Assessing Officer u/s 153A/143(3) for A.Y. 2016-17 with direction to pass fresh order after conducting proper enquiries, and considering discussion in paras above, after providing opportunity to the assessee also.” 5. Against the above order, assessee has filed appeal before us. We have heard both the parties and perused the records. ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 6 6. Ld. Counsel of the assessee stated that due enquiry has been made by the AO and assessee has duly given explanation. That upon acceptance of assessee’s explanation, no addition in this regard has been made. Ld. Counsel further placed reliance on the following case laws :- i. ITAT, Mumbai Bench in case of Sir Dorabji Tata Trust vs. DCIT (E) (2021) 188 ITD 38; ii. ITAT, Delhi Bench in case of Brahma Center Development (P) Ltd. vs. PCIT (2020) 185 DTR 353/77 ITR (Trib.) 156; iii. ITAT, Delhi Bench in case of ETT Ltd. vs. CIT (2019) 177 DTR 313; iv. ITAT, Delhi Bench in case of Amira Pure Foods Pvt. Ltd. vs. PCIT (2017) 51 CCH 473/63 ITR (Trib.) 355; v. ITAT, Surat Bench in case of Nilkanth Stone Industries vs. PCIT (2021) 189 ITD 718; vi. Hon’ble Karnataka High Court in case of CIT vs. International Society for Krishna Consciousness (2020) 272 taxman 534; vii. Hon’ble Andhra Pradesh High Court in case of PCIT vs. Deccan Jewellers Pvt. Ltd. (2021) 206 DTR 257/283 taxman 578; and viii. ITAT, Delhi Bench in case of Smt. Abha Bansal vs. PCIT (2021) 208 DTR 265. 7. Per contra, ld. DR for the Revenue relied upon the order of ld. Pr.CIT. 8. As regards ground no.1, ld. DR for the Revenue referred to the decision of the coordinate Bench of the ITAT in the case of Kapil Mehta in ITA No.533/Del/2021 order dated 11.01.2021. ITAT has rejected similar argument in this regard as under :- “6.11 On a plain reading of the section, we do not find that there is any fetters on the powers of PCIT or CIT for revising ‘ any order passed by the AO “except as provided in explanation 1(c)” of the section. 6.12 However, here the argument of the assessee is that powers granted to the PCIT and CIT u/s 263 becomes otiose if the authority below the rank of PCIT/ CIT i.e Joint Commissioner of Income tax, has approved the order u/s 153D of the Act. The natural corollary of the argument is that if the lower authority, u/s 153D, has approved the order, the Higher Authority i.e., PCIT and CIT lose their power to revise such orders. . It is obvious and as glaring as the day light that Pr. Commissioner of Income Tax is way high above the ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 7 Joint Commissioner of Income Tax. Reference to section 116 of the Income Tax Act, where the Income Tax authorities in their hierarchial order are listed, clears any doubt about it. 6.13 The Hon’ble Delhi High Court in NIIT Ltd. Vs. Union of India in WPC No. 172–179/2009 dated 11th December, 2009 in para No. 20 has categorically held that:- “20. The legal position which cannot be disputed is that when a particular authority is vested with the power to discharge statutory function, like the Commissioner who is empowered to pass orders under Section 263 of the Act, it is that authority which is to apply its independent mind and arrive at its own conclusion without being influenced by any other authority, much less the higher authority. Unfettered discretion lies in the Commissioner of Income Tax to pass orders under Section 263 of the Act. He is supposed to examine the records produced before him to arrive at a conclusion whether the assessment order passed by the AO suffers from infirmities and needs to be revised under Section 263 of the Act. The parameters which are laid down in Section 263 of the Act need to be fulfilled in exercising such a discretion. It is the Commissioner who has to satisfy himself, on the basis of available records, that in a given case the conditions stipulated under Section 263 of the Act are satisfied. In arriving at this conclusion, he is not to be controlled even by a higher authority. Likewise, the higher authority is not to interfere with the independence of his unfettered discretion which is statutorily conferred upon the Commissioner.” 6.14 Thus, even the authority above PCIT and CIT cannot deprive the powers of the revision and thus there is no reason that lower authority exercising powers granted to it can prevent the PCIT or the CIT to exercise revisionary powers. Therefore, it is apparent that none of the lower authorities or even a superior authority cannot put spokes in exercising the power of the Pr. Commissioner of Income Tax. Such is the mandate of the Hon’ble Delhi High Court. 6.15 Now we come to the decision of the Hon’ble Supreme Court in T.N. Civil Supplies Corpn. Ltd Vs Commissioner of Income-tax [2003] 260 ITR 82 (SC) wherein the Assessing Officer passed an order on the direction of the Inspecting Assistant Commissioner under Section 144B of the Act, which was subject to revision under Section 263 of the Act. The Hon’ble Supreme Court in that particular case has categorically held that the ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 8 orders are to be revised are orders passed by the Income Tax Officer. Hon’ble Supreme Court further held that provisions of Section 263 did not exclude ‘orders passed by the Assessing Officer on the direction of a superior authority either under Section 144A or Section 144B of the Act. The Hon’ble Supreme Court held that :- “2. The power to revise orders of the Income-tax Officer under section 263 of the Income-tax Act, 1961 was sought to be limited by the appellant-assessee by contending that the phrase \"order passed by the Income-tax Officer\" in section 263 excluded those orders passed by the Income-tax Officer pursuant to the directions of the Inspecting Assistant Commissioner under section 144B which was then included in the Act. 3. The High Court in its decision has followed its earlier decision in which it had referred to and relied upon the reasoning of several other High Courts on the same issue to negative the contentions of the assessee. Given the uniformity of interpretation by the several High Courts, it would not be appropriate to interfere with the decision of the High Court. 4. In any event we are of the view that having regard to the subsequent amendments to the Act issued from time to time there was no scope for limiting the phrase 'order passed by the Income-tax Officer' in section 263 to exclude orders passed by the Income- tax Officer on the directions of a superior authority either under section 144A or 144B.” 6.16 Categorically here the orders are not passed even under the instructions of the superior authority or under the direction of the superior authority, but merely an approval was granted by the Joint Commissioner of Income Tax under Section 153D of the Act to pass the orders. Provisions of Section 153D speak about “prior approval for assessment in the case of search”. They also provide for obtaining the prior approval of the Joint Commissioner for merely passing an order. Therefore, the decision of the Hon’ble Supreme Court clearly lays down that ‘any order passed by the Assessing Officer’ can be revised under Section 263 of the Act irrespective of the fact that any authority has granted any direction to the Assessing Officer. ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 9 6.17 Therefore, natural corollary would be show that all orders of search and seizure passed under Section 153A or under Section 153C of the Act are required to be passed after prior approval of the Joint Commissioner except as provided under Section 154BA(12). Therefore, if the argument of the Ld. AR is to be accepted then in such cases where the assessment has been framed under Section 153A or Section 153C, the same will go out of the ambit of the provisions of Section 263 of the Act and such a view is directly contrary to the decision of the Hon’ble Supreme Court in T .N .Civil Corporation Vs. CIT 260 ITR 82, Hon’ble Punjab & Haryana High Court Osho Forging Ltd. Vs. CIT (supra) and Hon’ble Delhi High Court in NIIT Ltd. Vs. Union of India (supra). 6.18 The power of the Commissioner under Section 263 of the Act is in the nature of supervisory jurisdiction. This power is granted to correct an error, which is prejudicial to the interest of the Revenue in the order of the Assessing Officer, even if it is approved by the Joint Commissioner, who is also falling below the rank of the Pr. Commissioner. If the argument of the ld. AR is accepted then the supervisory authority of the Pr. Commissioner granted under the Act is hampered. 6.19 Therefore, on provisions of Section 263 of the Act give un-fettered right to the Commissioner of Income Tax to revise any order passed by the Assessing Officer. Whatever was to be excluded by the law has already been provided under that Section and the only exception are the issues ‘decided and considered’ in the appellate orders. Therefore, the reasoning of the arguments advanced by the Ld. AR on this line also fails and we dismiss the same.” 9. We find that the above proposition is duly applicable in the ground raised by the assessee in this regard wherein it is urged that the jurisdiction exercised by Pr.CIT is wrong inasmuch as that is without revising the approval of the Addl. CIT. As already held by the ITAT above, there are no such fetters to the powers of ld. Pr.CIT and more so for the officer who is below in rank to the Pr. Commissioner. Hence, ground no.1 stands dismissed. 10. Now, we come to order passed under section 263 of the Act. In this regard, in the order passed u/s 263 of the Act, ld. Pr.CIT has already made a computation of addition which as per him should have been made. But in the same breadth, he is invoking the provisions of ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 10 clause (a) of Explanation 2 to section 263 of the Act holding and directing the AO to make proper enquiry. We find that this is quite contradictory on the part of the ld. Pr.CIT. In one part of the order, he is computing the addition which should have been done in the hands of the assessee. Thereafter, he is stating that there is lack of further enquiry and hence he is invoking the provisions of section 263 and directing the AO to make proper enquiry. In our considered opinion, such contradictory order is not legally sustainable. We note that in the case of Kapurchand Shrimal vs. CIT 131 ITR 451, Hon’ble Supreme Court has held that it is the duty of appellate authority to correct the errors in the orders of the authorities below and remand the matter back to them with or without direction unless prohibited by law. In the present case, we find that the above said ratio is fully applicable and the order passed by the ld. Pr.CIT is contradictory in itself. Hence, we remit the issue back to the file of ld. Pr.CIT to consider the issue afresh after giving an appropriate opportunity of being heard to the assessee and in the light of our observation hereinabove. 11. In the result, this appeal filed by the assessee is partly allowed for statistical purposes. 12. Our above order applies mutatis mutandis to both the appeals. 13. In the result, both the appeals are partly allowed for statistical purposes.” 6. Suffice to say, learned PCIT herein has once again passed his instant twin consequential revision orders reiterating his very stand that the Assessing Officer had not completed the foregoing search assessment(s) after due verification of all the relevant facts as under: “4. In pursuance of the order dated 01.11.2022 passed by the Hon’ble I.T.A.T., Bench-A, New Delhi, afresh show-cause notice u/s 263 of the Income Tax Act, 1961 was issued to the assessee through ITBA under DIN & Notice No. ITBA / COM /F /17 / 2023- 24 / 1053994148(1)dated27.06.2023requiring him to explain as to why the order dated 19.12.2019 passed by the DCIT, Central Circle- Meerut under Section 153A7143(3) of the Income Tax Act should not be considered as ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 11 erroneous in so far as it is prejudicial to the interests of the revenue on the following grounds: (i) “Return of income u/s 139(1) was filed on 31.12.2016 showing income of Rs. 24,15,870/-. Later on return u/s 153A(1)(a) of the Income Tax Act, 1961 was filed on 01.03.2019 showing total income of Rs.22,69,470/- meaning thereby short disclosure of income of Rs. 1,46,400/-. Discussion on this point has not been made in the assessment order, therefore, there is under assessment of income of Rs. 1,46,400/-. (ii) A search & seizure operation carried out on 30.11.2017 in your case at residential premises situated at Haveli, Jawahar Ganj Mandi, Shamli. The group/ family has purchased a bagh named as Sir Shadi Lal Enclave located at opposite Begrajpur Industrial Area near Munsurpur, Muzaffarnagar. This orchard is spread over about 585 Bighas and is adjacent to National Highway 58. The said Bagh was purchased in the name of certain firms. However, on the spot enquiry of the address of the firms it was found that no firms run on the said address. It was also found that no other profit earning activities were carrying out by the firms. The said bagh has been acquired at a very law consideration of the sum of Rs. 1,97,74,000/- whereas the Stamp Duty Value of the total land is Rs. 52,05,11,000/-. The registration deeds executed are as many as 17 deeds. In the purchase deed the said bagh shown to be purchased in the name of different firms and out of the said concerns, most of them namely M/s Aggarwal Sons, Goel Sons, Gupta Sons, Bindal& Sons etc were formed in F.Y. 2015-16. (iii) As regards the very low price of purchase, you have submitted that the deal was made 10-12 years ago. Shri Rajat Lal (25% share of said bagh) is one of the amongst three sellers, who fixed the deal as stated of property (Orchard) at Muzaffarnagar. The other seller is Smt. Sudha Singhania (25% Share), who is sister of Shri Rajat Lal and the third one is Shri Vivek Vishwanathan (50% share). Shri Rajat Lal in his statement has stated that a verbal agreement for sale of the property was made in the year 2010 with Late Ramesh Chand Gupta. Also Smt. Suman Gupta in her statement on oath said that the agreement for sale was made during the lifetime of her husband. The Payment against the purchase of land was made before the registration. In view of the statement of Smt. Suman Gupta and also indicated in a clear-cut manner by the seized documents (Pg 9 of LP-1 as pertaining to Smt. Suman Gupta). Therein, inter-alia, it has been shown that cash amount ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 12 of Rs. 1.25 Crore was given to the seller i.e., Shri Vivek Vishwanathan & Smt. Sudha Singhania in F.Y. 2012- 13.When queried for transfer of said land at such a low process, Shri Rajat Lal clearly stated that clear title deeds for said lands were not in their possession. In the Trial Balance of RCSC as on 31.03.201land in other seized documents too, credit balance as payable to these sellers has been shown. The name of Shri Vivek Vishwanathan & Smt. Sudha Singhania therein shown as sundry creditors. (iv) As per incriminating documents found during the search proceedings at the residence of the assessee, a ledger marked as RCSC pertaining to F.Y. 2014-15 to 2015-16 was found and seized. In the seized book a ledger account in the name of land Sir Shadi Lal Garden (land account) was found and seized. In the said ledger, it is clearly written that the cost of the 38% share of the land is Rs. 8.738 Cr. In this regard the assessee has stated that the actual amount is 38% of the Rs. 8.738 Cr. The evidence found during search does not support the submission of the assessee. In the ledger of RCSC costing for 38% clearly shown at 8.738 Crores and the entry is brought forward as on 01.04.2014, in itself shows that this entry was also present in ledger of earlier financial years too. The said investment of Rs. 8.738 Crores is clearly expended in cash. In view of this and also in view of other entries in the seized documents, wherein, it has been clearly emanated that amount was paid in cash before the transfer of land in 2015-16, and therefore Rs. 8.738 Crores is the unexplained investment in purchase of land at Sir Shadi Lal Garaden. (v) Further, you have stated that the entire consideration for the land was paid as back as F.Y. 2005-06. This submission is also not acceptable because the seized incriminating document LP-1, Page-3, which is a ledger pertaining to Smt. Suman Gupta for F.Y. 2012-13, show that a payment of Rs. 1.25 Cr. was made in F.Y. 2012- 13 to Shri Vivek Vishwanathan and Smt. Sudha Singhania, who are the co-sellers of this land. It shows that the amount other than sale deeds is unaccounted payment from undisclosed sources. (vi) you are one of the partners in two firms named as M/s Goel Sons and M/s Agarwal Sons, and these two firms purchased part of the land area of Shadi Lal Bagh in the year 2015-16 relevant to the A.Y. 2016-17. The total stamp duty value of the land purchased by the firm Goel Sons is Rs. 7,08,88,560/-. Shri Mohit Gupta has 60% share in the said firm, M/s Goel Sons. Thus, the ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 13 deemed contribution of Shri Mohit Gupta is Rs.4,25,33,136/-. As per section 56(2)(vii)(b), the value of land shall be taken as per stamp duty value and tax is also payable on that income. Since, it was found that the firm was created for the purpose of only registering the land and as no business activities have been carried out hence the amount that was received by seller of land may be treated as received from the partner of the firm i.e., the transaction was carried out not between the firm and the individual but between the two individuals only. Hence, the section 56(2)(vii)(b) is applicable in the case of individual. Total sale consideration is Rs.31,00,000/- and stamp duty value is Rs.7,08,88,560/-. Difference between stamp duty value and sale consideration is Rs. 6,77,88,560/- The 60% of this value Rs. 6,77,88,560/- comes to Rs. 4,06,73,136/- This amount of Rs. 4,06,73,136/- is deemed income of the assessee as per provision of section 56(2)(vii)(b) of the Act, 1961, and it should be taxed as income from other sources. The total stamp duty value of the land purchased in the firm Agarwal sons is Rs. 28,03,94,000/- and total sale consideration is Rs. 1,00,00,000/-. Difference between stamp duty value and sale consideration is Rs. 27,03,94,000/- Shri Mohit Gupta has 12.5% share contribution in M/s Agarwal Sons. Then The 12.5% of this value of Rs. 27,03,94,000/- comes to Rs. 3,37,99,250/-. The total income of Rs. 7,44,72,380/-(40673136+33799250) is deemed income of the assessee as per provisions of section 56(2)(vii)(b) of the Income Tax Act, 1961 which have been escaped to assessment. (vii) As per sec. 56(2)(vii)(b) of the Act, the value of land shall be taken as per stamp duty value and tax is also payable on that income. Since, it was found that the firm was created for the purpose of only registering the land and as no business activities have been carried out hence the amount that was received by seller of land shall be treated as received from the partner of the firm i.e., transaction was carried out not between the firm and the individual but between the two individuals only. Hence, the provisions of section 56(2)(vii)(b) of the Act 1961 are clearly applicable in your case. (viii) In view of above-mentioned facts and circumstances, you have income under the applicable provisions of the Income Tax At, mentioned in paras above, was not disclosed in the return of Income, and which has been under-assessed by the assessing officer while passing assessment order. Therefore, the order passed by the Assessing Officer has been rendered erroneous in so far as it is prejudicial to the interest of ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 14 the revenue in the light of Explanation 2 to Section 263 of the Income Tax Act, 1961. (ix) You are, therefore, in terms of subsection (1) of Section 263 of the Income Tax Act, 1961, required to show cause as to why the order dated 19.12.2019 for A.Y. 2016-17 passed by DCIT, Central Circle, Meerut, u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961 should not be considered as erroneous in so far as it is prejudicial to the interests of the revenue. You are required to furnish your reply before the undersigned via email on or before 07.03.2022 along with documentary evidences, upon which you wish to rely in support of your written submission. Please note that the limitation under the Act for passing the final order expires on 31.03.2022. Please also note that in case of failure to comply, it shall be presumed that you have nothing to say in this regard and the matter will be decided on merits on the basis of the material available on record”. 5. Vide the above show cause notice the date of compliance was fixed for04.07.2Q23 and the assessee was specifically asked to submit his reply alongwith documentary evidences, if any, by email on or before the date fixed for compliance. In response to this notice, the assessee vide his application dated 03.07.2023 sought an adjournment which was allowed and the next date of hearing was fixed on 25.07.2023. However, the assessee sought another adjournment vide his application dated 25.07.2023 which was also allowed and the next date of hearing was fixed on 14.08.2023.The case was further adjourned to 11.10.2023 on the request of the assessee. 6. On 12.10.2023, Shri Rahul Gupta, Advocate and Authorized Representative of the assessee attending the proceedings on behalf of the assessee and explained the issues involved. The AR of the assessee also filed a detailed reply dated 11.10.2023 of the assessee, Shri Ashish Gupta. The submissions made by AR were examined and the relevant issues argued extensively in the light of the observation made by the Hon’ble ITAT vide their order dated 19.12.2022. In support of his contentions, the assessee has also placed reliance on various judicial pronouncements which are as under: [i] Sir Dorabji Tata Trust Vs. DCIT(E) 188ITD 38 dt.28.12,2020 [Mum.][Trib.] [ii] Brahma Center Development (P) Ltd. Vs. PCIT [2020] 185 DTR 353/77 ITR(Trib.)156 (Delh)(Trib.) ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 15 [iii] ETT Ltd. Vs. CIT (2019) 177 DTR 313 (Del.) (Trib.) [iv] Amira Pure Foods Pvt. Ltd. Vs. PCIT (2017) 51 CCH 473/63ITR (Trib.) 355 (Del.) (Trib.) [v] Nilkanth Stone Industries Vs. PCIT (2021) 189 ITD 718 (Surat) Trib. [vi] CIT Vs. International Society for Krishna Consciousness (2020) 272 Taxman 534 (Kar.)(HC) [vii] PCIT Vs. Deccan Jewellers Pvt. Ltd. (2021) 206 DTR 257/283 Taxman 578 (AP) (HC) 7. The assessee’s reply was carefully considered and examined in the light of details/material available on records as well as the law laid down by various judicial forums in this regard. Thus, before coming to a logical conclusion, it would be appropriate to discuss the factual and legal aspects of the case which are as under: 8. From perusal of the seized documents, it is found that the above firms, M/s. Aggarwal Sons, M/s. Goel had purchased land in the F.Y. 2015-16. The said land is part of an orchard which was already in possession of Gupta family (Shri Rahul Gupta & others). Shri Mohit Gupta and other family members of the entire Gupta family has 38% share in the Bagh, and the land has been registered at much below value of the market value as per land registry office. Thus, it is crystal clear that these firms have been formed to acquire the impugned bagh and in actuality the firms are not doing any real business. Apart from using these firms to acquire the said bagh, no any business carried out by these firms till date. It is established that the firms created are paper firms and it was created to escape from tax liability as per section 56(2)(vii)(b) as .during the year under consideration the firm does not fall within the ambit of section 56(2)(vii)(b). It is also found that the total share of different members of Gupta family in land deal of Sir Shadi Lal Bagh Garden is 38% of total land area of 40.201 hectare as per incriminating documents found during the course of search pertaining to years before 2015-16. On examination of the profit-sharing ratio of the partners belonging to Gupta family in the three firms namely M/s Aggarwal Sons, M/s Goel Sons and M/s Gupta Sons is also 38%. It is shows that everything has been done in a planned manner. 9. M/s Aggarwal Sons was created on 11.02.2015. The details of the partners, their share capital and profit-sharing ratio is as under: ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 16 SI. No. Name of the Partners Share capital Ratio Profit Sharing 1 Rahul Gupta 778625 2.5 2.5 2 ShashhBala 1245800 4 4 3 Manisha Gupta 934350 3 3 4 Suman Gupta 934350 3 3 5 Ashish Gupta 311450 1 1 6 Mohit Gupta 3893125 12.5 12.5 7 Megha Gupta 3737400 12 12 8 Yogesh Bindal 1245800 4 4 9 Santosh Bindal 1245800 4 4 10 Abhishek Gupta 2504100 8 8 11 Sushil Garg 310200 1 1 12 Neha Gupta 2791800 9 9 13 Priyank Garg 2803050 9 9 14 Dr. Anguri Garg 2803050 9 9 15 Narendra Kumar Mittal 2810300 9 9 16 Bharat Mittal 2795800 9 9 Total 3,11,45,000 M/s Goel Sons was created on 15.10,2015. The details of the partners, their share capital and profit-sharing ratio is as under: SI. No. Name of the Partners Share capital Ratio Profit Sharing 1 Rahul Gupta 241720 5 5 2 Shashi Bala 963880 20 20 3 Mohit Gupta 2891640 60 60 4 Priyanka Gupta 728160 15 15 Total 4825400 The assessments considering the additions u/s 56(2)(vii)(b) of the I.T. Act have already been passed by the Assessing Officer in the case of Shashi Bala partner in the Firm M/s Agrawal Sons & M/s-Goel Sons, Manisha Gupta partner in the Firm M/s Gupta sons & M/s Agrawal Sons and in the cases of Yogesh Bindal, Sushil Garg, Dr. Anguri Gard & Narendra Kumar Mittal partners in the Firm M/s Agrawal Sons. 10. The assessee is a partner in two firms named as M/s Goel Sons and M/s Agarwal Sons, and these two firms purchased part of the land area of Shadi Lal Bagh in the year 2015-16 relevant to the A.Y. 2016-17. The total stamp duty value of the said purchased by the firm M/s. Goel Sons is Rs.7,08,88,560/-. Shri Mohit Gupta has 60% share in the said firm M/s Goel Son. Thus, the deemed contribution of Shri Mohit Gupta is Rs.4,25,33,136/- as per section 56(2)(viii)(b) the value of land shall be taken as per stamp duty value and tax is ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 17 also payabale on that income. Since, it was found that the firms were created for the purpose of only registering the land and as no business activities have been carried out, hence, the amount that was received by seller of land may be treated as received by the partner of the firm fee. the transaction was carried out not between the firm and the individual but between the two individuals only. Hence, the section 56(2)(viii)(b) of the I.T. Act, 1961 is applicable in the case of individual and the difference of sale consideration and stamp value should have been added as income from other sources of the assessee as per his partnership ratio. 11. Further, on perusal of records it is also seen that there is a difference in the income declared by the assessee in the return of income u/s 139(1) and in the return u/s 153A(1)(a) of the Income Tax Act, 1961. Thus, there is short disclosure of income which was left from assessment and the same should have been added to the total income of the assessee per para-3(i) above. However, the same was not done by the Assessing Officer. 12. As regards the issue of deemed income u/s.56(2)(viii)(b) of the I.T. Act, 1961, the assessee vide his reply dated 11.10.2023 has stated that the correct amount of stamp duty value of land purchased by M/s. Goel Sons is only Rs.3,96,95,560/- The assessee has further stated that “Your goodself has considered that in M/s. Goel Sons, 3 sale deeds has been executed for Rs.31 lacs but for stamp duty purpose its value is assessed at Rs. 7,08,88,560/-. This is factually incorrect. In fact in M/s. Goel Sons, only 2 sale deeds were executed for Rs. 19 lacs, the value of which for stamp purpose was assessed at Rs. 3,96,95,560/- See Sale deed at PB 59-76). At Pg 10 of your earlier order you have included one more sale deed of Rs. 12 lacs having stamp duty value at Rs. 3,11,93,000/-. However, it can be noted that the area as per the first sale deed and the third sale deed is same. From where the third sale deed is included is not known. This is not existent. In the Balance Sheet of Goel sons, the cost of land is reflected at Rs. 47,19,920/- comprising of cost of land Rs. 19 lacs and stamp duty paid Rs. 28,19,920/-(PB 77-78) ………..” 12.1. The above mentioned reply of the assessee has been considered and it is seen that the assessee’s contentions with regard to the deemed income u/s.56(2)(viii)(b) of the I.T. Act, 1961 are contrary to the facts of the present case keeping in view the findings of the AO in the case of M/s. Goel Sons for A.Y. 2016-17 wherein the AO has observed as under: ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 18 “The case was heard and discussed. On the basis of the reply file by the assessee and examination of papers/documents seized and submitted, the income of the assess is determined as under- The firm was created on 15 10 2015. The details of the partners their share capital and profit sharing is as under: Name of the partners Share capital Ratio Profit Sharing Rahul Gupta 241720 5 5 Mohit Gupta 2891640 60 60 Shashi Bala 963880 20 20 Priyanka Gupta 728160 15 15 Total 4825400 From perusal of the seized documents, it is found that the assessee had purchased land in the FY 2015-16 The said land is part of an orchard which was already in possession of Gupta Family (Shri Rahul Gupta & Others) as per seized document found during the course of search. Shri Rahul Gupta and other family members of the entire Gupta family has 38% share in the Bagh as per seized document named as RCSC. Sh. Rahul Gupta in his reply has also admitted that Gupta family has 38% share in the Orchard known as Sir Shadi Lal Garden The said bagh got registered in the name of three firms in which the Gupta family members are partners Amang the three firms, one of the firms is M/s Goel Sons The bagh is named as Sir Shadi Lal Enclave located at opposite Begrajpur Industrial area near Mansurpur, Muzaffamagar. This orchard is spread over about 585 Bighas and is adjacent to National Highway 58. The firm was created by furnishing false addresses and came into existence in February, 2015 In this regard, an on the spot enquiries at the address of the assessee firm given in the deed and the return, was carried out by the Investigation Wing It was found that no such firms were carrying out any business at the given addresses. At the stated addresses, no offices of the same or not even any name board of said concern found. The details of the land that was purchased in the name of the firms and when it registered and is whose name it was registered is as under: ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 19 Seller name Purchaser Name Sale Consideratio n Area Stamp Duty Paid Sale Consideration as per Stamp Duty Shri Vivek Vishwanathan S/o Priya Vishwanathan M/s. Goel Sons through Rahul Gupta 228000/- Khasra No. 820, 843, 849, 859/981, 860/982, 860B & 881 (1/2 Part of 1.366 Hectare & full part of 1.648 Hectare) 417620/- 5964670/- dt. 22.01.2016 Shri Vivek Vishwanathan S/o Priya Vishwanathan M/s. Gole Sons through Rahul Gupta 1672000/- Khasra No. 16, 17 2224 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 & 47 (full part of 17.8573 Hectare ka 19/100 part) 2361300/- 33730890/- dt. 22.01.2016 Shri Vivek Vishwanathan S/o Priya Vishwanathan M/s. Gole Sons 1200000/- Khasra No. 859/981, 860/982, 843, 860B, 849, 881 & 820 (1/2 Part of 1.366 Hectare & full part of 1.648 Hectare) 2184000/- 31193000/- dt.21.09.2015 3100000/- 4962920/- 70888560/- From the above it is clear that the land has been registered at much below value of the market value as per land registry office. Thus, it is crystal clear that these firms have been formed to acquire the impugned bagh and in actuality the firms are not doing any real business. Apart from using these firms to acquire the said bagh, no any business carried out by these firms till date. It is established that the firms created are paper firms and it was created by escape from the tax liability as per section 56(2)(vii)(b) as during the year under consideration the firms does not fall within the 'ambit of section 56(2)(vii) (b) A colorable device has been used to default the payment of tax liability………” 12.2. From the above details in the assessment order of M/s Goel Sons, it is noticed that the purchase consideration in respect of 3 sale deeds, is Rs.7.08.88,560/-, and not Rs.3,96,00,000/-. ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 20 13. In view of the foregoing facts, the value of land shall be taken as per stamp duty value and tax was also payable on that income. Since, it was found that the firms were created for the purpose of only registering the land and as no business activities have been carried out hence the amount that was received by seller of land may be treated as received from the partner of the firm i.e., transaction was carried out not between the firm and the individual but between the two individuals only. Hence, the section 56(2)(vii)(b) of the Act 1961 is applicable in the case of individual. Thus, after insertion of Explanation-2, the position of law as regards to under what circumstances an order can be deemed to be erroneous & prejudicial both, has changed substantively. Therefore after 01.06 2015 the propositions given by courts will have to be interpreted with reference to the deeming fiction now provided in the statute itself explaining the conditions wherein an order can be deemed to be erroneous & prejudicial. To avoid any confusion, it would serve the purpose if the said provisions are revisited and I cite them as under: “[Explanation 2—For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal [Chief Commissioner or Chief Commissioner or f Principal] Commissioner or Commissioner,— (a) the order is passed without making inquiries or verification which should have been made; [Emphasis supplied] (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.]” 14. As per clause (a) of Explanation-2 to Section 263, lack of verification/enquiries which were required to be made is one of the conditions to deem an order to be erroneous & prejudicial both. The assessee is liable to be taxed as per section 56(2)(vii)(b) in respect of his share ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 21 of land computed on the basis of his profit-sharing ratio in the two firms namely M/s Aggarwal Sons & M/s Gupta Sons. Explanation-2 enjoins upon the Assessing Officer to conduct necessary enquiries and verifications before passing an assessment order and the failure to do so, would lead to invocation of the provisions of Section 263 of the Income Tax-Act, 1961. The failure of the assessing Officer to do so has rendered the assessment order passed by him Officer deemed to be erroneous in so far as it is prejudicial to the interests of the revenue. 15. Even on legal footing, the case laws cited by the assessee in support of his contention do not help his cause in these proceedings. The assessee has taken shelter of certain case laws to make out a case that issues which have already been examined in detail do not come within the purview of Section 263 of the Income Tax Act, 1961. With due respect to the judicial pronouncements cited, the same are distinguishable not only on facts but on the position of law too. Facts borne out of records clearly show that the Assessing Officer did not make any enquiries or independent verification. The reply and documents filed by the assessee have been simply accepted as such without enquiries to reach a prudent satisfaction. The assessee has merely cited case laws without elaborating how the facts and legal proposition laid down by the Hon’ble Courts in these decisions supported his point of view. 16. Besides, there are several case laws where it has been held that lack of enquiry/verification of material available on record would render the order erroneous. A few such case laws are mentioned as follows:- A. The Punjab & Haryana High Court in the case of PCIT, Ludhiana vs. Venus Woollen Mills [2019] 412 ITR 188 [P&H] concurred with the view that where the Assessing Officer merely accepted the reply of the assessee without applying his mind as to the correctness of the claim, such an assessment would be erroneous in so far it was prejudicial to the interest of the revenue and would be hit by the provisions of Section 263 of the Income Tax Act, 1961. B. In CIT vs. Ballarpur Industries [2017] 85 taxmann.com 10 [Bombay] the Hon’ble High Court of Bombay held that absence of examination of the claim of deduction made by the assessee while passing an assessment order and allowed the claim made would render the order of the Assessing Officer erroneous and would invite the exercise of revisional jurisdiction under Section 263. ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 22 17. There is a catena of other decisions wherein the Courts have held that when the Assessing Officer fails to make enquiries which should have been done in the background of relevant material raising suspicion, the order passed by the AO is liable to be set aside u/s 263. The decisions relied for this proposition are as under: Gee Vee Enterprises v. Add/. CIT [1975] 99 ITR 375 (Delhi), Addl. CIT v. Mukur Corpn. [1978] 111 ITR 312 (Guj.), Addl. CIT v. Krishna Narayan Naik [1984] 150 ITR 513/[1983] 15 Taxman 535 (Bom.), CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465/[1995] 82 Taxman 31 (CIT v. Emery Stone Mfg. Co. [1995] 213 ITR 843/83 Taxman 643 (Raj.), Duggal & Co. Vs. CIT [1996] 220 ITR 456/[1994] 77 Taxman 331 (Del.) CIT Vs Anand Kumar Jain 370 ITR 140(Allahabad), Malabar Ind. Co. Ltd. 243 ITR 83(SC), Rampyaridevi Saraogi Vs CIT 67 ITR 84(SC), Tara Devi Agarwal Vs CIT 88 ITR 323(SC), CIT Vs South India Shipping Corporation 233 ITR 546(Mad). 18. In view of the discussions above, it is clear that there is non-application of mind on the part of the Assessing Officer in as much as the necessary verification of facts/enquiries which should have been made, have not been made, making the order erroneous and prejudicial to interest of revenue within the meaning of section 263 read with Clause (a) of Explanation-2 there under. I, therefore, under the powers conferred u/s 263 of the Income Tax Act, 1961, hereby set aside the order passed by Assessing Officer u/s 1153A/143[3] for A.Y.2016-17 with direction to pass fresh order after conducting proper enquiries, including third party enquiries and investigations etc. into the claim of the assessee, after providing opportunity to the assessee also.” 6.1 This leaves both the assessees aggrieved. 7. Before we could proceed further, we sought to know from both the parties as to what is the addition sought to be made in the impugned twin cases. We are informed in light of the learned PCIT’s revision above directions that the addition which is sought to be made herein is that u/s 56(2)(vii)(b) of the Act which is applicable in case of an individual or an HUF; as the ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 23 case may be, is found to have “received” a capital asset at a lower price than that adopted by the stamp authorities in clause (b) sub-clauses (i) & (ii) thereof. That being the case, we notice that it is not these twin assessees but their partnership firm M/s Goyal Sons, which had infact acted as the purchaser of the capital asset representing a share in an orchard measuring 585 bhigas, adjacent to National Highway No. 58. 8. Faced with this situation, we invite the learned CIT DR’s kind attention to para 12.1 of the impugned revisionary directions indicating share holding in the said partnership firm who has actually acted as the purchaser or “received” the asset(s) in the relevant previous year. This clinching fact has gone un-rebutted from the departmental side. All what the learned CIT DR has reiterated is that once these assessees have routed their impugned purchases through the partnership firm, the addition herein u/s 56(2)(vii)(b) of the Act ought to be made in their hands only. 9. We find no merit in the Revenue’s instant arguments. This is for the precise reason that both these individuals/assessee happen to be partner of the partnership firms M/s Goyal Sons, they could not be themselves treated as the actual purchaser for the purpose of involving the relevant statutory provisions ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 24 u/s 56(2)(vii)(b) of the Act. We wish to reiterate here that the legislature has inserted section 56(2)(x) of the Act dealing with “any person” including a partnership firm, to cover such a mischief 01.04.2017 onwards by the Finance Act, 2017 which admittedly does not carry any retrospective effect as the case in A.Y. 2016-17 only. We conclude in light of all these facts that even if the learned Assessing Officer had failed to verify all the relevant facts for the purpose of making impugned section 56(2)(vii)(b) addition in assessees hands, his twin search assessments could neither be held to be erroneous ones nor those causing prejudice to the interest of the Revenue, which forms a condition precedent for exercise of section 263 revision jurisdiction as held in Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 (SC). We accordingly reverse the learned PCIT revisionary directions in both these cases for this precise reason alone. 10. All other pleadings on merits as well as in law, identical in both these cases, stand rendered academic. ITA Nos. 3385 & 3386/Del/2023 Mohit Gupta & Ashish Gupta 25 11. These twin assessees as many appeals ITA Nos. 3385 & 3386/Del/2023 are allowed in above terms. A copy of this common order be placed in the respective case files. Order Pronounced in the Open Court on 27/02/2025. Sd/- Sd/- (Avdhesh Kumar Mishra) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 27/02/2025 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR "