DCIT CENTRAL CIRCLE-30, NEW DELHI V. CHATTAR SINGH, NEW DELHI

ITA 1310/DEL/2020

AI Insights

The case involves appeals by the Revenue against the orders of the Ld. CIT(A) for the assessment years 2012-13 and 2013-14, where the Ld. CIT(A) had deleted the additions made by the Assessing Officer. The additions were based on the DVO's valuation report and other documents, which the Ld. CIT(A) found not to be incriminating material as required under Section 153A of the Income Tax Act. The Tribunal agreed with the Ld. CIT(A)'s decision, citing various precedents and the legal position that in the absence of incriminating material, no additions can be made in unabated assessment years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31563 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs Kabul Chawla, Pr. CIT vs Meeta Gutgutia, Jai Steel (India) vs. Asstt. CIT, Kurele Paper Mills (P.) Ltd. vs. CIT, Mahesh Kumar Gupta vs. CIT, Ram Avtar Verma vs. CIT, Gurinder Singh Bawa vs. CIT, Saumya Construction (P.) Ltd. vs. CIT, Continental Warehousing Corpn (Nhava Sheva) Ltd. vs. CIT, Filatex India Ltd. vs. CIT, Chetan Das Lachman Das vs. CIT, Jayaben Ratilal Sorathia vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: ASHOK KUMAR JAIN
• Keywords: Set aside; Question of law; Unexplained expenditure; Unexplained investment; Document seized; Documents seized; Tax effect; Search and seizure; Valuation report; Block assessment; Bogus Share capital; Bogus
• Section: 147; 143(3); 143(2); 32; 153; 132; 153A; 68; 22; 69; 13; 153C; 133A; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA NOS. 1310 & 1311/Del/2020 (AYRS. 2012-13 & 2013-14) DCIT, CC-30, NEW DELHI ROOM NO. 320, E-2 ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI – 55 VS. CHATTAR SINGH, H.NO. 40, FATEHPUR BERI, SOUTH WEST, NEW DELHI – 74 (PAN: BEEPS4480L) (APPELLANT) (RESPONDENT) Department by : Shri Surender Pal, CIT(DR) Assessee by : Shri Ashok Kumar Jain, CA Date of hearing : 30.12.2024 Date of pronouncement : 8.1.2025 ORDER PER SHAMIM YAHYA, AM : These appeals filed by the Revenue are directed against the separate orders both dated 17.03.2020 of the Ld. CIT(A)-30, New Delhi relating to assessment years 2012-13 & 2013-14. 2. The grounds raised in assessment year 2012-13 read as under :- I. Ld. CIT(A) has erred in law and facts in deleting addition while relying on the decision of the Hon’ble High Court in the case of Kabul Chawla 380 ITR 573, whereas, Department’s SLP in the case of APAR Industries against Bombay High Court’s Order in ITA No. 1669 of 2013 dated 08.05.2015 has 2 been admitted alongwith 115 cases on the issue of restriction of addition only to incriminating material found during search, has been admitted vide Diary No. 37848/2015. II. Ld. CIT (A) has erred in law or facts without considering the incriminating documents named “sale.xls” which was recovered from the soft data impounded as Annexure-Al from, D-56, Chatarpur Enclave, New Delhi during the course of action u/s 133A of the I.T. Act, on 27.07.2016 at the office of R.K Horticulture Pvt. Ltd and D. R. Horticulture Pvt. Ltd. Ld. CIT (A) has erred in facts in para 8 of its order whereas it has been stated that document has been found from third party. Kartar Singh Tanvvar (main person on which search took place), brother of the assessee, is the director of R.K Horticulture Pvt. Ltd and D. R. Horticulture Pvt. and D-56, Chatarpur Enclave, New Delhi is the office where all construction and real estate related work take place. III. Ld. CIT (Appeal) has erred in law or facts in appreciating the fact that assessee has not brought on record the very purpose of creating excel sheet Sale.xls. The sheet enlists various properties of the area along with their actual market rates, real owners and the disclosed or white component expected in the deal of the property. From this sheet it is evident that the actual market price is much higher than the govt, rates and the unaccounted and undisclosed component in these deals can be as high as 75% of the total cost of the property. The sheet indicates very higher market price as compared to circle rates. IV. The Ld. CIT (Appeal) has failed to appreciate the facts that various incriminating evidences were found from different premises during the course of search and survey which conclusively prove that huge unaccounted cash were paid in these property deals while the registration was done at circle rate which was much lower than the prevailing market rates. (Annexure A-6 seized from the Residence of Dhruv Goel, Admission of Sh. Amit Sankhwal u/s 133A, phone messages 3 were impounded as Annexure A-l from Bharat Sawhney, Page 166 of A-2 Seized from Rajan Sharma) V. Ld. CIT(A) has erred in law or facts that the assessment order made only on the basis of DVO’s valuation report. The Assessing Officer has referred to DVO as per the provision of section 142(A) of the Act for correct determination of above threes properties only as mentioned in Sr. No. 2, 3 and 4 in the above table. VI. The Ld. CIT(A) has erred in law or facts in deleting the addition of Rs. 33,049/- as name of Nisha Tanwar who have submitted her confirmation was not mentioned in the bills. VII. In view of the above, facts and circumstances of the case, the decision of Ld. CIT(A) is not acceptable on merits. Moreover, the tax effect for the year under concerned is above the limit prescribed for filing appeal before ITAT as per CBDT Circular No. 17/2019 dated 8.8.2019 as well as CBDT’s Notification vide F.No. 279/Misc/142/2007-ITJ(Pt.) dated 20.8.2018. VIII. That the grounds of appeal are with prejudice to each other. IX. That the appellant craves leave to add, amend, alter or forego any ground (s) of appeal either before or at the time of hearing of appeal. 3. The brief facts of the case are that the assessee is an individual and is engaged in the business of contractor, construction of roads and building of government department in the name and style of proprietorship concern M/s Chattar Singh Construction Co. and Income from House Property and Interest Income. The return of income was filed on 29.09.2012, declaring income at Rs. 39,75,700/-. Subsequently, the case of the appellant was selected for scrutiny and the assessment was completed vide order dated 25.03.2015 at the assessed income of Rs. 8,20,70,760/-. Later on search and seizure action u/s 132 of the Act, was carried out on 27.07.2016 and 23.08.2016 in the case of the appellant along with the group cases of Shri Kartar Singh. Accordingly, the 4 A.O. issued notice u/s 153A of the Act on 06.04.2018 requiring the appellant to file the return of income. In response to this, the assessee filed his return 02.07.2018 at the income of Rs. 41,88,880/-. Accordingly, the A.O. issued notice u/s 143(2) of the Act, on 07.08.2018. The AO completed the assessment u/s 153A of the Act, for the year under consideration by making the additions on the basis of assessment order passed u/s 143(3) of the Act amounting to Rs. 7,78,81,880/-, on account of Undisclosed Consideration received from sale of Property No. D-89, village Chattarpur, Delhi amounting to Rs. 1,08,33,000/-, on account of Undisclosed Consideration received from sale of Property at W4B/5, West Avenue, Sainik Farms amounting to Rs. 63,57,859/-, on account of undisclosed income spent on Construction Expenses of property at Village Khanpur, Delhi amounting to Rs. 44,13,547/-, on account of Unexplained Repair Expenditure amounting to Rs. 33,049/-. The A.O. completed assessment u/s 153A of the Act, at the assessed income of Rs. 10,37,08,230/-. 4. Upon assessee’s appeal Ld. CIT(A) decided the issue in favour of the assessee by noting that assessment order was not based on any incriminating material or document found during the course of search and seizure. In this regard, he also placed reliance on several case laws. We may gainfully refer the findings of ld. CIT(A) as under:- “…8. From the assessment order, it is clear that no incriminating material was found during the course of search related to this assessment year: The first objection of the appellant is that the addition (without prejudice to the appellant’s stand) is based on the so called incriminating material that was found not in a search but in a survey, that too on a 3rd party. Further, the appellant has pointed out that the document does not contain any incriminating information. The document at hand does not contain the details of the subject properties in question at all. The document merely speaks of estimated value of some other properties. 5 9. Thus, primary contention of the appellant is that the addition is not based on any incriminating material but on the basis of DVO’s report. Further, the appellant has pointed out that no incriminating material was found during the course of search. 10 Now, I proceed to outline the issues for my adjudication: (A) Whether the assessment order is bad since this is an unabated assessment year and not based on any incriminating material found during the course of search? Whether the document found during the course of survey (and not search) can be used for framing an assessment u/s 153A for an unabated assessment year? Even otherwise, without prejudice, whether the document found during the course of survey that too on a third party can be treated as incriminating. (B) Whether assessment made only on the basis of DVO’s valuation report is a valid assessment u/s 153A for an unabated assessment year? (C) Does the valuation suffer from inconsistencies and is not sustainable on merit ? [A] Whether the assessment order is bad since this is an unabated assessment year and not based on any incriminating material found during the course of search? Whether the document found during the course of survey (and not search) can be used for framing an assessment u/s 153A for an unabated assessment year? Even otherwise, without prejudice, whether the document found during the course of survey too on a third party can be treated as incriminating: In this case, search u/s 132 of the Act, was carried out on 27.07.2016 and 23.08.2016. The document was recovered /found in a survey u/s 133A of the Act, on 27.07.2016. The said document does not have any dates. The said document has certain average/estimated rates of certain properties. The details in this sheet do not relate to the appellant’s property at all. The details do not speak of any transaction, per se. The details do not even carry any date. The document has been owned up by a 3rd person Shri Sumit Tanwar from whose hard disk this document was extracted pursuant to survey u/s 133A of the Act, 27.07.2016. In my understanding, the A.O. was also aware of this information not being of incriminating. Further, such document having been recovered from a 3rd party cannot be treated 6 as incriminating for purposes of assessment u/s 153A of the Act. In this connection, the position of law has been elucidated by the Hon’ble Delhi High Court in the case of CIT vs Kabul Chawla, 380 ITR 573. (i) I find that the assessment order does not speak of any incriminating document or material found during search. In fact the assessment order is not based on any seized or incriminating material found during search. (ii) The appellant has also sought to place reliance, among other, upon the order of Delhi High Court in the case of CIT vs Kabul Chawla, 380 ITR 573. It has been held in that order by the Hon’ble Delhi High Court. Para 37 is as follows- ‘‘37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(l) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs \"in which both the disclosed and the undisclosed income would be brought to tax”. iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment \"can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.\" 7 v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. ” (iii) The Hon’ble Delhi High Court has also held in the case of Pr. CIT vs Meeta Gutgutia, 395 ITR 526(Delhi), order dated 25.05.2017 at paras 58 till 53 as follows- “58. In Kabul Chawla (supra), the Court discussed the decision in Filatex India Ltd. (supra) as well as the above two decisions and observed as under: \"31. What distinguishes the decisions both in CIT v. Chetan Das Lachman Das (supra), and Filatex India Ltd. v. CIT-IV (supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two . decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in TTA No. 369 of 2015 (Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of 8 proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the IT AT, deleting the addition, was not interfered with.\" 59. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) v. Asstt. CIT f20131 36 taxmann.com 523/219 Taxman 223. The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: '33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) involved a case where certain books of accounts and other documents that had not been produced in the course of original assessment were found in the course of search. It was held where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration while computing the total income under Section 153A of the Act. The Court then explained as under: \"22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material; and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made.\" 34. The argument of the Revenue that the AO was free to disturb income de hors the incriminating material while making assessment under Section 153A of the Act was specifically rejected by the Court on the ground that it was \"not borne out from the scheme of the said provision\" which was in the context of search and/or requisition. The Court also explained the purport of the words \"assess\" and \"reassess\", which have been found at more than one place in Section 153A of the Act as under: 9 \"26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess'-have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word assess has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. 60. In Kabul Chawla (supra), the Court also took note of the decision of the Bombay High Court - in CITv. Continental Warehousing Corpn (Nhava Sheva) Ltd. [20151 58 taxmann.com 78/232 Taxman 270/374 ITR 645 (Bom.) which accepted the plea that if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any issue cart be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supra) as under: \"37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. Hi. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the. 10 aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs \"in which both the disclosed and the undisclosed income would be brought to tax\". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment \"can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.\" v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.\" 61. It appears that a number of High Courts have concurred with the decision of this Court in Kabul Chawla (supra) beginning with the Gujarat High Court in Saumya Construction (P.) Ltd. (supra). There, a search and seizure operation was carried out on 7th October, 2009 and an assessment came to be framed under Section 143(3) read with Section 153A(l)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The ITAT deleted the additions on the ground that it was not based on any incriminating material found during the course of the search in respect of AYs under consideration i.e., AY 2006-07. The Gujarat 11 High Court referred to the decision in Kabul Chawla (supra), of the Rajasthan High Court in Jai Steel (India) (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: '15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153 A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or' requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any 12 proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading \"Assessment in case of search or requisition\". It is \"well settled as held by the Supreme Court in a catena of decisions that the heading or the Section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153 the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153 A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found, as held by-the Rajasthan High Court in the case of Jai Steel (India)v. Asst. CIT (supra), the earlier assessment would have to be reiterated, in case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of an the six assessment years. In the opinion of this court, the said contention 13 does not merit acceptance, inasmuch as. the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court In the case of CIT v. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years ; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year.' 62. Subsequently, in Devangi alias Rupa (supra), another Bench of the Gujarat High Court reiterated the above legal position following its earlier decision in Saumya Construction (P.) Ltd. (supra) and of this Court in Kabul Chawla (supra). As far as Karnataka High Court is concerned, it has in IBC Knowledge Park (P.) Ltd. (supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in Salasar Stock Broking Ltd. (supra), Court in Kabul Chawla (supra). In Gurinder Singh Bawa (supra), the Bombay High Court held that: \"6. once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not disclosed during the regular assessment proceedings. \" 63. Even this Court has in Mahesh Kumar Gupta (supra) and Ram Avtar Verma (supra) followed the decision in Kabul Chawla (supra). The decision of this Court in Kurele Paper Mills (P.) Ltd. (supra) 14 which was referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue's SLP on 7th December, 2015. ” I find that the additions made in the assessment order are not based on any incriminating material or documents found during search. In fact, the assessment order does not refer to any seized material or any incriminating material found during the course of search. This position of law (that addition u/s 153A/153C can be made only on the basis of incriminating material etc. found during search), has been elaborated by the Hon’ble jurisdictional High Court in a plethora of cases as discussed above: CIT vs Kabul Chawla, 380 ITR 570 (Delhi) and Pr CIT vs Meeta Gutgutia, 395 ITR 526(Delhi). I am bound by law as laid down by my jurisdictional High Court as elaborated above. As such, I hold that the additions made by the Assessing Officer, not being based upon any seized material or incriminating material found during the course of search, are not sustainable. The additions are based merely on the report of the Valuation Officer, and do not have sanction of law within the meaning of section 153A of the Income Tax Act, 1951. (B) Whether assessment made only on the basis of DVO’s valuation report is a valid assessment u/ s 153A for an unabated assessment year? In view of analysis made under the earlier sub-heading, it is clear that additions u/s 153A of the Act, in an unabated assessment year can be made only on the basis of incriminating material found during the course of search. As analyzed by me earlier, no incriminating material relating to the appellant was found during the course of search. Even the A.O. appears to have concluded that there was no incriminating material within the meaning of section 153A of the Act, and therefore made additions of Rs. 1,08,33,000/-, Rs. 63,57,859/- and Rs. 44,13,547/-, on the basis of DVO’s report. In my understanding, based upon the position of law as laid down addition in an assessment u/s 153A of the Act, only on a DVO’s report cannot be sustained, in an unabated assessment year. (C) Does the valuation suffer from inconsistencies and is not sustainable on merit? 15 Since I have held that the foundational jurisdictional requirement for purposes of making assessment u/s 153A of the Act, is missing, this issue becomes academic and needs no adjudication. 11. In view of the aforesaid analysis, the assessment order passed by the Assessing Officer is not based on any incriminating material unearthed/found during the course of search. As laid down by Hon’ble Jurisdictional High Court an addition for an unabated assessment year cannot be made without incriminating material found in search. I am bound by the wisdom of the jurisdictional High Court. As such, additions of Rs. 1,08,33,000/-, Rs. 63,57,859/- and Rs. 44,13,547/-, are hereby deleted. 12. In ground No. 15 the appellant has challenged the addition of Rs. 33,049/-. In the appellate proceedings, the appellant has submitted that the unexplained expenditure on account of bills seized during the course of search which belongs to other family members who have admitted that this document pertains to them and not to the appellant. In this connection, the appellant stated that the addition was made on the basis of paper seized during the course of search which belongs to Ms. Nisha Tanwar, who is an independent assessee. Further, the appellant submitted that in the assessment proceedings, Ms. Nisha Tanwar has not only confirmed the transactions but also confirmed that the payment was made from her drawings out of her income. Therefore, the owner of the document/bill has owned the said document/bill and explained the ownership and mode and source of payment. Therefore, the said document/bill cannot be treated as incriminating material in the hands of the appellant as the identity of the person meeting the expenditure, source of expenditure and genuineness of expenditure stands explained by Ms. Nisha Tanwar. In view of the above analysis, the addition made by the AO amounting to Rs. 33,049/- is hereby deleted. Accordingly, ground No. 15 is hereby allowed.” ITA No. 1311/Del/2020 (AY 2013-14) 5. The grounds raised in assessment year 2013-14 read as under:- I. Ld. CIT(A) has erred in law and facts in deleting addition while relying on the decision of the Hon’ble High Court in the case of Kabul Chawla 380 ITR 573, whereas, Department’s SLP in the case of APAR Industries against Bombay High 16 Court’s Order in ITA No. 1669 of 2013 dated 08.05.2015 has been admitted alongwith 115 cases on the issue of restriction of addition only to incriminating material found during search, has been admitted vide Diary No. 37848/2015. II. Ld. CIT (A) has erred in law or facts without considering the incriminating documents named “sale.xls” which was recovered from the soft data impounded as Annexure-Al from, D-56, Chatarpur Enclave, New Delhi during the course of action u/s 133A of the I.T. Act, on 27.07.2016 at the office of R.K Horticulture Pvt. Ltd and D. R. Horticulture Pvt. Ltd. Ld. CIT (A) has erred in facts in para 8 of its order whereas it has been stated that document has been found from third party. Kartar Singh Tanvvar (main person on which search took place), brother of the assessee, is the director of R.K Horticulture Pvt. Ltd and D. R. Horticulture Pvt. and D-56, Chatarpur Enclave, New Delhi is the office where all construction and real estate related work take place. III. Ld. CIT (Appeal) has erred in law or facts in appreciating the fact that assessee has not brought on record the very purpose of creating excel sheet Sale.xls. The sheet enlists various properties of the area along with their actual market rates, real owners and the disclosed or white component expected in the deal of the property. From this sheet it is evident that the actual market price is much higher than the govt, rates and the unaccounted and undisclosed component in these deals can be as high as 75% of the total cost of the property. The sheet indicates very higher market price as compared to circle rates. IV. The Ld. CIT (Appeal) has failed to appreciate the facts that various incriminating evidences were found from different premises during the course of search and survey which conclusively prove that huge unaccounted cash were paid in these property deals while the registration was done at circle rate which was much lower than the prevailing market rates. (Annexure A-6 seized from the Residence of Dhruv Goel, Admission of Sh. Amit Sankhwal u/s 133A, phone messages 17 were impounded as Annexure A-l from Bharat Sawhney, Page 166 of A-2 Seized from Rajan Sharma) V. Ld. CIT(A) has erred in law or facts that the assessment order made only on the basis of DVO’s valuation report. The Assessing Officer has referred to DVO as per the provision of section 142(A) of the Act for correct determination of above threes properties only as mentioned in Sr. No. 2, 3 and 4 in the above table. VI. The Ld. CIT(A) has erred in law or facts that the addition of Rs. 1,68,55,466/- made on the basis of market rate mentioned in page no. 166 of Annexure A-2, seized from the residence of Rajan Sharma. Ld. CIT(A) has erred in law or facts in holding that page no. 166 of Annexure A-2 is not incriminating. It is fact on record that Sh. Rajan Sharma and the assessee Sh. Chattar Singh had business relation and involved in sale / purchase of properties. VII. The Ld. CIT(A) has erred in law or facts in deleting the addition of Rs. 1,06,231/- as name of Mrs. Shimlesh and Mr. Kapil Tanwar who have submitted their confirmation was not mentioned in the bills. VIII. The decision of Ld. CIT(A) with regard to cash receipt in sale of property at Chattarpur Enclave is accepted. IX. In view of the above, facts and circumstances of the case, the decision of Ld. CIT(A) is not acceptable on merits. Moreover, the tax effect for the year under concerned is above the limit prescribed for filing appeal before ITAT as per CBDT Circular No. 17/2019 dated 8.8.2019 as well as CBDT’s Notification vide F.No. 279/Misc/142/2007-ITJ(Pt.) dated 20.8.2018. X. That the grounds of appeal are with prejudice to each other. XI. That the appellant craves leave to add, amend, alter or forego any ground (s) of appeal either before or at the time of hearing of appeal. 18 6. The brief facts of the case are that the assessee is an individual and is engaged in the business of contractor, construction of roads and building of government department in the name and style of proprietorship concern M/s Chattar Singh Construction Co. and Income from House Property and Interest Income. The return of income was filed on 29.09.2013, declaring income at Rs. 76,49,160/-. Subsequently, the case of the appellant was selected for scrutiny and the assessment was completed vide order dated 25.03.2016 at the assessed income of Rs. 1,76,92,090/-. Later on search and seizure action u/s 132 of the Act, was carried out on 27.07.2016 and 23.08.2016 in the case of the appellant along with the group cases of Shri Kartar Singh. The A.O. issued notice u/s 153A of the Act on 06.04.2018 requiring the appellant to file the return of income. In response to this the appellant filed his return 11.07.2018 at the income of Rs. 74,30,300/-. Accordingly, the A.O. issued notice u/s 143(2) of the Act, on 07.08.2018. The AO completed the assessment u/s 153A of the Act, for the year under consideration by making the additions - on the basis of assessment order passed u/s 143(3) of the Act amounting to Rs. 40,96,790/- (in consequent upon the relief granted by the CIT(A)-27, New Delhi), on account of unexplained investment u/s 69 of the Act, in the property situated at Village Chhatarpur, Khasra No. 235 amounting to Rs. 22,28,800/-, on account of unexplained investment u/s 69 of the Act, in the property situated at Chattarpur, Khasra No. 278, amounting to Rs. 9,55,700/-, on account of unexplained Construction expenditure amounting to Rs. 1,06,231/-, on account undisclosed consideration from sale of property at village Khanpur, Sainik Farm amounting to Rs. 1,68,55,466/-, and on account of undisclosed cash receipts from sale of property at Chhattarpur Enclave amounting to Rs. 5,00,000/-. The AO completed the assessment u/s. 153A of the Act, at the assessed income Rs. 3,21,73,290/-. 19 7. Upon assessee’s appeal Ld. CIT(A) decided the issue in favour of the assessee by noting that assessment order was not based on any incriminating material or document found during the course of search and seizure. In this regard, he also placed reliance on several case laws. We may gainfully refer the findings of ld. CIT(A) as under:- “8. From the assessment order, it is clear that no incriminating material was found during the course of search related to this assessment year. The first objection of the appellant is that the addition (without prejudice to the appellant’s stand) is based on the so called incriminating material that was found not in a search but in a survey, that too on a 3rd party. Further, the appellant has pointed out that the document does not contain any incriminating information. The document at hand does not contain the details of the subject properties in question at all. The document merely speaks of estimated value of some other properties. 9. Thus, primary contention of the appellant is that the addition is not based on any incriminating material but on the basis of DVO’s report. Further, the appellant has pointed out that no incriminating material was found during the course of search. 10. Now, I proceed to outline the issues for my adjudication: (A) Whether the assessment order is bad since this is an unabated assessment year and not based on any incriminating material found during the course of search? Whether the document found during the course of survey (and not search) can be used for framing an assessment u/s 153A for an unabated assessment year? Even otherwise, without prejudice, whether the document found during the course of survey that too on a third party can be treated as incriminating. (B) Whether assessment made only on the basis of DVO’s valuation report is a valid assessment u/s 153A for an unabated assessment year? (C) Whether addition of Rs. 1,68,55,466/-, made on the basis of documents seized during the course of search in the case of Mr. Rajan Sharma is an incriminating material in the hands of the appellant? (D) Does the valuation suffer from inconsistencies and is not sustainable on merit ? 20 (A) Whether the assessment order is bad since this is an unabated assessment year and not based on any incriminating material found during the course of search? Whether the document found during the course of survey (and not search) can be used for framing an assessment u/s 153A for an unabated assessment year? Even otherwise, without prejudice, whether the document found during the course of survey too on a third party can be treated as incriminating: In this case, search u/s 132 of the Act, was carried out on 27.07.2016 and 23.08.2016. The document was recovered /found in a survey u/s 133A of the Act, on 27.07.2016. The said document does not have any dates. The said document has certain average/estimated rates of certain properties. The details in this sheet do not relate to the appellant’s property at all. The details do not speak of any transaction, per se. The details do not even carry any date. The document has been owned up by a 3rd person Shri Sumit Tanwar from whose hard disk this document was extracted pursuant to survey u/s 133A of the Act, 27.07.2016. In my understanding, the A.O. was also aware of this information not being of incriminating. Further, such document having been recovered from a 3rd party cannot be treated as incriminating for purposes of assessment u/s 153A of the Act. In this connection, the position of law has been elucidated by the Hon’ble Delhi High Court in the case of CIT vs Kabul Chawla, 380 ITR 573. (i) I find that the assessment order does not speak of any incriminating document or material found during search. Infact the assessment order is not based on any seized or incriminating material found during search. (ii) The appellant has also sought to place reliance, among other, upon the order of Delhi High Court in the case of CIT vs Kabul Chawla, 380 ITR 573. It has been held in that order by the Hon’ble Delhi High Court. Para 37 is as follows- “37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to 21 the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs \"in which both the disclosed and the undisclosed income would be brought to tax\". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment \"can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.\" v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search 22 or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. ” (iii) The Hon’ble Delhi High Court has also held in the case of Pr. CIT vs Meeta Gutgutia, 395 ITR 526(Delhi), order dated 25.05.2017 at paras 58 till 63 as follows - “58. In Kabul Chawla (supra), the Court discussed the decision in Filatex India Ltd. (supra) as well as the above two decisions and observed as under: \"31. What distinguishes the decisions both in CIT v. Che tan Das Lachman Das (supra), and Filatex India Ltd. v. CIT-IV (supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two . decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 (Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the 1TAT, deleting the addition, was not interfered with.\" 59. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) w Asstt. CIT f20131 36 taxmann.com 523/219 Taxman 223. The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: 33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) involved a case where certain books of accounts and other documents that had not been produced in the 23 course of original assessment were found in the course of search. It was held where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration while computing the total income under Section 153A of the Act. The Court then explained as under: \"22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material; and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made.\" 34. The argument of the Revenue that the AO was free to disturb income dehors the incriminating material while making assessment under Section 153A of the Act was specifically rejected by the Court on the ground that it was \"not borne out from the scheme of the said provision\" which was in the context of search and/or requisition. The Court also explained the purport of the words \"assess\" and \"reassess”, which have been found at more than one place in Section 153A of the Act as under: \"26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess'-have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word assess has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or 24 making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents.'\" 60. In Kabul Chawla (supra), the Court also took note of the decision of the Bombay High Court in CIT v. Continental Warehousing Corpn (Nhava Sheva) Ltd. [20151 58 taxmann.com 78/232 Taxman 270/374ITR 645 (Bom.) which accepted the plea that if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supra) as under: \"37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the. aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs \"in which both the disclosed and the undisclosed income would be brought to tax\". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment \"can be arbitrary or made without any relevance or nexus 25 with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.\" v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.\" 61. It appears that a number of High Courts have concurred with the decision of this Court in Kabul Chawla (supra) beginning with the Gujarat High Court in Saumya Construction (P.) Ltd. (supra). There, a search and seizure operation was carried out on 7th October, 2009 and an assessment came to be framed under Section 143(3) read with Section 153A(l)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The ITAT deleted the additions on the ground that it was not based on any incriminating material found during the course of the search in respect of AYs under consideration i.e., AY 2006-07. The Gujarat High Court referred to the decision in Kabul Chawla (supra), of the Rajasthan High Court in Jai Steel (India) (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: '15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately 26 preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub- section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading \"Assessment in case of search or requisition\". It is \"well settled as held by the Supreme Court in a catena of decisions that the heading or the Section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153. the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the 27 search or requisition, in other words, the assessment should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India vs. Asst. CIT (supra), the earlier assessment would have to be reiterated, in case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment woidd include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. ** ** ** 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of an the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, assessment has to be made in relation to the search or requisition, namely, , in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded 28 by the decision of this court In the case of CIT v. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years ; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year.' 62. Subsequently, in Devangi alias Rupa (supra), another Bench of the Gujarat High Court reiterated the above legal position following its earlier decision in Saumya Construction (P.) Ltd. (supra) and of this Court in Kabul Chawla (supra). As far as Karnataka High Court is concerned, it has in IBC Knowledge Park (P.) Ltd. (supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In Gurinder Singh Bawa (supra), the Bombay High Court held that: \"6 once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not disclosed during the regular assessment proceedings.\" 63. Even this Court has in Mahesh Kumar Gupta (supra) and Ram Avtar Verma (supra) followed the decision in Kabul Chawla (supra). The decision of this Court in Kurele Paper Mills (P.) Ltd. (supra) which was referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue's SLP on 7th December, 2015. ” I find that the additions made in the assessment order are not based on any incriminating material or documents found during search. In fact, the assessment order does not refer to any seized material or any incriminating material found during the course of search. This position of law (that addition u/s 153A/153C can be made only on the basis of incriminating material etc. found during search), has been elaborated by the Honhle jurisdictional High Court in a plethora of cases as discussed above : CIT vs Kabul Chawla, 380 ITR 570 (Delhi) and Pr CIT vs Meeta Gutgutia, 395 ITR 526 (Delhi) 29 I am bound by law as laid down by my jurisdictional High Court as elaborated above. As such, I hold that the additions made by the Assessing Officer, not being based upon any seized material or incriminating material found during the course of search, are not sustainable. The additions are based merely on the report of the Valuation Officer, and do not have sanction of law within the meaning of section 153A of the Income Tax Act, 1961. (B) Whether assessment made only on the basis of DVO’s valuation report is a valid assessment u/s 153A for an unabated assessment year? In view of analysis made under the earlier sub-heading, it is clear that additions u/s 153A of the Act, in an unabated assessment year can be made only’ on the basis of incriminating material found during the course of search. As analyzed by me earlier, no incriminating material relating to the appellant was found during the course of search. Even the A.O. appears to have concluded that there was no incriminating material within the meaning of section 153A of the Act, and therefore made additions Rs. 22,28,800/-, and Rs. 9,55,700/- on the basis of DVO’s report. In my understanding, based upon the position of law as laid down addition in an assessment u/s 153A of the Act, only on a DVO’s report cannot be sustained, in an unabated assessment year. C)Whether addition of Rs. 1,68,55,466/-, made on the basis of documents seized during the course of search in the case of Mr. Raj an Sharma is an incriminating material in the hands of the appellant? The appellant has submitted that he has sold property situated at Village Khanpur, Sainik Farms, New Delhi to Mrs. Renu Goyal for Rs.3,01,0,000/- on 06.11.2012. The AO has considered the rate of Rs. 60,000/- per sq. yards and estimated the value of property at Rs.8,06,66,400/- thereby making an addition of Rs. 1,68,55,466/- (half share of the appellant) on the basis of alleged documents seized during the course of search on third party i.e. Shri Rajan Sharma on 27.07.2016 which is alleged receipt of advance payment for the sale of property at 90, Sainik Farms @ Rs. 60,000/- per square yards signed by Ms. Alka Bareja. The said seized documents cannot be considered as incriminating document in the hands of the appellant due to the following reasons: • Firstly the said seized paper was not seized during the course of search on assessee. 30 • The said paper was seized during the course of search on Rajan Sharma which is separate assessee with distinct PAN Number and independent legal entity. • The appellant has not done any purchase or sale transaction with Alka Bareja. • The appellant has never owned or possessed nor sold 90 Sainik Farms to Alka Bareja. • Further the document was written as dated 25.05.2016 therefore cannot be considered as rate for the A/Y 2013-14. • Further no statement of the buyer Smt. Renu Goyal was recorded by Ld AO that she paid extra consideration to assessee. • Further, the said seized paper contains no mention of the property which was sold to Renu Goyal. In view of the above facts, the addition of Rs. 1,68,55,466/- made by the AO on the basis of seized documents during the course of search of Mr. Raj an Sharma does not belong to the appellant and actually belongs to Mr. Rajan Sharma, has not been correctly made in the hands of the appellant. In view of the above, the addition made by the AO amounting to Rs. 1,68,55,466/-, is hereby deleted. (D) Does the valuation suffer from inconsistencies and is not sustainable on merit? Since I have held that the foundational jurisdictional requirement for purposes of making assessment u/s 153A of the Act, is missing, this issue becomes academic and needs no adjudication. 11. In view of the aforesaid analysis, the assessment order passed by the Assessing Officer is not based on any incriminating material unearthed/found during the course of search. As laid down by Hon’ble Jurisdictional High Court an addition for an unabated assessment year cannot be made without incriminating material found in search. I am bound by the wisdom of the jurisdictional High Court. As such, additions made by the Assessing Officer are hereby deleted. 12. In ground No. 13 the appellant has challenged the addition of Rs. 1,06,231/-. In the appellate proceedings the appellant has submitted that the unexplained repair expenditure on account of bills seized during the course of search which belongs to other family members who have 31 admitted that this document/ bills pertains to them and not to the appellant. In this connection, the appellant stated that the addition was made on the basis of paper seized during the course of search which belongs to Mrs. Shimlesh and Mr. Kapil Tanwar, who are independent assessees. Further, the appellant submitted that in the assessment proceedings, Mrs. Shimlesh and Mr. Kapil Tanwar has not only confirmed the transactions but also confirmed tliat the payment was made from their drawings out of their income. Therefore, the owner of the document has owned the said document and explained the ownership and mode and source of payment. Therefore, the said document cannot be treated as incriminating material in the hands of the appellant as the identity of the persons meeting the expenditure, source of expenditure and genuineness of expenditure stands explained by Mrs. Shimlesh and Mr. Kapil Tan war. In view of the aforesaid analysis, the addition made by the AO amounting to Rs. 1,06,231/- is hereby deleted. Accordingly, ground No. 13 is hereby allowed. 13. In ground No. 17 the appellant has challenged the addition of Rs.5,0,000/-, on account of unexplained receipts from the sale of property at Chattarpur Enclave. From the submissions, it is seen that during the year under consideration the appellant sold the property at Chatarpur Enclave for a consideration of Rs. 1,25,00,000/- to Rajan Sharma, and Sunil Goel, vide agreement to sell dated 22.01.2013. The relevant extract of agreement to sell regarding the sale consideration is as under: \"That in consideration of the sum of Rs. 1,30,00,000/- (Rupees One Crores Thirty Lacs only), which has been already been received by the First Party from the Second Party, in the following manner: i. Rs. 65,00,000 vide Cheque No. 008161dated 19.09.2013, drawn on AXIS Bank Ltd, paid by Sh. Sunil Goel ii. Rs. 60,00,000 vide Cheque No. 151630 dated 19.09.2013, and iii. Rs. 5,00,000/- vide Cheque No. — dated — both drawn on Dena Bank, Chatarpur, New Delhi paid by Sh. Rajan Sharma The receipt of which First Party hereby admits and acknowledges in full and final settlement.\" From the above, it/s seen that in the said Agreement to Sell the First Party refers to the Assessee, Chattar Singh as Vendor and Second Party 32 refers to Rajan Sharma and Sunil Goel as Purchasers. From the perusal of agreement to sell, it is seen that it mentions sale consideration of Rs. 1,30,0 0,000/- but payment made and acknowledged by both the parties only to the extent of Rs. 1,25,00,000/- as full and final settlement and received by way of two cheques vide cheque number 008161 dated 19.09.2013 for Rs. 65,00,000/- and vide cheque number 151630 dated 19.09.2013 for Rs. 60,00,000/-, respectively. Thus, the documents itself make it categorically clear that the consideration in pursuance of the Agreement to Sell was only Rs. 1,25,00,000/-. The said fact that the consideration was Rs. 1,25,00,000/- has been further confirmed from the purchaser Sh. Sunil Goel and Sh. Rajan Sharma during the course of assessment proceedings. Further, both the parties had independently confirmed in their assessment proceedings before the AO that the deal was finalized for Rs. 1,25,00,000/- and they have not made any payment of Rs. 50,000/-. From the perusal of Agreement to Sale, confirmations from Rajan Sharma and Sunil Goel and submissions made by Rajan Sharma during the course of his assessment proceedings u/s 153A of the Act, it is noticed that they are uniformly stated the same that they have not made any payment of Rs. 5,00,000/-. In view of the above facts, the addition of Rs. 5,00,000/- is deleted.” 8. Against the above findings of the Ld. CIT(A), Revenue is in appeals before us. 9. We have heard both the parties and perused the records. We find that additions in these cases are not based on any seized material found during the course of search, which is crystal clear from the elaborate findings of the ld. CIT(A), as aforesaid. Furthermore, these are completed assessments and it is settled law that in completed assessment, no addition can be made u/s. 153A dehors any material found during search. We further find that Revenue in its Ground No. 1 has challenged that decision of the Hon’ble Delhi High Court in the case of Kabul Chawla 380 ITR 573 which has been admitted before the Hon’ble Apex Court for the proposition that addition should be restricted only to incriminating material found during the search. Further, Ld. DR referred to Ground No. 2 saying that there is reference of ‘sale.xls’ documents found. 33 However, we find that the said document was found in the course of action u/s. 133A of the Act and nothing to do with the seized found during search. In this view of the matter, when the Revenue in the ground itself admitted that addition has been made dehors incriminating material found during search and on perusal of the AO’s order it reveals no reference has been found that any material found during search on the basis of which he made the addition. The elaborate findings of the Ld. CIT(A) that incriminating material found during search has not been controverted by the Revenue. In this view of the matter, we find that Ld. CIT(A) has passed a well reasoned orders, by relying upon the relevant case laws, hence, we do find any infirmity in his orders, thus, we confirm the same. Our aforesaid view is fully supported by the decision of the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd., CA No. 67580 / 2021 dated 24.4.2023, (2023) SCC Online SC 481, wherein the Hon’ble Supreme Court has expounded that no addition can be made when the assessment framed u/s. 153A dehors incriminating material found during the search. 10. In the result, both the Revenue’s appeals are dismissed in the aforesaid manner. Order pronounced in the Open Court on 8/01/2025. SD/- SD/- (ANUBHAV SHARMA) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBhatnagar Copy forwarded to: - 1. Appellant. 2. Respondent. 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "