EKLAVYA PROJECTS,AHMEDABAD V. THE INCOME TAX OFFICER, WARD-3(3)(2), AHMEDABAD

ITSSA 16/AHD/2024

AI Insights

The case involves Eklavya Projects, a real estate developer, appealing against the order of the Commissioner of Income Tax (Appeals)-12, Ahmedabad, which confirmed the addition of Rs. 1,10,00,000 as undisclosed business income based on documents seized during a search operation at Claris Group. The primary legal contention was the validity of the notice issued under section 153C of the Income Tax Act and the subsequent assessment under section 143(3) read with section 153C. The Tribunal examined whether the necessary procedural requirements for invoking section 153C were met, particularly the recording of satisfaction by the AO of the searched person and the proper handling of seized documents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774191 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 12-03-2024
• Other Referred Cases: Nishant Construction Pvt. Ltd vs. ACIT, Dr. Keyur Parikh & Others vs. ACIT, Common Cause vs. Union of India, Andaman Timber Industries vs. Commissioner of Central Excise Kolkata II, CIT vs Vineeta Gupta
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: DHIREN SHAH; NUPUR SHAH; ARS
• Keywords: Business income; Unexplained investment; Income from undisclosed sources; Document seized; Documents seized; Assessment record; Opportunity of cross examination
• Section: 143(3); 132

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “सी“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ C ” BENCH, AHMEDABAD \u0015ी संजय गग\u001a, \u0011ाियक सद\u001b एवं \u0015ी नरे !साद िस\"ा, लेखा सद\u001b क े सम%। ] ] Before Shri Sanjay Garg, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member आयकर अपील सं /ITA No.16/Ahd/2024 िनधा \u0010रण वष\u0010 /Assessment Year : 2015-16 Eklavya Projects 405, Olive Arcade Off. C.G. Road Navrangpura Ahmedabad – 380 009 बनाम/ v/s. The Income Tax Officer Ward-3(3)(2) Ahmedabad – 380 014 \u0014थायी लेखा सं./PAN: AADFE 3073 C (अपीलाथ'/ Appellant) (!( यथ'/ Respondent) Assessee by : Shri Dhiren Shah & Ms. Nupur Shah, ARs Revenue by : Shri Rignesh Das, CIT-DR सुनवाई की तारीख/Date of Hearing : 24/06/2025 घोषणा की तारीख /Date of Pronouncement: 12/09/2025 आदेश/O R D E R Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-12, Ahmedabad [hereinafter referred to as ‘CIT(E)’] dated 12/01/2024 for Assessment Year (AY) 2015-16. 2. The assessee, in this appeal, has raised the following grounds of appeal: “1. The Ld. CIT(A) has erred in law and on facts in dismissing the appeal. He ought to have allowed the appeal fully in accordance with the grounds of appeal raised by the appellant company before him. Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 2 1. Challenging the validity of notice issued u/s. 153C of the Act and passing the order u/s. 143(3) r.w.s. 153C of the Act dated 30.12.2019 1. The Ld. CIT (A) has erred in law and on facts in confirming the action of the Ld. AO in issuing the notice u/s. 153C of the Act dated 26.09.2016 in the case of the appellant firm as no satisfaction is recorded by the AO of the person searched and accordingly, the provisions of section 153C are not applicable on facts and circumstances of the case. 2. That on the facts and in the circumstances of the case, the notice u/s 153C issued on 26.09.2016 is illegal as no incriminating material belonging to the appellant firm was found/seized during the course of search conducted in the case of Claris Group cases on 04.08.2015 and consequently, the assessment made u/s. 143(3) r.w.s. 153C of the Act is also illegal and deserves to be quashed. 3 The Ld. CIT (A) has erred in not appreciating the fact that Notice under section 153C of the Act issued by the Income Tax Officer, Ward 3(3)(2), Ahmedabad on 15.03.209, whereas, the Assessing Officer of the searched person has recorded his satisfaction on 02.04.2019 u/s. 132 r.w.s. 153C of the Act, meaning thereby that when the jurisdictional Assessing Officer has issued notice u/s. 153C of the Act to the appellant on 15.03.2019, the AO of the searched person has not recorded his satisfaction as pre-mandatory condition of Section 153C of the Act. 4. The Ld. CIT(A) has erred in not properly considering various judicial pronouncements relied upon by the appellant firm. II. Addition on account of undisclosed business income Rs. 1,10,00,000/- 1. The Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 1,10,00,000/- made by the Ld. AO on account of undisclosed business income / alleged on money relying on the seized material Page 46 of Annexure A/4 for sale of Flat No. 102 by the appellant firm to Akhilesh Venture Holdings LLP. 2. The Ld. CIT(A) has erred in law and on facts in relying upon the seized Page No. 47 of Annexure A-4 which does not bear project name, Unit holder name, booking amount or any other details and it does not have any relevancy with the actual transaction and the same seized page is required to be treated as dumb document in view of the decision of Hon'ble Income Tax Appellate Tribunal, Ahmedabad \"C\" Bench in the case of Nishant Construction Pvt. Ltd vs. ACIT, Circle 5, Ahmedabad, ITA No. 1502/Ahd/2015 (A.Y. 2011-12) dated 14.02.2017 and the decision of Hon'ble ITAT, Ahmedabad, Bench \"B\" Ahmedabad, in the case of Dr. Keyur Parikh & Others A.Ys.2008-09 IT(ss)A Nos.601, 602, 603,604,610, 611,612,634,639 640,652,674/Ahd/2011 & CO. Nos.28, 29/Ahd/2012 Order dated 18-10-2013, Hon'ble Supreme Court in the case of Common Cause (A Registered Society) and Ors vs. Union of India and Orsin 77 taxmann.com 245 (SC)(2017) as well as various Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 3 other judicial pronouncements of the Hon'ble Supreme Court and various High Courts. 3. The Ld. CIT (A) has erred in law and on facts in not granting the opportunity of cross examination of Shri Kirit K. Shah on the basis of his statement the addition has been made in the case of the appellant. The appellant humbly submits that no addition can be made in the case of appellant unless and until the opportunity of cross examination is granted to the appellant in view of the decision of Hon'ble Supreme Court in the case of Andaman Timber Industries vs. Commissioner of Central Excise Kolkata II [2015] 62 taxmann.com 3(SC) and various other judicial pronouncements relied upon by the appellant. 4. The Ld. CIT(A) has erred in law and on facts in placing the reliance on the order rendered by the Hon'ble Settlement Commission u/s. 245D(4) of the Act in the case of Claris Group of Companies. It is submitted that in respect of any applicant's case u/s. 245D(4) of the Act are not reportable like the orders of Hon'ble Income Tax Appellate Tribunal, Hon'ble High Courts and Hon'ble Apex Court as the orders rendered u/s. 245D(4) of the Act in respect of any particular applicant's case is settling the disputes between the applicant and department by the Hon'ble Income Tax Settlement Commission in view of provisions of Chapter XIX-A containing provisions of settlement of cases under the Income Tax Act, 1961 which is a separate code by itself read with Income Tax Settlement Commission (Procedure) Rules, 1997. Therefore, the orders rendered by the Hon'ble Settlement Commission in any particular applicant's case u/s. 245D(4) of the Act is also not permissible for reportable in general and only parties who have approached the Settlement Commission are privy to this order. The admission before Settlement Commission by a person cannot bind others, the appellant relies on the decision of High Court of Delhi in the case of CIT vs Vineeta Gupta (2014) 46 taxman.com 439. The appellant reserves its right to add, amend, alter or modify any of the grounds stated hereinabove either before or at the time of hearing. PRAYER The appellant firm therefore respectfully prays that:- 1. The action of the Ld. CIT (A) in confirming the action of the Ld. AO in issuing the notice u/s. 153C of the Act and passing the order u/s. 143(3) r.w.s. 153C of the Act dated 30.12.2019 may kindly be quashed. 2. The addition of Rs. 1,10,00,000/- confirmed by the Ld. CIT(A) as undisclosed business income may kindly be deleted. 3. Such and further relief as the nature and circumstances of the case may justify.” Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 4 3. The brief facts of the case, as extracted from the assessment order, are that the assessee is a real estate developer. The assessee filed its return of income originally on 29/09/2015 declaring a total income of Rs.67,94,468/-. The said return was processed u/s.143(1) of the Income Tax Act, 1961 (in short, “the Act”). 3.1. Thereafter, a search action u/s.132 of the Act was carried out on various premises of third parties i.e. group concerns of Claris Group on 04/08/2015. During the course of search at Claris Group, certain incriminating documents showing the unaccounted investment made in various properties by said Claris Group and its Associates were found and seized. Statement of one Shri Kirit Shah, who was a Director/Partner in various companies/LLPs of Claris Group was recorded. From the seized documents and the statement of said Shri Kirit Shah, it revealed that the said group had given substantial cash component for acquiring properties apart from the payment by cheque. It was found that that a payment of Rs.1,38,08,265/- was made by cheque and further a payment of Rs.1,10,00,000/- in cash to the assessee i.e. M/s.Ekalavya Projects by M/s. Akhilesh Venture Holding LLP, one of the group concerns of Claris Group, for purchase of property, i.e. Flat No.102, Olive Heights-II, Jodhpur, Ahmedabad. 3.2. It was, therefore, observed by the Assessing Officer (AO) of the searched party, that the said M/s. Akhilesh Venture Holding LLP had paid on-money in cash of Rs.1,10,00,000/- to the assessee over and above the sale consideration mentioned in the deed which was paid by cheque for the Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 5 purchase of Flat No.102, Olive Heights. As further mentioned by the AO in the assessment order (but disputed by the assessee), that the AO of the searched party, after recording his satisfaction that the said seized documents show that the assessee had received on-money of Rs.1,10,00,000/- over and above the sale consideration, sent the seized material to the AO of the assessee for re-opening of the assessment in the case of the assessee u/s.153C of the Act. The AO of the assessee, thereafter, recorded his satisfaction on 15/03/2019 regarding the escapement of the income of the assessee on the basis of seized material and issued show-cause notice to the assessee u/s 153C of the Act, requiring the assessee to file the return of income for the assessment year under consideration u/s 153C of the Act. In reply, the assessee stated that the original return of income filed on 29/09/2015 be treated as its return u/s 153C of the Act. The AO asked the assessee to file various details relating to the income of the assessee including the details of the properties sold, ledger account, audited Profit & Loss A/c., etc., which were furnished by the assessee. The assessee also filed objections against the issue of notice u/s.153C of the Act, which were rejected by the AO vide his order dated 08/12/2019. The assessee denied of having received any on- money over and above the sale consideration mentioned in the sale-deed from M/s. Akhilesh Ventrue Holding LLP. The AO, however, relied upon the seized documents, i.e. loose-papers - page Nos.44, 57, 58, 60 & 63 of Annexure A-3, page Nos.22 of Annexure A-4 and soft data seized from laptop of Shri Kirit A. Shah (Annexure A-7) containing excel-sheet named “Total Summery 1”. The AO observed that the said excel-sheet (Annexure A-7) contained details of scheme/projects in which such immovable properties were purchased by group concerns of Claris Group, names of entities from whom these properties were purchased, details of properties and details of Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 6 persons to whom the payments for such properties were made along with mode of payment. He further noted that page No.47 of Annexure A-4 also contained details of cash payments made for the purchase of property and receipt given by builders of Olive Heights Scheme of the assessee. He further observed that in his statement, Shri Kirit Shah designated partner in M/s. Akhilesh Venture Holding LLP had made the admission that Claris Group was involved in payment of on-money apart from the sale consideration for purchase of different properties by the different concerns of the Claris Group. The AO further observed that the said M/s. Akhilesh Venture Holing LLP had also approached the Settlement Commission and admitted that the Claris Group-concerns was involved in paying unaccounted money in cash for purchase of the various properties and surrendered their unaccounted income also and paid tax thereupon. The AO has drawn a chart in relation to the on-money received by the assessee, which, for the sake of ready reference, is reproduced as under: Sr. No Buyer Details of Seller (Name, PAN and Address) i.e. Assessee Details of Property F.Y. (i.e.) Year of Purchas e) A.Y. Cheque given for Purchase Property (Rs.) Cash Given for Property (Rs.) 1. Akhilesh Venture Holdings LLP M/s.Eklavya Projects PAN: AADFE3073C Address: 405, 4th Floor, Olive Arcade, Opp. Samundra Annexure, Navrangpura Ahmedabad Olive Heights Flat No.102 2014-15 2015-16 1,38,08,265/- 1,10,00,000/- Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 7 3.3. The AO observed that the aforesaid cash component of Rs.1,10,00,000/- was received by the assessee in Financial Year (FY) 2014-15 relevant to Assessment Year (AY) 2015-16. He observed that the payments mentioned to have been paid by cheque in the seized documents exactly matched with the sale consideration mentioned in the deed and even the name of the seller and purchaser also matched. He, therefore, observed that it was proved that the assessee had received cash component of Rs.1,10,00,000/- towards the sale of the said Flat No.102 in Olive Heights Project. 4. During the assessment proceedings, the assessee inter-alia raised a contention that the entire sales consideration of the flat was received by it between 10/10/2012 to 29/12/2012, which was verifiable from the sale-deed and that as per the prevalent practice, the on-money is received before the receipt of the payment by cheque and, therefore, it was highly improbable that the cash component would have been paid by M/s. Akhilesh Venture Holding LLP in the FY 2014-15. Even, if it is presumed that some cash component was paid by the seller, that would have been paid in the year 2012 itself and not in the year 2014 and, therefore, the addition cannot be made in AY 2015-16. The AO, however, observed that the sale-deed was executed on 19/08/2014, i.e. financial year under consideration, which was almost two years after payment received by cheque. He observed that it was obvious that the execution of the sale-deed was delayed for want of payment of the cash component agreed of Rs.1,10,00,000/-. He, therefore, observed that the addition was warranted in the assessment year under consideration only. He, accordingly, made the impugned addition of Rs.1,10,00,000/- into the income of the assessee. Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 8 5. Being aggrieved by the said order of the AO, the assessee preferred appeal before the CIT(A), but remained unsuccessful. 6. We have heard the rival contentions and gone through the record. The Ld.AR for the assessee inter alia has contested the validity of the addition on various legal grounds including the validity of the assessment framed u/s.153C of the Act for the assessment year under consideration. He has also raised objections relating to the very initiation of proceedings u/s 153C in the case of the assessee for want of necessary satisfaction recorded prior to that by the AO of the searched person which was sine qua non for assuming jurisdiction by the AO of the assessee for proceeding u/s.153C of the Act. 7. The Ld. DR, however, has relied upon the findings of the lower authorities. 8. We have considered the rival contentions of the Ld. Representatives of the parties. The first contention of the Ld. AR is that, in this case, no satisfaction was recorded by the AO of the searched party before sending the seized material to the AO of the assessee. He further submitted that the alleged satisfaction recorded by the AO of the searched party, relied upon by the AO of the assessee, was after the initiation of proceedings u/s.153C of the Act by the AO of the assessee and, therefore, the very initiation of proceedings in the absence of satisfaction recorded u/s.153C of the Act by the AO of the search party on the said date, was bad in law and, accordingly, the assessment order passed u/s.153C of the Act was liable to be quashed on this score alone. The Ld. Counsel for the assessee, in this respect, has relied upon page No.198 of the paper-book filed by the assessee, which is a copy of the Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 9 satisfaction recorded by the AO of the searched party namely Shri Rajneesh Yadav, Joint Commissioner of Income Tax, Cen. Circle-2(1) Ahmedabad. The date mentioned under his signatures on the last page of the satisfaction recorded by him is 2/4/2019. The case of the AO/DR, however, is that the same is a clerical error for recording the year as 2019 instead of the year 2018 and that, in fact, the satisfaction was recorded on 2/4/2018. The Ld. DR, in this respect, has relied upon the remand report which was called for by the Ld. CIT(A) from the AO with respect to the aforesaid contention of the assessee. In the said remand report dated 27/04/2023, the AO has reported that information was received with satisfaction note for taking action u/s 153C of the Act vide letter dated 2/4/2018 from the DCIT Cen.Cir-2(1), Ahmedabad in the Office of the Income Tax Officer, Ward-1(1)(1) Ahmedabad on 05/4/2018. Thereafter, the Income Tax Officer, Ward-1 (1)(1), Ahmedabad transferred the said information with satisfaction note vide his letter dated 24/5/2018 to the office of the AO of the assessee. Thereafter, the notice u/s.153C of the Act was issued by the AO to the assessee on 15/03/2019. The Ld. DR has submitted that, in this case, the satisfaction was recorded on 2/4/2018 by the AO of the searched party and not on 2/4/2019 as alleged by the Ld.AR of the assessee. However, the Ld.AR of the assessee has submitted that the date mentioned on the satisfaction note was dated 2/4/2019. We, on further perusal of the paper-book, found that there are two satisfaction notes mentioned to be recorded of the AO of the searched party in the paper-book. The wording/contents of both the satisfaction notes are verbatim same. A copy of the one of the said satisfaction notes is placed at page 183 of the Paper-Book No. II, which has been signed by Shri Manish Kumar Mishra, Income Tax Officer, Ward-3(3)(2), Ahmedabad, who, in fact was the AO of the assessee and not of the searched party. However, the same Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 10 is undated. The copy of the other satisfaction note is placed at page 198 of the paper Book-II. The said note has been signed by Shri Rajneesh Yadav, the AO of the searched party but is dated is 2/4/19. We have also called for the assessment records in this respect and have also perused the original satisfaction notes which bear the signatures and dates as noted above. We find that though the intimation along with seized documents was sent by the AO of the searched party on 2/4/2018, however, perhaps he failed to send the satisfaction note. When the assessee raised objection, in this regard, a satisfaction note of the searched AO was prepared by the AO of the assessee, namely, Shri Manish Kumar Mishra and also signed the same. Thereafter, he recorded his own satisfaction on 15/3/2019 and issued notice to the assessee u/s.153C of the Act. Had the AO of the assessee received the satisfaction note on 2/4/2018, the question that comes to our mind is as to why the AO of the assessee will record a separate satisfaction note but mentioning the same as that of AO of the searched person and would sign the same? Now, so far as the probability of a mistake in recording the year of the date recorded in the satisfaction note as 2019 instead of 2018 is concerned, it is commonly known that when a year changes or the new year comes, sometimes a mistake is committed in mentioning the past year in the date instead of the newly commenced year due to the conditioning of the mind as the one is accustomed to or in the habit of mentioning the date of the past year throughout the year and it slips to the mind that the year has changed. However, this type of mistake generally occurs in the month of January of the subsequent year and not thereafter as thereafter the mind adopts the practice of writing the date of that current year. However, it is highly improbable that a person, by mistake, would write the date of the next year/subsequent year. This type of clerical mistake of writing a date of a subsequent year to our Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 11 mind is not a routine mistake, rather the preponderance of the probabilities is that the satisfaction note of the searched party was got signed in the year 2019 and not in the year 2018. Though, the day and month have been mentioned correctly, but the year in the date, inadvertently has been mentioned as correct i.e. of the current in the year in which the document was actually signed. Our above view is fortified by the presence of another satisfaction note which is verbatim copy of the satisfaction of the AO of the searched person, but signed by Shri Manish Kumar Mishra, the AO of the assessee. Therefore, we find merit in the aforesaid contentions of the Ld.AR. 8.1. Now, coming to the second contention raised by the Ld.AR of the assessee. The Ld.AR of the assessee has submitted that as per the seized documents, i.e. excel-sheet (Annexure A-7), copy of which has been placed at Page No.179 of the paper-book-I, the alleged on-money received by the assessee was of Rs.50 lakhs on 21/08/2012 and another amount of Rs.10 lakhs allegedly received on 27/2/2013. He, in this respect, has submitted that firstly, the aforesaid amounts totaling to Rs.60 lakhs was allegedly received in the FY 2012-13 and not in the FY 2014-15; Secondly, that the total alleged on-money received by the assessee as per excel-sheet was Rs.60 lakhs and not Rs.1,10,00,000/. He, therefore, has submitted that even if it is presumed that the assessee had received on-money, even then the addition, at the most, could have been made at Rs.60 lakhs and that too in the AY 2013-14 and not in the assessment year under consideration, i.e. AY 2015-16. The Ld. Counsel for the assessee, in this respect, has further invited our attention to the copy of the seized document page No.44 of Annexure A-3, relied upon by the AO, copy of which has been placed at page No.185 of the paper-book, wherein also, the alleged on-money has been mentioned of Rs.60 lakhs in respect of Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 12 Flat No.102 at Olive Heights. Similarly, in the other documents relied upon by the AO, there are two components of payment mentioned therein as ‘A’ & ‘B’. Under the Head ‘A’ the cheque amount is mentioned whereas under the Head “B’ cash component paid has been mentioned. For the property i.e. Flat No.102 at Olive Heights and in column ‘B’, the amount mentioned is “60.00” from which the AO has arrived at the conclusion that the said amount referred to is Rs.60 lakhs. However, there is no mention of another 50 lakhs rupees allegedly received by the assessee in any of the documents, but the alleged receipt issued by the assessee i.e. page No.47 of Annexure A-4, the copy of which has been placed at 227 of the paper–book, the contents of which, for the sake of ready reference, are reproduced as under: “OH2 50.00 21/8/2012 50.00 11/9/2012 10.00 27/2/2013” 8.2. A perusal of the aforesaid document would also show that the alleged dates of alleged receipt of money by the assessee are dated 21/8/2012 for Rs.50 lakhs, dated 11/9/2012 for Rs.50 lakhs and dated 27/2/2013 for another amount of Rs.10 lakhs. The aforesaid all the dates are of FY 2012-13 relevant to AY 2013-14. Therefore, even as per the said receipt, the addition, if any, that could have been made in the assessment proceedings relevant to AY 2013-14 and not in the year under consideration, i.e. AY 2015-16. Another vital point raised by the Ld. Counsel for the assessee, in this respect, is that even in the statement of Shri Kirit Shah, he has not named any person of the assessee, who allegedly received the cash component. The AO, though, has mentioned that the said document contains the signature of the builder/key- person of the assessee, however, no name or identity of the said person, who Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 13 allegedly signed the said document has been mentioned, nor any enquiry in this respect has been made nor the said document was confronted either to the assessee or to Shri Kirit Shah to confirm the veracity of the said document Even the assessee has taken a categorical objection in this respect before the lower authorities that none of the seized material is related to the year under consideration. That the alleged seized documents depicts the payment in the FY 2-012-13. However, the said objection raised by the assessee has been brushed aside by both the lower authorities. Even when a remand report was called for by the Ld. CIT(A) on this issue that is as to whether the alleged money received by the assessee was amounting to Rs.60 lakhs or Rs.1,10,00,000/- and further in which year it was received, the AO in first part of his remand report dated 27/4/2023 has himself, in page No.2 of the said remand report, has mentioned that the seized document page No.47 of Annexure A-4 seized from the residential premises of Shri Kirit Shah also contains details of the cash payment for purchase of property and receipts given by the builders Olive Heights which showed that the assessee has received Rs.50 lakhs on 21/8/2012, Rs.50 lakhs on 11/3/2012 and Rs.10 lakhs on 27/03/2013. The AO having mentioned the said dates of receipt of on- money by the assessee in the remand report, however, rejected the objections in the last part of the same remand report, observing that the said cash component was received in the FY 2014-15 because of which the sale-deed was delayed for two years as the receipt of cash component was awaited. The AO having observed so, himself has rejected the authenticity of the seized material. If the seized material has to be relied upon, then the dates mentioned therein have to be taken as that of F.Y.-2012-13. If the alleged dates of the receipt of on-money has to taken as of F.Y. 2014-15 as mentioned by the AO in his remand report, then in this case, there is no evidence available on Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 14 the file from which it can be gathered that the assessee has received any on- money in the F.Y. 2014-15. The AO, having relied upon the seized documents, has himself stated that the date of receipt of alleged payment was in the FY 2012-13, then there was no question of making the addition in the year under consideration, i.e. AY 2015-16. The assessee succeeds on this ground also. 9. Now, coming to the another vital aspect of the case, which is about validity of the satisfaction recorded by the AO of the assessee. The AO of the assessee, as per record, has recorded his satisfaction on 15/3/2019, copy of which has been placed at page No.187 of the paper-book II. In the said satisfaction note, the AO of the assessee has referred to the Annexure A-3 containing details of investment made in property in cash as well as cheque, and Annexure A-4 at page No.47, which contains the alleged receipt given by the builders of Olive Heights Scheme, i.e. assessee M/s Eklavya Projects, and soft data seized from laptop of Shri Kirit A.Shah (Annexure A-7) containing excel-sheet named “Total Summery 1”. He has also relied upon the statement recorded u/s.132(4) of the Act of Shri Kirit Shah. He has also referred to Annexure A-14 recovered from search/survey action at Claris Corporate Headquarters which were confronted to Arjun Honda, wherein he mentioned that the ‘A’ component in the document was representing in payment in cheque and ‘B’ component as payment in cash. He, accordingly, drawn satisfaction that the documents found and seized from Claris Group pertained/related to the assessee and have a bearing on the determination of total income of the assessee for the assessment year under consideration, i.e. AY 2015-16. However, there is a copy of letter No. ITO-Ward- 3(3)(2)/EP(2)/153C/2019-20 dated 26/12/2019 placed at page No.223 of Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 15 paper-book-I, which has been written by the AO of the assessee after about 9 months of the date of recording of his satisfaction on 15/03/2019. As per the said letter, the DCIT Cen. Cir.(2)(1), namely Shri Manish Kumar Mishra, AO of the assessee, has requested the AO of the searched person to supply him incriminating material/document in the case of Shri Kirit Shah and Claris Corporate Headquarters for AY 2015-16. In the said letter, dated 26/12/2019, the AO of the assessee has requested the AO of the searched party that he after recording the satisfaction u/s.153C of the Act in the case of the assessee M/s.Eklavya Projects, has already initiated proceedings u/s.153C of the Act. That, however, on going through the material provided by the AO of the searched party along with satisfaction note, only on-money cash paid amounting to Rs.60 lakhs was found to have been paid by M/s Akhilesh Venture Holding LLP. That, however, as per satisfaction note, the on-money payment of Rs.1,10,00,000/- has been informed to the AO of the assessee. Further, that in the satisfaction note, the AO of the searched party has mentioned the seizure of page No.47 of Annexure A-4 from residential premise of Shri Kirit Shah, however, the said page No.47 of Annexure A-4 containing the details of cash payment receipt given by the assessee (M/s Eklavya Projects) against cash have not been supplied by the Office of the AO of the searched party to him (AO of the assessee). The AO of the assessee, therefore, has requested the AO of the searched party to provide him the incriminating material, page 47 of Annexure A-4 and copy of receipt against the cash given by the assessee in respect of cash received of Rs.1,10,00,000/- paid by M/s Akhilesh Venture Holding LLP and it has also categorically been mentioned that the documents supplied by the AO of the searched person show only the cash receipt of Rs.60 lakhs. It has been further requested that the said seized document should be handed over to Shri Harshad Shrimali, Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 16 Tax Assistant to the Office of the AO of the assessee. Further, it has been requested for co-operation as the case was going to be time-barred by 31/12/2019. The said document on the file shows that though the AO of the assessee though had recorded his satisfaction on 15/3/2019 allegedly relying upon the seized document page No.47, however, the said document page 47 was neither received nor seen by the AO of the assessee till 26/12/2019. Further, the assessment order was passed by the AO on 30/12/2019 as the assessment was going to be time-barred by 31/12/2019. 9.1. The aforesaid facts show that firstly, the satisfaction recorded by the AO was based on the documents which were not in his possession hence, the said satisfaction drawn by the AO of the assessee was defective. Secondly, the said document was not available to the AO of the assessee till 26/12/2019. However, relying upon the said document, he passed the assessment order on 30/12/2019 and there is nothing on the file that shows as to when did the AO of the assessee actually received the said document after 26/12/2019. 10. In view of the above discussion, the assessee succeeds on the legal ground that the alleged seized document pertained to the FY 2012-13 and not FY 2014-15, therefore, the impugned addition cannot be made in assessment year under consideration, i.e. AY 2015-16. Secondly, the satisfaction report of the AO of the searched person seems to have been obtained after initiation of assessment proceedings by the AO of the assessee u/s.153C of the Act. Thirdly, the satisfaction drawn by the AO of the assessee is also defective as discussed above. Fourthly, the seized document page 47, which allegedly bears the signature of the assessee or its key-persons was not confronted to the assessee at all and there is no mention as to who actually issued said Printed from counselvise.com ITA No.16/Ahd/2024 Eklavya Projects vs. The ITO Asst. Year : 2015-16 17 receipt on behalf of the assessee. In view of this, the assessment order passed u/s.153C of the Act is held bad in law and the impugned addition/made by the lower authorities is ordered to be deleted. 11. In the result, the appeal of the assessee stands allowed. Order pronounced in the Open Court on 12/09/2025. Sd/- Sd/- ( Narendra Prasad Sinha ) Accountant Member ( Sanjay Garg ) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 12/09/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : 1. अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(A)-12, Ahmedabad 5. िवभागीय #ितिनिध , अिधकरण अपीलीय आयकर , अहमदाबाद/DR,ITAT, Ahmedabad. 6. गाड\u0010 फाईल / Guard file. आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (dictation pad is attached with file) : 09.09.2025 2. Date on which the typed draft is placed before the Dictating Member. : 10.09.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 12.9.25 7. Date on which the file goes to the Bench Clerk. : 12.9.25 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : Printed from counselvise.com "