Pradeep Soni, Jodhpur V. DCIT, Central Circle-1, Jodhpur

ITA 530/JODH/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3806 (ITAT-JODHPUR)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-01-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 21-12-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Principle of natural justice; Fair market value; Valuation report; Block assessment; Reassessment proceedings
• Section: 147; 132; 154; 143(3); 153A; 69B; 264; 113; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER ITA No. 530/Jodh/2023 Assessment Year: 2013-14 Pradeep Soni B-13, Mandore Mandi Jodhpur [PAN: AXZPS 6833 R] (Appellant) Vs. DCIT, Central Circle-01, Jodhpur (Respondent) ITA No. 531/Jodh/2023 Assessment Year: 2013-14 Pushpa Devi Soni B-13, Mandore Mandi Jodhpur [PAN: ACLPD 5046 J] (Appellant) Vs. DCIT, Central Circle-01, Jodhpur (Respondent) ITA. No. 532/Jodh/2023 Assessment Year: 2013-14 Leela Devi B-13, Mandore Mandi Jodhpur [PAN: AIVPD 2533 L] (Appellant) Vs. DCIT, Central Circle-01, Jodhpur (Respondent) ITA. No. 533/Jodh/2023 Assessment Year: 2013-14 Parvati B-13, Mandore Mandi Jodhpur [PAN: ALHPP 6432 B] (Appellant) Vs. DCIT, Central Circle-01, Jodhpur (Respondent) I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 2 Appellant by Sh. Rajendra Jain, Adv. Respondent by Sh. Shailendra Sharma, CIT DR Date of Hearing 25.01.2024 Date of Pronouncement 20.02.2024 ORDER PER BENCH These four appeals filed by assessee is arising out of the order of the Commissioner of Income Tax, Jaipur-5 dated 06/12/2023 [here in after ld. CIT ] for assessment years 2013-14 to 2015-16 which in turn arise from the order dated 31.08.2021, 13.08.2021, 12.08.2021 & 16.08.2021 passed under section 153A of the Income Tax Act, by DCIT, Central Circle-01, Jodhpur. 2. Since the issues involved in these appeals are almost identical on facts and are almost common, except the difference in figure, therefore, these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 3. At the outset, the ld. AR has submitted that the matter in ITA No. 530/Jodh/2023 may be taken as a lead case for discussions as the I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 3 issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount in other cases. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 530/Jodh/2023 is taken as a lead case. Based on the above arguments we have also seen that for these appeals grounds are similar, facts are similar, and arguments were similar and therefore, were heard together and are disposed by taking lead case facts, grounds, and arguments from the folder in ITA No. 530/Jodh/2023. 4. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. 530/Jodh/2023 on the following grounds; “1. That on the facts and in the circumstances of the case, the order passed by ld. CIT(A) is bad in facts, bad in law, and also flagrant disregarded of law and rules of procedure or in violation of principles of natural justice. 2. That on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in representing false, incorrect and illegal facts by holding that “the data of investment/expenditure in such property collected during search operation and the statement recorded on these data u/s 132(4) are sufficient to treat as incriminating material collected during the course of search. 3. That on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in deliberately and consciously had plagiarizing and representing wrong fact in the appellate order by making arbitrary & false allegation and framed the reason for sustained the addition in a hypothetical way by putting the assessee to erroneous harassment and inconvenience. I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 4 4. That on the facts and in the circumstances of the case, the Id CIT(A) ought to have deleted the addition made by Id AO in light of decision of Hon'ble Supereme Court in the case of PCIT V/s Abhisar Build Well Pvt. Ltd as no incriminating material was found during the search in respect of investment in construction of residential house by appellant. 5. That on the facts and in the circumstances of the case, the Id CIT(A) grossly erred in sustaining addition of Rs. 31,92,011/- in respect of unexplained investment in construction of residential house u/s 69B of the Act. 6. That on the facts and in the circumstances of the case, the Id CIT(A) grossly erred in sustaining addition by adopting the value estimated by the DVO ignoring the fact that the valuation should have made on the basis of PWD rates not as per CPWD rates as applied by DVO as held by Hon'ble Supreme Court in the case of Sunita Mann Singh reported in 393 ITR 121 and Hon'ble Jurisdictional High Court of Rajasthan. 7. That on the facts and in the circumstances of the case, the Id CIT(A) grossly erred in rejecting the expert report (Authorized Valuer Report) and comments on DVO report and legal & factual submission in casual and arbitrary manner which is against the principle of natural justice. 8. That on the facts and in the circumstances of the case, the Id CIT(A) grossly erred in shown disregarding to the authoritative pronouncement of Hon'ble Supreme Court and various Hon'ble High Courts including Hon'ble Jurisdictional High Court of Rajasthan has grave consequences on the rule of law in the country and it is nothing short of exceeding his jurisdiction and a contemptuous act on his part. 9. That on the facts and in the circumstances of the case, the Id CIT(A) grossly erred in abusing his position entered into illegal conspiracy with mala fide intentions thereby causing wrongful loss to the assessee. 11. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 12. The petitioner prays for justice & relief.” 5. Succinctly, the fact as culled out from the records is that the assessee has filed the original return of income on 29/09/2013 for the A.Y 2013-14 declaring total income of Rs. 1,57,69,030/-. A search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out at I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 5 business/residential premises of Soni Group of Jodhpur on 09/04/2018 to which the assessee Smt. Leela Devi belongs wherein several incriminating documents along with cash, jewellery and other valuables were found/seized from the various premises of the group searched. 5.1 The Soni Group is primarily engaged in the business of trading in Agro Commodities on NCDEX platform and also carry out transactions of Future & Options. In addition, the group is also engaged in the finance business by extending cash loans on interest. Notices u/s 153A dated 18/11/2019 for the A.Ys. 2013-14 to 2018-19 were issued, which were served digitally requiring to file the return of income within 30 days of receipt of notice. In compliance to the same, assessee has filed its ITR u/s 153A for A.Y. 2013-14 declaring total income at Rs. 1,57,69,030/- on 30/12/2019. The assessee is proprietor of M/s Soni Industries and engaged in trading in NCDEX, which are of the nature of speculative business and besides of above, he is having rental income & interest income from FDRs and Bank accounts. The above transactions are done through the broker company M/s Nine Star Commodities Pvt. Ltd. and the assessee has booked overall profit of Rs. 2,42,69,175/- and booked overall loss of Rs. 79,96,933/-, resulting into gross profit of Rs. 1,62,72,242/-. I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 6 5.2 During the course of search at her residential premises 164, 2nd Polo, Paota, Jodhpur certain incriminating documents were found and seized Exhibit 1 Party No. 2 and in the adjoining house occupied by her brother-in-law at 163, 2nd Polo, Paota, Jodhpur (Party No. 3) as well as the business premises of Soni group situated at B- 13. Mandore Mandi, Jodhpur (Party No. 4), voluminous records of sale/purchase of land and other documents of incriminating nature were found and seized, which were inventorised as per Exhibit 1-70 (Party No. 3) and Exhibit 1-7 (Party No. 4) in which several documents pertaining to the assessee and his family members were found and seized. 5.3 During the course of search, the ADIT (Inv.), Bikaner (the Authorised Officer) had referred the valuation u/s 132(9D) to DVO to evaluate the fair market value of both the residential premises of the Soni group viz. 163, 164, Polo 2 nd , Paota, Jodhpur. This was done by him owing to this fact that the joint house owners of both the houses did not reflect the true investment in their respective ITRs or the construction cost in respect of these houses. 5.4 The basis for making this reference by the ADIT (Inv.) u/s 132(9D) was the statement recorded of Shri Bhanwar Lal Soni, who was I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 7 questioned as a head of family about the valuation, if any, got done earlier of the said property by any Registered Valuer and to let the department know about the investment made by the family members of Shri Bhanwar Lal Soni, in whose names the said property pertained. 5.5 Apparently, the cost of investment deposed by Shri Bhanwar Lal Soni was far below and that gave the basis for such reference to Valuation Cell. It is nowhere provided u/s 132(9D) of the Income Tax Act, 1961 that there should be some incriminating documents found relevant to property construction during search before making any reference to Valuation Cell. Before the Valuation Officer, the assessee and his family members could not adduce any evidence regarding the period of construction of these two houses, therefore, the Valuation Officer in the Valuation Report took the mean period of construction as 01/04/2012 to 31/03/2013, which is evident from the valuation report received on 05/07/2018. 5.6 In view of this position, the Valuation Officer has taken the period of construction as 01/04/2012 to 31/03/2013. As per the report of the Valuation Officer, the valuation of both the residence has been determined by her as per the following chart:- I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 8 5.7 Accordingly the significant difference of cost of investment as declared by the assessee and evaluated by the valuation cell of Rs. 1,15,79,366/- in regard to residential house 164, Polo 2 nd , Paota, Jodhpur was there. The assessee was required to state the reason as to why the said differential amount of Rs. 50,44,881/- (Rs. 1,08,42,165/- Rs. 57,97,284/-) should not be considered as the undisclosed income of the assessee Shri Pradeep Soni and his wife Smt. Leela Devi for F.Y. 2012-13, in proportion to their investment declared in their books. In reply to the same the assessee's AR on the ground of legality challenged this valuation on this point that the Valuation Officer has sent letter u/s 132(9D) to make avail her all the details regarding construction, ownership of house and other relevant information from Shri Bhanwar I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 9 Lal Soni, who is not owner of the any of the two residences. As such, he was not the person entitled to provide any information in this regard to him. In this regard, it is worthwhile to mention that the ADIT(Inv.) was already having knowledge that the said house no. 164 belongs to Smt. Leela Devi and Shri Pradeep Soni as was stated by Shri Bhanwar Lal Soni in reply to Q. No. 46 recorded during the search proceedings. The technical objection of the AR Shri Rajendra Jain is now not sustainable in overall perspective of the case, when the entire difference in cost investment issue is dealt in the hands of actual owners Smt. Parvati Soni and Smt. Pushpa Devi in respect of H. No. 163, Polo 2nd Paota, Jodhpur and Shri Pradeep Soni and Smt. Leela Soni in respect of H. No. Smt. 164, Polo 2 nd , Paota, Jodhpur. 5.8 Further, the AR has also objected the reference made by the ADIT(Inv.) u/s 132(9D) to get valuation of the residences from the DVO as according to him it is 'Settled Law' that u/s 132 the Competent Authority must have incriminating documents or information in his possession and thereafter has reason to believe that the investment declared by the assessee in the books of accounts was not correct. He further states that the Investigation Officer did not disclose any I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 10 incriminating documents found during the course of search, basing upon which he found this case eligible for reference to Valuation Cell. 5.9 This objection is again not sustainable in view of the position of law when the sub-section 9D of section 132 was inserted in the Act w.e.f. 01/04/2017 when the ADIT(Inv.) has been given power to refer for valuation of the property u/s 142A of the Income Tax Act, 1961 for determination of valuation and there is no prerequisite in this section 132(9D) that before doing so the Investigation Officer should have in possession some incriminating material with him during the course of search. There is as such no pre- requisition laid down in this section that the Investigation Officer (Authorised Officer) can only refer to the Valuation Officer u/s 142A, he should possess some incriminating material or reason to believe in this regard. The so called 'Settled Law stated by the AR in his reply may be relevant for the searches, which were conducted prior to 01/04/2017 before the insertion of this section in the Act. Definitely, during the course of search the grandeur of the residences, quality of construction and its furnishing has made the Investigation Officer to form a belief that the overall cost of construction cited by Shri Bhanwar Lal Soni, the senior most member of the group at Rs. 1.85 Crore for both the residences cumulatively, was far less than I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 11 the actual investment made by the real owners and that is why he referred to the DVO u/s 142A. His reference has also substantiated his belief as the Valuation Officer estimated the fair market value of both the properties at much higher value than that was disclosed by the real owners in their returns. 5.10 Considering this position, the differential amount of valuation in proportion to the overall investment made by the assessee Shri Pradeep Soni during the F.Y. 2012-13 amounting to Rs. 50, 44 ,80 11- is considered as investment made by her in construction of house from unaccounted income and thus, liable to be added to the income of the assessee for A.Y. 2013-14. As such, an addition of Rs. 50,44,881/- u/s 69B of the Income Tax Act, 1961 is made to the total income of the assessee. Subsequently, the assessee had filed rectification u/s 154 in respect of arithmetical mistake as committed by the AO while passing the assessment order and the AO after verification & examination of record had rectified the mistake & reduced the addition of Rs. 50,44,881/- to Rs. 31,92,011/- and accordingly passed the rectification order u/s 154 r.w.s 153A of the Act. I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 12 6. Aggrieved from the order of Assessing Officer, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: “Decision on ground no 10 to 19 10.2.1 I have considered the facts of the case and written submission of the appellant as against the observations/ findings of the AO in the assessment order for the year under consideration. 10.2.2 The appellant had argued that reference made to DVO was illegal as no books of accounts were rejected before making reference to DVO. The argument of the appellant is not on merit. After amendment in Finance Act 2014, there is no longer requirement for rejection of books to make a reference to the DVO. Earlier it was mandatory to reject books of accounts before making reference to DVO. To remove such hurdle Sec. 142A of the Act was substituted by inserting a new Sec. 142A by the Finance (No.2) Act, 2014, which no longer requires rejection of books of accounts of an Assessee to make a reference to the DVO. In the present case reference to DVO was sent on 26.04 2018. Thus, the reference made to DVO is legally correct. 10.2.3 The appellant had argued and contended that that the addition was made only on the basis of DVO report and there is no incriminating material found during the search and the addition made by the A.O. in the absence of any incriminating material found during the search. invoking the provisions of Section 153A for the year under consideration is illegal. Further the appellant had also relied on the judgment of the Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax Vs Abhisar Build Well Pvt. Ltd. Civil Appeal No. 6580/Del/2021 dated 24/04/2023. The argument raised by the appellant is not valid as the above referred judgment is NOT applicable to the present case. In the present case search was conducted at the residential premises of the appellant i.e. on the property under question. The AO in his remand report had clearly mentioned that during the course of search, statement was recorded and questions related to investment in this property were duly asked and had been replied. The facts relating to expenditure or investment in the property were gathered from various searched premises during the course of search. The AO had reported in his remand report that during the search various incriminating documents have been found and impounded in respect of the purchase of immovable properties and the key person Shri Bhanwar Lal Soni failed to explain investment made in construction of the house property. On account of which to ascertain the cost of investment in the house property, it was referred to the DVO by the authorised officer during the course of search proceedings. In the PCIT Vs Abhisar Buildwell P. LTD., the Hon'ble Supreme Court of India has also laid down as under.” I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 13 “At the cost of repletion, it is observed that the assessment under Section 153A of the Act is arked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 1534 is to bring under tar the undisclosed income which is found during the course of search or pursuant to search or requisition" The AO in his remand report had stated that during the course of search, statement u/s 132(4) was recorded of Shi Bhanwar Lal Son, who was the father of the appellant and he was the key person of the group. In this statement questions were asked related to investment in the construction of this property. The reference was made during the course of search by the conducting DOIT The basis for making this reference by the ADIT (Inv.) u/s 132(90) was the statement of Shri Bhanwar Lal Som, who was questioned as a head of family about the valuation. if any got done cartier of the said property by any Registered Valuer. The relevant portion of the salid statement of Shri Bhanwar Lal Soni, had already reproduced above in the order. Thus, the COITI authorised officer at the search premises after collecting the facts and data of the investment in the property and after considering the statement recorded u/s 132(4) had made refference to the DVO. Thus the data of investment expenditure in such property collected during search operation and the statement recorded on these data uls 132(4) are sufficient to treat as Incriminatting material collected during the course of search. Thus the argument of the appellant that addition based upon DVO report was made without any incriminating material is not on ment. Thus, grounds no 10 to 19 are hereby dismissed. 11. The 20 ground of appeall is that on the facts and in the circumstances of the case, the Id AO grossly emed in charging interest uls 2348 and 234C of the Act. This issue is consequential in nature so no needing any specific adjudication and are accordingly treated as dispose off. 12. The last Ground of Appeal is that the appellant craves leave to add, alter, amend or withdraw any of the grounds off appeal during the course of appellate proceedings. The appellant has not added or altered, amend or withdraw any of the above mentioned grounds of appeal. Accordingly, such mention by the appellant in its ground is treated as general in nature, no needing any specific adjudication and is accordingly treated as dispose off. 13. In the result, the appeal is treated as dismissed.” 7. In this appeal the ld. AR of the assessee submitted a detailed paper book and the index of the documents / judgement relied upon is extracted here in below : I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 14 S. No. Particulars Page No. 01 Copy of letter dated 29/05/2018 in response to notice u/s 139(9D) by Valuation officer. 1 - 2 02 Copy of notice issued u/s 139(9D) by Valuation officer dated 04/05/2018 received on 28/05/2018 3 - 4 03 Copy of corrigendum letter dated 31/05/2018 received on 04/06/2018. 5 - 7 04 Copy of letter dated 11/06/2018 issued u/s 132(9D) of the Act. 8 05 Copy of legal objection filed in response to notice issued dated 11/06/2018 9 - 11 06 Copy of letter dated 13/06/2018 along with reference for valuation of residential house No. 163 & 164, Ridhi Sidhi, polo 2 nd , Paota, Jodhpur 12 - 14 07 Copy of reply dated 07/06/2018 in response to notice issued u/s 132(9D) of the Act. 15 - 16 08 Copy of reply dated 14/06/2018 furnishing the complete details of investment made in residential property in specified performa along with supporting bills & vouchers. 17 - 182 09 Copy of valuation report of registered valuer dated 31/01/2014. 183 - 210 10 Copy of valuation report of Departmental Valuation officer (DVO) dated 02/07/2018. 211 - 224 11 Copy of objection dated 20/03/2020 filed by registered valuer against the valuation made by the DVO. 225 - 242 12 Copy of reply filed by assessee during the assessment proceeding along with supporting documents. 243 - 254 13 Copy of assessment order passed u/s 143(3) of the Act dated 02/12/2015 255 - 256 14. Copy of written submission before the Ld CIT(A). 257 - 275 15. Copy of AO comment on remand report dated 26/09/2023. 276 - 280 16. Copy of rejoinder filed by assessee dated 26/10/2023. 281 - 292 INDEX TO PAPER BOOK- 2 (JUDICIAL DECISIONS) S. No. Particulars Page No. 01 The Hon’ble ITAT, Kolkata Bench in the case of ACIT v/s JIS Foundation in ITA No. 86 to 92/Kol/2019 dt. 09/07/2021. [No reference to DVO without incriminating material] 1 - 23 02 The Hon’ble ITAT, Delhi Bench in the case of DCIT v/s Sumit Mittal in ITA No. 833/Del/2022 dt. 09/11/2023. [No addition on the basis of DVO report in absence of any incriminating material] 24 - 32 03 The Hon’ble ITAT, Amritsar Bench in the case of Golden Tulip Hospitality v/s ACIT in ITA No. 264 & 265/Asr/2023 dt. 10/11/2023. [Valuation on the basis of PWD rates not CPWD rates] 33 - 52 04 The Hon’ble High Court, Jodhpur in the case of Micro Marbles Pvt. Ltd. v/s ITO in CWP No. 13719/2021 dt. 04/01/2023. [Statement recorded u/s 132(4) cannot be basis for addition] 53 - 66 8. The ld. AR of the assessee submitted that the ld. DVO valued land and building both. When it brough to the notice of the ld. AO he has rectified this mistake. But for the reasons known to the ld. AO he has I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 15 made the addition only for the alleged difference in the cost of construction. The objections to the valuation report made by the DVO were filed but were not considered. The rate for estimating cost of construction were taken as CPWD instead state PWD rate. If the rate of state PWD is considered then there is no such difference as alleged by the department. The ld. AO has not replied to the objection filed by the assessee in adopting the DVO’s value. Both the ld. AO and CIT(A) both has confirmed reference to DVO merely on a statement. There no data or material suggesting any incriminating material in respect of the building under question. 9. Per contra, the ld. DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A). She submitted that the ld. AO has already rectified the valuation of land as the same were purchased and therefore, that aspect of the matter is already rectified. The objections are purely technical in nature and thus rightly been held as non- sustainable. The reference was made based on the statement recorded u/s. 132(4) and prima facie the search team found that value reflected in the books is much more than what is expended and that was in support of the statement the reference to valuation was correct. The assessee I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 16 was found in possession of various other property purchase and sales deed which was not recorded in the books. As the search is after the amendment in the law i.e. w.e.f. 01.04.2017 section 132(9D) gives such power for valuation and thus there is no such pre-condition valuation linked with incriminating material. Based on these averment the ld. DR supported the addition made and prayed to sustained the same based on the arguments advanced. 10. The ld. AR of the assessee in the rejoinder submitted that before the first appellate authority the remand report was called for the specific issue as to confirm whether any incriminating material found or not. In that report dated 26.09.2023 it is admitted that the basis for making the valuation is only the statement of a person who is not owner of the property. On the merits that the rates adopted by the DVO are Central PWD rate and considering the various judgment including the judgment of the jurisdictional high the rate should be adopted that of the state PWD and if that rate is applied then there is no such difference as such. In the earlier year the assessment is completed u/s. 143(3) and thus now pursuant to search no addition can be made based on the decision of the apex court in the case of Abhisar Buildwell. I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 17 11. We have heard the rival contentions and perused the material placed on record and also gone through the decision relied upon both the parties. The bench noted that the apple of discord in this bunch of appeal is that whether the addition based on the valuation report be made on the completed assessment when the valuation is made purely based on the statement and view of the building made by the searched. The assessment in this case of the assessee was completed and the assessment order has already been in this case u/s. 143(3) on 02.12.2015. As it is evident from the assessment record that the searched team referred the matter to the valuation on based on the statement of Shri Bhanwar Lal Soni. It is also not under disputed that the searched team has not found any incriminating material. The ld. AR of the assessee relied upon the judgment of the jurisdictional high court in the case of Micro Marbles Private Limited DB Civil Writ Petition no. 13719/2021 wherein it is held that “A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself trigger the assessment. The relevant part of the observation is reproduced here in below : 32. It may be noted that the statement recorded under Section 132 (4) of the Act can be used in evidence for making the assessment only if such statement is made in context with other evidence, or material discovered during search. A statement of a person, which is not relatable to any incriminating document I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 18 or material found during search and seizure operation cannot, by itself, trigger the assessment. 33. In view of the aforesaid facts and circumstances, we are of the opinion that shorn of all other technical aspects which may have been raised before us, the very fact that the material referred to in the "reasons to believe" was not supplied to the petitioner, the entire proceedings for the reopening of the assessment and leading to the consequential assessment stand vitiated in law. 12. Considering the judgment of the jurisdictional high court as stated above and considering the fact that the year under assessment is a completed assessment and in a search proceeding so far as it relates to the completed assessment only the addition can only be made with any corroborative material found during the search. As it is evidently cleared from the facts recorded and discussed in the orders of the lower authority they have merely based on the outer look and the statement of Shri Bhanwar Lal Soni there is no corroborative material suggest that the assessee has invested the money beyond the cost reflected in the books of accounts. In support of so the ld. AR of the assessee submitted that the assessee himself constructed the property which is of family owned and if the rate of State PWD is considered instead of Central PWD then there is no much difference even otherwise and the objections raised by the assessee has not been considered by the lower authority and has made the addition which is nothing but on the presumption and assumption. Such type of addition cannot be made in the post search I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 19 case as decided by the apex court in the case Principal Commissioner of Income Tax, Central-3 ...Appellant Versus Abhisar Buildwell P. Ltd. ...Respondent 2. The core issue involved in the present batch of appeals is the scope of assessment under section 153A of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act, 1961’). According to the Revenue, the Assessing Officer (hereinafter referred to as the ‘AO’) is competent to consider all the material that is available on record, including that found during the search, and make an assessment of ‘total income’. Some of the High Courts have agreed with the said proposition. However, according to the respective assessees and as per some of the High Courts’ decisions, if no assessment proceeding is pending on the date of initiation of the search, the AO may consider only the incriminating material found during the search and is precluded from considering any other material derived from any other source. 5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search under Section 132 or requisition under Section 132A or not, i.e., whether any addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under Section 132 A of the Act, 1961 or not. 6. It is the case on behalf of the Revenue that once upon the search under Section 132 or requisition under Section 132A, the assessment has to be done under Section 153A of the Act, 1961 and the AO thereafter has the jurisdiction to pass assessment orders and to assess the ‘total income’ taking into consideration other material, though no incriminating material is found during the search even in respect of completed/unabated assessments. 7. At the outset, it is required to be noted that as such various High Courts, namely, Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and the Kerala High Court have taken the view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating material. The lead judgment is by the Delhi High Court in the case of Kabul Chawla (supra), which has been subsequently followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in the case of Saumya Construction (supra), which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. Commissioner Of Income Tax v. Mehndipur Balaji, 2022 SCC OnLine All 444 : (2022) 447 ITR 517 has taken a contrary view. 7.1 In the case of Kabul Chawla (supra), the Delhi High Court, while considering the very issue and on interpretation of Section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 20 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 153A(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 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.” 7.2 Thereafter in the case of Saumya Construction (supra), the Gujarat High Court, while referring the decision of the Delhi High Court in the case of Kabul Chawla (supra) and after considering the entire scheme of block assessment under Section 153A of the Act, 1961, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no additional can be made by the AO and the AO has no jurisdiction to re-open the completed assessment. In paragraphs 15 & 16, it is held 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 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 I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 21 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, subsection (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 of 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 be connected with something found 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) 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.” 8. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 22 addition can be made in respect of completed assessment in absence of any incriminating material. 9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under Section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under Section 158BA of the Act, 1961. The erstwhile scheme of block assessment under Section 158BA envisaged assessment of ‘undisclosed income’ for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the ‘undisclosed income’ and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the ‘undisclosed income’ was chargeable to tax at a special rate of 60% under section 113 whereas income other than ‘undisclosed income’ was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the ‘undisclosed’ income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under Section 153A are triggered by conducting of a valid search under Section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 10. On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under Section 153 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. Section 153A of the Act reads as under: “153A. Assessment in case of search or requisition - (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A after the 31 st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 23 in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation.—For the removal of doubts, it is hereby declared that,— (i) save as otherwise provided in this section, Section 153- B and Section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.” 11. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the ‘total income’ in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to subsection (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the ‘total income’ for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 24 unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. 13. Respectfully following above judgment and ratio decided that merely the statement cannot be made base to make the addition and the decision of the apex court that in search assessment under s. 153A, the I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 25 Assessing Officer cannot assess or reassess the total income filed under s. 153A of the Act unless some incriminating material was found during the search. The Revenue has not demonstrated the nature of material found in the course of search which led to impugned additions in the absence of any incriminating material. The cost of land incurred and recorded in the books has been duly accepted and reduced from the fair value derived by the valuer in the order passed under section 154 of the Act. The sustained addition is based on the valuation report of the DVO which is also considering the CPWD rates instead of PWD rates. Thus, the addition made towards the alleged difference in cost of construction made in the order of the assessment deserves to be deleted as the addition on cost of construction is based on valuation report which is in the realm of estimations without any nexus to any incriminating documents per se. Hence, in the absence of any incriminating material found, therefore, we see no perceptible reason to confirm the addition and therefore, the same is directed to be deleted. In terms of these observations, the appeal of the assessee in ITA no. 530/Jodh/2023 is allowed. I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 26 14. The fact of the case in ITA Nos. 531 to 534-Jodh-2023 is similar to the case in ITA No. 530-Jodh-2023 and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in this appeal No. 531 to 534/Jodh/2023 is equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 530/Jodh/2023 for the Assessment Year 2013-14 shall apply mutatis mutandis in the case of Pushpa Devi Soni, Leela Devi & Parvati in ITA Nos. 531 to 534-Jodh-2023 for the Assessment Year 2013-14. In the result, four appeals of the assessee are allowed. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Ganesh Kumar, PS (On Tour) Copy of the order forwarded to: (1)The Appellant (2) The Respondent I.T.A. Nos. 530 to 533/Jodh/2023 Assessment Year: 2013-14 27 (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order Date Initial 1. Draft dictated on Sr.PS/PS 2. Draft placed before author Sr.PS/PS 3. Draft proposed & placed before the Second Member JM/AM 4. Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr. P.S./P.S. Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8. Date on which file goes to the Head Clerk 9. Date on which file goes to the AR 10. Date of dispatch of Order