9911796707
TMI Blog2018 (3) TMI 1858X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Assessing Officer has erred in reopening the assessment of the assessee when there is no relation with the alleged land transaction of the assessee. 3. Under the facts and circumstances of the case the learned Assessing Officer has erred in enhancing the addition to Rs. 1,13,00,000/- on substantive basis from Rs. 1,24,99,000/- made by the learned Assessing Officer on protective basis without bringing any material on record only on the basis of statement of Shri Madan Mohan Gupta which was given only to save himself from the tax liability. 4. Under the facts and circumstances of the case the learned Assessing Officer has erred in giving the finding that the land deal was made by Shri Rajendra Kumar Jain and he is the person who purchased the land and sold to Navratan Kothari and Vimal Chand Surana and Shri Madan Mohan Gupta was only name lender. 5. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing. Ground nos. 1 & 2 are regarding validity of reopening of assessment. 2. The assessee is an Individual and filed his return of income on 31.10.2007 declaring total income of Rs. 29,04,041/-. Subsequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which shows that there was no material to arrive at a definite belief that the income of Rs. 11.59 crores has escaped assessment. The ld. A/R has further submitted that though the ld. CIT (A) has converted protective assessment into substantive but to the extent of Rs. 1,13,00,000/-. Therefore, the AO was having no reason to believe that an income of Rs. 11.59 crores has escaped assessment. The ld. A/R has further submitted that the land transaction alleged by the AO has no connection with the assessee as there was no such transaction between the assessee and Shri Madan Mohan Gupta or through Shri Madan Mohan Gupta. The seized material as referred by the AO does not show any such transaction between the assessee and Shri Madan Mohan Gupta or any transaction of purchase of land by the assessee otherwise. The AO has made addition on protective basis which has no relevance with the reasons recorded for reopening of the assessment. Thus when no addition was made with reference to the reasons recorded, then the AO is precluded in making any other addition while framing the reassessment. In support of his contention he has relied upon the decision of Hon'ble Madras High Court in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the hands of the assessee. In support of his contention, he has relied upon the decision of Hon'ble Supreme Court in the case of Ganga Saran & Sons Pvt. Ltd. vs. ITO, 130 ITR 1 (SC) and submitted that the Hon'ble Supreme Court has held that action under section 148 is not warranted on mere suspicion or rumor. Similarly in the case of Phoolchand Bajrang Lal vs. CIT, 203 ITR 456 (SC), the Hon'ble Supreme Court has held that it is open to the assessee to establish that there in fact existed no belief and the belief was not bonafide one or based on vague, irrelevant and no specific information. Hence, the ld. A/R has submitted that the AO was unable to substantiate information/belief of escapement of income of Rs. 11.59 crores as in the reassessment proceedings he has made an addition of Rs. 1.47 crore on protective basis. In support of his contention, he has relied upon the decision of Bangalore Bench of the Tribunal in the case of DCIT vs. Bullion Investments & Financial Services Pvt. Ltd. 29 DTR 325 as well as decision in the case of Smt. Farzana F. Desai vs. ACIT, 14 DTR 552 and submitted that when the AO has finally made the assessment on protective basis then in the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure No. & Exhibit No. Page No. Found/Seized from 1. Annexure A Exhibit -1 15 to 24, 27, 28, 43, 44 and 69 to 74 Residential premises 2. Annexure-A Exhibit-2 47 and back side of 48, 50 to 54 Residential premises 3. Annexure-A Exhibit-5 1 to 77 Residential premises 4. Annexure0 AS Exhibit-1 1 to 3, 7, 9, 10 Office premises During the search and seizure action under section 132 of the Act carried on 23rd May, 2013 statement of Shri Madan Mohan Gupta was recorded wherein he has explained the transactions as found in the seized material which is a diary maintained by Shri Madan Mohan Gupta. He has stated that the transactions as per these entries recorded in the seized material pertain to the land deal at village Chainpura behind EP Jaipur which was purchased by the assessee through Shri Madan Mohan Gupta. Thus Shri Madan Mohan Gupta has stated in the statement that the entire purchase consideration was given by the assessee to him for purchase of the said land. The AO accordingly proposed to reopen the assessment by recording reasons as under :- "During the course search and seizure operation in the case of Rajendre Jain Group DOS 23-05-2013 certain incrementing do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments as referred by the AO in the reasons recorded are the pages of the diary in which various transactions are recorded in the name of different persons and against specific dates. The relevant pages as referred by the AO are placed at pages 16 to 21 of the paper book which are as under :- It is evident from the entries recorded in the seized material that all these entries are started from 31st December, 2007 onwards and subsequent entries in the year 2008, 2009 and 2010. In most of the entries specific name though the initials were mentioned and, therefore, these are not in the name of the assessee. Thus from the seized material which is referred by the AO in thereasons recorded, there is nothing to disclose any entry of payment of money by the assessee to Shri Madan Mohan Gupta during the year under consideration. Once the entries recorded in the seized material do not pertain to the year under consideration then the statement of Shri Madan Mohan Gupta cannot be relied upon without any corroborating evidence and specifically when the transaction of land is otherwise not in dispte as it was finally purchased by Shri Madan Mohan Gupta through his company, namely M/s. Kalyan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment for the year under consideration. Further, the AO while framing the assessment has made an addition of Rs. 1,24,99,000/- on protective basis which itself manifest and established the fact that the reasons to form the belief by the AO for reopening of the assessment is not based on any tangible material to show that the income assessable to tax has escaped assessment. Thus it is clear that the AO has formed the belief only on presumption and not on the basis of material as referred in the reasons. Therefore, the reopening of the assessment merely on the basis of suspicion and presumption which is not supported by even the material as referred in the reasons recorded and available with the AO then the reopening of the assessment is not valid and liable to be quashed. We accordingly quash the reopening of the assessment as invalid and consequently the reassessment framed is also set aside being not sustainable. Since we have quashed the reopening of the assessment being not valid, therefore, the other grounds raised by the assessee as well as the cross appeal of the revenue have become infructuous and are dismissed. 5. In the result, appeal of the assessee is allowed and appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and annexed as Annexure 'A' Exhibit 1-8. The AO further noted that as per the transactions recorded in the seized papers to the tune of Rs. 12,30,84,000/-, a sum of Rs. 7,19,50,000/- relates to the assessment year 2009-10 and Rs. 3,86,35,000/- related to assessment year 2010-11. Since these transactions were not recorded in the books of the assessee but found in the papers and seized material, therefore, the AO issued a show cause to the assessee as to why the amount of Rs. 7,19,50,000/- should not be treated as income for the assessment year 2009-10. The assessee filed his reply and objected to the addition. The assessee denied having any connection with the alleged land transaction as found recorded in the diary seized from the premises of Shri Madan Mohan Gupta. Accordingly, the AO after considering the facts, substantive addition of the amount has been made in the hands of Shri Madan Mohan Gupta and protective addition was made in the hands of the assessee. On appeal, the ld. CIT (A) has converted the protective addition into substantive addition in the hands of the assessee. 8. Before us, the ld. A/R of the assessee has submitted that no incriminating material/document was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the ld. CIT (A) is not justified in deleting the addition made by the AO and sustaining only Rs. 50,00,000/-. He has further submitted that in the remand report, the AO has clearly made out an addition of Rs. 5,55,84,000/- and recommended the same for substantive basis. 9. We have considered the rival submissions as well as relevant material on record. There is no dispute that a search and seizure action under section 132 was carried out in the case of the assessee and group/associates of the assessee. Therefore, when the search action was taken in the case of the assessee, then as per the provisions of section 153A the AO is bound to assess or reassess the income of the assessee for 6 assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted or requisition was made. There is no dispute that the assessment year under consideration is falling within the 6 assessment years as provided under section 153A and, therefore, the initiation of proceedings under section 153A are valid and proper. However, the question arises whether the AO is justified in making the addition in the reassessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground no. 2 of the assessee's appeal and the ground raised by the revenue in the cross appeal. 10. Ground no. 2 & 3 of the assessee and ground of the revenue are regarding the addition of Rs. 50,00,000/- sustained by ld. CIT (A) under section 68 of the IT Act. This ground is common as the revenue has also challenged the impugned order of the ld. CIT (A) to the extent of the addition deleted by ld. CIT (A). The ld. A/R of the assessee has submitted that the additions sustained by ld. CIT (A) is based on the wrong presumption and assumption of the fact as there was no such addition made by the AO in the assessment order whereas the addition made by the AO on protective basis has been deleted by the ld. CIT (A) and, therefore, the subsequent addition of Rs. 50,00,000/- is not sustainable as it is not based on any material or evidence. The ld. CIT (A) in the detailed discussion while deciding the issue has given the finding in favour of the assessee whereas only in a table as at page no. 63 of the impugned order the ld. CIT (A) has sustained an addition of Rs. 50,00,000/- under section 68. Thus the ld. A/R has submitted that the assessment framed under section 153A in the absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as under : AY Name Addition required to be made Under sec./nature of addition 2008-09 Navrattan Kothari Rs. 15,87,19,309/- Undisclosed investment made in cash u/s 68 2008-09 Vimal Chand Surana HUF Rs. 2,64,66,445/- Undisclosed investment made in cash u/s 68 2008-09 Kaushal Chand Surana* Rs. 1,32,13,382/- Undisclosed investment made in cash u/s 68 2008-09 Rajendra Kr Jain* Rs. 3,20,00,000/- Undisclosed investment made in cash u/s 68 2008-09 Rajendra Kr. Jain* Rs. 8,32,55,232/- Undisclosed business profit. 2007-08 Rajendra Kr Jain Rs. 1,13,00,000/- Undisclosed investment made in cash u/s 68 (Direction for AO u/s 150(1) of the Act to re-open u/s 147 of the of the case for Sh. Rajendra Kr. Jain and Sh Kaushal Chand Surana for AY 08-09) In case of Chainpura land dealings, no addition either on substantive basis of protective basis has been proposed in the hands of Sh Madan Mohan Gupta & M/s. Shri Kalyan Buildmart Pvt. Ltd. Further, it is also pertinent to mention here that, no protective addition of Rs. 7,19,50,000/- has been proposed in the remand report. Further, as per detailed working given in para no. 2.1.8.5 for issue n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed u/s 139(1) expired on 30.09.2011. A search in the case of the assessee was conducted on 17.07.2013 and as on the date of search the assessment for the year under consideration was not pending. Thus, it is clear that the notice issued by the AO u/s 153A consequent to the search carried out u/s 132 is for reassessment of income of the assessee. We further note that in the course of assessment proceedings the Assessing Officer has accepted the income declared by the assessee in the original return of income except a disallowance of Rs. 26,183/- on account of employees contribution to ESI and PF. The entire assessment order is silent about any of the incriminating document found or seized during the course of search and seizure action and therefore, it is clear that the assessment framed by the Assessing Officer u/s 153A for the assessment year under consideration is not based on any document found or seized during the course of search or requisition made. This fact has not been disputed by the Revenue that the assessment for the year under consideration u/s 153A r.w.s. 143(3) is not based on any incriminating document found during the course of search. This issue has been consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lain from a careful reading of the said two . decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 (Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the ITAT, deleting the addition, was not interfered with." 59. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) v. Asstt. CIT [2013] 36 taxmann.com 523/219 Taxman 223. The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: '33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents."' 60. In Kabul Chawla (supra), the Court also took note of the decision of the Bombay High Court in CIT v. Continental Warehousing Corpn (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78/232 Taxman 270/374 ITR 645 (Bom.) which accepted the plea that if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supra) as under: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction (P.) Ltd. (supra). There, a search and seizure operation was carried out on 7th October, 2009 and an assessment came to be framed under Section 143(3) read with Section 153A(1)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The ITAT deleted the additions on the ground that it was not based on any incriminating material found during the course of the search in respect of AYs under consideration i.e., AY 2006-07. The Gujarat High Court referred to the decision in Kabul Chawla(supra), of the Rajasthan High Court in Jai Steel (India) (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: '15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153. the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; 62. Subsequently, in Devangi alias Rupa (supra), another Bench of the Gujarat High Court reiterated the above legal position following its earlier decision in Saumya Construction (P.) Ltd. (supra) and of this Court in Kabul Chawla (supra). As far as Karnataka High Court is concerned, it has in IBC Knowledge Park (P.) Ltd. (supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In Gurinder Singh Bawa (supra), the Bombay High Court held that: "6. . . . . . once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not disclosed during the regular assessment proceedings." 63. Even this Court has in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es." 67. By contrast, there is no such statement in the present case which can be said to constitute an admission by the Assessee of a failure to record any transaction in the accounts of the Assessee for the AYs in question. On the contrary, the Assessee herein stated that, he is regularly maintaining the books of accounts. The disclosure made in the sum of Rs. 1.10 crores was only for the year of search and not for the earlier years. As already noticed, the books of accounts maintained by the Assessee in the present case have been accepted by the AO. In response to question No. 16 posed to Mr. Pawan Gadia, he stated that there was no possibility of manipulation of the accounts. In Smt. Dayawanti Gupta (supra), by contrast, there was a chart prepared confirming that there had been a year-wise non-recording of transactions. In Smt. Dayawanti Gupta (supra), on the basis of material recovered during search, the additions which were made for all the years whereas additions in the present case were made by the AO only for AY 2004-05 and not any of the other years. Even the additions made for AYs 2004-05 were subsequently deleted by the CIT (A), which order was affirmed by the ITAT. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Conclusion 72. To conclude: (i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04? (ii) Question (ii) is answered in the affirmative i.e., in favour of the Assessee and against the Revenue. It is held that with reference to AY 2004-05, the ITAT was correct in confirming the orders of the CIT (A) to the extent it deleted the additions made by the AO to the taxable income of the Assessee of franchise commission in the sum of Rs. 88 lakhs and rent payment for the sum of Rs. 13.79 lakhs?" Accordingly, in view of the facts and circumstances of the case that the assessment in question was framed u/s 153A is not based on any incriminating material found or seized and therefore, the addition made by the AO of Rs. 26,183/- on account of employees Contribution to ESI and PF is not justified and the same is deleted by following decisions of Delhi High Court in case Pr. CIT vs. Meeta Gutgutia (supra)." Therefore, when the addition is not based on the seized mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal before or at the time of hearing." ITA No. 521/JP/2017 (Revenue) : "1. Whether on the facts and in the circumstances of the case the CIT (A) was right in deleting the protective addition of Rs. 3,86,35,000/- made by the AO on account of undisclosed investment quantified on the basis of seized documents when the substantive addition made in the hands of Sh Madan Mohan Gupta has also been deleted by the ld. CIT (A) in a separate order. 2. The Appellant crave, leave or reserves the right to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 15. Ground No. 1 is regarding validity of assessment passed under section 153A read with section 143(3). This issue is common as raised by the assessee for the assessment year 2009-10. In view of our finding on this issue for the assessment year 2009-10, the same stands disposed off in terms of our finding for the assessment year 2009-10. 16. Ground No. 2 is regarding the addition of Rs. 1,01,99,728/- sustained by ld. CIT (A). The AO in the assessment framed under section 153A read with section 143(3) has made an addition of Rs. 1,01,99,728/- with reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P/2008 arising out of ITSSA No. 24/JP/2005. The AO has not made out the case of linking these transactions with the business affairs of the assessee, thus the AO has failed to discharge his duty and making the addition in the hands of the assessee. Some of the transactions are having the dates which pertain to financial year 2008-09 and, therefore, are not related to the assessment year under consideration. The ld. A/R has referred to Annexure-A page 55 of the seized document and submitted that the transactions from date 30th July, 2008 to 7th February, 2009 do not pertain to the assessment year under consideration and, therefore, the AO has committed a gross error in taking all the amounts against this transaction as income of the assessee for the year under consideration. Further, except the statement of Shri Madan Mohan Gupta, there is nothing in the seized material that these transactions are related to the assessee. The ld. A/R has further submitted that the addition is based on the statement of Shri Madan Mohan Gupta whereas the assessee was not allowed to cross examine Shri Madan Mohan Gupta and, therefore, the assessment order based on the statement without giving the oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 2009. The AO further noted that as per the details of the plots given in the sale deed, 12 plots are matching as found in page 57. However, in the sale deed, numbers were not mentioned in respect of 2 plots. Therefore, the AO has taken all the 12 plots found recorded at page 57 of the seized material as the transaction in which on money of Rs. 1,01,99,728/- was paid by the assessee. The relevant details of plots and finding of the AO are given in para 6.6.4 and 6.6.5 as under :- "6.6.4. On going through the page no. 57 as well as details produced by the assessee, it is gathered that there is a vital difference between sale price mentioned in the registries and the details mentioned on this page. The same is summarized as under :- S. No. Plot No. Area (Sq.yds) Rate (per sq. yds.) as mentioned on page no. 57. Total Amount as per details mentioned on page no. 57. Sale Consideration shown in sale deed Difference 1 16 260.00 5800 15,08,000 5,43,456 9,65,535 2 17 260.00 4900 12,74,000 5,43,465 7,30,535 3 29 216.66 5800 12,56,628 4,52,873 8,03,755 4 32 216.66 5800 12,56,628 4,52,850 8,03, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Hemang Construction Pvt. Ltd. and not in the name of the assessee. Thus the AO has presumed that on money has been paid by the assessee from his undisclosed income on the basis of statement of Shri Madan Mohan Gupta who has explained the difference amount as the cash consideration which was paid to the seller after receiving the same from the assessee. Prima facie if a transaction is carried out between two parties then any on money received in the said transaction has to be considered as paid by the purchaser. In the case in hand when the land in question was purchased by M/s. Hemang Construction Pvt. Ltd. and not in the personal name of the assessee then in the absence of any material to show that the difference amount was paid by the assessee from unaccounted or undisclosed income of the assessee, the same cannot be considered as the undisclosed income of the assessee. Further, the AO has relied upon the statement of Shri Madan Mohan Gupta without allowing the assessee to cross examine Shri Madan Mohan Gupta. The AO has reproduced the reply of the assessee in para 6.5 and in the last part of the reply whereby the assessee has clearly demanded cross examination of Shri Madan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealers and what extraction the appellant wanted from them." Thus it is clear that if an order is made on the basis of the statement of an witness without giving an opportunity of cross examination then the said order suffers from serious flaw which renders the order nullity in as much as it amounts to violation of principles of natural justice and adversely affecting the assessee. In the case in hand the transactions recorded in the seized documents clearly pertains to the purchase of land in the name of the company and, therefore, the seized documents do not reveal who has paid on money in the said transaction. The AO has held that the on money is paid by the assessee whereas the transaction was in the name of the company M/s. Hemang Construction Pvt. Ltd. Further, when assessee as well as Shri Madan Mohan Gupta both were the directors of the said company then except the statement of Shri Madan Mohan Gupta there was no other material or record to establish that the said on money was paid only by the assessee and not by Shri Madan Mohan Gupta or by both or by the company. Therefore, this decision of the AO that the on money was paid by the assessee is absolutely based on the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction of purchase of land by the assessee or any group concern of the assessee during the year 2010 and, therefore, these notings in the diary can be related to the said transaction of purchase of land. The AO has considered this payment as the payment made by the assessee for purchase of land as held in para 7.6.3 as under :- " 7.6.3. In view of the above, the cash payment of Rs. 9,00,000/- found recorded as paid to Moolchand during this AY are to be treated as undisclosed income of the assessee which he has invested for purchase of plots at Jamna Vihar, Teelawala in the name of his companies. However, to protect the interest of revenue, protective addition of an amount of Rs. 9,00,000/- has been made in the case of Shri Madan Mohan Gupta for this assessment year because these papers were found from the premises of him and he is liable to explain these papers as per the provisions of section 292C of the Act. Thus, addition of Rs. 9 lacs is hereby made in the total income of the assessee as unaccounted investment in purchase of plots. Therefore, penalty proceedings u/s 271(1)(c) of the Act for concealment of income/for furnishing inaccurate particulars of income are bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rming the addition of Rs. 5,50,000/- on account of unaccounted investment in purchase of plot/on the basis of papers seized from residential premises of Shri Madan Mohan Gupta without bringing any new facts on record. 3. Under the facts and circumstances of the case the learned CIT (A) has erred in confirming the addition of Rs. 8,40,227/- u/s 50C of the Income Tax Act, 1961 without comparing the DLC rate, whereas the property has no DLC rate. 4. Under the facts and circumstances of the case the learned CIT (A) has erred in giving the finding that the payment made to Moolchand has been made out of books on the basis of documents seized from third party without examining Shri Moolchand. 5. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing." 23. Ground No. 1 is regarding validity of order passed under section 153A read with section 143(3) of the Act. 24. We have heard the ld. A/R as well as the ld. D/R and considered the relevant material on record. Since the assessment proceedings for the assessment year under consideration were not concluded but pending as on the date of search, therefore, the same got a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat DLC rates for Kesav Vihar were not fixed by the authorities. The ld. CIT (A) did not accept the contention of the assessee and confirmed the addition made by the AO. 28. Before us, the ld. A/R of the assessee has submitted that the AO has adopted a short cut method for making the addition on this account on the basis of a letter from the Sub Registrar Stamps which has clearly stated that the DLC rates for Kesav Vihar are not fixed. He has further submitted that no opportunity was provided to the assessee before the DLC rates of another area was adopted by the AO. Hence, the addition made by the AO is not sustainable. The ld. A/R has submitted that when the DLC rates were not available then in the absence of any valuation by DVO, the AO is not justified to adopt the rates of another area. 28.1. On the other hand, the ld. D/R has relied upon the orders of the authorities below. 29. We have considered the rival submissions as well as relevant material on record. At the outset, we note that despite the objections raised by the assessee against the adoption of the DLC rates of adjoining area, namely, Siddharth Nagar, the ld. CIT (A) has confirmed the action of the AO in para 3.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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