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TMI Blog2019 (4) TMI 1925X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeal) has erred in law and on facts in not appreciating that the addition of Rs. 31,35,850/- has been made without any positive & cogent evidence and rather on irrelevant facts. 3. That the Ld. CIT (Appeal) has erred in law and on facts in not appreciating that the Ld. AO has not considered the evidences produced by the appellant which clearly establishes that no cash payment was made by the appellant. 4. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence." 3. Consequent to the search conducted in Aerens group of cases on 17.08.2011, a search and seizure operation u/s 132 of the I.T. Act, 1961 was also conducted at the premises of the assessee on 10.02.2012. The jurisdiction over the assessee was transferred from the ITO, Ward-23 (2), New Delhi to ACIT, Central Circle-9, New Delhi, issued by the CIT, Delhi-VIII, New Delhi u/s 127 of the Act on 25/09/2013. Subsequently, a notice u/s 153A of the IT Act, 1961 was issued and served upon the assessee on 30.09.2013. In response to the same, the assessee stated that the return filed u/s 139(1) on 27.07.2007 be treated as the return filed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to prove our investment of alleged cash amount in the property." The Assessing Officer further observed that in the same excel sheet the name of one Sh. I.E. Soomar, E-405, Greater Kailash-ll, New Delhi also appeared at Sr. No. 39 who admitted that the cash investment of Rs. 6.64 crores being made in the said project, and paid the taxes on the same. The Assessing Officer observed that the assessee failed to adduce an iota of evidence in respect of the cash investment of Rs. 31,85,850/-. Therefore, in the light of the above discussion and the surrender made by Sh. I.E. Soomar on the basis of similar evidence, the Assessing Officer opined that the cash investment of Rs. 31,85,850/-made by the assessee was not disclosed by assessee in its books of account. Accordingly, the Assessing Officer added the amount of Rs. 31,85,850/-to the income of the assessee as income from undisclosed sources. 4. The Assessing Officer observed that in the same excel sheet name of one Shri I.E. Soomar. 5. Being aggrieved by the assessment order, the assessee filed appeal before the CIT (A). The CIT(A) dismiss the appeal of the assessee. 6. The Ld. AR submitted that the present appeal of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two searches were conducted one at AEZ group on 17.08.2011 and one at Mr Subhash Khattar on 10.02.2012. This addition was also made in respect of investment in Indrapuram Habitat Center Gziabad and on the basis of confession of Shri I.E.Soomar. The Subhash Khattar filed appeal being ITA No. 902/DEL/2015 before the Tribunal and Tribunal held that no addition under Section 153A of the Act can be made in absence of any incriminating documents found in search. The Tribunal also noted that merely because some third party has surrendered some amount in his hands that does not mean that such surrender binds all other independent assessees. The Ld. AR submitted that all these aspects have been considered by the Tribunal in its order dated 30.06.2016. The Ld. AR further submitted that order of the Tribunal has now been affirmed by the High Court in ITA no 60 of 2017. The Ld. AR further submitted that while deciding the case of Subhash Khattar, Hon'ble High Court decided the issue after framing the question of law and after taking cognizance of ITAT order evidencing the dates of search and investment in projects of AEZ. The Ld. AR submitted that recently "A" Bench of the Tribunal, Delhi Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O issued notice to the assessee asking the source of alleged investment. During the course of assessment proceedings, the assessee explained that assessee had not invested anything in the alleged property. However, the Assessing Officer relied upon the confession of some I.E. Soomar and made the addition in the hands of the assessee. The said confession and the said Group search is already taken into account in co-investor's case by this Tribunal. The Tribunal has allowed the appeal of the co-investor which is mentioned in the proceedings of the present assessee (Subhash Khattar Vs. ACIT A.Y. 2006-07 ITA No. 902/Del/2015 order dated 30/06/2016). The Hon'ble Tribunal held in para 8 as under: "8. Considering the above submissions, we find that the Learned CIT(Appeals) has upheld the addition in question mainly on the basis of (i) the details written on the hard disc found during the course of search from the premises Aerens Group, wherein payment through cheque and cash have been mentioned against the name of assesee at Sr. No. 32; Shri I. E. Soomar appearing at Sr. No. 39 of the said hard disc had admitted the cash investment of Rs. 6.64 crores being made in the said project and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon'ble Jurisdictional Delhi High Court in the case of CIT vs Kabul Chawla (Supra). Under the circumstances, we are of the view that the Assessing Officer was not justified in assuming jurisdiction u/s 153A and authorities below ere also not justified in making and sustaining the addition in question merely on the basis of a hard disc found during the course of search at the premises of Aerens Group without any corroborative evidence in support. We thus hold that the assessee/appellant succeeds on both the above issues, i.e. on validity of assumption of jurisdiction u/s153A and the addition in question. The grounds involving the above issues are accordingly allowed. 9. In result, appeal is allowed." The same was confirmed by the Hon'ble Delhi High Court vide order dated 25/7/2017. Thus, the issue raised in the present appeal is already covered in Co-investors' case. 9. In result, appeal of the assessee being ITA No. 770/DEL/2015 is allowed. 10. Now we are taking up ITA No. 938/Del/2015. The grounds of appeal are as under: 1. That the Ld. CIT (Appeal) has erred in law and on facts in confirming die addition of Rs. 25,20,884/- as income from undisclosed sources which was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee invested a sum of Rs. 32,70,884/- for purchase of flat / space / land with M/s Indirapuram Habitat Centre, a concern of AEZ group. The Assessing Officer observed that out of the above amount of Rs. 32,70,884/- the assessee paid a sum of Rs. 7,50,000/- by cheque which was duly reflected the balance sheet but no details of the cash payment amounting to Rs. 25,20,884/- were available record. According to the Assessing Officer no satisfactory explanation was also furnished by the assessee except denial of the cash payment. Since the cash payment was proved on basis of material seized, the Assessing Officer opined that the assessee made the above cash payment out of the books of account and treated it as unexplained income of the assessee. However, before adding back the same, vide notice dated 5.02.2014, the Assessing Officer gave an opportunity to the assessee to furnish a reply. According to the Assessing Officer, the assessee filed reply narrating the history of the case without any merit to considered and extracted para 5 of the said reply and incorporated in the same in the assessment order as under: "Your honour merely on the basis of an impression which has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appeal before the CIT (A) and argued that no addition can be made as no incriminating material was found in the search of assessee. However, the CIT (A) sustained the addition. The Ld. AR submitted that no addition can be made in absence of any incriminating document unearthed during search. The Ld. AR further submitted that in one similar matter namely in the case of Subhash Khattar a similar addition of Rs. 3,21,00,000/- was made by the revenue. In that case also two searches were conducted one at AEZ group on 17.08.2011 and one at Mr Subhash Khattar on 10.02.2012. This addition was also made in respect of investment in Indrapuram Habitat Center Gziabad and on the basis of confession of Shri I.E.Soomar. The Subhash Khattar filed appeal being ITA No. 902/DEL/2015 before the Tribunal and Tribunal held that no addition under Section 153A of the Act can be made in absence of any incriminating documents found in search. The Tribunal also noted that merely because some third party has surrendered some amount in his hands that does not mean that such surrender binds all other independent assessees. The Ld. AR submitted that all these aspects have been considered by the Tribunal in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is pertinent to note that in present case on 17.08.2011, a search and seizure action has undertaken in the case of AEZ group during this search it is alleged that the assessee invested an amount of Rs. 32,70,884/-via cash in M/s Indrapurarn Habitat Center Pvt. Ltd. Thereafter, a search action was also undertaken in the case of assessee on 10.02.2012. However, no evidence supporting the case of revenue vis-a-vis investment in cash in Indrapurarn Habitat Center was found. AO issued notice to the assessee asking the source of alleged investment. During the course of assessment proceedings, the assessee explained that assessee had not invested anything in the alleged property. However, the Assessing Officer relied upon the confession of some I.E. Soomar and made the addition in the hands of the assessee. The said confession and the said Group search is already taken into account in coinvestor's case by this Tribunal. The Tribunal has allowed the appeal of the coinvestor which is mentioned in the proceedings of the present assessee (Subhash Khattar Vs. ACIT A.Y. 2006-07 ITA No. 902/Del/2015 order dated 30/06/2016). The Hon'ble Tribunal held in para 8 as under: "8. Considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises of another person and there being no independent material available supporting such addition, was not justified. Besides, we also find substance in the contention of the Learned AR that assessment u/s153A of the act in absence of incriminating material found during the course of search at the premises of the assessee and in absence o abatement of assessment on the date of search, cannot be made in the present case as per the above cited decisions including the decision of Hon'ble Jurisdictional Delhi High Court in the case of CIT vs Kabul Chawla (Supra). Under the circumstances, we are of the view that the Assessing Officer was not justified in assuming jurisdiction u/s 153A and authorities below ere also not justified in making and sustaining the addition in question merely on the basis of a hard disc found during the course of search at the premises of Aerens Group without any corroborative evidence in support. We thus hold that the assessee/appellant succeeds on both the above issues, i.e. on validity of assumption of jurisdiction u/s153A and the addition in question. The grounds involving the above issues are accordingly allowed. 9. In result, appeal is allowed." The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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