TMI Blog2022 (1) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the opportunity for the rebuttal of the assessee has not been done, the additions made in the assessment under section 143(3) read with section 147 of the Act are not sustainable. Assessment in the case of co-owners - Also there was the search proceedings with respect to the co-owner namely Kanchanbhai Baldevbhai under the provisions of section 132 of the Act. As a result of search proceedings, assessment order was framed under section 153A of the Act where addition was made on account of unaccounted investment in the land as discussed above which was subsequently deleted by the learned CIT (A) - we find that the issue on merit was not decided rather the appeal was decided on technical reason that there cannot be any addition with respect to the unabated assessment years until and unless there was found some document of incriminating nature. Admittedly, there was no document found from the premises of the co-owner in the course of search with respect to the impugned unaccounted investments. Further, the order of the learned CIT (A) was not maintainable before the ITAT for the simple reason that the tax effect in the dispute was less than ₹ 50 lacs. Issue in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition of ₹ 1,05,51,219/-. 5. It is therefore prayed that the reassessment proceedings may be quashed, the assessment may be annulled and the addition of ₹ 1,05,51,219/- may be deleted. 6. Your appellant craves leave to add, alter or amend any ground of appeal at the time of hearing. 3. The interconnected issue raised by the assessee is that the learned CIT (A) erred in confirming the addition made by the AO for ₹ 1,05,51,219/- being income from undisclosed sources on account of unaccounted investments made in the land. 3.1 The facts in brief are that the assessee in the present case is an individual and earning income from salary, house property and capital gain. The assessee along with Shri Kanchanbhai Baldevbhai in the year under consideration has purchased piece of land bearing survey number 311/4 311/6 for ₹ 6 Lacs only. The share of the assessee in the land was 50% only. Therefore, the assessee has shown investments at ₹3 Lacs in the income tax return. 3.2 There was a search and seizer operation under section 132 of the Act carried out at Himalaya group dated 22nd April 2008. Among other documents seized durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sold by Smt. Pareshben D Modi. 3.7 Likewise, there was no request made by the assessee for the cross verification of the statements recorded under section 132(4) of the Act of the persons namely Shri Rohit Modi and Kamlesh Modi which was used for making the addition in the hands of the assessee. Thus, the conduct of the assessee suggests that he had no explanation for having made investment of his unaccounted income in the impugned land. Thus the AO, in view of the above, treated the sum of ₹ 1,05,51,219/- being 50% of ₹ 2,11,02,238/- as unaccounted investment and added to the total income of the assessee. 4. Aggrieved assessee preferred an appeal to the learned CIT (A) 4.1 The assessee before the learned CIT (A) submitted that the seized materials which have been used for making the addition have not been provided by the AO for his rebuttal. Likewise, the statement of the 3rd party cannot be used against the assessee for the purpose of the addition. 5. However, the learned CIT (A) rejected the contention of the assessee by observing as under: 3.5. The facts of the case and the submissions are considered. The AO has made the addition or. the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee on account of unaccounted investment in the land was based on the documents seized from the premises of 3rd party in the course of search wherein the person namely Shri Rohit Modi and Kamlesh Modi have also accepted to have received the unaccounted money in cash from the assessee and other co-owner which was also offered to tax. First of all, we note that the land was sold by Smt. Pareshben D. Modi to the assessee and other co-owner and not by the parties as discussed aforesaid. Indeed, the vendor is the mother of the aforesaid person namely Shri Rohit Modi and Kamlesh Modi. Thus there is close connection between the vendor of the land viz a viz the parties in whose possession the material was seized/admission to have received with respect to the unaccounted money paid in cash. Thus the 1st issue arises whether the materials seized and the statement furnished by the aforesaid parties can be used against the assessee. The answer stands in affirmative. It is for the reason that the opportunity for the rebuttal to the assessee for the seized documents and the statements recorded under section 132(4) of the Act are sine qua non in order to meet the principles of natural jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there was the search proceedings with respect to the co-owner namely Kanchanbhai Baldevbhai under the provisions of section 132 of the Act. As a result of search proceedings, assessment order was framed under section 153A of the Act where addition was made on account of unaccounted investment in the land as discussed above which was subsequently deleted by the learned CIT (A) by observing as under: 9.1 We see no reasons to take any other view of the matter than the view so taken by the coordinate bench. Respectfully following the same, and having noted that the additions of ₹ 11,05,51,0007- is not based on any incriminating material found during the search operations on the assessee, we delete the said addition. Since the issue, related to the addition which was not based on any seized incriminating material and the proceedings in the assessment year under consideration were not abated on the date of initiation of search, has been adjudicated, there is no need to comment on the merit of the issue. 9.2 In view of the above, the powers of the AO to make addition were confined to the extent of availability of seized and incriminating material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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