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TMI Blog2024 (11) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciating the fact that during the course of search proceedings, incriminating documents regarding investment in the construction of Hotel building were found and seized from the premises of the assessee and the valuation of building was done by DVO. 2. Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in deleting the addition of Rs. 56,60,800/- made on account of undisclosed income from Garden Mahaveer Paradise without appreciating the fact that during the course of search proceedings, incriminating documents depicting the actual rate of booking per day were found and seized from the premises of the assessee, Furthermore, the ld. CIT(A) erred in not appreciating the statements of the employees regarding booking of the garden for different occasions. 3. Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in deleting addition made by the AO by relying upon the judgment of Hon'ble Supreme Court in the case of Abhisar Buildwell and UK paint without appreciating the fact that judgment of Hon'ble Supreme Court in Abhisar Buildwell case is applicable where no incriminating documents on which the additions were made are fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Commissioner of Income Tax (Appeals) grossly erred in not quashing the assessment order as well as the notice issued u/s 153A as illegal, barred by limitation and without jurisdiction. 2. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) grossly erred in not quashing the assessment order passed without mandatory Document Identification Number (DIN) as illegal and non est. C.O. No.8/JP/2024-A.Y. 2011-12 (Assessee) 1. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) grossly erred in not quashing the assessment order passed without mandatory Document Identification Number (DIN) as illegal and non est. 2. At the outset of hearing, the Bench noted that in both the respective Departmental appeals, there is delay of 13 days for which the Department has filed applications for condonation of delay with the reasons that ''However, due to voluminous time barring matters pending for disposal by 31-03-2024, this office was unable to file further appeal before the Hon'ble ITAT, Jaipur Bench, Jaipur within stipulated timeline i.e. within 60 days from the receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-11 in the ground of appeal number two where the Ground of Appeal has been allowed. Material facts of the present appeal being para material with the fats of the appeal in the assessment year 2010-11, the findings of the appeal order in the case of assessment year 2010-11 in ground of appeal number two will apply mutatis mutandis to the present appeal for the assessment year 2011- 12 and it is held accordingly. Accordingly, this ground of appeal is hereby allowed. 3.3 During the course of hearing, the ld. DR supported the order of the AO and submitted that the ld. CIT(A) is not justified in deleting the addition of Rs. 1,87,93,584/- made on account of unexplained investment in construction of Hotel building without appreciating the fact that during the course of search proceedings, incriminating documents regarding investment in the construction of Hotel building were found and seized from the premises of the assessee and the valuation of building was done by DVO. He further vide his letter No. CIT(DR-II)/ITAT/JPR2024-25/466 dated 20-08-2024 has forwarded the letter of DCIT, Central Circle-1, Jaipur in connection with ITA No. 469& 470/JP/2024 relating to Shri Mahaveer Kumar Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53A of the Act. 3. Further, it is also submitted that the search proceedings were carried out at the premises of the assessee on 28.09.2017. Therefore, proceedings u/s 153A of the Act was initiated in compliance to provisions laid down in section 153A(1)(b) of the Act. 4. It is also submitted that the Id.CIT(A) has followed the same judgement in the appeal no. 1165/2019-20 for AY 2010-11 in the case of the assessee but involved tax effect was less than the prescribed limit for filing further appeal and also not falls under any exception clause as per CBDT's circular no. 17/2019 dated 08.08.2019 5. It is also submitted that the documents submitted by the assessee before Hon'ble bench in the form of paper book has already been entertained during the assessment as well as appellate proceedings. No new justification or evidence has been furnished by the assessee, therefore, no further comments on paper book are required to be submitted. 6. Further, the cross objection filed by the assessee that the assessment order was passed without mandatory DIN has no significance as the assessment was communicated vide DIN no. ITBA/AST/M/153A/2019- 20/1023482059(1) dated 30.12.2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship firm in which the assessee is one of the partners. It is noticed from the records that objection in this regard was also filed with the AO during the pendency of the assessment proceedings but still the addition was made by the AO who completely relied upon the DVO's valuation report. It is noticed from the submissions of the assessee that no time was allowed by the AO to furnish registered valuer report or other evidences as the assessment was framed in a hurried manner by making addition of Rs. 1,87,93,584/- being the amount of alleged investment in construction of Hotel building. Further, addition of Rs. 50,60,800/- was also made as unexplained income from Mahaveer Paradise garden thereby completely ignoring the two important facts, first that Mahaveer Paradise was not even started during the year under consideration and second that the property was solely used by the assessee for get-togethers of family, relatives, business associates etc. on obligatory basis for which no rent was charged. On appeal to the ld. CIT(A), assessee submitted additional evidence along with application under Rule 46A. In remand report [ available in the PB page 389-382], the AO failed to point th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,551/- the AO relied on DVO valuation report estimating the construction cost at Rs. 6,01,40,900/-. Details are tabulated as under (CIT(A) order page 40) Financial Year Cost of Construction (Rs.) Difference Declared by the assessee (Rs.) Estimated by Valuation Cell (DVO) (Rs.) 2009-10 3285697 15798800 12513103 2010-11 4934816 23728400 18793584 2011-12 4287038.45 20613700 16326661.55 12507551.45 60140900 32935093 3.8 It is noted from the documents available before the Bench that the addition made by the AO was unjustified due to the following reasons:- 1 FIRST REASON : NO ADDITION IN SEARCH, IF NO INCRIMINATING MATERIAL FOUND DURING SEARCH : It is now a settled law that no addition can be made in search u/s 153A in respect of completed/unabated assessments, if no incriminating document found during search. Reliance is being placed on the judgment of Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell P. Ltd. in Civil Appeal No. 6580 Of 2021 recently decided on 24.04.2023 wherein it was held 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s report was furnished to the assessee during the reassessment proceedings. However, it is required to be noted that except the DVO's report, there was no further tangible material before the Assessing Officer. Therefore, solely on the basis of the DVO's report which, as per the catena of decisions of the Hon'ble Supreme Court as well as this Court, can be said to be the opinion of the DVO only, no addition can be made with respect to difference between the cost of construction determined by the DVO and shown by the assessee. 5. Under the circumstances and in the facts and circumstances of the case, it cannot be said that the learned Tribunal has committed any error in deleting the additions made by the Assessing Officer on account of difference of the cost of construction which was solely based upon the DVO's report." 3. THIRD REASON : DISCREPANICES POINTED OUT BY THE ASSESSEE IN DVO'S REORT NOT CONSIDERED BY LD. AO : It is noted that no discrepancies were pointed out in the valuation report dated 21.01.2020 of registered valuer Mr. G.P. Meena at Rs. 3,64,37,200/- (rupees three crores sixty four lakhs thirty seven thousand two hundred) forming part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said firm which was used for running a hotel by the said partnership firm whose income was being declared in the income tax return of the said firm. Assessee is merely a partner in that firm. In relation to the partnership firm M/s Kalyan Hotels & Resorts, partnership deed, audit report alongwith audited financial statements, income tax return, computation of total income, building/construction account in the books of M/s Kalyan Hotels & Resorts have been furnished in the paper book page no. 113 to 181 and reasons are best known to the A.O. regarding why notices were issued u/s 153A to the assessee and the impugned additions for construction were made in the hands of the assessee instead of the partnership firm wherein construction activity was being carried and in whose books of account building construction was being recorded. The books of account of the partnership firm were regularly maintained and were duly audited by a Chartered Accountant with construction bills/vouchers duly available for verification. It is now a settled law that addition for unexplained construction on the basis of DVO's report cannot be made without rejecting the books of account maintained for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of law, for the reason that it was more beneficial from revenue viewpoint. The Bench noticed that the A.O. generally mentioned in the remand report that there are various discrepancies in the valuer report but no specific discrepancy is mentioned in the remand report except PWD rate. 3.9 The ld. CIT(A) considered all these aspect of the matter and allowed the ground of the assessee which is evident from Para No. 6.2 at page no. 47 of the ld. CIT(A) order for AY 11-12 and corresponding para no. 6.2 at page no. 57 of the ld. CIT(A) order for AY 2010-11. The ld. CIT(A) after considering the assessment order, documents and judgments on record, remand report and submissions of the assessee passed a detailed and reasoned order, and the Bench does not find any infirmity in his order. 3.10 Moreover, as is evident that the assessment year under consideration is beyond the six years and relates to the proceeding carried out by the revenue based on the provision of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules'1962. It would be better to go through those provision of the Act and rules to decide the issue on hand: Relevant part of section 153A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by such summons or notice, or (b) anyperson to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,- (A) the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 (other than an authorisation under the proviso thereto) by the 58[Director-General or Director] or the 59[Chief Commissioner or Commissioner] or any such 60[Deputy Director] or 61[Deputy Commissioner] as is empowered by the Board in this behalf shall be in Form No. 45; (b) the authorisation under the proviso to sub-section (1) of section 132 by a 59[Chief Commissioner or Commissioner] shall be in Form No. 45A; (c) the authorisation under sub-section (1A) of section 132 by a 59[Chief Commissioner or Commissioner] shall be in Form No. 45B. (2A) Every authorisation referred to in sub-rule (2) shall be in writing under the signature of the officer issuing the authorisation and shall bear his seal. xxx xxx xxx If we peruse all these provisions together i.e. provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules'1962 activate the applicability of provision of Section 153A of the Act. As it evident that the search is initiated on the strength of warrant of authorization issued by the authorizing officer to the authorized officer in terms of Section 132 of the act read with Rule 112 of the Income-tax Rules1962. Search warrant can be issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the ld. CIT(A) with respect to allowance of legal ground no. 1 of the assessee in Form No. 35 wherein the legal ground as to challenging the assessment order as time barred and without jurisdiction was decided by the learned CIT(A) in favour of the assessee (relevant paper book page no. 290 to 297). In the light of the discussion so recorded herein above, Ground No. 1 raised by the revenue is dismissed. 4.1 Apropos Ground No 2 it is noticed that the ld. CIT(A) has allowed the ground of the assessee as to addition of Rs. 56,60,800/- on account of undisclosed income from Garden Mahaveer Paradise by taking into consideration the submissions of the assessee and also taking into consideration decision of Hon'ble Supreme Court in the case of PCIT vs Abhisar Buildcon (P)Ltd. (supra). The relevant narration as made by the ld CIT(A) in his order is reproduced as under:- ''8.2 I have considered the facts of the case and written submissions of the appellant as against the observations/ findings of the AO in the assessment order for the year under consideration. The contentions / submissions of the appellant are being discussed and decided as under:- I have decided the similar i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition 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. It is further submitted that no incriminating material was found during search operations in respect of the assessment year under consideration as is also evident from the assessment order passed u/s 153A wherein there is no mention about any incriminating material found for the relevant assessment year. The additions were made arbitrarily purely on guess work basis. Even in the remand report there is no mention about any incriminating material. Copy of one register of M/s Kalyan Hotels & Resorts was found (paper book page no. 193) but that document pertains not to the year under consideration but to AY 2018-19 wherein the learned Assessing Officer has made additions which were also sustained in part by the learned CIT(A). In no way the material relates to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence under Rule 46A wherein he has confirmed that the assessee has provided him the garden for his function free of cost on complimentary basis (paper book page no. 393 to 397). The caretaker Shri Mansingh Gurjar, whose statements were recorded only had knowledge of the fact that parties and functions are held at Mahaveer Paradise, he had no knowledge of the fact that whether the functions were complimentary on obligatory basis or were chargeable. The fact that the garden was used for personal purposes for assessee family and friends on complimentary basis is duly evident from the following : a. Confirmation letter from the Rajasthan Tax Consultants Association confirming that Mahaveer Paradise Garden was given to the association free of any charges on 31.12.2017 and 31.12.2018 has been submitted at paper book page no. 194, 196. b. Copy of image of a memento presented to the assessee by the Rajasthan Tax Consultants and the Tax Consultants Association, Jaipur in appreciation of providing the garden free of cost to the associations has been submitted at paper book page no. 195. c. Assessment order passed by the Luxury Tax and Vat department for the F.Y 2016-17 confirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e estimation made by the AO towards undisclosed income of under reporting of sales Revenue from sale of plots, is purely a guess work, which is based on the suspicion and surmises, but not based on any material evidences. Therefore, we are of the considered view that the AO is completely erred in estimating sales Revenue from sale of plots for all the three assessment years. The Ld.CIT(A) after considering relevant facts has rightly deleted the additions made by the AO and thus, we are inclined to uphold the findings of the Ld.CIT(A) and accordingly, the appeals filed by the Revenue are dismissed for all the three assessment years" This legal principle is supported by the decision of the Hon'ble Bombay High Court in the case of M/s.Harish Textile Engrs. Ltd v. DCIT, reported in 379 ITR 160, wherein, it has been clearly held that on-money received on sale of Stenter Machines for the block period, cannot be estimated on the basis of evidences filed for few instances. A similar view had been taken by the Hon'ble Gujarat High Court in the case of M/s.Standard Tea Processing Co. Ltd., reported in 215 Taxman 659. The Hon'ble Karnataka High Court in the case of B. Nagendra Baliga, repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT vs. Akme Projects Ltd. (42 Taxmann.com 379) wherein it has similarly been held that the additions made on the basis of unsigned draft agreement could not be sustained when AO had not made any investigation. The draft agreement could have been the starting point of investigation and further detailed verification which had not been carried out. The Hon'ble High Court of Madras in the case of CIT vs.Kalyanasundaram (155 Taxman 454) held that where AO did not conduct any independent enquiry relating to value of property and merely relied on the statement of seller, the additions could not be sustained. The Hon'ble High Court of Gujarat in the case of CIT vs. Maulikkumar K. Shah (307 ITR 137) similarly held that noting in the seized dairy found from the premises could not lead to additions since AO had not brought any corroborative material to support the same. The onus heavily lay on the revenue to prove with corroborative evidence that the entries in the seized dairy actually represented the sale made by the assessee, Such onus was not discharged by the revenue and therefore, mere entries in the seized material was not sufficient to prove that the assessee indulged in such a transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ality was unearthed during course of proceedings under section 153A, Assessing Officer while completing assessment under said section could not disturb completed assessment of assessee in respect of such earlier assessment year - Held, yes [Para 7] 4.4 Further during the course of hearing, the ld. AR has drawn our attention to the following decisions by giving the references of the two decisions in the case of PCIT vs Abhisar Buildwell (P) Ltd. U.K. Paints vis a vis incriminating material: ''It is humbly submitted that incriminating material and not merely material should be found during the course of search for making addition in respect of unabated assessments. The term "incriminating" is a negative term which means "to provide evidence that somebody is guilty of a crime". There is no whisper about any incriminating material found during search in the assessment order or in the remand report. Moreover, it is pertinent to mention here that the ld. AO in Notice u/s 142(1) dated 26.12.2019 (paper book page no. 234) at para no. 7 had asked :- "Please explain whether any incriminating document/electronic device pertaining to you for this AY was found and seized. Please furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his order. In this view of the matter, the Ground No. 2 of the Department is dismissed. 4.6 So far as ground no. 3 of the revenue is concerned it is evident that no incriminating material was found during search otherwise the AO would have directly asked queries by confronting the incriminating material. As far as construction bills are concerned, these are duly recorded and declared by the assessee as construction investment. These are in the nature of material and not incriminating material. Each and every material found during search cannot be treated as incriminating. The assessing authorities nowhere pointed out any specific bill / document which was not declared by the assessee. The ld.CIT(A) duly considered all submissions, judgments, material on record, AO's remand report and allowed the appeal of the assessee by passing a detailed and reasoned order to which we concur with his findings. Thus, the Ground No. 3 of the Revenue is dismissed. 5.1 As regards the C.O. of the assessee, the Bench feels that since the appeal of the department has been dismissed by us, therefore, it has relevance to consider the grounds of the CO for adjudication. Thus, both the grounds of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has furnished his report on 23.10.2018. As per the valuation report furnished by the DVO total investment in the construction of house was Rs. 5,72,26,401/- during the F.Y. 2011-12 to 2014-15. However, the appellant has declared total investment of Rs. 2,42,91,308/-. The copy of valuation report was provided to the appellant. During assessment, the AR of the appellant has furnished written submission on 14.12.2019. The assessee has not furnished the source of investment in construction of the house, rather he has challenged the valuation done by the DVO, Jaipur. The objections of the appellant were as under:- * The DVO has used the CPWD rates for valuation whereas the rates of State PWD rates are also valid. *The valuation of the furniture, bath fittings, lift, and other items is taken at higher side by the DVO. * The DVO has provided deduction for self-arrangement to the extent of 2.5% o (ii) The Id. AO in the remand report has stated that the contention of the assessee that no incriminating material / document found during the course of search is not acceptable, as during the course of search/survey original bills of various materials /items, amounting to Rs. 1,94,97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o any documents or other incriminating material found during search like emails exchanged or whatsapp messages or unaccounted bills or cash payment documents etc. showing unaccounted payments or investment. The addition has been done solely on the basis of valuation report obtained during the course of assessment proceedings. From the above discussion, it is hereby held that the addition in the impugned assessment year on the issue is not on the basis of incriminating material unearthed during the course of search and seizure action. (iv) It is argued on behalf of the appellant that there was no incriminating material unearthed during the course of search and the addition is done without the basis of any incriminating material and since the assessment was not an abated assessment in other words no assessment was pending when the search took place hence the scope of addition which could have been done by the learned assessing officer in an assessment in pursuance of search & seizure in a non-abated assessment was restricted to the issues on which incriminating material was found during the search. (v) The facts regarding the status of any pending assessment as on date of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved." (emphasis supplied) On the issue there is similar judgement of Hon'ble Supreme Court in the case of Deputy Commissioner of Income-tax v. U. K. Paints (Overseas) Ltd. [2023] 150 taxmann.com 108 (SC)/[2023] 454 ITR 441 (SC)[25-04-2023). The judgement has been carefully considered. In para 1 and 3 the Hon'ble Supreme Court has held as under:- In this batch of appeals, the assessments in case of each assessee were under section 153-C of the Income-tax Act, 1961 (for short, 'the Act). As found by the High Court in none of the cases any incriminating material was found during the search either from the Assessee or from third party. In that view of the matter, as such, the assessments under section 153-C of the Act are rightly set aside by the High Court. However, Shri N Venkataraman, learned ASG appearing on behalf of the Revenue, taking the clue from some of the observations made by this Court in the recent decision in the case of PY. CIT. Abhisar Buildwell (P) Ltd.(2023) 149 taxmann.com 399 (SC), more particularly, paragraphs 11 and 13, has prayed to observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partmental Valuation Officer does not constitute materials or information relatable to the search. Such a view have been recorded in the judgments of the Madhya Pradesh High Court in CIT v. Khushlal Chand Nirmal Kumar reported in (2003) 263 ITR 77 and Delhi High Court in CIT vs. Manoj Jain (2006) 287 ITR 285 and CIT v. Ashok Khetrapal (2007) 294 ITR 143. While expressing our respectful agreement with the said views, it has to be held that the determination of undisclosed income of Rs. 40,04,369 in respect of the building in question being solely on the basis of the report of the Departmental Valuation Officer was rightly interfered with by the learned Tribunal. The said conclusion of the learned Tribunal, therefore, will not be open to interference." In the case of CIT v. Khushlal Chand Nirmal Kumar reported in [2003] 263 ITR 77 it is held by the Hon'ble Madhya Pradesh High Court as under- "11. We have referred to the aforesaid clarification for the simple reason, Mr. Arya submitted that amendment was effected to section 15888 in the year 2002 with effect from 1-7-1995 and the amendment would be applicable to the present case as block period covers 10 years commencing 1986 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er XIV-B. There would be no finality if the department a permitted to add back to the income of the assessee on the basis of the departmental valuer's report obtained subsequent to the order of the regular assessment. Hence, the Tribunal was right in deleting the said addition. Accordingly, question No. 3 is answered in the affirmative, le, in favour of the assessee and against the department" In the case of in CIT vs. Manoj Jain [2006] 287 ITR 285 it is held by the Hon'ble Delhi High Court as under "1. The Tribunal has, recorded a clear finding of fact that the search on the premises of the assessee did not lead to the seizure of any Incriminating evidence to suggest that any Income had not been disclosed or would not have been disclosed for tax purpose under the Income-tax Act, 1961. It has, on that finding, held that the Assessing Officer was not justified in making additions on the basis of the report of the Valuation Officer in regard to two of the properties purchased by the assessee. The reasoning of the Tribunal's order proceeds thus: "As a result of the search on the assessee, no evidence was found which may represent wholly or partly income or property w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order on the basis of incriminating material unearthed during the course of search and seizure action. The judgement of Hon'ble Supreme Court in the case of Abhisar Buildwell (supraj and UK. Paints (supral are squarely applicable to the facts of the case Accordingly, following the judgment of honorable Supreme Court the impugned addition made in assessment order u/s 153A cannot be sustained and is hereby deleted as the same is not made on the basis of incriminating material unearthed during the search. The addition, without basis of incriminating material unearthed during search, if any, could have been done by the learned assessing officer in re-assessment proceedings by issuance of notice under section 148 of the Act. Procedures are hand-made of justice and intended to subserve and facilitate the cause of justice. Without expressing opinion on the merits of the quantum issues, it is observed that as a general rule, rightful tax payable should be determined and the alternatives provided under the law should be allowed full play CBDT (ITJ Section) has issued Instruction No. 1 of 2023 dated 23-08-2023 vide F.No 279/Misc./M-54/2023-ITJ on the subject "Implementation of the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It is further noted that no incriminating material was found during search operations in respect of the construction of house property as is also evident from the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndelwal at Rs. 2.80 Crores (paper book page no. 42 to 66) submitted during the assessment proceedings but also not considered various discrepancies pointed out by the assessee during the assessment proceedings while making the impugned addition. The discrepancies pointed to the ld. A.O. during the assessment proceedings have been summarized as under:- 1. The DVO has used the CPWD rates for valuation whereas the registered valuer has used the State PWD rates. It is well settled by a number of decisions that for the purpose of valuation it is the State PWD rates which are to be applied and adopted in place of the CPWD rates and reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of CIT, Ajmer v. Sunita Mansingha reported in 393 ITR 121 (SC) (judgment compilation page no. 46 to 48). Cost of construction as per CPWD method adopted by DVO is Rs. 36457400.33/- whereas by our registered valuer is Rs. 13622368.44. So the major difference of Rs. 22835031.89/- is just because of valuation method used by DVO and our registered valuer. As per order of Supreme Court adopting state PWD rates are equally accepted in getting the valuation costs. 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jaquar fitting is used and Assessee has bills for the same. Jaquar basic range has been used in the house and additional cost of Jaquar fitting is not more than Rs. 400000/- as against Rs. 1545000/- taken by DVO. No Base has been provided by the DVO in ascertaining how he had arrived at the figure Rs. 1545000/-. Basic cost of sanitary has already been included in the arriving of the cost of house. Only difference in cost should have been added to the basic sanitary cost. Further, no bathtubs have been used in the house. It is again submitted that already 12 % Extra cost has been taken by the DVO as mentioned in Abstract of Cost. 6. Main gate:- It is not Specifically Mentioned how DVO came to the figure of Rs. 104133/- since old wooden planks have been used by the Assessee for building the gate. 7. Terrace flooring:- Precast terrazzo tiles have been used in terrace flooring which are quite cheap. DVO has not mentioned the rates used in arriving at the figure. But the above mentioned valuer have used proper BSR rates. 8. Extra cost for providing & fixing Italian marble Rs. 3792452/- :- The extra cost taken by DVO in this respect is wrong as it is already included in the constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments on record, remand report and submissions of the assessee passed a detailed and reasoned order and we do not find any infirmity in his order. Thus Ground No. 1 read with ground no. 4 of the Department is dismissed. 7.1 Ground No. 2 of the Department pertains to the addition of Rs. 62,37,040/- on account of undisclosed income from Garden Mahaveer Paradise and this issue has been decided by the ld. CIT(A) in favour of the assessee by observing as under:- ''8.2 I have considered the facts of the case and written submissions of the appellant as against the observations findings of the AO in the assessment order for the year under consideration. The contentions / submissions of the appellant are being discussed and decided as under:- I have decided the similar issue in the case of the appellant for the assessment year 2010-11 in the ground of appeal number four where the Ground of Appeal has been allowed. Material facts of the present appeal being para material with the fats of the appeal in the assessment year 2010-11, the findings of the appeal order in the case of assessment year 2010-11 in ground of appeal number four will apply mutatis mutandis to the present appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material and not merely material should be found during the course of search for making addition in respect of unabated assessments. The term "incriminating" is a negative term which means "to provide evidence that somebody is guilty of a crime". There is no whisper about any incriminating material found during search in the assessment order or in the remand report. Moreover, it is pertinent to mention here that the AO in Notice u/s 142(1) dated 19.07.2019 (paper book page no. 335) at para no. 7 had asked :- "Please explain whether any incriminating document/electronic device pertaining to you for this AY was found and seized. Please furnish explanation regarding the same and whether the details therein are reflected in the books of a/c" It is further noted from the query raised by the A.O. as to whether any incriminating material was found and seized during search. Hence, it is evident that no incriminating material was found during search otherwise the AO would have directly asked queries by confronting the incriminating material. As far as construction bills are concerned, these are duly recorded and declared by the assessee as construction investment. These are in the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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