DCIT Vs Shree Sai Properties (ITAT Pune)
On-Money Addition Quashed: Reopening under Section 147 Invalid Where Search Material Triggers Section 153C
The Pune Bench of the ITAT upheld the order of the CIT(A) quashing reassessment proceedings initiated under section 147 where the entire basis for reopening was incriminating material seized during a search on a third party (Kokani Group). The Tribunal held that once seized documents allegedly relating to the assessee are found in a third-party search, the only permissible course is assessment under section 153C, and recourse to section 147 is impermissible. Since the Assessing Officer proceeded under section 147 instead of section 153C, the reassessment was held to be without jurisdiction.
On merits also, the Tribunal affirmed deletion of additions of ₹86.63 lakh and ₹7.93 crore alleged as on-money receipts. It was held that the additions were based merely on uncorroborated loose sheets, extrapolation from a single entry, and assumptions without any independent evidence linking cash payments to the assessee. Neither the seized documents nor statements recorded established that any cash was paid to the assessee, and no opportunity of effective cross-examination was provided. Accordingly, the Revenue’s appeal was dismissed in entirety.
FULL TEXT OF THE ORDER OF ITAT PUNE
