Seema Agarwal Vs DCIT (ITAT Delhi)
In the present case, search and seizure action under section 132 was conducted in the case of a third party, during which certain documents were allegedly found and seized which were stated to relate to the assessee. Based on the seized material, the Assessing Officer of the searched person recorded a satisfaction note dated 15.03.2022 under section 153C stating that the seized documents belonged to or pertained to the assessee and had a bearing on determination of her income. However, instead of recording separate satisfaction for each assessment year, the Assessing Officer recorded a single consolidated satisfaction note covering Assessment Years 2014-15 to 2020-21. The satisfaction note did not contain any year-wise identification of incriminating material, nor did it specify how the seized documents related to particular assessment years or how they had a bearing on determination of total income for each year.
Pursuant to the said satisfaction note, notices under section 153C were issued and assessments were completed under sections 143(3)/153C on 29.03.2023 for AY 2018-19 and 30.03.2023 for AY 2019-20. In the assessment orders, the Assessing Officer made addition of Rs. 34,00,000 under section 69 on account of alleged unexplained investment in construction of property. The addition was primarily based on certain documents seized from the premises of the third party and not from the possession of the assessee. The Assessing Officer did not bring any independent corroborative material on record and proceeded to make addition by drawing adverse inference from the seized documents. The assessee explained that no such cash payments were made for construction and furnished documentary evidence regarding actual construction cost and sources of investment, but the Assessing Officer rejected the explanation without obtaining any valuation report or independent verification.
