Sudheer Neela Vs ACIT (ITAT Hyderabad)
The ITAT Hyderabad disposed of five appeals filed by the assessees through a common consolidated order, as identical issues were involved. The primary issue concerned the validity of proceedings initiated under section 153C of the Income-tax Act, 1961, based on a seized “Agreement of Sale” dated 31.12.2019. The assessee, an individual who had not filed a return under section 139, was subjected to proceedings following a search conducted on 23.03.2021 in the case of the Spectra Group of Companies. During the search, the said agreement was found at the premises of the third party. Based on this document, the Assessing Officer recorded a satisfaction note and initiated proceedings under section 153C, ultimately making additions of Rs.18,04,500 and Rs.4,44,600 under section 69A and completing the assessment at Rs.22,49,100.
The assessee challenged the validity of the proceedings, contending that the seized document was unsigned by any of the vendors, including the assessee, and thus lacked evidentiary value. It was further argued that the initiation of proceedings was solely based on this document without any independent corroborative evidence. The Department, however, argued that the document contained detailed information and was corroborated by subsequent transactions, thereby constituting valid incriminating material.
