Case Law Details
DCIT Vs Mehfooz Khan (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting additions made under Sections 69 and 153A of the Income-tax Act for Assessment Year 2018-19. The Tribunal held that the additions were not supported by incriminating material found during the search.
The case arose from a search and seizure operation conducted under Section 132 in the Tyagi Group on 16 May 2018, during which the assessee was also covered. Following the search, the Assessing Officer (AO) completed the assessment under Section 153A read with Section 143(3), determining the total income at Rs. 6,43,79,840/-. The CIT(A) partly allowed the assessee’s appeal by deleting three additions challenged by the Revenue before the Tribunal.
The first addition of Rs. 2,83,50,000/- under Section 69 was made on account of alleged unexplained investment in immovable property based solely on a copy of a registered sale deed found during the search. The CIT(A) noted that the assessee had produced all documents relating to the property purchase, including confirmations from lenders, bank statements and PAN details establishing the identity, creditworthiness and genuineness of the loan transactions. The AO neither issued notices to verify the lenders nor brought any corroborative material to disprove the evidence produced by the assessee. The CIT(A) further held that a registered sale deed is a public document open to public inspection and, by itself, could not be treated as incriminating material. Since the assessment for the relevant year had already been completed, additions could not be made in the absence of incriminating material. The Tribunal agreed with these findings and upheld the deletion of the addition.
The second addition of Rs. 76,50,000/- under Section 69 related to alleged unexplained investment based on copies of agreements to sell (Ikraranamas). The assessee explained that one agreement had been cancelled on the same day after refund of the advance amount, while another agreement had never been executed. The CIT(A) observed that these documents had been seized from the possession and control of another person and not from the assessee. It also noted that the AO had not examined the sellers, issued notices to verify the transactions, or produced any corroborative evidence to establish that the assessee had actually purchased the properties or made cash payments. The Tribunal held that no addition could be sustained under Section 153A on the basis of documents not seized from the assessee and upheld the deletion of the addition.
The third addition of Rs. 2,71,32,500/- arose after the AO rejected the assessee’s claim under Section 44AD and grossed up gross receipts of Rs. 16,27,950/- by applying a 6% rate. The CIT(A) observed that the assessee had originally filed its return under Section 139 and again filed the same income in response to notice under Section 153A. It held that the AO had treated the same receipts as income twice, resulting in double taxation, and had made the grossing-up entirely on assumptions. The CIT(A) also found that the assessment order contained no reference to any seized material supporting the addition. Relying on judicial precedents, it concluded that additions under Section 153A in completed assessments require incriminating material found during the search. The Tribunal affirmed these findings and upheld the deletion of the addition.
The Tribunal observed that the AO had not produced corroborative evidence to support the additions relating to the property transactions or the grossing-up of receipts. It agreed with the CIT(A) that the impugned additions were not based on incriminating material unearthed during the search and therefore could not be sustained in proceedings under Section 153A for a completed assessment. Accordingly, the Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the revenue is directed against the order of the Commissioner of Income Tax, (Appeal-23), New Delhi [hereinafter referred to as “Ld. CIT(A))”] dated 13-01-2025 pertaining to A.Y. 2018-19 arising out the assessment order dated 29-09-2021 u/s.143(3) r.w.s. 153A of the Income-tax Act, 1961, (in short ‘the Act’).
2. The revenue has filed the following grounds of appeal as under:
1. The CIT(A) has erred on facts and in law in deleting addition of Rs. 2,71,32,500/- added as business income of the assessee.
2. The Ld. CIT(A) has erred on fats and in law in deleting addition of Rs. 76,50,000/- under section 69 of the Act.
3. The Ld. CIT(A) has erred on facts and in law in deleting addition of Rs. 2,83,50,000/- under section 69 of the Act.
3. The brief facts of the case are that search and seizure operations were conducted u/s. 132 of the Act in Tyagi group of cases on 16.05.2018. The case of the assessee was also covered in these operations. The AO issued notice u/s. 153A of the Act on 15.01.2020. In response of this notice u/s. 153A, assessee filed return on 29.1.2020 declaring total income of RS. 12,47,340/-. After submission of the return u/s. 153A, notice u/s. 143(2) issued to the assessee on 26.10.2020. thereafter, various other notices were issued to the assessee which have been duly complied with. Finally, assessment u/s. 153A of the Act was completed on 29.92.201, determining the total at Rs. 6,43,79,840/-. Against the aforesaid action of the AO, assessee appealed before the Ld. CIT(A). Ld. CIT(A) has partly allowed the appeal of the assessee.
4. Aggrieved, the Revenue is in appeal before us.
5. We have heard both the sides and perused the records. Ld. DR relied upon the order of the AO. However, Ld. AR for the assessee relied upon the order of the CIT(A) and requested to uphold the same wherein, Ld. CIT(A) has held as under:-
8. I have considered the material on record including written submissions, additional grounds and supplementary written submissions of the appellant filed in the course of appellate proceedings. I have also perused the assessment order passed u/s 153A r.w.s. 143(3) of the Act.
9. Ground No.1 and 2 are general in nature so there is no need to adjudicate separately.
10. Ground No. 3 and 4 are related to the addition of Rs.2,83,50,000/-u/s 69 of the Act on account of unexplained investment on acquisition of immoveable property merely on the basis of copy of sale deed found during the search proceedings.
11. During the assessment and appellate proceedings, appellant submitted all the documents related to the purchase of property alongwith the confirmations from the lenders with bank statements and PAN, from whom the appellant had taken loans for the purchase of property to prove the identity, creditworthiness and genuineness of the transactions entered into with the appellant. (PB-21-50, 57- 60). If the Ld. AO was having any doubt about identity, creditworthiness and genuineness of the transactions, Ld. AO could have issued notice u/s 133(6) to verify the same from the lenders. Furthermore, the Ld. AO has not controverted the contents of respective confirmations submitted and no corroborating material evidence or findings have, been brought on record to negate the averments made in the confirmation. Therefore, additions made by the Ld. AO was not justified.
12. Further, sale deed of property is executed add registered before the registrar of property, is a public document, open for inspection for public at large, therefore the same cannot be treated as an incriminating document in nature and moreover the assessment of the appellant is a completed assessment (return u/s 139 filed on 16.07.2018, thus last date of issuing notice u/s 143(2) was 30.09.2019) therefore, in the absence of any incriminating material, additions cannot be made. Reliance is placed on CIT-3 Pune Vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) and Pr.CIT Vs. Abhisar Buildwell Pvt. Ltd. in Civil Appeal No. 6580 of 2021. Thus, contention of the Ld. AO to add Rs.2,83,50,000/- just on the basis of copy of sale deed found during the search proceeding is not justified. Hence, liable to be deleted.
13. The addition made by the Assessing Officer is deleted. Therefore, ground no. 3 and 4 are allowed.
14. Ground No. 5 and 6 are related to the addition of Rs.75,50,000/- (Rs.45,50,000/- + Rs. 31,00,000/-)u/s 69 of the Act on account of unexplained investment in property made by the appellant merely on the basis of copy of agreement to sale (Ikraranamas) found during the search proceedings.
15. During the assessment and appellate proceedings, appellant submitted that he did not purchase any property from any of the persons as mentioned in the copy of agreements to sale (Ikraranamas) seized from the residence of Shadab Ahmed Siddiqui. However, appellant submitted that, he entered into an agreement with Mr. Vinod Kumar on 08.05.2017 for Rs.45,50,000/- and has given advance/token money in cash of Rs.1,00,000/- but later on, same was refunded by Mr. Vinod Kumar and deal was cancelled on the same day. Further, appellant also submitted that he never entered into any agreement with Ms. Priyanka Agarwal D/o Sh. Vijay Kumar Gupta for Rs. 31,00,000/- , that is the reason the said agreement to sale is not signed by any of the party.
16. Further, above additions were made on the basis of document found from the control and possession of Mr. Shadab Ahmed Siddiqui and not from the control and possession of the appellant. Therefore, no addition can be made in the assessment framed u/s 153A on the basis of these documents not found from possession and control of the assessee-company.
17. In the regard, reliance is placed on the following judicial decisions: Super Malls (P) Ltd. vs. PCIT 8, New Delhi, (2020) 423 ITR 282, the Hon’ble Supreme Court considered the matter of procedure to be followed in a situation mentioned above that is when document seized in the course of search from a person is sought to be used in the assessment of another person.
18. Therefore, in view of the above, it is submitted that the alleged seized material was not seized from the assessee and therefore, cannot be relied upon by the Ld. AO for framing the assessment u/s 153A. Thus, the addition made on such document could not have been made, hence liable to be deleted.
19. Further, when the name and address of the seller of the property is given on the agreements, it is not understood as to why the addition is made in the hands of the appellant. Ld. AO has not examined any of the person (seller) who received such cash. Ld. AO should have used his power to issue notice u/s 133(6) to the seller of the property to confirm the transactions. Even if the said transactions were confirmed by the sellers, Ld. AO must have made additions in the income of the sellers and initiated proceedings u/s 153C on them. But, Ld. AO did not take any steps to verify the authenticity of the said agreements: and transactions and made the additions on his assumption only just because the said agreement, has assesse’s signature. Furthermore, the Ld. AO has not controverted the contents of respective submissions submitted and no corroborating material evidence or findings have been brought on record to negate the averments made in the submissions. Thus, there is no such evidence on record to establish that the assessee has actually purchased the property and made the payments in cash. .
20. Thus, from the above it is clear that the appellant has not purchased any property in cash and also there is no valid document such as sale deed etc. which proves that the property is in the name of the appellant.
21. Thus, addition made by Ld. AO on his assumption is not justified and hence deleted. Therefore, ground no. 5 and 6 are allowed.
22. Ground No.7 to 10 are related to addition of Rs.2,71,32,500/- on account of additions made by grossing up gross receipts of Rs.16,27,950/- @ 6% by rejecting the claim u/s 44AD of the Income Tax Act 1961.
23. The Assessing officer found that the appellant had disclosed a total income of Rs. 12,47,340/- after claiming various deductions. The appellant has disclosed a total receipt/turnover of Rs.16,27,950/- in the return of income furnished u/s 153A of the Act. On such receipts, the appellant disclosed a net profit of Rs. 16,27,950/- (net profit @ 100% of gross receipts).
24. The main argument of the appellant is that appellant filed his return originally u/s 139 on 16.07.2018 after declaring his business receipts u/s 44AD. Thereafter, appellant again filed the same amount of income u/s 153A on 29.01.2020 declaring the same amount of income. Therefore, in the absence of incriminating material, Assessing Officer was not justified in denying the benefit computation u/s 44AD of the Act in framing assessment u/s 153A of the Act and also grossing up the gross receipts of Rs.16,27,950/- @ 6% to Rs.2,71,32,500/-
25. The Assessing Officer has not only treated the entire receipts of the appellant as income twice but also grossed up the gross receipts @ 6% on assumption basis because Ld. AO is of the opinion that, the appellant earns commission income which does not fall in business activities as mentioned u/s 44AD(6)(ii) of the Act and that assessee has shown total income of Rs. 16,27,950/- which is 6% of gross receipts, which comes to Rs. 2,71,32500/-which is beyond the turnover of Rs.2 crore eligible for deduction u/s 44AD and also the appellant does not earn any income u/s 44AD of the Act in the A.Y. 2019-20. In doing so, the Assessing Officer has added amount of Rs. 16,27,950/- twice, which leads to double taxation. Such an action of the Assessing Officer in grossing up the entire gross receipts @ 6% on assumption basis is also not justified because the appellant has disclosed 100% of the gross receipts as income which is as per law is justified and same is verified from the copy of screenshot of the ITR shown in the page no. 144 of the assessment order. Further, limit of Rs.2 crore is not any condition u/s 44AD, rather if gross receipts exceeds Rs. 2 Crore than Tax Audit is applicable. Also, question of commission income is not applicable in the said case because appellant has already declared 100% of gross receipts as net income. Hence, question of any expense also not arose. Therefore, Ld. AO was not justified in grossing up of gross receipts which appellant already declared as 100% income of gross receipts.
26. From the assessment order, it is seen that there is no reference to any seized material found during the course of search on which the impugned grossing up is made. The addition on the basis of grossing of gross receipts appears to have been made without any reference to any seized material whatsoever. The impugned addition is not based on seized material that is an essential requirement of assessment u/s 153A of the Act.
27. The Hon’ble Delhi High Court in the case of CIT vs Kabul Chawla (2016) 380 ITR 573 had an occasion to deal with the issue. In this case, the Hon’ble High Court has he’d as under:-
“On a conspectus of Section 153A(1) of the Act. read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under:-
Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place.
Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise.
The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the ‘total income’ of the aforementioned six years in separate assessment orders for each of the six years, in other words there will be only one assessment order in respect of each of the six AYs “in which boih the disclosed and the undisclosed income would be brought to tax”.
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.”
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.
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.
Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.”
28. The Hon’ble Supreme Court in the case of Pr.CIT Vs. Abhisar Buildwell Pvt. Ltd. in Civil Appeal No. 6580 of 2021 and other connected appeals has considered the issue. The Hon’ble Apex Court vide its order dated 24.04.2023 has held as under:-
8. For the reasons stated herein below, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material.
9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under Section 153A of the Act, 1961.
9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under Section 158BA of the Act, 1961. The erstwhile scheme of block assessment under Section 158BA envisaged assessment of ‘undisclosed income’ for two reasons, firstly that there were two parallel assessments, envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the ‘undisclosed income’ and (ii) regular assessment in accordance with the provisions of the Act to make assessment, qua income other than undisclosed income. Secondly, that the ‘undisclosed income’ was chargeable to tax at a special rate of 60% under section 113 whereas income other than ‘undisclosed income’ was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the ‘undisclosed’ income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment, for six years. Search assessments/ block assessments under Section 153A are triggered by conducting of a valid search under Section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/ trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Section 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search.
10. On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under Section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under:-
“153A. Assessment in case of search or requisition – (1) Notwithstanding anything contained in Section 139, Section 14 7, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A after the 31st day of May, 2003, the Assessing Officer shall –
a. Issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may bo prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139:
b. Assess or reas’sess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made;
Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years;
Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132-A, as the case may be, shall abate.
(2) If any proceeding initiated or any order of assessment or reassessment made under subsection (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner:
Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation. – For the removal of doubts, it is hereby declared that, –
i. save as otherwise provided in this section, Section 153-B and Section 153-C, all provisions of this Act shall apply to the assessment made under this section;
ii. in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. “
24. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the ‘total incomo’ in respect of each assessment year falling within six assessment years. However, it is required to bo noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate. As per subsection (2) of Section 153A, if any proceeding initiated or any order or assessment or reassessment made under sub-section (i) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which was abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/ reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the ‘total income’ for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material in found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assesses or reassess the ‘total income’ taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under section 147/48 of the Act, subject to fulfilment of the conditions mentioned in section 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under section 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy.
25. If the submission on behalf of the Revenue that in case of search oven where no incriminating material is found during the course of search, even in case of unabated/ completed assessment, the AO can assess or reassess the income/total income taking into consideration the other materia! is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Section 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant, to search or requisition. Therefore, only in a Case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A only pending, assessment/ reassessment shall stand abated and the AO would assume the jurisdiction with respect (d such abated assessments. It does not provide that all completed/unabated assessments shall abate, if the submission on behalf of the Revenue Is accepted, in that case, second proviso to section 153A and sub-section (2) of Section 153A would be redundant and/or ro-writing the said provisions, which is not permissible under the law.
26. For the reasons stated hereinabove, we .are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumy a Construction (supra) and the decisions 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.
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 materialunearthed 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 Section 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.
The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs.”
29. In this case, the assessment for the A.Y 2018-19 was completed u/s 143(1) on 29.01.2019 therefore, the Assessing Officer was required to make addition on the basis of seized material in the impugned assessment proceedings. As the addition is not made on the basis of seized material, therefore, the addition made by the Assessing Officer is liable to be deleted.
30. In view of the decision of the Hon’ble Supreme Court in the case of Pr.CIT Vs. Abhisar Buildwell Pvt. Ltd. in Civil Appeal No. 6580 of 2021 dated 24.04.2023 it is held that the Assessing Officer was not justified in making addition in respect of completed assessment without any incriminating material.
31. The addition made by the Assessing Officer is deleted. Therefore, ground no. 7 to 10 are allowed.”
5.1 After perusing the aforesaid findings of the Ld. CIT(A), with regard to deletion of addition amounting to Rs. 2,83,50,500/- made on account of unexplained investment on acquisition of immovable property merely on the basis of copy of sale deed found during the search proceedings is concerned, we note that this addition was made on account of unexplained investment on acquisition of immovable property merely on the basis of copy of sale deed found during the search proceedings. It is noted that all the documents related to the purchase of property alongwith the confirmations from the lenders with bank statements and PAN, from whom the appellant had taken loans for the purchase of property to prove the identity, creditworthiness and genuineness of the transactions entered into with the assessee were submitted before the lower authorities. The AO has not controverted the contents of respective confirmations submitted and no corroborating material evidence or findings have, been brought on record to negate the averments made in the confirmation. It is well settled law that in the absence of any incriminating material, additions cannot be made. Therefore, Ld. CIT(A) has rightly deleted the addition in dispute, which does not need any interference on our part, hence, we uphold the same.
5.2 With regard to deletion of addition amounting to Rs. 76,50,000/- u/s. 69 of the Act is concerned, we note that this addition was made on account of unexplained investment in property made by the assessee merely on the basis of copy of agreement to sale (ikraranamas) found during the search proceedings. It is noted that the said additions were made on the basis of document found from the control and possession of Mr. Shadab Ahmed Siddiqui and not from the control and possession of the assessee, therefore, no addition can be made in the assessment framed u/s. 153A on the basis of these documents not found from possession and control of the assessee company. Therefore, Ld. CIT(A) has rightly deleted the addition in dispute, which does not need any interference on our part, hence, we uphold the same.
5.3 With regard to deletion of addition of Rs. 2,71,32,50/- made on account of additions made by grossing up gross receipts of Rs. 16,27,950/- @6% by rejecting the claim u/s. 44AD of the Income Tax Act, 1961 is concerned, it is noted that in the assessment order there is no reference to any seized material found during the course of search on which the impugned grossing up is made. The addition on the basis of grossing of gross appears to have been made without any reference to any seized material whatsoever. The impugned addition is not based on seized material that is an essential requirement of assessment u/s. 153A of the Act, thus the addition made by the AO is liable to be deleted, in view of the law settled by the Hon’ble Apex Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. in Civil No. 6580 of 2021 dated 24.4.2023. Therefore, Ld. CIT(A) has rightly deleted the addition in dispute, which does not need any interference on our part, hence, we uphold the same.
6. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court 24.06.2026
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