Kavita Gupta Vs DCIT (ITAT Delhi)
The ITAT Delhi allowed the assessee’s appeal and quashed assessment framed u/s 153C along with addition of ₹50 lakh made u/s 69 for alleged cash investment in a Noida flat. The Tribunal observed that proceedings were initiated merely on the basis of a loose paper containing the assessee’s name found during search in Hans Group and statements of third parties, without any seized material belonging to the assessee or corroborative evidence. It held that denial of cross-examination of the persons whose statements were relied upon violated principles of natural justice and such untested third-party statements could not sustain addition. Since jurisdiction u/s 153C itself failed and addition was based only on uncorroborated material, the entire assessment was held unsustainable and the appeal of the assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
Appeal in this case has been filed by the assessee against the order dated 24.02.2025 passed by ld. Commissioner of Income Tax(Appeals)-30, New Delhi, against the assessment order dated 13.02.2024 passed under section 153C of the Income Tax Act, 1961 (hereinafter ‘the Act’) pertaining to Assessment Year 2020-21.
2. Grounds of appeal raised by the assessee are as under:-
01. That the Ld. Commissioner of Income Tax (Appeals)-30, Delhi, New Delhi, has erred both in law and on facts in upholding the assumption of jurisdiction as wrongly made by the Assessing Officer U/s.153C of the Act and framing the assessment U/s.153C r.w.s. 143(3) of the Act.
02. That while upholding the assumption of jurisdiction as made by Assessing Officer, the Ld. CIT (A), has failed to appreciate that since neither money, bullion, Jewellery or other valuable articles or things belonging to the Appellant and nor any books of accounts or documents pertaining to the Appellant were seized as a result of search, the assumption of Jurisdiction U/s.153C of the Act was illegal, invalid and unsustainable.
03. That the Ld. CIT (A), has failed to appreciate that addition made and upheld was without jurisdiction since there was no incriminating, material was detected as a result of reach on the searched person.
04. That on the facts and in the circumstance of the case and in law the Ld. CIT (A) erred in confirming the addition of Rs.50/- Lac made by Assessing Officer U/s.69 of the Act in the total income of the Appellant, whereas all the relevant documents were being duly submitted by the Appellant before Assessing Officer as well as to Ld. CIT (A), Delhi, New Delhi.
05. That CIT (A) grossly erred in confirming the addition made U/s.69 of the Act of Rs.50/- Lac as by Assessing Officer merely on the basis of the statement of Mr. Praveen Kumar Jain and Mr.Vaibhav Jain without providing an opportunity to cross examining them under the facts and circumstances of the case.
06. That on the facts and in circumstance of the case Ld. CIT (A), has erred both on facts and law in confirming the addition U/s.69 of the Act of Rs.50/- Lac, which was made by the Assessing Officer, on the basis of material collected at the back of the Appellant without giving an opportunity to rebut the same even after repeated demand in violation of principles of natural justices.
07. Without prejudicial to ground no.1 to 6, on facts and in the circumstance of the case Ld. CIT (A), has erred in confirming the addition Rs.50/- Lac as made by Assessing Officer on account of investment made in cash for booking of Flat No.1501, in BURJ PROJECT, Nodia, holding it to be unexplained investment, invoking Sector-69. The Appellant prays that the addition of Rs.50/- Lac made U/s.69 of the Act be deleted.
08. Without prejudice to ground no. 1 to 6 above on facts and in the circumstance of the case and in law Ld. CIT (A) has erred in confirming the action of Assessing Officer in levying tax U/s.115BBE(1) of the Act @60% on alleged unexplained money assessed U/s.69 of the Act, which required to be deleted
09. That the Ld. CIT (A), has erred in upholding the order passed by the Assessing Officer by ignoring the vital fact that the order of the Assessing Officer is arbitrary, illegal, bad in law and in violation of Principal of contemporary jurisprudence.”
3. During the course of proceedings before us, the ld. Counsel for the assessee has challenged the assessment made under section 153C on the ground that during the search proceedings no incriminating material/documents pertaining to the assessee was found nor any valuable jewellery, etc belonging to the assessee was found or seized by the search party. Therefore, the assessment proceedings initiated under section 153C and the addition made therein is not as per law given in section 153C of the Act.
