Sharad Kumar Bhandari Vs DCIT (ITAT Jaipur)
Background: The Income Tax Appellate Tribunal (ITAT), Jaipur, adjudicated the appeals of Sharad Kumar Bhandari and his wife Juhi Bhandari concerning reassessment notices issued under Section 153C of the Income Tax Act, 1961. The case arose from a search and seizure operation conducted under Section 132 at the premises of M/s OM Kothari Group on 13 July 2020. During the search, incriminating documents were found on the mobile phone of Shri Vishal Kothari, including an image labeled “Details as on 17.04.2013” indicating the sale of flats in the Pallacia Project, where the assessee’s name appeared.
The documents suggested that the assessee and his wife purchased a flat for Rs. 2.53 crore, including Rs. 55 lakh in cash (‘on-money’). The assessee’s alleged share of the on-money was Rs. 27.50 lakh. Consequently, notices under Section 153C were issued for assessment years (AY) 2015-16 to 2021-22, proposing additions under Section 69 of the Act using the percentage completion method for project payments.
Assessment and DRP Proceedings:
The Assessing Officer (AO) issued a draft assessment proposing total additions of Rs. 27.50 lakh. The Dispute Resolution Panel (DRP) later restricted this addition to Rs. 11,69,050 for AY 2015-16, considering cheque payments made by the assessee without justification of source. The AO had recorded a single satisfaction note for AY 2015-16 to 2021-22, which the assessee challenged as defective and arbitrary, arguing that Section 153C requires year-specific incriminating material and cannot be issued mechanically across multiple years.
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