ACIT, New Delhi v. M/s. K.S. Chawla & Songs (HUF), New Delhi

ITA 2724/DEL/2015 | 2008-2009
Pronouncement Date: 18-05-2021 | Result: Dismissed

Appeal Details

RSA Number 272420114 RSA 2015
Assessee PAN ASDHK7622M
Bench Delhi
Appeal Number ITA 2724/DEL/2015
Duration Of Justice 6 year(s) 12 day(s)
Appellant ACIT, New Delhi
Respondent M/s. K.S. Chawla & Songs (HUF), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 18-05-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 18-05-2021
Last Hearing Date 28-04-2020
First Hearing Date 28-04-2020
Assessment Year 2008-2009
Appeal Filed On 06-05-2015
Judgment Text
1 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. BILLAIYA ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA. 2724/DEL/2015 (A.Y 2008-09) [BY DEPARTMENT] ACIT CIRCLE-45 (1) NEW DELHI. (APPELLANTS) VS. M/S. K. S. CHAWLA & SONS [HUF] C4 RAJOURI GARDEN NEW DELHI 110 027. PIN : ASDHK7622M (RESPONDENTS) A N D C. O. NO. 456/DEL/2015 [BY ASSESSEE] [ IN ITA. 2724/DEL/2015 (A.Y 2008-09) M/S. K. S. CHAWLA & SONS [HUF] C4 RAJOURI GARDEN NEW DELHI 110 027. PIN : ASDHK7622M (APPELLANTS) VS. ACIT CIRCLE-45 (1) NEW DELHI. (RESPONDENTS) O R D E R PER SUCHITRA KAMBLE JM : THE I.T. APPEAL IS FILED BY THE DEPARTMENT AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 3/02/ 2015 PASSED BY CIT (APPEALS)-15 NEW DELHI FOR ASSESSMENT YEAR 2008-0 9. THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF FOR THE SAKE OF CONVENIENCE BY THIS CONSOLIDATED ORDER. ASSESSEE BY : SHRI RAJESH ARORA C.A.; DEPARTMENT BY: SHRI MAHESH THAKUR SR.DR DATE OF HEARING 4.05.2021 DATE OF PRONOUNCEMENT 18.05.2021 2 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 ITA. 2724/DEL/2015 (A.Y 2008-09) [BY DEPARTMENT] 2. THE ONLY GROUND OF APPEAL RAISED IS AS UNDER :- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW LD. CIT (APPEALS) HAS ERRED IN RESTRICTING ADDITION OF RS.2 18 88 000/- TO RS.8 02 993/- BASED ON THE VALUATION REPORT RECEIVE D IN THE AOS OFFICE ON 8.07.2013 AFTER COMPLETION OF ASSESSMENT PROCEEDING S WITHOUT CALLING FOR AOS COMMENTS ON SUCH REPORT? C. O. NO. 456/DEL/2015 [BY ASSESSEE] 3. THE GROUNDS OF APPEAL RAISED IN THE CROSS OBJEC TION ARE AS UNDER :- 1. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND FACTS OF T HE CASE IN HOLDING THE REOPENING OF ASSESSMENT PROCEEDINGS UNDER SECTION 1 47 R.W.S. 148 OF THE INCOME TAX ACT 1961 ('THE ACT') AS VALID AND FIIRT HER ERRED IN REJECTING THE SUBMISSIONS OF THE APPELLANT HUF AGAINST THE SAID R EOPENING BY HOLDING THEM TO BE ACADEMIC IN NATURE WHICH IS HIGHLY ARBITRARY UNJUSTIFIED UNLAWFID AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF THE C ASE IN SUSTAINING THE LEGALITY OF ASSESSMENT PROCEEDINGS UNDER SECTION 14 7 R.W.S 148 OF THE ACT WHICH WAS COMPLETED BY THE LD. A.O WITHOUT PASSING ANY SPEAKING ORDER WHICH IS AGAINST THE PRINCIPLES FOR DISPOSAL OF OBJ ECTIONS TO REOPENING ASSESSMENT AS LAID DOWN BY THE HON'BLE APEX COURT I N GKN DRIVESHAFIS (INDIA) LTD. VS. DCIT: 259ITR 19 (SC). 3. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF TH E CASE IN HOLDING THE SALES CONSIDERATION OF PROPERTY OF THE APPELLANT HUF AS R S. 85 52 993 UNDER SECTION 50C OF THE ACT AS AGAINST RS. 77 50 000 DECLARED BY THE APPELLANT HUF AND FURTHER ERRED IN SUSTAINING THE ABOVE DIFFERENCE OF RS. 8 02 993 AS ALLEGED ON- MONEY FOR THE PURPOSE OF COMPUTING CAPITAL GAINS IN THE HANDS OF THE APPELLANT HUF WHICH IS HIGHLY ARBITRARY UNCALLED F OR UNJUSTIFIED AND BAD IN LAW. 4. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF TH E CASE IN CONFIRMING THE ACTION OF THE LD. ASSESSING OFFICER TO MAKE REFEREN CE FOR VALUATION UNDER SECTION 55A OF THE ACT FOR THE PURPOSES OF MAKING A DDITION ON ACCOUNT OF ALLEGED UNDISCLOSED INCOME UNDER SECTION 69A OF THE ACT WHICH IS HIGHLY ARBITRARY UNJUSTIFIED AND BAD IN LAW. 4.1 THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF TH E CASE IN RELYING UPON THE VALUATION REPORT UNDER SECTION 55A OF THE ACT WHICH WAS RECEIVED AFTER THE COMPLETION OF REASSESSMENT PROCEEDINGS WHICH IS HI GHLY ARBITRARY UNJUSTIFIED AND BAD IN LAW. 5. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF TH E CASE IN CONFIRMING THE ACT OF THE LD. ASSESSING OFFICER TO CONVERT THE REASSES SMENT PROCEEDINGS MADE ON 3 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 PROTECTIVE INTO SUBSTANTIVE PROCEEDINGS THROUGH PAS SING A RECTIFICATION ORDER UNDER SECTION 154 OF THE ACT TO ASSUME FRESH JUR ISDICTION OVER THE APPELLANT COMPANY WHICH IS HIGHLY ARBITRARY UNJUSTIFIED UN CALLED FOR AND BAD IN LAW. ADDITIONAL GROUND: NOTWITHSTANDING TO GROUND NO.1 & 2 RAISED BY THE R ESPONDENT THE ASSESSING OFFICER HAS ERRED IN LAW AND FACTS OF THE CASE IN M AKING ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT 1961 (THE ACT) WITHOUT APPRECIATING THAT ASSESSMENT COULD BE MADE ONLY UNDER SECTION 153C OF THE ACT BASED UPON DOCUMENTS/ INFORMATION FOUND DURING THE COURSE OF S EARCH OF THE THIRD PARTY. 3. THE ASSESSEE IS HINDU UNDIVIDED FAMILY. THE RET URN DECLARING INCOME OF RS.6 38 800/- WAS FILED BY THE ASSESSEE ON 28.03.20 10. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SOLD ITS SHARE IN RES IDENTIAL PROPERTY SITUATED AT DLF GURGAON TO MR. ABHINAV ARORA AND MRS. RANJU ARO RA FOR A SALE CONSIDERATION OF RS.77 50 000/-. THE CAPITAL GAIN ON THIS TRANSFER HAD BEEN DECLARED IN THE INCOME TAX RETURN AFTER CLAIMING I NDEXED COST OF ACQUISITION AT RS.8 88 590/-. DURING THE SEARCH AND SEIZURE OPERAT ION U/S 132 OF THE INCOME TAX ACT 1961 IN THE CASE OF THE BUYERS VIZ. MR. A BHINAV ARORA AND MRS. RANJU ARORA SOME INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE ASSESSMENT U/S 153A OF THE ACT IN THEIR CASE WAS COMPLETED AFT ER MAKING ADDITION OF UNEXPLAINED ON-MONEY PAYMENTS IN HANDS OF PURCHASER SHRI ABHINAV ARORA AND SMT. RANJU ARORA. THE ASSESSING OFFICER OBSERVE D THAT THE ADDITION MADE IN CASE OF THE BUYER HAS A DIRECT BEARING ON THE SE LLER AS WELL AS THEY WERE THE RECIPIENT OF THE ON-MONEY. CONSEQUENTLY NOTICE U/S 148 OF THE ACT WAS ISSUED IN THE ASSESSEES CASE. THE ASSESSING OFFICER IN HI S ORDER U/S 147/143(3) MADE AN ADDITION OF RS. 2 18 88 000/- BEING HALF SHARE AS ALLEGED ON MONEY RECEIVED BY THE ASSESSEE AND NOT DECLARED AS PART OF SALES C ONSIDERATION. THE ASSESSING OFFICER ENHANCED THE ASSESSEES INCOME UNDER THE HE AD CAPITAL GAINS BY RS.2 92 044/- BY REDUCING THE COST OF ACQUISITION A ND DISALLOWED THE ASSESSEES CLAIM OF EXEMPTION ON ACCOUNT OF CAPITAL GAIN ON SA LE OF SHARES AMOUNTING TO RS.9 47 957/-. THE ASSESSMENT WAS COMPLETED AT AN I NCOME OF RS.2 15 34 140/-/-. 4 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THOUGH THE APPEAL IS F ILED BY THE REVENUE THE CROSS OBJECTION BE TAKEN UP FIRST AS THE ASSESSEE I S CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER ITSELF. THE LD. AR SUBMITTED T HAT THE ASSESSEE IS REGISTERED AS A HUF AND IS ASSESSED TO TAX VIDE PAN : ASDHK7622M. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION ON 28.03.2010 DECLARING TOTAL INCOME OF RS. 6 38 800/- . ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) WAS COMPLETED AT R ETURN INCOME DECLARED BY THE ASSESSEE VIDE ORDER DATED 22.12.2010. DURING TH E YEAR UNDER REFERENCE THE ASSESSEE HAS SOLD ITS SHARE IN RESIDENTIAL PROPER TY SITUATED AT 8 KACHNAR MARG DLF GURGAON HARYANA TO MR. ABHINAV ARORA AND MRS. RANJU ARORA AT A TOTAL CONSIDERATION OF RS.77 50 000/- HAVING INDEX COST OF ACQUISITION OF RS. 8 88 590/-. HOWEVER DURING THE COURSE OF SEARCH AT DAWAT GROUP OF COMPANIES DATED 15.10.2009 A VALUATION REPORT MARK ED AS PG 13- 15/ANNEXURE A-2/AR-1 WAS FOUND. ON THE BASIS OF TH E ALLEGED DOCUMENT AN ADDITION OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT OF RS. 2 18 88 000/- EACH WAS MADE IN THE HANDS OF MR. ABH INAV ARORA AND MRS. RANJU ARORA I.E. PURCHASER OF THE PROPERTY SOLD BY THE ASSESSEE. ON FURTHER APPEAL BY THE PURCHASERS BEFORE THE CIT(A)-33 THE CIT(A)-33 INFORMED THE ASSESSING OFFICER OF THE ASSESSEE ABOUT THE VALUATI ON REPORT FOUND DURING THE COURSE OF SEARCH VIDE LETTER DATED 22.03.2012. HOWE VER THE CIT(A)-33 IN THE APPEAL OF PURCHASER OF PROPERTIES LATER DELETED TH E ADDITIONS MADE ON THE BASIS OF VALUATION REPORT AFTER HOLDING THAT VALUATION R EPORT CANNOT BE TAKEN AS A YARDSTICK FOR UNACCOUNTED INVESTMENT VIDE ORDER DA TED 28.03.2013. THEREAFTER IN THE MEAN TIME THE JURISDICTIONAL ASSESSING OFFIC ER OF THE ASSESSEE ON THE BASIS OF INFORMATION RECEIVED FROM THE CIT(A)-33 RE OPENED THE CASE OF ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND A NOTICE UNDER SECTION 148 OF THE ACT WAS SERVED VIDE NOTICE DATED 31.03.2012. IN RESPONSE TH EREOF THE ASSESSEE 5 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 SUBMITTED THAT THE RETURN OF INCOME FILED ON 28.03. 2010 TO BE CONSIDERED AS RETURN FILED UNDER SECTION 148. THEREAFTER THE ASS ESSING OFFICER PROVIDED THE ASSESSEE AN UNSTAMPED COPY OF REASONS TO BELIEVE ON WHICH NEITHER THE DATE OF SIGNING OF NOTICE NOR THE SATISFACTION OF APPROPRIA TE AUTHORITY HAS BEEN RECORDED. IN RESPONSE TO THE REASONS FOR REOPENING THE ASSESSEE FILED THE ABOVE OBJECTIONS VIDE LETTER DATED 05.03.2013 AND DATED 2 6.03.2013. MEANWHILE THE ASSESSING OFFICER BEFORE DISPOSING THE REASSESSMEN T PROCEEDINGS HAD ALSO REFERRED THE PROPERTY IN QUESTION FOR VALUATION BEF ORE THE VALUATION OFFICER. HOWEVER THE ASSESSING OFFICER WITHOUT DISPOSING TH E OBJECTIONS FILED BY THE ASSESSEE AND WITHOUT WAITING FOR THE VALUATION REPO RT OF THE DVO PASSED AN ORDER UNDER SECTION 147 OF THE ACT DATED 30.03.2013 AT AN ASSESSED INCOME OF RS. 2 15 34 135/-. THE ADDITION OF RS. 2 18 88 000/ - HAS BEEN MADE ON ACCOUNT OF UNEXPLAINED MONEY UNDER SECTION 69A OF T HE ACT WHEREIN THE ASSESSING OFFICER HELD THAT THE ADDITIONS MADE IN T HE HANDS OF BUYER PURPORTEDLY ESTABLISHES THAT THE ASSESSEE RECEIVED THE ALLEGED MONEY OVER AND ABOVE THE DECLARED SALE CONSIDERATION OF RS. 77 50 000/-. HOWEVER ON FURTHER APPEAL BEFORE THE CIT(A) THE CIT(A) ON THE BASIS O F VALUATION REPORT OF THE DVO ASSESSED THE TOTAL SALE CONSIDERATION TO RS. 85 52 993/- BY RESTRICTING THE ADDITIONS UNDER SECTION 69A OF THE ACT TO RS. 8 02 993/-. WITH RESPECT TO THE DISALLOWANCE OF RS. 9 47 957/- MADE ON ACCOUNT OF 5 4F OF THE ACT THE SAME WAS ALLOWED BY THE CIT(A) DURING THE APPEAL PROCEED INGS. ON BEING AGGRIEVED BY THE CIT(A) ORDER REVENUE PREFERRED AN APPEAL BE FORE THE TRIBUNAL VIDE APPEAL NO. 2724/DEL/2015. IN RESPONSE TO THIS THE ASSESSEE FILED CROSS OBJECTIONS VIDE C/O NO. 456/DEL/2015. THE LD. AR SU BMITTED THAT ON PERUSAL OF THE REASONS TO BELIEVE PROVIDED BY THE ASSESSING OF FICER IT CAN BE OBSERVED THAT THE ASSESSING OFFICER HAS NOT PROVIDED APPROVAL OF APPROPRIATE AUTHORITY FOR REOPENING THE CASE. THE ASSESSEE DURING THE COURSE OF PROCEEDINGS VIDE LETTER DATED 05.11.2012 REQUESTED THE ASSESSING OFFICER TO PROVIDE THE COPY OF SANCTION FROM APPROPRIATE AUTHORITY. HOWEVER THE S AME HAS YET NOT BEING PROVIDED TO THE ASSESSEE. THE LD. AR POINTED OUT TH E PROVISIONS OF SECTION 151 6 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 OF THE ACT. APPLYING THE PROVISIONS OF SUB-SECTION 2 OF SECTION 151 IN THE INSTANT CASE IT CAN BE CONCLUDED THAT THE ASSESSIN G OFFICER CANNOT ISSUE NOTICE UNDER SECTION 148 OF THE ACT UNLESS APPROVAL OF JCI T OR OFFICERS OF ABOVE RANK WAS OBTAINED BY THE ASSESSING OFFICER. SINCE IN TH E INSTANT CASE THE ASSESSING OFFICER EVEN AFTER REMINDER OF THE ASSESSEE DID NOT PROVIDE THE APPROVAL OF APPROPRIATE AUTHORITY THEREFORE IN THE ABSENCE OF APPROVAL NOTICE FOR REOPENING THE CASE ISSUED BY THE ASSESSING OFFICER IS BAD IN LAW AND THUS DESERVES TO BE QUASHED. THE LD. AR FURTHER SUBMITTE D THAT ON BARE READING OF REASONS TO BELIEVE IT CAN BE OBSERVED THAT THE ASS ESSING OFFICER REOPENED THE CASE IN HAND ON THE BASIS OF LETTER RECEIVED FROM T HE CIT(A)-13 NEW DELHI VIDE LETTER F. NO. CIT (APPEALS)/11-12/312 DATED 22.03.2 012 WHO INFORMED THAT ADDITIONS HAVE BEEN MADE IN THE HANDS OF BUYERS FOR THE PROPERTY IN QUESTION BY THE ACIT CC-19 NEW DELHI. THE ASSESSING OFFICER IN THE CASE AT HAND SOLELY RELIED ON THE ADDITIONS MADE BY THE ACIT CC-19 AND FAILED TO APPLY HIS OWN MIND AND TO GIVE HIS INDEPENDENT FINDINGS. THE LD. AR RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SART HAK SECURITIES CO. (P.) LTD. VS. ITO (2010) 329 ITR 110. THE LD. AR ALSO SUBMITT ED THAT REOPENING OF A CASE U/S 148 IS NOT PERMISSIBLE ON BORROWED SATISFACTION OF ANOTHER OFFICER. THE PRE- REQUISITE CONDITION REQUIRED FOR THE ASSESSING OFFI CER IS TO GIVE HIS OWN FINDINGS FOR REOPENING THE CASE IN HAND AND NOT TO RELY UPON THE FINDINGS GIVEN BY ANY OTHER OFFICER. THE HONBLE SUPREME COURT IN THE CAS E OF CALCUTTA DISCOUNT CO. LTD. (1961) 41 ITR 191 (SC) ANALYZED THE PHRASE 'RE ASON TO BELIEVE' AND OBSERVED THAT: 'IT IS FOR HIM TO DECIDE WHAT INFERENCES OF FACTS C AN BE REASONABLY DRAWN AND WHAT LEGAL INFERENCES HAVE ULTIMATELY TO BE DRAWN. IT IS NOT FOR SOMEBODY ELSE TO TELL THE ASSESSING AUTHORITY WHAT INFERENCES WH ETHER OF FACTS OR LAW SHOULD BE DRAWN. IN THE INSTANT CASE THE REASONS RECORDED BY THE AS SESSING OFFICER ARE SIMPLY BASED UPON THE INFORMATION PASSED ON BY THE CIT(A) 13 AND THE ADDITION MADE BY THE RESPECTIVE JURISDICTIONAL OFFICER IN THE HAN DS OF THE BUYER. THE ASSESSING 7 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 OFFICER IN THE CASE OF ASSESSEE SIMPLY RELIED ON T HE SEIZED DOCUMENT RELIED UPON BY THE ASSESSING OFFICER OF THE BUYERS AND REO PENED THE CASE. THE SAME IS ALSO EVIDENT FROM THE FACT THAT ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER WITHOUT GIVING ANY SPECIFIC FINDING TO THE CASE AND PASSING A PROTECTIVE ORDER BASED ON THE ADDITIONS MADE BY THE ASSESSING OFFICER AT CC-19. IN ABSENCE OF ANY SPECIFIC FINDING OF THE ASSESSING OF FICER THE REASONS FOR REOPENING RECORDED BY THE ASSESSEE IS MECHANICAL IN NATURE AND THUS THE REOPENING DESERVES TO BE ANNULLED. THE LD. AR SUBMI TTED THAT THE ASSESSEE DURING THE COURSE OF PROCEEDINGS FILED OBJECTIONS IN RESPONSE TO THE REASONS FOR REOPENING PROVIDED BY THE ASSESSING OFFICER VIDE LE TTER DATED 05.03.2013. HOWEVER THE ASSESSING OFFICER WITHOUT DISPOSING TH E OBJECTIONS RAISED BY THE ASSESSEE ADJUDICATED THE MATTER THUS DENYING THE A SSESSEE TO PROVE WITH THE MATTER IN ACCORDANCE WITH THE LAW. THE LD. AR POINT ED OUT THE DECISION OF HONBLE APEX COURT IN THE CASE OF HOME FINDERS HOUS ING LTD. V. ITO [2018] 94 TAXMANN.COM 84 (SC)(SUPRA) WHEREIN THE HONBLE APE X COURT UPHELD THE DECISION OF HONBLE MADRAS HIGH COURT REMANDING THE MATTER BACK TO THE ASSESSING OFFICER WHEREIN THE ASSESSING OFFICER DID NOT DISPOSE OFF THE OBJECTIONS FILED BY THE ASSESSEE. DURING THE COURSE OF PETITION THE HONBLE HIGH COURT NOTICED THAT THE ASSESSEE FILED ITS OBJECTION S ON 26.03.2016. THEREAFTER THE ASSESSEE FILED ANOTHER LETTER DATED 28.11.2016 WHEREIN IT RESISTED THE FRESH ASSESSMENT PROCEEDINGS. ON PERUSAL OF THE LETTERS THE HONBLE COURT NOTICED THAT THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS DID NOT CITE THE ATTENTION OF THE ASSESSING OFFICER TO DISPOSE OFF THE OBJECTI ONS AND PASS A SPEAKING ORDER AS PER THE PROCEDURE LAID DOWN IN ANOTHER DECISION OF HONBLE SUPREME COURT IN CASE OF GKN DRIVESHAFTS (INDIA) LTD. ON THE BASI S OF THIS FACT THE HONBLE HIGH COURT HELD THAT THE ASSESSEE IN ORDER TO TAKE ADVANTAGE OF THE IRREGULARITY COMMITTED BY THE ASSESSING OFFICER DID NOT POINT OU T THE PROCEDURE LAID DOWN BY THE HONBLE APEX COURT AND CONSEQUENTLY WHILE AD JUDICATING THE MATTER THE HONBLE HIGH COURT SET-ASIDE THE CASE OF THE ASSESS EE TO THE ASSESSING OFFICER FOR THE DISPOSAL OF OBJECTIONS. IN THIS RESPECT TH E LD. AR SUBMITTED THAT THE 8 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 AFORESAID DECISION OF THE HONBLE APEX COURT (SUPRA ) IS NOT APPLICABLE ON THE ASSESSEE. THE JUSTIFICATION FOR NON-APPLICABILITY O F THE DECISION OF THE HONBLE APEX COURT ON THE CASE OF ASSESSEE IS THAT THE ASSE SSEE FILED THE OBJECTIONS AGAINST REASONS FOR REOPENING VIDE ITS LETTER DATED 05.03.2013. HOWEVER THE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 147 / 143(3) OF THE ACT VIDE ORDER DATED 20.03.2013 WITHOUT DISPOSING OFF THE OB JECTIONS FILED BY THE ASSESSEE. IN THIS MANNER THE STATUTORY OBLIGATION CASTE BY THE LAW HAS NOT BEEN DISCHARGED BY THE ASSESSING OFFICER AND THUS IT DOES NOT WARRANT THE REMAND TO THE ASSESSING OFFICER FOR CURING THE INHE RENT DEFECT IN THE ORDER WHICH MAKES THE ORDER INVALID AND VOID. HENCEFORTH THE FACTS OBSERVED BY THE HONBLE HIGH COURT IN SUPRA THAT SINCE THE ASSESSE E IN ORDER TO TAKE ADVANTAGE OF THE PROCEDURAL DEFECT DID NOT POINT OUT THE ASSE SSING OFFICER TO DISPOSE OFF THE OBJECTIONS THEREFORE THE MATTER DESERVES TO B E REMANDED BACK TO THE FILE OF ASSESSING OFFICER FOR DISPOSAL OF OBJECTIONS ARE N OT PRESENT IN THE CASE OF ASSESSEE. THEREFORE IN VIEW TO THIS THE DECISION OF HONBLE APEX COURT IS NOT APPLICABLE TO THE ASSESSEE AND THE ASSESSEE IS STIL L GUARDED BY THE LEGISLATION LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. IT IS PERTINENT TO MENTION THAT THE ASSESSING OFFIC ER DID NOT DEAL IN WITH THE OBJECTIONS FILED BY THE ASSESSEE AND WITHOUT CONSID ERING THE OBJECTIONS FILED BY THE ASSESSEE STATED THAT THE REPLY IS UNACCEPTABLE AND DEALT IN WITH THE MERITS OF THE CASE. THE ASSESSING OFFICER HAD NEVER DISPOS ED OFF THE OBJECTIONS FILED BY THE ASSESSEE WHICH IS A STATUTORY REQUIREMENT FOR T HE ASSESSING OFFICER TO VEST IN WITH POWERS TO COMPLETE THE ASSESSMENT IN LAWFUL MANNER. HENCEFORTH THE PRE-REQUITE FINDING OF HONBLE APEX COURT IS NOT PR ESENT IN THE CASE OF ASSESSEE AND THEREFORE THE SAID DECISION IS NOT APPLICABLE ON THE ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER RECEIV ED THE INFORMATION IN RESPECT OF THE VALUATION REPORT FROM THE CIT(A)-13 BEFORE WHOM THE APPEAL OF THE PURCHASER WAS PENDING FOR ADJUDICATION. THE ASSESSI NG OFFICER WHO ASSESSED THE CASE OF THE BUYER DID NOT FIND IT WORTH PASSING ON AND THUS DID NOT RECORD HIS SATISFACTION IN THIS RESPECT. THE CIT(A)-13 WHO PASSED THE INFORMATION TO 9 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 THE ASSESSING OFFICER WHILE ADJUDICATING THE MATTE R IN CASE OF BUYER OF PROPERTY GRANTED SUBSTANTIAL RELIEF TO THE BUYER AND HELD TH AT THE VALUATION REPORT OF THE VALUER CANNOT BE TAKEN AS YARDSTICK FOR UNACCOUNTED INVESTMENT. HENCE THE BASIS FOR REOPENING THE CASE I.E. THE COPY OF VAL UATION REPORT WAS HELD TO BE INVALID FOR THE PURPOSE OF MAKING ANY ADDITION IN T HE HANDS OF THE BUYER BY THE CIT(A) AND HENCE THE REASONS TO BELIEVE CEASED TO E XIST IN CASE OF THE ASSESSEE. IN THE CASE OF BALAKRISHNA H. WANI VS. ITO (2010) 3 21 ITR 519 (BOM) IT WAS HELD THAT: ONCE IT IS CLEAR THAT THE BASIS AND FOUNDATION FOR THE FORMATION OF THE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT CEASE D TO EXIST THE JURISDICTIONAL CONDITION PRECEDENT TO EXERCISE OF P OWER TO REOPEN THE ASSESSMENT WAS NOT FULFILLED. THE IMPUGNED NOTICE A ND ORDER ARE QUASHED. HENCEFORTH IN VIEW TO THE ABOVE JUDGEMENT THE IMP UGNED NOTICE AND ORDER DESERVES TO BE QUASHED. 6. AS REGARDS TO GROUND NO. 3 OF THE CROSS OBJECTIO NS THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS. 2 18 88 000/- TO THE INCOME OF THE ASSESSEE U/S 69A OF THE ACT ALLEGING UNEXPLA INED MONEY RECEIVED BY THE ASSESSEE IN RESPECT OF SALE OF PROPERTY AT 8 KACH NAR MARG DLF GURGAON TO MR. ABHINAV ARORA AND MRS. RANJU ARORA. THE ASSESSI NG OFFICER WHILE ADJUDICATING THE MATTER HELD THAT SINCE THE ADDITIO NS WERE MADE IN THE HANDS OF THE BUYERS IT ESTABLISHES THAT THE ASSESSEE HAD RECEIVED ALLEGED ON-MONEY IN RESPECT OF THE PROPERTY IN QUESTION. DURING THE COU RSE OF APPELLATE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY THE CIT(A) OB SERVED THAT THE ASSESSING OFFICER HAD REFERRED THE PROPERTY FOR VALUATION TO THE DVO DURING THE PENDENCY OF RE-ASSESSMENT PROCEEDINGS. HOWEVER THE SAID REP ORT OF THE DVO WAS RECEIVED ON 08.07.2013 I.E. AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. THE DVO IN ITS REPORT VALUED THE PROPERTY AT RS. 1 71 05 985/- AND THUS THE SHARE OF THE ASSESSEE WAS CALCULATED AND COMES TO R S. 85 52 993/-. THE CIT(A) ON THE BASIS OF THE SAID REPORT OF THE DVO RESTRICT ED THE TOTAL CONSIDERATION FOR 10 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 COMPUTING THE CAPITAL GAINS IN THE HANDS OF THE ASS ESSEE TO RS. 85 52 993/- AS AGAINST RS. 77 50 000/- DECLARED BY THE ASSESSEE. T HUS ADDITION TO THE EXTENT OF RS. 8 02 993/- WAS CONFIRMED. IN THIS RESPECT T HE LD. AR RELIED UPON THE PROVISIONS OF SECTION 69A OF THE INCOME TAX ACT 19 61 AND SUBMITTED THAT THE PROVISIONS OF THIS SECTION IS ATTRACTED ONLY WHEN F OLLOWING CONDITIONS ARE SATISFIED: (A) THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MO NEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE (B) THE SAME IS NOT RECORDED IN THE BOOKS OF ACCOUN T IF ANY MAINTAINED BY ASSESSEE FOR ANY SOURCE OF INCOME; AND (C) NO SATISFACTORY EXPLANATION IS OFFERED BY THE A SSESSEE AS REGARDS SUCH MONEY BULLION OR OTHER VALUABLE ARTICLE. IF THE AFORESAID CONDITIONS ARE SATISFIED THEN THE MONEY OR VALUE OF THE BULLION JEWELLERY OR OTHER VALUABLE ARTICLE MAY BE DEEMED T O BE THE INCOME OF THE ASSESSEE OF THE FINANCIAL YEAR IN WHICH IT IS SO FO UND. HOWEVER THE ASSESSING OFFICER IS BOUND TO MAKE ENQUIRIES AND GATHER SUFFI CIENT MATERIAL BEFORE PROCEEDING TO MAKE ADDITION ON THIS COUNT. THE LD. AR RELIED UPON THE DECISION OF CIT VS. N. SOWBHAGMULL MAHAVIRCHAND (1983) 142 I TR 747 (MAD). ALTHOUGH THE ASSESSING OFFICER IN THE ORDER MADE ADDITIONS UNDER SECTION 69A OF THE ACT HOWEVER HE HAD NOWHERE MENTIONED IN THE ORDER THAT HOW THE ASSESSEE WAS FOUND TO BE THE OWNER OF ALLEGED MONEY. MOREOVE R THE QUESTION OF OWNERSHIP DOES NOT ARISE SINCE NO MONEY AS ALLEGED BY THE ASSESSING OFFICER HAS BEEN FOUND EITHER FROM THE POSSESSION OF THE AS SESSEE OR THE BUYERS OF THE PROPERTY. THE ASSESSING OFFICER IN ORDER TO MAKE TH E ALLEGED ADDITIONS SOLELY RELIED UPON THE COPY OF VALUATION REPORT OBTAINED B Y THE BUYERS FOR THE PURPOSE OF RAISING BANK LOAN. THE LD. AR FURTHER SUBMITTED THAT THE CIT(A)-13 HAS HELD THAT THE VALUATION REPORT OBTAINED FOR THE PURPOSE OF RAISING BANK LOAN CANNOT BE TAKEN AS YARDSTICK FOR UNACCOUNTED INVESTMENTS. THE SAME IS EVIDENT FROM THE COPY OF ORDER DATED 28.03.2013 PLACED AT PAGES 25-34 OF PAPER BOOK. HENCE WHERE THE BASIS FOR MAKING THE ADDITION IN T HE HANDS OF THE BUYER HAS 11 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 BEEN HELD AS INADMISSIBLE AND UNSUSTAINABLE THE AD DITION MADE IN THE HANDS OF THE ASSESSEE HUF SOLELY RELYING ON THE ADDITIONS IN THE HANDS OF THE BUYER DESERVES TO BE DELETED MORE PARTICULARLY IN VIEW OF THE FACT THAT THE IMPUGNED VALUATION REPORT HAS NOT BEEN FOUND FROM THE POSSES SION OF THE ASSESSEE. MOREOVER THE REPORT OF THE VALUATION OFFICER FOUND DURING SEARCH DOES NOT ISPO- FACTO IMPLY THAT DIFFERENTIAL AMOUNT HAS BEEN RECEI VED BY THE ASSESSEE. THEREFORE RELYING ON THE ABOVE IT CAN BE CLEARLY ESTABLISHED THAT THE ADDITION MADE ON THE BASIS OF VALUATION REPORT DESERVES TO B E DELETED. AS REGARDS TO GROUND NO. 4 & 4.1 OF THE CROSS OBJECTION THE LD. AR SUBMITTED THAT THESE GROUNDS ARE NOT PRESSED BY THE ASSESEEE. AS REGARDS THE ADDITIONAL GROUNDS FILED BY THE ASSESSEE RELATING TO CROSS OBJECTIONS THE LD. AR SUBMITTED THAT HENCE THE ORDER PASSED IS BAD IN LAW VOID AB INITI O AND DESERVE TO BE QUASHED. THE LD. AR FURTHER SUBMITTED THAT IN THE INSTANT CA SE SEARCH & SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT ON 15.10.2009 IN THE PREMISES OF MR. ABHINAV ARORA AND MRS. RANJU ARORA. CONSEQUENTLY T HE ASSESSING OFFICER INITIATED RE-ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT RELYING UPON THE INFORMATION RECEIVED BASED ON THE ALLEGED INCRIMINA TING DOCUMENTS FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF A 3RD PARTY I.E. MR. ABHINAV ARORA AND MRS. RANJU ARORA. AT THIS JUNCTURE IT IS PERTINENT TO MENTION THAT ASSESSMENT BASED UPON THE DOCUMENTS FOUND DURING TH E COURSE OF SEARCH OF 3RD PARTY PREMISES CAN BE MADE ONLY U/S 153C OF THE ACT. THUS THE PROVISION OF SECTION 153C OF THE ACT COVERS SITUATION WHEREIN ANY ALLEGED INCRIMINATING DOCUMENTS PERTAINING TO THE ASSESSEE IS FOUND DURIN G THE SEARCH OF 3RD PARTY PREMISES. FURTHERMORE THE PROVISIONS OF SECTION 15 3C OF THE ACT ARE NON- OBSTANTIVE PROVISIONS AND THE SAME SPECIFICALLY EXC LUDES THE OPERATION OF SEC. 147 OF THE ACT THEREFORE THE ASSESSING OFFICER IN THE PRESENT CASE HAS GROSSLY ERRED IN INVOKING THE PROVISIONS OF SEC. 147 INSTE AD OF 153C OF THE ACT. IF THE ALLEGED ACTION OF THE ASSESSING OFFICER UNDER SEC. 147 IS PERMITTED ON THE BASIS OF DOCUMENTS FOUND IN THE COURSE OF SEARCH OF 3RD P ARTY PREMISES THEN THE PROVISIONS OF SEC. 153C OF THE ACT WOULD BECOME RED UNDANT. FURTHER TO 12 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 SUPPORT THE AFORESAID CONTENTION RELIANCE IS SOUGHT TO BE PLACED ON THE DECISIONS OF THE AMRITSAR TRIBUNAL IN THE CASE OF A CIT VS. ARUN KUMAR KAPOOR (140 TTJ 249) WHEREIN ALSO THE CASE OF THE ASSESSEE WAS RE-OPENED U/S 147 OF THE ACT BASED UPON THE DOCUMENTS FOUND DURING THE C OURSE OF SEARCH OF 3RD PARTY PREMISES. THE TRIBUNAL CATEGORICALLY HELD THA T ASSESSING OFFICER HAS ERRED IN RE-OPENING THE CASE OF THE ASSESSEE U/S 147 OF T HE ACT AS THE ASSESSMENT BASED UPON ALLEGED INCRIMINATING DOCUMENTS FOUND DU RING THE COURSE OF SEARCH AT THE 3RD PARTY PREMISES COULD ONLY BE MADE U/S 15 3C OF THE ACT. THE SAID ORDER WAS REFERRED IN THE VERY RECENT JUDGMENT OF T RIBUNAL DELHI BENCH IN CASE OF SHELLY AGGARWAL NEW DELHI VS. ITO GHAZIABAD (I TA 1501/DEL/2017) DATED 08.08.2017 WHEREIN ALSO THE CASE OF THE ASSESSEE W AS RE-OPENED U/S 147 OF THE ACT BASED UPON ALLEGED INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH AT MR. ABHINAV ARORA AND MRS. RANJU ARORA . THE TRIBUNAL WHILE ADJUDICATING THE AFORE-SAID CASE CATEGORICALLY HEL D THAT THE NOTICE ISSUED U/S 148 OF THE ACT AND THE CONSEQUENT ASSESSMENT FRAMED U/S 147 OF THE ACT IS VOID-AB-INITIO AS IN THE INSTANT CASE ASSESSMENT B ASED UPON INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH OF 3RD PARTY PREMISES CAN BE MADE U/S 153C OF THE ACT. THE RELEVANT EXTRACTS OF THE SAME ARE RE-ITERATED AS UNDER:- 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE PAPER BOOK. ON HAVING GONE THROUGH THE DECISIONS CITED ABOVE ESPECIALLY THE DECISION OF AM RITSAR BENCH IN THE CASE OF ITO VS. ARUN KUMAR KAPOOR (SUPRA) I FIND THAT IN T HAT CASE AS IN THE PRESENT CASE BEFORE ME REASSESSMENT WAS INITIATED ON THE B ASIS OF INCRIMINATING MATERIAL FOUND IN SEARCH OF THIRD PARTY AND THE VAL IDITY OF THE SAME WAS CHALLENGED BY THE ASSESSEE BEFORE THE LEARNED CIT(A PPEALS) AND THE LEARNED CIT(APPEALS) VITIATED THE PROCEEDINGS. THE SAME WAS QUESTIONED BY THE REVENUE BEFORE THE ITAT AND THE ITAT AFTER DISCUSSI NG THE CASES OF THE PARTIES AND THE RELEVANT PROVISIONS IN DETAILS HAS COME TO THE CONCLUSION THAT IN THE ABOVE SITUATION PROVISIONS OF SEC. 153C WER E APPLICABLE WHICH 13 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 EXCLUDES THE APPLICATION OF SECTIONS 147 AND 148 OF THE ACT. THE ITAT HELD THE NOTICE ISSUED UNDER SEC. 148 AND PROCEEDINGS UNDER SEC. 147 AS ILLEGAL AND VOID AB INITIO. IT WAS HELD THAT ASSESSING OFFICER HAVING NOT FOLLOWED PROCEDURE UNDER SEC. 153C REASSESSMENT ORDER WAS R IGHTLY QUASHED BY THE LEARNED CIT(APPEALS). I ALSO DRAW MY SUPPORT FROM T HE ITAT NEW DELHI DECISION IN THE CASE OF RAJAT SHUBRA CHATTERJI VS. ACIT NEW DELHI ITA NO. 2430/DEL/2015 DATED 20.5.2016 WHEREIN THE REASSESS MENT WAS QUASHED ON THE SIMILAR FACTS AND CIRCUMSTANCES BY FOLLOWING THE ITAT AMRITSAR DECISION IN THE CASE OF ITO VS. ARUN KUMAR KAPOOR ( SUPRA). IN THE PRESENT CASE BEFORE ME IT IS AN ADMITTED FACT AS ALSO EVIDENT FROM THE REASONS RECORDED AND THE ASSESSMENT ORDER THAT THE INITIATION OF REO PENING PROCEEDINGS WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF INFOR MATION AVAILABLE WITH THE AO. I THUS RESPECTFULLY FOLLOWING THE DECISION OF C O-ORDINATE BENCH OF THE ITAT AMRITSAR IN THE CASE OF ACIT VS. ARUN KUMAR KAPOOR - 140 TTJ 249 VS. (AMRITSAR) AND THE ITAT DELHI DECISION IN THE CASE OF RAJAT SHUBRA CHATTERJI VS. ACIT NEW DELHI ITA NO. 2430/DEL/2015 DATED 20. 5.2016 HOLD THAT PROVISIONS OF SEC. 153C OF THE ACT WERE APPLICABLE IN THE PRESENT CASE FOR FRAMING THE ASSESSMENT IF ANY WHICH EXCLUDES THE APPLICATION OF SEC. 147 OF THE ~ HENCE NOTICE ISSUED UNDER SEC. 148 OF THE AC T AND ASSESSMENT FRAMED IN FURTHERANCE THERETO UNDER SEC. 147 READ WITH SEC TION 143(3) OF THE ACT ARE VOID AB INITIO. HENCE THE REASSESSMENT IN QUESTION IS ACCORDINGLY QUASHED. SINCE I HAVE ALREADY QUASHED THE REASSESSMENT THER E IS NO NEED TO ADJUDICATE OTHER GROUNDS. THUS THE LD. AR POINTED OUT THAT THE PRESENT CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL ITSELF IN T HE CASE SHELLY AGGARWAL NEW DELHI VS. ITO GHAZIABAD (ITA 1501/DEL/2017) DATED 08.08.2017 ON ACCOUNT OF IDENTICAL FACTS. ALSO SIMILAR DECISION WAS TAKEN BY THE TRIBUNAL IN THE CASE OF SUSHIL GAUR VS. ITO (1500/DEL/2017). THEREFORE IN THE INSTANT CASE ALSO THE ISSUE OF NOTICE U/S 148 OF THE ACT AND CONSEQUENT R E-ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT DESERVE TO BE QUASHED. 14 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 7. AS REGARDS THE REVENUES APPEAL THE LD. AR SUB MITTED THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS MADE AN ADDITION UNDER SECTION 69A OF THE ACT INSPITE OF THE FACT THAT THE ASSESSI NG OFFICER DID NOT HAVE ANY EVIDENCE REGARDING ACTUAL RECEIPT OF MONEY BY THE A SSESSEE. THEREFORE ON THE BASIS OF THIS FACT THE CIT(A) OUGHT TO HAVE DELETED WHOLE OF THE ADDITION MADE BY THE ASSESSING OFFICER. HOWEVER THE CIT(A) INSTE AD OF DELETING THE ADDITION RESTRICTED IT TO RS. 8 88 590/- BY INVOKING THE PRO VISIONS OF SECTION 50C OF THE ACT. THE LD. AR POINTED OUT THAT THE ASSESSEE HAS F ILED AN APPEAL BEFORE THE CIT(A) AGAINST ADDITION UNDER SECTION 69A. THUS TH E ADDITION BY THE CIT(A) UNDER SECTION 50C OF THE ACT WAS NOT CALLED FOR. MO REOVER THE LD. AR FURTHER POINTED OUT THAT THE ASSESSEE HAS NOT FILED ANY ADD ITIONAL EVIDENCE DURING THE FIRST APPELLATE PROCEEDINGS WHEREIN ASSESSING OFFIC ERS COMMENTS ARE PRE- REQUISITE BEFORE PASSING OF CIT(A)S ORDER. (SUB-RU LE 3 OF RULE 46A). THEREFORE THE GROUNDS RAISED BY THE REVENUE THAT THE REPORT O F THE DVO HAS BEEN CONSIDERED BY THE CIT(A) WITHOUT OBTAINING ASSESSIN G OFFICERS COMMENTS IS UNCALLED FOR. WITHOUT PREJUDICE TO ABOVE THE LD. A R FURTHER SUBMITTED THAT ASSESSMENT WAS COMPLETED ON 30.03.2013 AND THE SAME WAS TO GET TIME BARRED ON 31.03.2013. THEREFORE IS THE VALUATION REPORT W AS NOT RECEIVED BEFORE 31.03.2013 IT CANNOT BE CONSIDERED AFTER THE CASE HAS BEEN EITHER COMPLETED OR IS TIME BARRED. THE ASSESSING OFFICER HAS NO JUR ISDICTION TO CONSIDER ANY REPORT IF RECEIVED AFTER THE TIME BARRING DATE. IN THIS RESPECT RELIANCE IS SOUGHT TO BE PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT THE WRIT PETITION OF ACC LTD. VS. DISTRICT VALUATION OFFICER W.P. (C) 37 95/2011. IN THIS PETITION THE HONBLE DELHI HIGH COURT VIDE PARA 12 OF ITS ORDER HELD THAT ONCE THE ASSESSMENT IS TIME BARRED AND THE VALUATION REPORT FOR SUCH YEAR IS RECEIVED AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS THEN IT IS OPEN FOR INCOME TAX AUTHORITIES TO TAKE ACTION AS PERMISSIBLE. ACCO RDINGLY WHEN VALUATION REPORT WAS RECEIVED IT WAS BEYOND THE JURISDICTION OF THE ASSESSING OFFICER THEREFORE THE GRIEVANCE OF THE REVENUE THAT THE CI T(A) PASSED THE ORDER 15 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 WITHOUT THE ASSESSING OFFICERS COMMENT DOES NOT DE SERVE TO BE CONSIDERED. HENCE APPEAL OF THE REVENUE DESERVES TO BE REJECTED . 8. THE LD. DR SUBMITTED THAT THE REASONS WERE RECOR DED BEFORE ISSUANCE OF NOTICE UNDER SECTION 148 WHICH WAS ISSUED WITHIN TI ME. FURTHER THE OBJECTIONS RAISED BY THE ASSESSEE WERE DISPOSED OF BY A SPEAKI NG ORDER WHICH CLEARLY SHOWS APPLICATION OF MIND ON THE PART OF THE ASSESS ING OFFICER. THE LD. DR SUBMITTED THAT AS A RESULT OF A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE INCOME TAX ACT 1961 IN THE DAWAT GROUP OF CASE S SOME INCRIMINATING DOCUMENTS SHOWING PAYMENT OF ON-MONEY BY SH ABHINAV ARORA AND MRS. RANJU ARORA FOR SALE OF PROPERTY AT 8 KACHNAR MARG DLF GURGAON TO THE ASSESSEE ALONG WITH M/S P S CHAWLA AND SONS WAS FOU ND. THE ASSESSING OFFICER OF SH ABHINAV ARORA AND MRS. RANJU ARORA PA SSED ON THE INFORMATION TO THE ASSESSING OFFICER OF THE ASSESSEE HEREIN. SINCE THE INFORMATION CONTAINED FRESH MATERIAL THE ASSESSING OFFICER RIGHTLY RE-OP ENED THE CASE UNDER SECTION 148. AS THE INCRIMINATING MATERIAL SEIZED DID NOT B ELONG TO THE ASSESSEE BUT ONLY CONTAINED MATERIAL REGARDING UNDISCLOSED INCOM E OF THE ASSESSEE PROVISIONS OF SECTION 153C NEED NOT BE INVOKED AND NOTICE UNDER SECTION 148 WAS RIGHTLY ISSUED. THE ASSESSING OFFICER THEREAFT ER PROCEEDED TO ADD THE ON MONEY BASED ON VALUATION REPORT SEIZED TO THE INCOM E OF THE ASSESSEE. THE CIT(A) HAS RESTRICTED THE ADDITION FROM 2 18 88 000 /- TO RS. 8 02 993/- BASED ON VALUATION REPORT RECEIVED AFTER THE COMPLETION O F ASSESSMENT WITHOUT REFERRING IT TO THE ASSESSING OFFICER. THE ACTION O F THE CIT(A) IS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES AND ALSO THE DECIS ION OF THE HONBLE DELHI HIGH COURT IN CASE OF MANISH BUILDWELL PVT. LTD. VS . CIT IN ITA NO. 938/2011. THEREFORE THE LD. DR PRAYED THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER AND THE CROSS OBJECTION AS WELL AS ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BE DISMISSED. 16 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. SINCE THE VALIDITY OF THE REOP ENING IS CHALLENGED BY THE ASSESSEE IN CROSS OBJECTION AND THE GROUNDS RAISED IN THE CROSS OBJECTIONS AS WELL AS THE ADDITIONAL GROUNDS ARE PIVOTAL THEREFO RE WE ARE ALLOWING THE ADDITIONAL GROUNDS AND TAKING UP THE CROSS OBJECTIO NS OF THE ASSESSEE FIRST. AS REGARDS THE ADDITIONAL GROUNDS FILED BY THE ASSESSE E RELATING TO CROSS OBJECTIONS IN THE PRESENT ASSESSEES CASE SEARCH & SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT ON 15.10.2009 IN THE PREMIS ES OF MR. ABHINAV ARORA AND MRS. RANJU ARORA. CONSEQUENTLY THE ASSESSING O FFICER INITIATED RE- ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT RELYING U PON THE INFORMATION RECEIVED BASED ON THE CERTAIN DOCUMENTS FOUND DURIN G THE COURSE OF SEARCH FROM THE PREMISES OF A 3RD PARTY I.E. MR. ABHINAV A RORA AND MRS. RANJU ARORA. THUS THE ASSESSMENT IS BASED UPON THE DOCUMENTS FO UND DURING THE COURSE OF SEARCH OF 3RD PARTY PREMISES BUT THAT CAN BE MADE ONLY U/S 153C OF THE ACT. THE PROVISION OF SECTION 153C OF THE ACT IS ATTRACT ED WHEN THERE ARE ANY INCRIMINATING DOCUMENTS PERTAINING TO THE ASSESSEE WHICH ARE FOUND DURING THE SEARCH OF 3RD PARTY PREMISES. THE CONTENTION OF THE LD. AR THAT THE PROVISIONS OF SECTION 153C OF THE ACT ARE NON-OBSTANTIVE PROVI SIONS AND THE SAME SPECIFICALLY EXCLUDES THE OPERATION OF SEC. 147 OF THE ACT THEREFORE THE ASSESSING OFFICER IN THE PRESENT CASE HAS GROSSLY E RRED IN INVOKING THE PROVISIONS OF SEC. 147 INSTEAD OF 153C OF THE ACT APPEARS TO BE CORRECT IN LEGAL PARLANCE. WHEN ANY INCRIMINATING DOCUMENTS ARE FOUN D SECTION 153C IS INVOKED AND THE SAME HAS TO BE APPLIED BY THE REVEN UE AUTHORITIES AS SECTION 147 HAS ITS OWN SEPARATE FOOTING FOR INVOKING THE P ROVISIONS. IF SEC. 147 IS PERMITTED ON THE BASIS OF DOCUMENTS FOUND IN THE CO URSE OF SEARCH OF 3RD PARTY PREMISES THEN THE PROVISIONS OF SEC. 153C OF THE A CT WOULD BECOME REDUNDANT. THIS IS ALSO SUPPORTED BY THE DECISIONS OF THE AMRI TSAR TRIBUNAL IN THE CASE OF ACIT VS. ARUN KUMAR KAPOOR (140 TTJ 249) RELIED BY THE LD. AR DURING THE HEARING WHEREIN ALSO THE CASE OF THE ASSESSEE WAS R E-OPENED U/S 147 OF THE ACT BASED UPON THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH OF 3RD PARTY 17 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 PREMISES. THE TRIBUNAL CATEGORICALLY HELD THAT ASSE SSING OFFICER HAS ERRED IN RE-OPENING THE CASE OF THE ASSESSEE U/S 147 OF THE ACT AS THE ASSESSMENT BASED UPON ALLEGED INCRIMINATING DOCUMENTS FOUND DURING T HE COURSE OF SEARCH AT THE 3RD PARTY PREMISES COULD ONLY BE MADE U/S 153C OF T HE ACT. THE SAID ORDER WAS REFERRED IN THE VERY RECENT JUDGMENT OF TRIBUNAL D ELHI BENCH IN CASE OF SHELLY AGGARWAL NEW DELHI VS. ITO GHAZIABAD (ITA 1501/DE L/2017) DATED 08.08.2017 WHEREIN ALSO THE CASE OF THE ASSESSEE W AS RE-OPENED U/S 147 OF THE ACT BASED UPON ALLEGED INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH AT MR. ABHINAV ARORA AND MRS. RANJU ARORA . THE TRIBUNAL WHILE ADJUDICATING THE AFORE-SAID CASE CATEGORICALLY HEL D THAT THE NOTICE ISSUED U/S 148 OF THE ACT AND THE CONSEQUENT ASSESSMENT FRAMED U/S 147 OF THE ACT IS VOID-AB-INITIO AS IN THE INSTANT CASE ASSESSMENT B ASED UPON INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH OF 3RD PARTY PREMISES CAN BE MADE U/S 153C OF THE ACT. THUS THE ASSESSMENT IN T HE PRESENT CASE ITSELF BECOMES NULL AND VOID. BESIDES THIS ON THE OTHER G ROUNDS OF THE CROSS OBJECTIONS IT IS PERTINENT TO NOTE THAT ORIGINAL A SSESSMENT PROCEEDINGS UNDER SECTION 143(3) WAS COMPLETED AT RETURN INCOME DECLA RED BY THE ASSESSEE VIDE ORDER DATED 22.12.2010. DURING THE YEAR UNDER REFER ENCE THE ASSESSEE HAS SOLD ITS SHARE IN RESIDENTIAL PROPERTY SITUATED A T 8 KACHNAR MARG DLF GURGAON HARYANA TO MR. ABHINAV ARORA AND MRS. RANJ U ARORA AT A TOTAL CONSIDERATION OF RS.77 50 000/- HAVING INDEX COST O F ACQUISITION OF RS. 8 88 590/-. HOWEVER DURING THE COURSE OF SEARCH AT DAWAT GROUP OF COMPANIES DATED 15.10.2009 A VALUATION REPORT MARK ED AS PG 13- 15/ANNEXURE A-2/AR-1 WAS FOUND. ON THE BASIS OF TH E SAID DOCUMENT AN ADDITION OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT OF RS. 2 18 88 000/- EACH WAS MADE IN THE HANDS OF MR. ABH INAV ARORA AND MRS. RANJU ARORA I.E. PURCHASER OF THE PROPERTY SOLD BY THE ASSESSEE. ON FURTHER APPEAL BY THE PURCHASERS BEFORE THE CIT(A)-33 THE CIT(A)-33 INFORMED THE ASSESSING OFFICER OF THE ASSESSEE ABOUT THE VALUATI ON REPORT FOUND DURING THE COURSE OF SEARCH VIDE LETTER DATED 22.03.2012. HOWE VER THE CIT(A)-33 IN THE 18 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 APPEAL OF PURCHASER OF PROPERTIES LATER DELETED TH E ADDITIONS MADE ON THE BASIS OF VALUATION REPORT AFTER HOLDING THAT VALUATION R EPORT CANNOT BE TAKEN AS A YARDSTICK FOR UNACCOUNTED INVESTMENT VIDE ORDER DA TED 28.03.2013. THE SAID DECISION OF THE CIT(A) WAS LATER CONFIRMED BY THE T RIBUNAL IN PURCHASER ABHINAV ARORA AND RANJU ARORA IN ITA NOS. 4039 & 40 40/DEL/2013 AND 4113 & 4114/DEL/2013 ORDER DATED ..OCTOBER 2019. THESE FACTS WERE NOT DISPUTED BY THE LD. DR AT THE TIME OF HEARING. IN THE PRESEN T ASSESSEES CASE THE ASSESSING OFFICER PROVIDED THE ASSESSEE AN UNSTAMPE D COPY OF REASONS TO BELIEVE ON WHICH NEITHER THE DATE OF SIGNING OF NOT ICE NOR THE SATISFACTION OF APPROPRIATE AUTHORITY HAS BEEN RECORDED. IN RESPONS E TO THE REASONS FOR REOPENING THE ASSESSEE FILED THE ABOVE OBJECTIONS VIDE LETTER DATED 05.03.2013 AND DATED 26.03.2013. MEANWHILE THE ASSESSING OFFI CER BEFORE DISPOSING THE REASSESSMENT PROCEEDINGS HAD ALSO REFERRED THE PRO PERTY IN QUESTION FOR VALUATION BEFORE THE VALUATION OFFICER. HOWEVER TH E ASSESSING OFFICER WITHOUT DISPOSING THE OBJECTIONS FILED BY THE ASSESSEE AND WITHOUT WAITING FOR THE VALUATION REPORT OF THE DVO PASSED AN ORDER UNDER S ECTION 147 OF THE ACT DATED 30.03.2013 AT AN ASSESSED INCOME OF RS. 2 15 34 135/-. THE ADDITION OF RS. 2 18 88 000/- HAS BEEN MADE ON ACCOUNT OF UNEXP LAINED MONEY UNDER SECTION 69A OF THE ACT WHEREIN THE ASSESSING OFFICE R HELD THAT THE ADDITIONS MADE IN THE HANDS OF BUYER PURPORTEDLY ESTABLISHES THAT THE ASSESSEE RECEIVED THE ALLEGED MONEY OVER AND ABOVE THE DECLARED SALE CONSIDERATION OF RS. 77 50 000/-. THOUGH THE LD. DR IN THE SUBMISSIONS S TATED THAT THE OBJECTIONS WERE DISPOSED OF BUT THE ASSESSMENT ORDER DOES NOT REVEAL THE SAME. FURTHER ON PERUSAL OF THE REASONS TO BELIEVE PROVIDED BY TH E ASSESSING OFFICER IT CAN BE OBSERVED THAT THE ASSESSING OFFICER HAS NOT PROVIDE D APPROVAL OF APPROPRIATE AUTHORITY FOR REOPENING THE CASE. FROM THE REASONS ALSO WE CAN OBSERVE THAT THE ASSESSING OFFICER REOPENED THE CASE ONLY ON THE BASIS OF LETTER RECEIVED FROM THE CIT(A)-13 NEW DELHI DATED 22.03.2012 WHO INFOR MED THAT ADDITIONS HAVE BEEN MADE IN THE HANDS OF BUYERS FOR THE PROPERTY I N QUESTION BY THE ACIT CC- 19 NEW DELHI. BUT THE ASSESSING OFFICER IN THE PRES ENT ASSESSEES CASE SOLELY 19 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 RELIED ON THE ADDITIONS MADE BY THE ACIT CC-19 AND NOT GIVEN ANY SEPARATE REASONS OF SATISFACTION. THUS THE ASSESSING OFFICE R FAILED TO GIVE INDEPENDENT FINDINGS. THE LD. AR RELIED UPON THE DECISION OF TH E HONBLE DELHI HIGH COURT IN THE CASE OF SARTHAK SECURITIES CO. (P.) LTD. VS. IT O (2010) 329 ITR 110 IS APT IN THE PRESENT CASE. THE REOPENING OF A CASE U/S 148 I S NOT PERMISSIBLE ON BORROWED SATISFACTION OF ANOTHER OFFICER. THE PRE-R EQUISITE CONDITION REQUIRED FOR THE ASSESSING OFFICER IS TO GIVE HIS OWN FINDIN GS FOR REOPENING THE CASE IN HAND AND NOT TO RELY UPON THE FINDINGS GIVEN BY ANY OTHER OFFICER. THE RELIANCE OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CALCUTTA DISCOUNT CO. LTD. (1961) 41 ITR 191 (SC) REGARDING THE PHRAS E REASON TO BELIEVE HAS TO BE TAKEN INTO ACCOUNT. IN THE INSTANT CASE THE REA SONS RECORDED BY THE ASSESSING OFFICER ARE SIMPLY BASED UPON THE INFORMA TION PASSED ON BY THE CIT(A)13 AND THE ADDITION MADE BY THE RESPECTIVE J URISDICTIONAL OFFICER IN THE HANDS OF THE BUYER. THE ASSESSING OFFICER IN THE CA SE OF ASSESSEE SIMPLY RELIED ON THE SEIZED DOCUMENT RELIED UPON BY THE ASSESSING OFFICER OF THE BUYERS AND REOPENED THE CASE WHICH IS EVIDENT FROM THE ADDITIO NS THAT HAVE BEEN MADE BY THE ASSESSING OFFICER WITHOUT GIVING ANY SPECIFIC F INDING TO THE CASE AND PASSING A PROTECTIVE ORDER BASED ON THE ADDITIONS M ADE BY THE ASSESSING OFFICER AT CC-19. IN ABSENCE OF ANY SPECIFIC FINDIN G OF THE ASSESSING OFFICER THE REASONS FOR REOPENING RECORDED BY THE ASSESSEE IS M ECHANICAL IN NATURE AND THUS THE REOPENING ITSELF IS BAD IN LAW. THE LD. AR POINTED OUT THE DISTINGUISHING FACTS OF THE DECISION OF HONBLE APE X COURT IN THE CASE OF HOME FINDERS HOUSING LTD. V. ITO [2018] 94 TAXMANN.COM 8 4 (SC)(SUPRA) AND IS NOT APPLICABLE ON THE ASSESSEE. AS IN THE PRESENT ASSES SEE HAS FILED THE OBJECTIONS AGAINST REASONS FOR REOPENING VIDE ITS LETTER DATED 05.03.2013 BUT THE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 147 / 143(3) OF THE ACT VIDE ORDER DATED 20.03.2013 WITHOUT DISPOSING OFF THE OB JECTIONS FILED BY THE ASSESSEE. THUS IT IS A BINDING PROVISION BY THE LA W AND THE ASSESSING OFFICER CANNOT OVERLOOK THE SAME. THUS THERE IS INHERENT D EFECT IN THE ORDER WHICH MAKES THE ORDER INVALID AND VOID. THEREFORE IN VIE W TO THIS THE DECISION OF 20 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 HONBLE APEX COURT IS NOT APPLICABLE TO THE ASSESSE E AND THE ASSESSEE IS STILL GUARDED BY THE LEGISLATION LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. FURTHER THE ASSESSING OFFICER RECEIVED THE INFORMATION IN RESPECT OF THE VALUATION REPORT FROM THE CIT(A)-13 BEFORE WHOM THE APPEAL OF THE PURCHASER WAS PENDING FOR ADJUDIC ATION. THE CIT(A)-13 WHO PASSED THE INFORMATION TO THE ASSESSING OFFICER WH ILE ADJUDICATING THE MATTER IN CASE OF BUYER OF PROPERTY GRANTED SUBSTANTIAL RE LIEF TO THE BUYER AND HELD THAT THE VALUATION REPORT OF THE VALUER CANNOT BE TAKEN AS YARDSTICK FOR UNACCOUNTED INVESTMENT. HENCE THE BASIS FOR REOPE NING THE CASE I.E. THE COPY OF VALUATION REPORT WAS HELD TO BE INVALID FO R THE PURPOSE OF MAKING ANY ADDITION IN THE HANDS OF THE BUYER BY THE CIT(A) AN D HENCE THE REASONS TO BELIEVE CEASED TO EXIST IN CASE OF THE ASSESSEE. TH US ON THIS ASPECT ALSO THE ASSESSMENT BECOMES VOID-AB-INITIO. AS REGARDS TO GR OUND NO. 3 OF THE CROSS OBJECTIONS THE CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAD REFERRED THE PROPERTY FOR VALUATION TO THE DVO DURING THE PENDEN CY OF RE-ASSESSMENT PROCEEDINGS. HOWEVER THE SAID REPORT OF THE DVO WA S RECEIVED ON 08.07.2013 I.E. AFTER THE COMPLETION OF THE ASSESSMENT PROCEED INGS. THE DVO IN ITS REPORT VALUED THE PROPERTY AT RS. 1 71 05 985/- AND THUS THE SHARE OF THE ASSESSEE WAS CALCULATED AND COMES TO RS. 85 52 993/-. THE CI T(A) ON THE BASIS OF THE SAID REPORT OF THE DVO RESTRICTED THE TOTAL CONSIDE RATION FOR COMPUTING THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE TO RS. 8 5 52 993/- AS AGAINST RS. 77 50 000/- DECLARED BY THE ASSESSEE. THUS ADDITIO N TO THE EXTENT OF RS. 8 02 993/- WAS CONFIRMED. THE LD. AR RELIED UPON TH E DECISION OF CIT VS. N. SOWBHAGMULL MAHAVIRCHAND (1983) 142 ITR 747 (MAD). THE CIT(A)-13 HAS HELD THAT THE VALUATION REPORT OBTAINED FOR THE PURPOSE OF RAISING BANK LOAN CANNOT BE TAKEN AS YARDSTICK FOR UNACCOUNTED INVESTMENTS. HENCE WHERE THE BASIS FOR MAKING THE ADDITION IN THE HANDS OF THE BUYER HAS B EEN HELD AS INADMISSIBLE AND UNSUSTAINABLE THE ADDITION MADE IN THE HANDS O F THE ASSESSEE HUF SOLELY RELYING ON THE ADDITIONS IN THE HANDS OF THE BUYER DOES NOT SUSTAIN AND THE SAME HAS TO BE DELETED PARTICULARLY IN VIEW OF TH E FACT THAT THE SAID VALUATION 21 ITA. 2724 /DEL/2015 AND C.O. 456/DEL/2015 REPORT HAS NOT BEEN FOUND FROM THE POSSESSION OF TH E ASSESSEE. BESIDES THIS THE REPORT OF THE VALUATION OFFICER FOUND DURING SE ARCH DOES NOT SPECIFICALLY SET OUT THAT DIFFERENTIAL AMOUNT HAS BEEN RECEIVED BY T HE ASSESSEE. THUS IT CAN BE CLEARLY ESTABLISHED THAT THE ADDITION MADE ON THE B ASIS OF VALUATION REPORT DOES NOT SUSTAIN AND DESERVED TO BE DELETED. THEREFORE WE ARE ALLOWING THE CROSS OBJECTIONS OF THE ASSESSEE. 10. SINCE WE HAVE ALLOWED THE ADDITIONAL GROUNDS OF THE CROSS OBJECTIONS AND HELD THAT THE ASSESSMENT ITSELF IS NULL AND VOID T HE APPEAL OF THE REVENUE WHICH IS ON THE MERIT OF THE ADDITION DOES NOT SUST AIN. HENCE APPEAL OF THE REVENUE IS DISMISSED. 11. IN RESULT APPEAL OF THE REVENUE IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF MAY 2021 SD/- SD/- ( N. K. BILLAIYA ) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED : 18/05/2021 *MEHTA*