YOGESH SUNDERJI KARIA,PUNE vs. DCIT, C.C-2(4), PUNE,, PUNE

First, we take up IT(SS)A No.22/PUN/2025 for assessment year 2008-09 as the lead case.

Facts of the case, in brief, are that the assessee is an individual and engaged in real estate business. He filed his return of income on 31.03.2010 declaring total

Subsequently, a search and seizure action u/s 132 of the Act was conducted in the case of the assessee on 26.02.2014 which was concluded on 25.04.2014. During the course of search operation cash amounting to Rs.5,41,900/- was found out of which cash amounting to Rs.4,00,000/- was seized. Similarly, jewellery valued at Rs.7,19,44,480/- was found out of which no Jewellery was seized. A notice u/s 153A of the Act dated 22.01.2016 was issued and served on the assessee calling for the return of income within 15 days of the service of notice in response to which, the assessee filed his return of income on 04.03.2016 declaring total income of Rs.1,29,88,870/-. Thereafter, statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee in response to which the assessee filed certain details.

During the course of assessment proceedings the Assessing Officer on examination of the books of account observed that the assessee had received an amount of Rs.33,49,67,018/ from M/s. Sobha Developers Ltd. towards sale of land at Wagholi during the financial years 2007-08 and 2008-09. He observed that this land was purchased by the assessee from M/s. Jatin Real Estate Developers Pvt. Ltd. for a consideration of Rs.8,75,00,000/-. However, as per books of account the assessee has also debited certain compensation against the proceeds receivable from M/s. Sobha Developers Ltd. for calculating the capital gain, the particulars of which are as under: Name of the Party Amount in Rs. Dhanraj Chaganlul & Co. 7,51,00,000 Premium Paper and Board Industries Ltd. 7,00,00,000 Crimson Infratech 7,00,00,000 Total 21,51,00,000

He observed that statement of the assessee was recorded u/s 131 on 10.06.2014 and from the answers given by the assessee it was clear that the assessee was not even fully aware of the two parties for which Rs.7 crore was paid to each of them. Further, these stakes were created orally through some commitments given by the assessee and for which no documentary proof was produced to justify the claim. He noted that during the course of post search proceedings the Investigation Wing has conducted inquiry in respect of the above parties according to which no such persons were found at the location of Premium Paper and Board Industries Ltd. Further, Crimson Infratech is a Kolkata based company and no person could be traced at the given location or address. He,

The assessee submitted that the payments have been made towards compensation for getting clear title of the property which were initially sought to be sold to these parties. The assessee submitted two Memorandum of Understandings i.e. one dated 19.06.2007 with Premium Paper and Board Industries Limited and another dated 19.06.2007 with Dhanraj Chhaganlal & Company.

However, the Assessing Officer was not satisfied with the above arguments made by the assessee. He noted that a cheque of Rs.1 crore was issued by the above parties but not deposited by the assessee and refused to accept the same. On perusal of the MoU he noted that both the parties had made payment of Rs.2 lakh and Rs.1 lakh respectively, however, the same were not reflected in the bank statements for the relevant period. The Assessing Officer referred to the statement of the assessee recorded u/s 131 on 10.06.2014 where the assessee in response to question Nos.3 and 11 has stated as under:

He noted that suddenly during the last stage of assessment proceedings the assessee submitted the MOU, reconciliation agreements, press releases, correspondence etc. He noted that the press releases are in respect of sale to M/s. Shobha Developers and has no bearing on any of the above parties. Further, even without the above parties being in picture, the press release would be required for sale to M/s. Shobha Developers. According to the Assessing Officer correspondence, MOU and reconciliation documents are all fabricated and an afterthought. Further, the copy of return of income and financial statements of M/s. Dhanraj Chhaganlal & Co. filed by the assessee shows that the assessee has filed the financial statement for assessment year 2009-10 and some extracts from ROC website but has not filed the return of income of the said party. The Assessing Officer therefore held that the assessee has failed to discharge his onus of proving the existence of the said parties. In view of the above the Assessing Officer held that the compensation paid to the above two parties is not genuine. He, therefore, disallowed the same from the capital gain offered by the assessee.

Similarly the Assessing Officer noted that during the course of search and post search enquiries certain glaring discrepancies were found in the books of account. He noted that the assessee is depositing huge cash in his bank account but the source of the same is not known and in the books of account of the assessee for years there exists negative cash balance. He, therefore, asked the assessee to explain as to why the same should not be added to the income of the assessee and asked the assessee to give the manner in which the peak is arrived. Although the

Before the Ld. CIT(A) the assessee, apart from challenging the addition on merit, challenged the validity of the assessment completed u/s 153A of the Act in absence of any incriminating material. It was argued that for the year under consideration the assessee had claimed deduction of only Rs.5,22,47,308/- out of total compensation paid of Rs.21,51,00,000/- and therefore, the Assessing Officer was not justified in disallowing the entire amount of compensation paid of Rs.21,51,00,000/-. Similarly the assessee has received Rs.33,49,67,018/- from M/s. Sobha Developers Ltd. in two financial years 2007-08 and 2008-09 relevant to assessment years 2008-09 and 2009-10. Although the Assessing Officer has

However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee. So far as the argument that no incriminating material was found, therefore, no addition could be made is concerned, the Ld. CIT(A) rejected the same on the ground that non-genuine payment of commission was raised during the course of search and enquiries conducted by the Investigation Wing revealed that the above two parties were not traceable at their declared address, therefore, the addition is clearly based on incriminating material and findings of the search team.

Similarly the disallowance of compensation of Rs.21,51,00,000/- was also upheld by the Ld. CIT(A) on the ground that the assessee failed to discharge the basic onus of proving the genuineness of these compensation and no independent evidence was produced and the documents produced by the assessee are nothing but self-serving documents. The relevant observations of the Ld. CIT(A) while sustaining the disallowance of Rs.21.50 crore and upholding the 153A assessment in absence of any incriminating material found from para 9.3 to 9.8 read as under:

Similarly he also upheld the addition of Rs.76,55,000/- on account of unexplained cash deposit in the bank account by observing as under:

Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds: The following grounds are taken without prejudice to each other - On facts and in law, 1] The assessee submits that the approval granted by the learned Addl. CIT u/s 153D is in a mechanical manner without proper application of mind and accordingly, the assessment order passed in consonance of the said approval is bad in law and the same may be declared null and void. 2] The assessee submits that the approval granted by the ld. Addl CIT u/s. 153D is not in accordance with the requirements of the said section and hence, as the approval granted is invalid in law, the assessment order passed in consonance of the said approval be declared null and void. 3] The learned CIT(A) erred in confirming the addition of Rs.21,51,00,000/- made by the learned A.O. in respect of compensation paid to three parties namely, Dhanraj Chaganlal & Co., Premium Paper and Board Industries Ltd and Crimson Infratech while computing the capital gain on sale of land without appreciating that no incriminating evidence was found as a result of search in respect of the said issue and accordingly, по disallowance could be made on this issue in the asst. completed u/s 153A of the Act. 4] The learned CIT(A) erred in rejecting the contention of the appellant that no incriminating evidence was found pertaining to the issue of compensation paid of Rs.21,51,00,000/- by holding that the issue of non genuine payment of compensation was raised during the course of search action and hence, the addition was rightly made in the asst. completed u/s 153A. 5] The ld. CIT(A) failed to appreciate that no incriminating evidence was found in the course of search relating to the issue of payment of compensation of Rs.21,51,00,000/- by the assessee and hence, the ld. A.O. was not justified in making the said addition in the assessment completed u/s. 153A and thus, the said addition made ought to have been deleted. 6] The learned CIT(A) erred in holding that the appellant had failed to discharge the onus of proving the genuineness of the compensation paid amounting to Rs.21,51,00,000/- and therefore, the addition was rightly made by the learned A.O. 7] The learned CIT(A) failed to appreciate that the compensation paid of Rs.21,51,00,000/- to the above three parties was genuine and there was no reason to disallow the same while computing the capital gain in the hands of the assessee.

The Ld. Counsel for the assessee submitted that the grounds of appeal No.1 and 2 are additional grounds and they are purely legal in nature which go to the root of the matter and all necessary facts are already available on record. Referring

The Ld. DR on the other hand strongly objected to the admission of the additional grounds raised by the assessee.

After hearing both the sides and considering the fact that the additional grounds raised by the assessee are purely legal in nature and all the material facts necessary for adjudication of the issue are already available on record and no new facts are required to be investigated, therefore, in view of the decision of Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (supra) and in the case of Jute Corporation Of India Ltd vs Commissioner Of Income Tax And Anr (supra), the additional grounds raised by the assessee are admitted for adjudication.

So far as the above grounds of appeal No.1 and 2 are concerned, the assessee has challenged the validity of approval given u/s 153D of the Act in a mechanical manner and without application of mind.

The Ld. Counsel for the assessee referring to page 2 of the paper book drew the attention of the Bench to the letter dated 30.03.2016 forwarded by the DCIT to the JCIT according to which he has sent the draft assessment orders in the case of

Referring to the decision of Hon’ble Allahabad High Court in the case of PCIT vs. Sapna Gupta reported in (2023) 147 taxmann.com 288 (Allahabad), copy of which is placed at pages 140 to 145 of the paper book, he submitted that the Hon’ble High Court in the said decision has held that as per provisions of section 153A(1) and 153D of the Act, the Assessing Officer has to obtain the approval with respect to each assessment year. Since the JCIT in the instant case has granted one common approval for all the years which is not in accordance with the provisions of section 153D of the Act, therefore, such approval is bad in law.

Referring to the decision of the Third Member of the Delhi Bench of the Tribunal in the case of Dheeraj Chaudhary vs. ACIT reported in (2025) 178 taxmann.com 360 (Delhi-Trib.), copy of which is placed at pages 7 to 39 of the paper book, he submitted that the Ld. Third Member at paras 8 and 9 of the order has held that the approval has been granted for all the six years vide one approval and hence the same is bad in law. Since in the instant case the JCIT has given a common approval for all the seven years, therefore, the same being not in accordance with the provisions of the Act, such approval granted should be

In his next plank of argument, the Ld. Counsel for the assessee submitted that the approval has been given in a mechanical manner and without proper application of mind.

Referring to the copy of assessment order for assessment year 2008-09, the Ld. Counsel for the assessee drew the attention of the Bench to para 4 of the order where the Assessing Officer has categorically mentioned that “the assessee had received an amount of Rs.33,49,67,018/- from M/s. Sobha Developers Ltd. towards sale of land at Wagholi during financial year 2007-08 and financial year 2008- 09”.

Referring to the copy of return filed for assessment year 2008-09, copy of which is placed at pages 231 to 235 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to page 233 and submitted that the assessee has sold the land at Wagholi for a consideration of Rs.8,45,00,000/-. Referring to the copy of return filed for assessment year 2009-10, copy of which is placed at pages 236 to 239 of the paper book, he drew the attention of the Bench to page 237 and submitted that the assessee in the said computation has declared the sale of land in 2 parts i.e. one land at Wagholi for Rs.4,21,42,025/- and another land at Wagholi at Rs.20,83,24,993/-. Thus, the assessee has sold the land in two assessment years.

Referring to the notice issued u/s 142(1) of the Act along with the questionnaire, copy of which is placed at pages 40 to 49 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to the question No.6 (page 46) wherein the Assessing Officer himself has mentioned that the assessee has received an amount of Rs.33,49,67,018/- from M/s. Sobha Developers Pvt. Ltd. towards the sale of land at Wagholi in financial year 2007-08 to financial year 2008-09. Thus, when the Assessing Officer in the assessment order has mentioned that the land has been sold in two years, in the questionnaire he has mentioned that the sale of land has been made in two years and the assessee in the returns for assessment years 2008-09 and 2009-10 has disclosed the sale of land in 2 years, however, the addition has been made on account of compensation paid by the assessee in one year i.e. assessment year 2008-09 only. He submitted that when the compensation paid of Rs.21.51 crore was claimed as deduction partly in assessment year 2008-09 and partly in assessment year 2009-10 on the basis of consideration received in the respective assessment years, the Assessing Officer could not have disallowed the same in only one assessment year i.e. assessment year 2008-09 and the JCIT without applying his mind has given his approval to such action of the Assessing Officer. Therefore, such approval given in a mechanical manner and without application of mind is liable to be quashed and the subsequent proceedings are also liable to be quashed.

The Ld. Counsel for the assessee further submitted that the Assessing Officer has also made addition on account of cash deposits in bank account which

Referring to the following decisions, copies of which are placed in the paper book, he submitted that where the approval granted u/s 153D of the Act is in a mechanical manner and without proper application of mind, such approval granted is invalid and hence the consequential assessment orders be declared as null and void: (i) PCIT vs. Anuj Bansal (2024) 165 taxmann.com 2 (Delhi) (ii) PCIT vs. Anuj Bansal (2024) 165 taxmann.com 3 (SC) (iii) Chitra Narendra Parma vs. ACIT and batch of appeals vide ITA Nos.1262 to 1272/PUN/2024, order dated 14.07.2025 for assessment years 2016-17 and 2017-18. (iv) PCIT vs. Sapna Gupta (2023) 147 taxmann.com 288 (Allahabad)

In grounds of appeal No.3 to 5 the assessee has challenged the order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.21,51,00,000/- made by the Assessing Officer in the order passed u/s 153A of the Act in absence of any incriminating material.

The Ld. Counsel for the assessee submitted that the assessee owned a land at Wagholi along with Shri Ishwar Goyal which was purchased from Jain Real Estate Developers Pvt. Ltd. for a total consideration of Rs.17.50 crores in the financial year 2007-08. Out of the said amount, the amount pertaining to the assessee was Rs.8.75 crore. This land was sold by the assessee and Shri Goyal to M/s. Sobha Developers Ltd which was held by the assessee as an investment. The assessee, while computing the gain on sale of the above referred land, claimed deduction on account of compensation paid to the following three parties:

He submitted that in the return furnished prior to search, the assessee has disclosed the gain on sale of the land as a short term capital gain. The Assessing Officer in the proceedings u/s 153A disallowed the entire compensation paid to the above three parties of Rs.21.51 crores. While doing so, he held that the assessee was not aware of the two parties namely Premier Paper and Industries and Crimson Infratech. He further stated that the investigation wing had carried out enquiries and it was found that no person could be traced at the location of the above two parties. He also referred to the statement of the assessee recorded u/s 131 on 10.06.2014 to substantiate his case. Further he rejected the documentary evidences submitted by the assessee holding that the transactions of payment of compensation were not genuine and he accordingly made addition of Rs.21,51,00,000/-.

The Ld. Counsel for the assessee submitted that the assessee for the impugned assessment year had filed the return of income prior to the search action. Further, the assessment u/s 153C was also completed for this year. Now, in the order passed u/s 153A after the search action, the Assessing Officer disallowed the compensation paid by the assessee to the three parties although no incriminating evidence was found in the course of search to indicate that the compensation paid

The Ld. Counsel for the assessee submitted that the Ld. CIT(A) / NFAC while dismissing the ground challenging the validity of addition in absence of incriminating material has held that during the course of search enquiries were conducted by the Investigation Wing which revealed that the two entities were not traceable at their declared addresses and therefore, the addition is based on the incriminating material and findings of the search action. The Ld. Counsel for the assessee submitted that the action of the Ld. CIT(A) / NFAC is not justified in holding that the addition is based on the basis of incriminating material and findings of the search action. He submitted that the assessee was questioned for the first time in the statement recorded u/s 131 on 10.06.2014 which was after the conclusion of the search action. Therefore, the finding of the Ld. CIT(A) / NFAC

Referring to the decision of Hon'ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. reported in (2023) 149 taxmann.com 399 (SC), he submitted that the Hon’ble Supreme Court in the said decision has held that in respect of completed assessments / unabated assessments, no addition can be made by the Assessing Officer in absence of any incriminating material found during the course of search u/s 132 or the requisition u/s 132A. He accordingly submitted that addition of Rs.21.51 crores cannot be made and should be deleted.

So far as the grounds of appeal No.10 to 12 are concerned, the same relates to the order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.76,55,000/- made by the Assessing Officer on account of unexplained cash deposit.

The Ld. Counsel for the assessee submitted that the said addition is also not justified in absence of any incriminating evidence found during the course of search. He submitted that the assessment for assessment year 2008-09 was completed. The bank account in respect of which the addition has been made was

He accordingly submitted that the assessment order should be treated as null and void due to mechanical approval by the JCIT u/s 153D of the Act. The order also is invalid in view of the common approval given by the JCIT. Even on merit

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case completed the assessment determining the total income of Rs.23,57,43,870/- as against the returned income of Rs.1,29,88,870/- by disallowing Rs.21.51 crores claimed by the assessee as deduction from capital gain being the compensation paid to 3 parties, the details of which are given at para 5 of this order. Similarly, he also made addition of Rs.76,55,000/- being unexplained cash deposit from undisclosed sources. We find the Ld. CIT(A) / NFAC upheld both the additions and dismissed the grounds challenging the addition made vide order u/s 153A of the Act in absence of any incriminating material, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the common and mechanical approval given u/s 153D of the Act by the JCIT is not in accordance with law. Further, in absence of any incriminating material, no addition could have been made in the order passed u/s 143(3) r.w.s. 153A of the Act.

We find some force in the above arguments of the Ld. Counsel for the assessee. A perusal of the assessment order shows that the Assessing Officer at para 4 of the order has mentioned that “the assessee had received an amount of Rs.33,49,67,018/- from M/s. Sobha Developers Ltd. towards sale of land at Wagholi during financial year 2007-08 and financial year 2008-09”. The relevant para of the order of the Assessing Officer reads as under:

Similarly, the Assessing Officer in the questionnaire sent along with notice u/s 142(1) of the Act has also mentioned in question No.16 as under:

Further, a perusal of the copy of computation filed along with the return of income for assessment year 2008-09, copy of which is placed at page 233 of the paper book shows that the assessee during the year under consideration has sold the land at Wagholi for Rs.8,45,00,000/- which has been given as under:

Similarly for assessment year 2009-10 the assessee has sold the land at Wagholi, the details of which are placed at page 237 of the paper book and which read as under:

Thus, when the assessee in the instant case has declared the sale of land in two assessment years, the Assessing Officer in the assessment order as well as in the questionnaire issued along with notice 142(1) of the Act also mentioned the sale of land in two years, however, the Assessing Officer disallowed the entire compensation in one year i.e. in assessment year 2008-09. We, therefore, find some force in the arguments of the Ld. Counsel for the assessee that the JCIT has given the approval in a mechanical manner without proper application of mind.

Further, a perusal of the order shows that the Assessing Officer made addition of cash deposit in bank account during assessment years 2008-09 to 2014- 15. For assessment year 2014-15, the Assessing Officer had made addition of Rs.6,73,69,100/- on account of cash deposit in the bank account. When the assessee during the course of appeal proceedings explained that the actual cash deposit for the said year was Rs.1,58,93,600/- and not Rs.6,73,69,100/- as considered by the Assessing Officer, the Ld. CIT(A) / NFAC called for a remand report from the Assessing Officer who accepted the above mistake and held that the actual cash deposited is Rs.1,58,93,600/-. The relevant observations of the Assessing Officer in the remand report read as under:

This also indicates that the addition on account of cash deposit has been made erroneously and the approval has been given in a mechanical manner without verifying the actual facts.

We further find for assessment years 2008-09, 2009-10 and 2014-15 the Assessing Officer added the entire cash deposits. However, for assessment years 2010-11 to 2013-14 the Assessing Officer made addition on the basis of negative peak balance as per tally data backup. Thereafter, in the remand report the Assessing Officer requested the Ld. CIT(A) / NFAC to enhance the addition for assessment years 2010-11 to 2013-14 by requesting to tax the entire amount of cash deposits. We, therefore, find merit in the argument of the Ld. Counsel for the assessee that the Assessing Officer was confused while making the assessment for which he requested the Ld. CIT(A) / NFAC for enhancement of income. It shows

We find the Hon’ble Delhi High Court in the case of PCIT vs. Anuj Bansal (supra) has held that where Addl. CIT granted approval under section 153D without noticing discrepancy in assessment order or search material, such a mechanical approval without application of mind would be invalid in eyes of law. The relevant observations of Hon’ble Delhi High Court read as under:

We find when the Revenue filed SLP against the order of Hon’ble High Court before the Hon’ble Supreme Court, the Hon’ble Supreme Court dismissed the SLP as reported in 165 taxmann.com 3 (SC).

We find the Hon’ble Orissa High Court in the case of ACIT vs. Serajuddin & Co. reported in (2023) 150 taxmann.com 146 (Orissa) has held that the requirement of proper approval of superior officer before an order of assessment or re-assessment is passed pursuant to search operation is a mandatory requirement of section 153D of the Act and that such approval is not meant to be given mechanically and while elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. The Hon’ble High Court further held that where assessment orders passed in cases of assessee were totally silent about the Assessing Officer having written to the Addl.CIT seeking his approval or of the Addl.CIT having granted such approval, the Tribunal was correct in holding that such approval was granted mechanically without application of mind by the Addl.CIT resulting in vitiating the orders themselves.

We find when the Revenue filed SLP against the order of Hon’ble Orissa High Court, the Hon’ble Supreme Court dismissed the SLP as reported in 163 taxmann.com 118 (SC).

We find the Delhi Bench of the Tribunal (Third Member) in the case of Dheeraj Chaudhary vs. ACIT (supra) has held that where the Additional Commissioner granted approval under section 153D mechanically, without application of mind and that too without assigning any reason, impugned approval was invalid and, thus, impugned assessment orders were vitiated and liable to be quashed. Since in the instant case the Ld. JCIT has granted approval under section 153D without noticing the discrepancy in assessment order or search material, therefore, such a mechanical approval without application of mind is invalid in eyes of law in view of the decisions cited (supra). Consequently, the order passed u/s 143(3) r.w.s. 153A of the Act is also liable to be quashed. We, therefore, quash the order passed u/s 143(3) r.w.s. 153A due to mechanical approval u/s 153D.

Even otherwise also, we find the JCIT has given a common approval u/s 153D of the Act for assessment years 2008-09 to 2014-15, copy of which is placed at page 1 of the paper book and which reads as under:

We find the provisions of section 153D of the Act read as under:

We, therefore, find merit in the arguments of the Ld. Counsel for the assessee that the approval u/s 153D of the Act has to be given separately for each assessment year and not on a combined basis for assessment years 2008-09 to 2014-15. However, in the instant case the JCIT has give one common approval for all the years which is not in accordance with the provisions of section 153D of the Act.

We find an identical issue had come up before the Hon’ble Allahabad High Court in the case of PCIT vs. Sapna Gupta (supra). The Hon’ble High Court at paras 19 and 20 of the order observed as under:

Further, we find the Delhi Bench of the Tribunal (Third Member) in the case of Dheeraj Chaudhary vs. ACIT (supra) has also held that where the Additional Commissioner has granted one approval for all the six years, such approval granted by the Addl. Commissioner is bad in law. The relevant observations of the Tribunal read as under:

In view of the above decisions cited (supra), we hold that the common approval given by the Ld. JCIT for 7 years instead of each assessment year is not

We further find that the assessee in the instant case has declared the capital gain on sale of land as short term capital gain. The Assessing Officer in the proceedings u/s 153A of the Act disallowed the entire compensation of Rs.21.51 crore paid to three parties. According to the Assessing Officer the assessee was not aware of the two parties namely Premier Paper Industries and Crimson Infratech. He has also stated that the Investigation Wing had carried out enquiries and it was found that no person could be traced at the location of the above two parties. Further, the Assessing Officer also referred to the statement of the assessee recorded on 10.06.2014 to substantiate his case. He also rejected the various evidences submitted by the assessee holding that these are afterthought and the transactions of payment of compensation were not genuine.

A perusal of the details furnished in the paper book shows that the assessee has filed his return prior to the search action. Further, the assessment u/s 153C was also completed for this year. We find the Assessing Officer in the order passed u/s 153A of the Act has disallowed the compensation paid by the assessee in absence of any incriminating evidence found during the course of search to indicate that the compensation paid by the assessee was not genuine. A perusal of the statement recorded u/s 132(4) of the Act, copy of which is placed at pages 18 to 35 of the paper book which was recorded on 26.02.2014 and on 27.02.2014 nowhere shows

Similarly, we find the addition of cash deposit in the bank account of Rs.76,55,000/- was also made on the basis of details furnished during the course of assessment proceedings and no incriminating material was found during the course of search. The Assessing Officer in the notice issued u/s 142(1) of the Act, copy of which is placed at pages 42 to 49 of the paper book, in question No.17 has asked the assessee regarding the cash deposits and peak negative balance in financial

There is no reference of assessment year 2008-09 in the said notice. Only when the assessee filed the copies of bank statements for assessment years 2008-09 to 2014-15 that the Assessing Officer taxed such cash deposits for the year under consideration. Therefore, we find merit in the argument of the Ld. Counsel for the assessee that in absence of any incriminating material found during the course of search, no addition could have been made on account of cash deposits in the bank account when the assessment was completed earlier u/s 153C of the Act.

We find the Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra) has held that in respect of completed assessments / unabated assessments, no addition can be made by the Assessing Officer in absence of any incriminating material found during the course of search u/s 132 or the requisition u/s 132A. The relevant observations of Hon’ble Supreme Court read as under:

Since the Assessing Officer in the instant case has disallowed the compensation of Rs.21.51 crores and made addition of Rs.76,55,000/- being cash deposits in the bank account in absence of any incriminating material found during the course of search, therefore, in view of the decision of Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra), no addition could have been made in the order passed u/s 143(3) r.w.s. 153A of the Act in a completed assessment.

In view of the above discussion, we conclude that the JCIT has given the approval mechanically without application of mind and that too in a common approval for all the six years. Therefore, such approval being not in accordance with law, the order passed u/s 143(3) r.w.s. 153A of the Act has to be quashed.

Identical grounds have been raised by the assessee in the remaining appeals. We have already decided the issue and allowed the grounds raised by the assessee in IT(SS)A No.22/PUN/2025. Following similar reasonings, we allow the grounds raised by the assessee in other appeals also.

In the result, all the seven appeals filed by the assessee are allowed.