YASHDA ASSOCIATES,PUNE vs. DCIT, C.C-2(3), PUNE, PUNE

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ITSSA 21/PUN/2025Status: DisposedITAT Pune24 September 2025AY 2011-126 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the additional grounds of appeal raised by the assessee. It noted that the satisfaction note was recorded on April 26, 2018. Following the Supreme Court's decision in PCIT vs. Shalimar Town Planners (P.) Ltd. ([2024] 161 taxmann.com 306 (SC)), which held that notices under section 153C are valid for a period of six years from the end of the financial year preceding the date on which satisfaction was recorded, the Tribunal found that Assessment Year 2011-12 falls beyond this six-year period. Consequently, the notice issued under section 153C and the consequential assessment order were held to be bad in law. The Tribunal did not need to decide on the merits of the additions made under section 69C as the assessment itself was quashed on procedural grounds.

What were the facts?

The assessee, Yashda Associates, filed an appeal against the order of the CIT(A), Pune-12, for Assessment Year (AY) 2011-12. This order stemmed from an assessment under section 153C read with section 143(3) of the Income Tax Act, 1961, passed on December 28, 2018. The dispute revolves around additions made to the assessee's income. The assessee's primary contention is that the notice under section 153C, issued on April 26, 2018, was invalid for AY 2011-12 due to time bar. The revenue, represented by the CIT(DR), conceded that AY 2011-12 falls outside the prescribed time limit based on the date of the satisfaction note.

What were the issues?

1. Whether the applicability of section 153C to the present case is valid and the assessment order is not null and void, considering the date of the satisfaction note and the assessment year in question? 2. Whether the additions of Rs. 1,55,87,500/- and Rs. 10,90,000/- under section 69C are warranted when the seized documents relate to land purchases by third parties and not the appellant, who acted only as a broker? Assessee's Contentions: - The satisfaction note was dated April 26, 2018. As per the first proviso to section 153C and the Supreme Court's decision in PCIT vs. Shalimar Town Planners P. Ltd. and CIT vs. Jasjit Singh, the period of six years should be calculated from the end of the financial year preceding the date of satisfaction. Therefore, AY 2011-12 is outside this time limit, rendering the notice and assessment order null and void. - The seized documents pertain to land purchases by respective vendors, not the appellant. The appellant was merely a broker for selling plots. - Cash payments for land purchases were made out of advances received on sale of plots, thus explaining the source of funds. - The partner, Shri Abhale, clarified that the data was obtained from a landowner, and the appellant was a broker. - Purchase deeds show the appellant was not a party to the land purchases. - The partner's statement under section 132(4) did not clearly admit the alleged payments as the firm's income. - Documentary evidence (purchase deeds) outweighs oral statements. - A common satisfaction note for multiple AYs (2011-12 to 2016-17) is invalid. Revenue's Contentions: - The Revenue accepted that AY 2011-12 is beyond the six-year period calculated from the date of the satisfaction note and that the case is covered in favor of the assessee by the Supreme Court's decision.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3),Section 69C,Section 153A,Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE

Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Nikhil Pathak
For Respondent: Shri Amit Bobde - CIT(DR)
Hearing: 10/09/2025Pronounced: 24/09/2025

आयकर अपीलीय अधिकरण ”बी” न्यायपीठ पुणेमें। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपऩल सं. / IT(SS)A No.21/PUN/2025 निर्धारण वषा / Assessment Year: 2011-12 Yashda Associates, V The DCIT, Shop No.2, Plot No.72, Omkar s Central Circle-2(3), Pune. Apartment, Tapodham Colony, Talegaon Station, Tal-Maval, Pune – 410506. PAN: AAAFY9542M Appellant/ Assessee Respondent / Revenue Assessee by Shri Nikhil Pathak Revenue by Shri Amit Bobde - CIT(DR) Date of hearing 10/09/2025 Date of pronouncement 24/09/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeal), Pune-12 passed under section 250 of the Income Tax Act, 1961 dated 09.07.2025 for the A.Y.2011-12 emanating from the Assessment Order under section 153C r.w.s 143(3) of the Income Tax Act, 1961, dated 28.12.2018. The Assessee has raised the following grounds of appeal :

IT(SS)A No.21/PUN/2025 [A] “11 The learned CIT(A) erred in holding that applicability of section 153C to the present case is valid and the asst. order is not null and void. 2] The learned CIT(A) failed to appreciate that the seized documents were relating to payments for purchases of lands and as the appellant was not a purchaser of lands and seller of plots but only a broker for selling the plots, the consideration for land purchases pertained to the respective vendors and not the appellant and hence, section 153C is incorrectly invoked in this case. 3] The learned CIT(A) erred in confirming the additions of Rs. 1,55,87,500/-and of Rs. 10,90,000/- u/s 69C on the ground that these cash payments as per seized records were relating to the purchases of lands by the appellant firm when as per the registered documents these lands were not purchased by the appellant but by different persons. 4] The learned CIT(A) erred in confirming the above additions of cash payments for purchases of lands u/s 69C in the hands of the appellant by giving following wrong reasons a. The appellant has not proved that the unaccounted cash payments for purchases of lands as per seized documents were made by the third parties. b. The purchase and sale deeds submitted by the appellant do not prove that the purchase and sale transactions were made by third parties and not by the appellant. 5] The learned CIT(A) failed to appreciate that - a. The seized documents indicated cash receipts on sale of plots out of which the cash payments for land purchases were noted and hence, there was no question of treating the cash payments for land purchases as unexplained and thus, the above additions u/s 69C are not warranted. b In the statement, Shri Abhale, Partner had clarified that the payments for purchases of lands were made out of advances received on sale of plots and thus, the additions u's 69C are not warranted. 61 The learned CIT(A) was not justified in holding that - a. The records found on the computer pertained to the purchases of lands by the appellant and the cash components therein constituted unexplained expenditure u/s 69C. 2

IT(SS)A No.21/PUN/2025 [A] b. The purchase and sale documents of lands and plots submitted by the appellant as evidences in appeal proceedings do not negate the contents of the seized records and the admission made by the appellant during search. C The fact that the appellant was only a confirming party in the sale transactions as a broker is not material when the cash payment notings for purchase of lands were found in the possession of the partner of the firm and they contained specific transanctional data. 71 The learned CIT(A) failed to appreciate that - a. The lands were not purchased by the appellant and therefore, it cannot be held that the appellant has made the cash payments simply because the notings were found during the search on the appellant's partner. b. The payments for purchase of these lands were made by the respective purchasers and not by the appellant as per the purchase deeds. c. Shri Abhale, partner of the appellant firm had explained that he had obtained this data from Shri Gunjal, one of the land owners and the appellant was a broker for selling the plots and therefore, the data was kept in his computer. d. As per the purchase deeds, the appellant was not a party to the purchases of the lands and therefore, the question of the appellant making such payments to the earlier land owners did not arise at all. e. In the statement of Shri Abhale u/s 132(4) he does not admit clearly that the alleged payments for purchases of lands constitute income of the appellant firm. f. Without prejudice, the documentary evidence in the form of purchase deeds clearly outweigh the oral statement. g. As per the seized papers and the statement of Shri Abhale, cash payments for purchases of lands were made out of the advances received on sale of plots and thus, the sources of cash payments were explained and hence, the additions u/s 69C are not justified. 8] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”

IT(SS)A No.21/PUN/2025 [A] 1.1 Additional Grounds of appeal raised by the Assessee are as under :

“1] The assessee submits that in this case, the satisfaction note is dated 26.04.2018 and accordingly, as per the provisions of the first proviso to section 153C, the date of search shall be construed as date of handing over of the books of accounts or documents which in this case is 26.04.2018 and hence, no notice u/s 153C could be issued by the learned A.O. for the year under consideration and accordingly, the asst. order passed u/s 153A r.w.s. 153C be declared null and void.

2] The assessee further submits that in this case, there is a common satisfaction note recorded u/s 153C for A.Ys. 2011-12 to 2016-17 which is invalid in law and therefore, the notice issued u/s 153C is bad in law and the asst. order passed u/s 153A r.w.s. 153C be declared null and void.”

Findings and Analysis : 2. We have heard both the parties and perused the records. In this case, Assessment Order was passed u/s.153C r.w.s 143(3) of the Act, for A.Y.2011-12 on 28.12.2018. The notice u/s.153C was issued on 26.04.2018.

3.

Ld.AR filed a paper book. Ld.AR invited our attention to copy of the satisfaction note recorded by Dy.Commissioner of Income Tax, Central Circle-2(3), Pune dated 26.04.2018. Ld.AR further submitted that since the satisfaction note was recorded on 4

IT(SS)A No.21/PUN/2025 [A] 26.04.2018, as per the Hon’ble Supreme Court in the case of PCIT Vs. Shalimar Town Planners P. Ltd., and CIT Vs. Jasjit Singh [2023] 155 taxmann.com 155(SC), the period of six years is to be calculated from the end of the financial year preceding the date on which satisfaction was recorded. In this case, satisfaction was recorded on 26.04.2018. Ld.AR further submitted that A.Y.2011-12 is outside the time limit of six(06) years.

4.

Ld.DR for the Revenue accepted the fact that Assessment Year 2011-12 is beyond the period of six(06) years when calculated from the date of satisfaction note. Ld.DR also accepted that the case is covered in favour of assessee by the Hon’ble Supreme Court Decision(supra).

4.1 Thus, in this case, admittedly satisfaction was recorded on 26.04.2018.

5.

The Hon’ble Supreme Court in the decision of PCIT Vs. Shalimar Town Planners(P.) Ltd., [2024] 161 taxmann.com 306(SC) vide order dated 21.03.2024 has held as under : Quote“3. Accordingly, notices under section 153C of the Income-tax Act, 1961 will be valid for a period of six years from the end of the 5

IT(SS)A No.21/PUN/2025 [A] financial year preceding the date on which the satisfaction was recorded.

4.

The appeals are disposed of in the above terms.”Unquote

5.1 Respectfully following the Hon’ble Supreme Court, it is held that Assessment Year 2011-12 is beyond the time period of six(06) years. Therefore, the notice u/s.153C and consequential order is bad in law. Accordingly, the additional grounds raised by the assessee are allowed.

6.

In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 24 September, 2025.

Sd/- Sd/- VINAY BHAMORE Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पपणे / Pune; ददिधंक / Dated : 24 Sep, 2025/ SGR आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : अपऩलधर्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. नवभधगऩयप्रनिनिनर्, आयकर अपऩलऩय अनर्करण, “बऩ” बेंच, पपणे / DR, 5. ITAT, “B” Bench, Pune. गधर्ाफ़धइल / Guard File. 6. आदेशधिपसधर / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपऩलऩय अनर्करण, पपणे/ITAT, Pune. 6

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