SAI SHRADDHA ENTERPRISES,MUMBAI vs. ACIT CC-3, THANE

These are the four appeals filed by Sai Shraddha Enterprises (the assessee/ appellant) for A.Y. 2011-12 to 2014-15 against the assessment order passed under Section 143(3) read with section

Similar orders were passed for other three assessment years which are also under challenge.

In all these appeals, the assessee has raised an additional ground of appeal common to all four assessment years. The additional ground is as under:-

The learned Authorized Representative reiterated on the same facts and arguments.

We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that in the above ground, the assessee has challenged jurisdiction under which the assessment order should have been passed. The ground raised by the assessee is legal in nature, goes to the root of the matters, jurisdictional in nature and does not require any further investigation of facts. Therefore, same is admitted for all the four years.

We first state the facts of the case for A.Y. 2011-12, which is the first year. The assessee is a partnership firm engaged in the business of builders and developers. A search was carried out under Section 132 of the Act and survey under Section 133A of the Act was also carried out on 31st July, 2014 in Ameya Group of cases. The survey under Section 133A of the Act was carried out and documents were impounded showing cash transactions belonging to the assessee. On perusal of such impounded documents at premises of 1st Floor, Narsinh Smruti Building, Gaothan, Virar (W), Mumbai, it was seen that some of the papers belong to the assessee and having a bearing on the determination of total income of the assessee. The relevant assessment years were 2011-12 to 2014-15. Accordingly, after recording the satisfaction note a notice under Section 153C of the Act was issued on 30th September, 2015 by A.Y. 2009-10 to 2014-15. The assessee was also provided the copies of the statements recorded on 23rd March, 2015. The assessee filed return of income under Section 153C of the Act for all the years on 10th November, 2015 at ₹ nil. Subsequently, notice under Section 143(2) of the Act was also issued and further notice

The learned Assessing Officer found that assessee has incurred cash expenditure which are recorded in the books of account of the assessee amounting to ₹7,11,07,000/- for A.Y. 2011-12, ₹77,75,000/- for A.Y. 2012-13, ₹1,38,87,500/- for A.Y. 2013-14 and ₹92,99,900/- for A.Y. 2014-15. Accordingly, the addition under Section 69C of the Act of ₹7,11,07,000/- was made for A.Y. 2011-12 and consequently, assessment order under Section 143(3) read with section 153C of the Act was passed on 15th September, 2016, determining the total income of the assessee at ₹ 7,11,07,000/-

Assessee challenged the assessment order before the learned CIT (A), Pune-11, and [the learned CIT (A)]. The assessee argued the additions on the merits of the case, which was confirmed by the learned CIT (A). The learned CIT (A) passed a consolidated order for A.Y. 2011-12 to 2014-15 confirming the additions on the merits of the case. Therefore, now assessee is in appeal before us.

On the additional ground, the learned Authorized Representative submitted that the alleged incriminating evidence on which the addition is made were not seized in the case of search action under Section 132 of the Act, but these are the documents impounded during the survey under Section 133A of the Act and therefore, all these four assessment orders passed under Section 143(3) read with section 153C of the Act are not valid. The

The learned Departmental Representative vehemently supported the order of the learned Assessing Officer and submitted that when the search and survey actions were carried out on 31st July, 2011 simultaneously, all the documents whether found during the course of survey or during the search, on the same day authorizes the learned Assessing Officer to pass an assessment order under Section 153C of the Act. He specifically referred to the factual report of the learned Assessing Officer dated 27th October, 2022.

We have carefully considered the rival contentions and perused the orders of the lower authorities. The fact clearly shows that a search under Section 132(1) as well as survey under Section 133A of the Income-tax Act, 1961 (the Act) was carried out at various premises of Ameya Group, Virar, Mumbai. During the course of survey under Section 133A of the Act at ground and 1st floor, Narsinh Smruti Building, Gaothan, Virar (W), Mumbai on 31st July, 2014, the documents were impounded as bundle no. 2 of party A-29. Based on this material, the addition under Section 69C of the Act is made in the hands of the assessee by invoking the provisions of section 153C of the Act. On careful reading of the assessment orders at page no.1 and 2 in Para no.1 and at page no.4 in Para no.7.1, the learned Assessing Officer

In view of this, the assessment order passed under Section 153C of the Act for A.Y. 2011-12 to 2014-15 are not sustainable. Therefore, same are quashed.

Additional ground raised by the assessee for all the four years are allowed.

In view of above, our finding, the additions on the merits are not required to be adjudicated.

In the result, all the four appeals of assessee are allowed.