SUNIL KUMAR AGARWAL,JAIPUR vs. ACIT, CEN. CIR-2, JAIPUR

In the result the appeal of the assessee in for assessment year 2016-17 stands partly allowed.

1. The Learned CIT(A) has erred confirming the action of the Learned Assessing Officer in framing the assessment u/s 153A/143(3) of the Income Tax Act, 1961 and addition to income made therein is void ab-initio and the assessment deserves to be quashed. The addition of Rs. 4,20,000/-made is not based on any incriminating document found/ seized during the course of search from the custody of the assessee or any other finding recorded by him on account of action u/s 132 of the Income Tax Act 1961. The learned AO has wrongly assumed the jurisdiction/has made additions without reference to any seized document/material.

2. Under the facts and circumstances of the case, the learned CIT(A) has erred in confirming the addition of Rs. 4,20,000/-made by the Learned AO on account of unexplained investment made for purchase of agricultural land in the & 519 to 521/JP/2025 Sunil Kumar Agarwal name of Shri Nanda Ram Meena.

3. The Appellant requests its right to add, amend or alter all or any of the grounds of appeal on or before hearing.

While conducting the assessment proceeding the ld. AO noted that in the course of Search & Survey operation at the residence of Shri Sunil Kumar Agarwal at Plot No.

1. These papers related to original sale deed made between Shri Nanda Ram Meena and Shri Hariom Meena as per which Shri Nanda Ram Meena purchased agricultural land situated at Vill- Beedpinarpura, Tehsil-Chaksu, Jaipur, Khasra No. 697 having area of 0.06 hectare from Shri Hari Om Meena. As per the registered deed, the DLC rate of the property was Rs. 4,20,000/-. During the course of search proceedings, Shri Vipul Narnoli submitted that Shri Nanda Ram Meena is working as peon in his office and this property was purchased by him.

Statement of Shri Nanda Ram Meena was also recorded on 30.06.2019 wherein he was confronted and asked to explain about the purchase of the said property. Shri Nanda Ram Meena categorically denied to have purchased any property from Shri Hariom Meena. He was also asked regarding the thumb impression on the relevant sale deed. He submitted that he is a literate person and puts his signature on the papers instead of signature was obtained. Thereafter, the statement of Shri Nanda Ram Meena was shown to Shri Vipul Namoli. He was asked as to why the property should not be considered as his benami property. Shri Vipul Narnoli submitted that the said property is not benami as it belongs to Shri Nanda Ram Meena though he might not be aware of the same. However, Shri Nanda Ram Meena subsequently claimed that he was asked to put thumb impression on some papers by Shri Anshul Agarwal. He has denied to have paid any consideration for purchase of property. In view of the statements recorded u/s 132(4) of the Income Tax Act, 1961, was clear that the agricultural land discussed above was a benami property of Shri Anshul Agarwal and he had purchased it in the name of Shri Nanda Ram Meena.

The entire consideration to the seller was paid in cash. Therefore, there was no evidence to establish that the investment was made by Shri Nanda Ram Meena. The original sale deed of the property was found from the premises of Shri Anshul Agarwal ie. Plot No. 5. Ahinsa Marg, Mahaveer Nagar, Jaipur. Had it been the property of Shri Nanda Ram Meena, why original papers relating to it would have been found from the custody of Shri Anshul Agarwal. Therefore, a reference has been sent to the Asst.

Commissioner of Income Tax (BPU), Jaipur by the office of DDIT (Inv.)-II, the assessment proceedings, vide order sheet entry dated 24.09.2021, the assessee was required to show cause why cash payment of Rs. 4,20,000 made by Shri Anshul Agarwal for purchase of the property in question should not be treated as his undisclosed income for the year. In response it was submitted that the above payment was made Sunil Agarwal out of withdrawals made for household purposes and accumulated earnings. The reply has been perused and found unacceptable as it is devoid of any evidence or supporting documents. The source of investment is unexplained. Accordingly, an amount of Rs. 4,20,000/- was added to the returned income of the assessee for A.Y 2015-16.

“Ground No. 1 5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

From the discussion above and from the perusal of the facts of the case it emerges that the document under question was in the name of Shri Nand Ram Meena for the purchase of land of Rs. 4,20,000/-. He categorically stated that he was unaware of the same and further stated in his statements that he signs the & 519 to 521/JP/2025 Sunil Kumar Agarwal documents and does not put his thumb impression on documents. Then he has further reiterated in his statements dated 30/06/2019 at page no. 9 that he is working in the assessee's office since 2008 and once he was taken to Chaksu and made to put thumb impression on some documents and copies of his ID and photo were also collected from him.

He has categorically denied making any payment for the same in his documents. The ld. Assessing Officer has clearly stated the sequence of events in his order and has summarized it as benami transaction of the assessee and hence in view of the factual matrix of the case, this addition deserves to be sustained. Hence, this ground of appeal is dismissed.

Ground No. 2 6.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

In this ground, the appellant has raised issue in respect of charging of interest u/s 234A, 234B and 234C. In this regard it is stated that charging of interest is mandatory and consequential in nature, therefore the AO is directed to give effect of the same on the income determined vide this appellate order. Accordingly, the ground of appeal raised by the appellant on this issue is disposed off.

Ground No. 3

7.1 The appellant has added an additional ground of appeal which has been discussed and adjudicated by me in the above paras. Accordingly such mention by the appellant in its ground is treated as disposed off.”

36. As the assessee did not find any favour, from the appeal so filed before the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds raised by the assessee, ld. AR of the assessee, has filed the written submissions which is reproduced herein below:

& 519 to 521/JP/2025 Sunil Kumar Agarwal The assessee is carrying out business activity in partnership firm M/s K Sunil Narnoli and M/s Gulmohar Developers from which he has received remuneration, share of profit & interest on capital. The assessee was also having income under the head “income from house property” “capital gains” and “other sources” during the year under consideration. Search and seizure operations u/s 132 of the Income Tax Act, 1961 were carried out in “Narnoli Group” of cases on 28/06/2019, in which the assessee was also covered. Notice u/s 153 A was issued on 09/02/2021. In response to this notice, the assessee filed return declaring total income of Rs.23,84,470/- on 09/09/2021. Copy of acknowledgment of return of income and computation of income are available on paper book page no. 1 to 6. Notice u/s 143(2) was issued on 02/03/2021. The Learned Assessing Officer has completed the assessment u/s 143(3)/153A of the IT Act 1961 on 29.09.2021 determining total income of Rs. 28,04,470/- While framing the assessment, the Assessing Officer made an addition of Rs. 4,20,000/- on account of alleged purchase of agricultural land in the name of Shri Nand Ram Meena treated as “benamidar” of the assessee. The addition has been made with reference to copy of sale deed showing purchase of land of Rs. 4,20,000/- by Shri Nand Ram Meena found during the course of search from the possession of the son of the assessee, Shri Anshul Agarwal. Aggrieved with the order of the learned Assessing Officer the assessee preferred before the learned CIT(A). The learned CIT(A) dismissed the appeal of the assessee without considering his submission. Aggrieved with the order of the learned the learned CIT(A) the assessee has preferred appeal before your honour. The individual grounds of appeal are as under :- Ground No. 1 – The Learned CIT(A) has erred confirming the action of the Learned Assessing Officer in framing the assessment u/s 153A/143(3) of the Income Tax Act, 1961 and addition to income made therein is void ab-initio and the assessment deserves to be quashed. The addition of Rs.4,20,000/- made is not based on any incriminating document found/ seized during the course of search from the custody of the assessee or any other finding recorded by him on account of action u/s 132 of the Income Tax Act 1961. The learned AO has wrongly assumed the jurisdiction/has made additions without reference to any seized document/material.

1. Facts of the case:-

& 519 to 521/JP/2025 Sunil Kumar Agarwal A search u/s 132 was conducted at the business/residential premises of the assessee group on 28.06.2019. However, no incriminating documents or loose papers or any material pertaining to the year under consideration was found / seized pertaining to the assessee disclosing unaccounted income relating to the year under consideration. No surrender of undisclosed income was made pertaining to the year under consideration in the hands of the assessee. It is submitted that at the time of search conducted on 28.06.2019, no assessment in this case was pending. Therefore, on the date of search, assessment for the A.Y. 2015-16 did not abate. In such circumstances, the established position of law is that while completing assessment under section 153A, additions are warranted only on the basis of seized material. Since in this case, specifically for A.Y. 2015-16, no seized material was found, as such, no additions were warranted. The learned AO has erred in law in making addition on the basis of documents which were found from the premises/custody of Shri Anshul Agarwal as mentioned by the ld. AO herself on page 3 of the assessment order. The relevant para is quoted below:- “ In view of the statements recorded u/s 132(4) of the Income Tax Act, 1961, it was clear that the agricultural land discussed above was a benami property of Shri Anshul Agarwal and he had purchased it in the name of Shri Nand Ram Meena. The entire consideration to the seller has paid in cash. Therefore, there was no evidence to establish that the investment was actually made by Shri Nanda Ram Meena. The original sale deed of the property was found from the premises of Shri Anshul Agarwal, i.e. Plot No.5, Ahinsa Marg, Mahaveer Nagar, Jaipur. Had it been the property of Shri Nand Ram Meena, why original papers relating to it would have been found from the custody of Shri Anshul Agarwal.”

In view of the aforesaid facts, the papers relating to purchase of land of Rs. 4,20,000/- in the name of Shri Nand Ram Meena purchased on 09.10.2014 were found from the custody of Shri Anshul Agarwal and not from the possession of the assessee. These papers did not pertain to the assessee and hence did not require to be considered in the hands of the assessee. The ld. AO has wrongly considered these papers in the hands of the assessee and has unlawfully made addition of Rs. 4,20,000/- in the hands of the assessee. The addition is ab-initio void. Thus the addition in this case was totally misplaced and unwarranted. The same is totally against the established position of law. The settled position of law is that in a case of search additions to income can be made only with reference to and on the basis of incriminating material and not otherwise. If no incriminating & 519 to 521/JP/2025 Sunil Kumar Agarwal material has been found in search, in such a situation no additions are called for. Therefore, the addition is not based on incriminating material pertaining to the assessee. Simply on the basis of a registered sale deed which was found in possession of a family member during the course of search, cannot be treated as incriminating material. This sale deed was in the possession of the Shri Anshul Agarwal for safe keeping purpose and the investment was not made by the assessee. No such evidence was found during the course of search. Therefore, without bringing any material on record the addition cannot be made in the hands of the assessee. The same deserves to be deleted. The following case laws are quoted in support as under: - 2. Favourable Case Laws: - In view of the aforesaid discussion and facts of the case it is apparently clear that the assessment was not pending at the time of the search as such it could not abate. Further there was no incriminating material found during the course of search relating to the year under consideration and hence no addition could have been made. The following case laws are quoted in support: - (i) Latest decision of the Apex court on the issue – It is submitted that during the course of search, no incriminating material was found during the course of search either with reference to the addition made. In view of this, by making additions on these grounds, the Learned Assessing Officer travelled beyond his jurisdiction. The Hon'ble Supreme Court in their latest decision in the case of PCIT Central-3 Vs. Abhisar Buildwell P. Ltd (454 ITR 212) dated 24/04/2023, has held as under :- ".. in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961." In view of the aforesaid decision, it is clear that in case of unabated assessment, no addition can be made by the Learned Assessing Officer in the absence of any incriminating material found during the course of search. In the case of the assessee, assessment for the ASSESSMENT YEAR 2015-16 was not pending, as such, it was unabated and hence, additions were possible only with reference to incriminating material found during search. Since no incriminating material was found and none has been referred to in the assessment order, the Learned & 519 to 521/JP/2025 Sunil Kumar Agarwal Assessing Officer was precluded in making additions. The additions made by the Learned Assessing Officer deserve to be deleted. (ii) Saumya Construction Pvt Ltd Vs. Pr. CIT Tax Appeal No. 24 of 2016 (High Court of Gujarat) Assessee was engaged in business of construction and development of properties, trading in fabrics and garments—Search and seizure operation was carried out and assessment came to be framed u/s.143(3) r.w. section 153A(1)(b) determining total income of assessee at Rs.14,49,51,130/- against declared income at Rs.3,44,00,130— During course of assessment proceedings, assessee had paid Rs.11,05,51,000/- to one Shri Rohit Modi in respect of land through sale deed—Shri R in his assessment, admitted receipt of Rs.11,05,51,000/- as on-money received in cash in transaction of land—AO held that on- money had been paid by assessee in transaction for purchase of land from Shri R and P and accordingly, added amount of Rs.11,05,51,000/- to total income of assessee u/s.68 in respect of unexplained investment for purchase of land—Commissioner(A) confirmed addition on ground that payment was made by assessee because assessee was purchaser as all rights of development had been vested in assessee by virtue of conveyance deed—Tribunal placed reliance upon its earlier decision in case of Sanjay Aggarwal v. DCIT, held that addition was not based on any incriminating material found during search operations on assessee and hence, such addition could not be made u/s.153A—Held, it was not case of revenue that any incriminating material in respect of AY under consideration was found during course of search—At relevant time when notice came to be issued u/s.153A, assessee filed its return of income—Much later, at fag end of period within which order u/s.153A was to be made, in other words, when limit for framing assessment as provided u/s.153 was about to expire, notice had been issued seeking to make proposed addition of Rs.11,05,51,000/- on basis of the material which was not found during course of search, but on basis of statement of another person—It was admitted position that no incriminating material was found during course of search, however, it was on basis of some material collected by AO much subsequent to search, that additions came to be made—On behalf of revenue, it had been submitted that if any incriminating material was found, notwithstanding that in relation to year under consideration, no incriminating material was found, it would be permissible to make additions and disallowance in respect of all six AYs—In opinion of this court, said submission did not merit acceptance, inasmuch as, assessment in respect of each of six AYs was separate and distinct assessment—U/s.153A, assessment had to be made in relation to search or requisition, namely, in relation to material disclosed during search or requisition—If in relation to any AY, no incriminating material was found, no addition or disallowance could be & 519 to 521/JP/2025 Sunil Kumar Agarwal made in relation to that AY in exercise of powers u/s.153A and earlier assessment should have to be reiterated—In this regard, this court was in complete agreement with view adopted by Rajasthan HC in case of Jai Steel (India), Jodhpur v. Assistant CIT (supra)—Besides, as rightly pointed out by assessee, controversy involved stands concluded by decision of this court in case of CIT -1 v. Jayaben Ratilal Sorathia (supra) wherein it had been held that while it could not be disputed that considering section 153A, AO could reopen and/or assess return with respect to six preceding years; however, there must be some incriminating material available with AO with respect to the sale transactions in particular AY—It was not possible to state that order passed by Tribunal suffered from any legal infirmity so as to give rise to question of law, much less, substantial question of law, warranting interference—Appeal, was, accordingly, dismissed. (iii) The issue has now been decided by the High Court of Rajasthan in the case of Jai Steel India Vs. ACIT 88 DTR 1. The Hon'ble High Court has held as under–

"Section 153A cannot be read in isolation, in as much as, the same is triggered only on account of any search/requisition u/s 132 or 132A. If any books of accounts or other documents relevant to the assessment had not been produced in the court of original assessment and found in the course of search, such books of accounts or other documents have to be taken into consideration while assessing or reassessing the total income under the provisions of s. 153A. Even in a case where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration. The requirement of assessment or reassessment under the said section has to be read in the context of s. 132 or s. 132A, in as much as in case nothing incriminating is found on account of such search or requisition, then the question of reassessment of the concluded assessments does not arise." The decision of the Hon'ble High Court has held that proceedings u/s 153A are warranted only on existence of incriminating material which in this case was absent. (iv) COMMISSIONER OF INCOME TAX vs. KABUL CHAWLA HIGH COURT OD DELHI (2015) 126 DTR 0130 (Del) The court has summarized the legal position in para 37 of the order which is as under:-

& 519 to 521/JP/2025 Sunil Kumar Agarwal 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. (v) Pr. CIT vs MEETA GUTGUTIA Prop. M/s FERNS “N” PETALS (2017) 395 ITR 526 (DELHI) ; 152 DTR 153 (DELHI) (Confirmed by the Supreme Court of India) Under section 153A of the Act, assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra). Besides, as rightly pointed out by the learned & 519 to 521/JP/2025 Sunil Kumar Agarwal counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court In the case of CIT v. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years ; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year."

& 519 to 521/JP/2025 Sunil Kumar Agarwal Dismissing the appeals of the Income-Tax Department, it was held that the scope of assessment under section 153A was limited to the incriminating evidence found during the search and no further. It was also held that section 153A of the Act did not make any distinction between the assessment conducted under section 143(1) and section 143(3) of the Act. In this context, observations of the High Court in Paragraph (5) on pages 585 and 586 of the report are relevant, which are reproduced as follows :- “We have considered the arguments canvased by the learned counsel for the respective parties. On perusal of Section 153A of the Act, it is manifest that it does not make any distinction between assessment conducted under Section 143(1) and 143(3). This Court had occasion to consider the scope of Section 153A of the Act in case of The Commissioner of Income Tax v. Gurinder Singh Bawa and in the case of The Commissioner of Income Tax v. Continental Warehousing Corporation & Anr.(referred to supra). It has been observed that Section 153A cannot be a tool to have a second inning of assessment either to the Revenue or the Assessee. Even in case of The Commissioner of Income Tax v. Gurinder Singh Bawa (referred to supra) the assessment was under Section 143(1) of the Act and the Court held that the scope of assessment after search under Section 153A would be limited to the incriminating evidence found during the search and no further. In the said Judgment, the Judgment of this Court in The Commissioner of Income Tax v. Continental Warehousing Corporation & Anr. (referred to supra) has been followed.” Conclusion: - Thus, it is established position of law up to the stage of the APEX Court as is apparent from the afore-cited case laws that addition is not warranted in the absence of incriminating material. Hence, the addition made in the case being without jurisdiction deserves to be deleted as the same is not based on any search material / incriminating material found during search. Ground No. 2 – Under the facts and circumstances of the case, the learned CIT(A) has erred in confirming the addition of Rs. 4,20,000/- made by the Learned AO on account of unexplained investment made for purchase of agricultural land in the name of Shri Nanda Ram Meena. (1) Statement of Shri Nand Ram Meena It is submitted that in this case, the whole and sole basis of making addition in the hands of the assessee is the statement of Shri Nand Ram Meena. A copy of the statement of Shri Nand Ram Meena recorded on 30.06.2019 u/s 132(4) is & 519 to 521/JP/2025 Sunil Kumar Agarwal available on Paper Book Page No 7 to 15. It is submitted that during the course of search, copy of sale deed dated 09.10.2014 showing purchase of land by Shri Nand Ram Meena was found from the possession of Shri Anshul Agarwal son of the assessee. This fact is apparent from the relevant para of the assessment order quoted above. Copy of the sale deed is available on Paper Book from Page 16 to 20. Shri Nand Ram Meena was examined on 30.06.2019. The perusal of his statement reveals the following :- Shri Nandram Meena is educated up to 8th class. He operates bank (i) account in State Bank of India. He has also got a mobile No.9602404229. (ii) At first in reply to Question No.14, when he was shown the copy of the sale deed, Shri Nand Ram Meena deposed that he did not purchase any such land. (iii) In reply to Question No.15, Shri Nand Ram Meena stated that the thumb impression on the sale deed does not belong to his thumb. Later on, in reply to Q.No. 20 and 21, Shri Nand Ram Meena stated that he was working with the Narnoli Group since 2008 and was getting salary of Rs.12,500/-. On being further pressed to recollect his memory, Shri Nand Ram Meena stated specifically in response to Q. No. 21 that somewhere in Oct. 2014, Shri Anshul S/o Shri Sunil Kumar had taken him to Village Chaksu along with his ID. Thus, he has an impression that it was at that time that his thumb impression and ID were used for purchasing the agricultural land (reply to Q.No. 22). He has also stated that for fear of being discharged from service, he did not object to Shri Anshul and not questioned him for obtaining his thumb impression and using his ID card for the purpose of purchase of land.

The above statements of Shri Nand Ram Meena show that he was having good knowledge about the purchase of the land. Further, in his statement, he has no- where stated that this land was purchased by the assessee, Shri Sunil Kumar Agarwal. He has only stated that Shri Anshul S/o Shri Sunil Kumar had taken him to Village Chaksu where the sale deed was executed and his signatures, thumb impression and ID were used. In these circumstances, it is clear that on the basis of statement of Sh. Nand Ram Meena, the purchase of land could not be considered as belonging to the assessee. Although in his statement, Shri Nand Ram Meena stated first that the thumb impression on the stamp paper of sale deed did not belong to him, but later on he retracted from the same. So his statement cannot be taken on face value. On account of fear of the Department, Shri Nand Ram Meena avoided acceptance of the ownership of land. Further, although Shri Nand Ram meena stated that he did not pay anything for the & 519 to 521/JP/2025 Sunil Kumar Agarwal purchase of the land, but at the same time he did not say who paid for purchase of the land. It is not known how the ld. AO concluded that the investment in purchase of the land was made by the assessee.

In view of the aforesaid position, no addition could have been made in the hands of the assessee on the basis of statement of Shri Nand Ram Meena, which is the only material in the possession of the AO. Shri Nand Ram Meena is not “benamidar” of the assessee. (Parameters of holding benami property – Not Followed)

The Ld. AO has further erred in holding that the agricultural land purchased by Shri Nand Ram Meena was benami property of the assessee. The Ld. AO has not brought any material on record to establish that investment in the purchase of the agricultural land was done by the assessee and not by Sh. Nand Ram Meena. Without establishing that the assessee had made investment in the purchase of the agricultural land in the name of Sh. Nand Ram Meena, the said land could not be termed as benami property of the assessee. No evidence has been brought on record in this regard. It is further submitted that during the course of search no paper was found indicating that the assessee made investment either in the purchase of agricultural land in the name of Sh. Nand Ram Meena. In absence of any such paper or document the Ld. AO was not justified in treating the agricultural land as Benami Property of the assessee and in treating Nand Ram Meena as Benamidar of the assessee.

It is further submitted that in the following decisions of various courts including the Supreme Court of India, guide lines and parameters have been laid down for determining the character of a Benami Property. The property has to be tested on these parameters before holding the same as Benami. (a) It is submitted that the Supreme Court of Indiain the case of Bhim Singh & Anr Vs Kan Singh (And Vice Versa) on 21,Dec.,1979, 1980 AIR 727 laid down tests for deciding benami transactions. The Court held as under:-

“2. The principles governing the determination of the question whether a transfer is a benami or not are: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; & 519 to 521/JP/2025 Sunil Kumar Agarwal (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima-facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of the parties the motives governing their action in bringing about the transaction and their subsequent conduct. [641C-E]” (b) The Supreme court further held in the case of Smt. P. Leelavathie (D) Vs. Shankarnarayana Rao (Civil Appeal No. 1099 of 2008, Dt. Of judgment 09.04.2019) with regard to benami transactions and laid down important propositions:

“It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact” (c) In yet another case of Valliammal Vs. Subramaninam, Hon’ble Supreme Court has held that:- “There is a presumption in law that the person who purchases the property is the owner of the same. This presumption can be displaced by successfully pleading and proving that the document was taken benami in the name of another person for some reason, and the person whose name appears in the document is not the real owner, but only a benami. Heavy burden lies on the person who pleads that the recorded owner is a benami-holder.” (d) The above propositions have been reiterated by the AFTP (Tribunal) in the case of Ramneek Singh Vs. IO FPA-PBPT-3/CHD/2018 date 21.06.2019 wherein it has been held that:- “37. In proceedings pertaining to Benami Property / Transaction, it is the initiating officer who is the party asserting the existence of benami transaction, therefore the burden of proving such assertion qua cogent evidence is upon the initiating officer only and unless such burden is discharge, the other party is not legally obliged to be called upon to prove his case ”

& 519 to 521/JP/2025 Sunil Kumar Agarwal (e) USHA BHAR VS SANAT KUMAR BHAR (135 TM 526) HC of Callcutta Benami transaction : The principle 3. In a suit claiming a property as Benami, there must be cogent and sufficient evidence to conclude that the apparent is not the real. In order to ascertain whether a particular sale is Benami and the apparent purchaser is not the real owner, the burden lies on the person asserting to prove so. Such burden has to be strictly discharged through legal evidence of definite character. Such evidences either directly prove the fact of Benami or establish circumstances unerringly and reasonably raising an inference of that fact. It is the intention of the parties, which is to be discovered. Very often such intention is shrouded in a thick veil. It is not possible to pierce the veil easily. But such difficulties would not relieve the person asserting the transaction to be Benami of any part of the serious onus that rests on him. The difficulty would not justify the acceptance of mere conjecture or surmise as a substitute for proof. The proof has to be weighed against a document prepared and executed showing the person expressly as purchaser or transferee. This follows the initial presumption in favour of the apparent state of affairs being the real state of affairs. However, the question is largely one of facts. For determining this question, no absolute formula could be evolved nor can a formula so evolved be uniformly applied in all situations. But in such circumstances, it is the probabilities and inferences, which are to be gathered in order to discover the relevant indicia. It is not sufficient to show circumstances, which might create suspicion. The Court cannot decide on the basis of suspicion. It has to act on legal grounds established by evidence. There have been various decisions by different High Courts and the Supreme Court on these questions. By now these propositions are well-settled through those decisions. In order to determine whether a transaction was or is a Benami one, the following guidelines may be followed :- (1) The source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a Benami colour; (4) the position of the parties and the relationship, if any, between the claimant and the alleged Benamidar; (5) the custody of the title deeds after the sale; and (6) the conduct of the parties concerned in dealing with the property after the sale. In view of the aforesaid decisions it is submitted that so far as the burden of proving the property as Benami is concerned the same lies on the authority & 519 to 521/JP/2025 Sunil Kumar Agarwal claiming / stating the property to be so. The position has not changed in this regard even after the amendment of 2016. Therefore, in this case it was for the department to bring on record evidences that the agricultural land in the name of Sh. Nand Ram Meena was in fact purchased by the assessee . It was for the Ld. AO to prove that investment in the purchase of the agricultural land was made by assessee. In the assessment order the Ld. AO has not discussed the same. In view of this, the addition made deserves to be deleted. (2) Finding of the ld. AO It is submitted that the perusal of the assessment order the following findings have been recorded by the AO :- (i) On page 2 of the assessment order, it is mentioned by the ld. AO that “…thereafter, the statement of Shri Nand Ram Meena was shown to Shri Vipul Narnoli. He was asked as to why the property should not be considered as his benami property. Shriu Vipul Narnoli submitted that the said property is not benami as it actually belongs to Shri Nand Ram Meena though he might not be aware of the same”. Copy of statement of Shri Vipul Narnoli is available in Paper Book from Page 21 to 44 . It is submitted that the above para clearly indicates that the ld. AO was considering Shri Vipul Agarwal, son of the assessee as holding the property of Shri Nand Ram Meena as benami property, despite this, the addition has been made in the case of the assessee. Whereas, statement of Shri Vipul Agarwal was recorded who has no concern. It was also stated that was keeping for safe purpose. The addition have wrongly been made in the face of the aforesaid finding, where the ld. AO considered Vipul Narnoli as holding the property as benami property.

(ii) On page 3 of the assessment order, the ld. AO has observed as under :- “ In view of the statements recorded u/s 132(4) of the Income Tax Act, 1961, it was clear that the agricultural land discussed above was a benami property of Shri Anshul Agarwal and he had purchased it in the name of Shri Nand Ram Meena. The entire consideration to the seller has paid in cash. Therefore, there was no evidence to establish that the investment was actually made by Shri Nanda Ram Meena. The original sale deed of the property was found from the premises of Shri Anshul Agarwal, i.e. Plot No.5, Ahimsa Marg, Mahaveer Nagar, Jaipur. Had it been the property of Shri Nand Ram Meena, why original papers relating to it would have been found from the custody of Shri Anshul Agarwal.”

& 519 to 521/JP/2025 Sunil Kumar Agarwal The perusal of the aforesaid para reveals that here the ld. AO has considered Shri Anshul Agarwal as the real owner of the land purchased in the name of Shri Nand Ram Meena. The aforesaid two positions adopted by the ld. AO in treating the land owned by Nand Ram Meena, are contradictory. At one stage, Shri Vipul Agarwal is considered as the owner of the land belonging to Shri Nand Ram Meena, but in the second stage, Shri Anshul Agarwal is considered as the owner of the land belonging to Shri Nand Ram Meena. This discloses the confused state-of-affairs at the level of the ld. AO. The ld.AO herself was not sure how to deal the issue of land owned by Shri Nand Ram Meena. In any case the name of the assessee does not figure in the mind of the ld. AO while deciding the issue of the land owned by Shri Nand Ram Meena. It is not clear from the assessment order as how the ld. AO concluded that Shri Nand Ram Meena was benamidar of the assessee. In these circumstances, the addition made deserves to be deleted. (3) Violation of principles of natural justice It is submitted that the addition in the case of the assessee has been made with reference to the statement of Shri Nand Ram Meena recorded on 30.06.2019. In this regard, the ld. AO has acted unlawfully and illegally. He has used the statement of Shri Nand Ram Meena in making the addition with affording opportunity of cross-examination to the assessee. It is settled position of law that statement which has remained untested by cross examination is not good evidence. It is submitted that the statement of Sh. Nand Ram Meena was recorded on 30.09.2019 u/s 132(4) of the IT Act at the back of the assessee. Such statement is not considered above aboard. In the absence of cross examination the Ld. AO was precluded in utilizing the statement against the assessee. Therefore, the assessment proceedings stand vitiated. Similarly, the ld. AO has acted on the submission of Shri Anshul Agarwal, who is alleged to have stated that it was the assessee who made the payment for the purchase of the land. Again no opportunity was given to the assessee to cross- examine Shri Anshul Agarwal before acting upon his submission. In view of this also, the ld. AO has acted against the established principles of law. Before using the submission of Shri Anshul Agarwal against the assessee, it was incumbent upon the ld. AO to have allowed opportunity of cross-examination of Shri Anshul Agarwal. This has not been done. Hence, the assessment proceedings stand vitiated. The addition made deserves to be deleted. The following case laws are quoted in support:- (a) C. VASANTLAL CO VS COMMISSIONER OF INCOME TAX (45 ITR 206) SC:-

& 519 to 521/JP/2025 Sunil Kumar Agarwal The ITO is not bound by any technical rules of the law of evidence. It is open to him to collect materials to facilitate assessment even by private enquiry. But if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it. The statements made by Achaldas and Poonamchand before the ITO were material on which the IT authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf. (b) KALRA GLUE FACTORY VS SALES TAX TRIBUNAL ORS (167 ITR 498) SC Statement which was not tested by cross examination is not good evidence. (c) HEIRS AND LRs OF LATE LAXMANBHAI S PATE VS COMMISSIONER OF INCOME TAX (222 CTR 138) HC Gujrat The legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross-examination, is that if the addition is made, the same is required to be deleted on the ground of violation of the principles of natural justice. (d) PRAKASH CHAND NAHTA VS COMMISSIONER OF INCOME TAX (218 CTR 367) HC of MP The aforesaid circumstances eloquently speak that the addition in the order of assessment has been made on the basis of the statement made by M. There is no cavil that a prayer was made under s. 131 to summon said M for cross- examination. That has not been done. The language employed under s. 131 empowers the AO to ensure the attendance of any person. When the statement of M was used against the assessee and an affidavit was filed controverting the same, it was obligatory on the part of the AO to allow the prayer for cross- examination. That would have been in the fitness of things and in compliance of principles of natural justice. As the AO had not summoned M, the proprietor of R & Co., in spite of the request made under s. 131, the evidence of said M could not have been used against the assessee and in the absence of affording reasonable opportunity of being heard by summoning the said witness the assessment order is vitiated and cannot be saved as the addition has been made on the foundation of his deposition. (e) COMMISSIONER OF INCOME TAX VS BIJU PATNAIK (190 ITR 396) HC of Orrisa A statement recorded ex-parti u/s 131 cannot be used against the assessee without providing opportunity to him to place materials for rebutting the same. A & 519 to 521/JP/2025 Sunil Kumar Agarwal final finding can be arrived at only after giving reasonable opportunity to the assessee in that regard. The ratio of the aforesaid decisions is squarely applicable to the fact sof the case of the assessee. Hence, the assessment order has been passed violating the principles of natural justice. The assessment order is vitiated and therefore deserves to be quashed. Conclusion

In the facts and circumstances of the case, and in view of the submissions made above, the addition of Rs. 4,20,000/- deserves to be deleted. The following points need to be highlighted :- (a) The alleged sale deed of land was not recovered from the possession of the assessee. It was found from the premises/custody of Shri Anshul Agarwal as stated by the ld. AO in page 3 of the assessment order. Therefore, ld. AO acted wrongly in considering the ownership of the land in the hands of the assessee. (b) The ld. AO has largely acted on the basis of statement of Shri Nand Ram Meena, but the assessee was not allowed opportunity for cross-examination. This vitiates the entire assessment proceedings. (c) In this case, on the date of search, i.e. on 28.06.2019, no assessment was pending for A.Y. 2015-16. In such circumstances, addition to income could have been made only on the basis of incriminating material found during search for this assessment year, which is not the case. Hence, addition made deserves to be deleted. (d) Possession of the deed with Shri Anshul Agarwal alone is not a deciding factor for holding the land of Shri Nand Ram Meena as a benami property. Unless it is held that sources of investment in the purchase of land came from the assessee, the land cannot be held as a benami property of the assessee and addition cannot be made. Ground No. 3– The Appellant requests its right to add, amend or alter all or any of the grounds of appeal on or before hearing. Not pressed. was placed on the following evidence / records / decisions:

Sr. Particular Page No. no. 1 Copies of acknowledgement of original return of income 1-6 filed for AY 2015-16 2. Copy of statement of Shri Nand Ram Meena 7-15 3. Copy of sale deed in respect of purchase of agricultural land 16-20 4. Copy of statement of Sh. Vipul Narnoli 21-44

Ground I: Legality of Addition under Section 153A (Alleged absence of incriminating material) This rejoinder is respectfully submitted on behalf of the Revenue. The present appeal arises from the order of Ld. CIT (A), Jaipur, against which the assessee is in appeal. The brief facts of the case as noted in the assessment order are that a search and seizure action u/s 132 of the Act was carried out by the department on the members of Narnoli Group on 28.06.2019. Appellant filed his return of income on 10.01.2021 for the AY 2020-21 declaring a total income at Rs. 2,64,82,110/-. Ld. AO issued a notice u/s 143(2) of the Act to the appellant on 01.03.2021. Finally, Id. AO completed the assessment vide order dt.29.09.2021 at a total income of Rs.2,89,47,315/-. Aggrieved by the aforesaid assessment, the appellant has filed the appeal before the Ld.CIT(A). The Ld.CIT(A)allowed appeal of the assessee and confirmed part and assessee is in appeal before your Honours. The assessee has filed paper book, written submission and grounds in form no 36. The revenue submits rebuttal on each as under with request to consider this rejoinder as part of record and arguments of revenue. Assessee's Contention: The assessee asserts that the addition of ₹4,20,000 in the 153A/143(3) assessment is void ab initio, claiming no incriminating material & 519 to 521/JP/2025 Sunil Kumar Agarwal was found during the search under Section 132. He relies on judicial precedents that in an unabated/completed assessment, no addition can be made under Section 153A absent seized incriminating evidence, rendering the assessment beyond jurisdiction. Revenue's Rejoinder: This objection is misconceived on facts and law. In the present case, the search operations did yield incriminating material pertaining to the assessee's undisclosed income. Notably, a registered sale deed for the agricultural land (purchased in the name of Shri Nand Ram Meena) was seized from the premises of Shri Anshul Agarwal during the search. This seized document directly links the assessee to an unexplained investment and thus constitutes incriminating material unearthed during the search. The assessee's reliance on cases like Kabul Chawla (Del. HC) and Saumya Construction (Guj. HC) is distinguishable - those rulings bar additions in completed assessments only when no incriminating evidence at all is found. Here, by contrast, the recovered sale deed is a specific incriminating evidence, satisfying even the test laid down in those cases. Jurisdiction under Section 153A: It is further submitted that Section 153A, by its very text, empowers the Assessing Officer ("AO") to assess or reassess the "total income" of the six years preceding the search. There is no statutory stipulation that additions must be confined solely to seized material. Indeed, as the Revenue has previously argued in similar cases, the very scheme of Section 153A would be stultified if no addition could be made absent seized material. In this case, however, that debate need not detain us because material was in fact seized supporting the addition. The revenue therefore submits that the initiation of Section 153A proceedings and the impugned addition are valid. The addition is not ultra vires Section 153A; rather, it is a direct result of evidence unearthed by the search, and thus the assessee's legal ground has no merit. Ground II: Addition of ₹4,20,000 on Merits Unexplained Investment in Benami Purchase of Land Assessee's Contention: On merits, the assessee denies any unaccounted investment, contending that the agricultural land standing in Shri Nand Ram Meena's name is not the assessee's property. He argues that the AO had no basis to treat the ₹4.20 lakh payment for purchase of the land as the assessee's undisclosed income. The assessee may also claim that no funds were provided by him and that the document found is unreliable or unrelated to his finances. Revenue's Rejoinder: The addition of ₹4,20,000 for unexplained investment is fully justified by the evidence gathered. The following points clearly establish that the assessee is the real investor in the land and that the amount constitutes his undisclosed income:

& 519 to 521/JP/2025 Sunil Kumar Agarwal 1. Seized Sale Deed as Evidence: A registered sale deed dated //** (for ₹4,20,000 consideration) in the name of Shri Nand Ram Meena was found and seized during the search of Shri Anshul Agarwal's premises. This document, being in the custody of a person other than the ostensible buyer, is a crucial incriminating piece of evidence. It indicates that the assessee's business associate/relative had possession of the deed, strongly suggesting the assessee's involvement in the purchase. The assessee has not disputed the authenticity of this sale deed. He was confronted with this document during assessment proceedings, yet failed to produce any credible explanation as to why this land purchase document was found in the group's premises if he truly had no connection.

3. Onus on Assessee to Explain Source: When an investment is detected, the law places the onus on the assessee to explain the nature and source of funds (Section 69 of the Income Tax Act). This principle has been affirmed in numerous rulings - if the assessee cannot explain the source of an investment, it is treated as unexplained income. In the present case, the assessee has not furnished any documents (such as bank statements, cash books, or confirmation from Shri Nand Ram) to demonstrate that *4,20,000 was paid out of accounted funds or by Nand Ram's own means. In similar cases, where assessee failed to explain the source of a purchase found in search, the entire investment has been treated as unexplained income in the hands of the real owner. Here too, the AO was correct to add ₹4.20 lakh as the assessee's unaccounted investment, since no contrary evidence was produced.

4. Circumstantial Evidence - Conduct of Parties: All surrounding circumstances point toward a benami arrangement. The assessee's conducte.g. not disclosing this asset in his books or returns, and the involvement of a close associate (Shri Anshul Agarwal) safeguarding the documents - betrays the truth that the assessee is the beneficial owner of the land. Shri Nand Ram Meena, by contrast, & 519 to 521/JP/2025 Sunil Kumar Agarwal appears to be a name-lender: he did not occupy or cultivate the land (to the best of our knowledge), and the benefit of owning the land accrued to the assessee's business interest (the land was strategically useful to the assessee's group). The motive for benami purchase is evident: the land in question is agricultural, and it is a matter of record that the assessee (a non-agriculturist) would not have been legally eligible to buy agricultural land in that area. Hence, a benamidar (a local agriculturist) was used to facilitate the purchase. Such an arrangement, far from being speculative, is supported by the seized documents and the assessee's failure to provide any alternative explanation. In light of the above, the Revenue submits that the addition of ₹4,20,000 is fully supported on merits. The evidence meets the standard of proof required: we have a documentary trail of the transaction and sworn testimony, which together establish that the assessee deployed his undisclosed funds to purchase the land in Nand Ram Meena's name. The assessee's mere denial, unaccompanied by evidence, cannot override these proven facts. Ground III: Alleged Violation of Natural Justice - Denial of Cross-Examination & Reliance on Third-Party Statements Assessee's Contention: The assessee argues that the addition is vitiated by breach of natural justice, claiming that the AO relied on statements of third parties (e.g. the statements of Shri Anshul Agarwal or Shri Nand Ram Meena) without offering the assessee an opportunity to cross-examine those individuals. He has cited case laws which hold that no addition can be made solely on a third- party statement if cross-examination is denied. The assessee likens his case to those precedents, contending that the statements used against him are untested hearsay and should be discarded, thereby nullifying the addition. Revenue's Rejoinder: The Revenue respectfully submits that the principle of cross-examination, while sound, has not been violated in any manner that prejudices the assessee's rights in this case. Our response is as under: 1. Documentary Evidence is Primary: Unlike cases where an addition is based only on an informant's statement, here we have primary documentary evidence - the seized sale deed. The addition was fundamentally based on this document, which was disclosed to the assessee and formed part of the show-cause during assessment. The third-party statements were used merely to corroborate and explain the circumstances of this document. Thus, even if (arguendo) the statements are disregarded, the hard evidence of the sale deed remains, pointing to the assessee's unexplained investment. The assessee was fully confronted with this evidence and given the chance to rebut it. There is, therefore, no fatal infirmity in relying on corroborative statements where the core fact (existence of the undisclosed purchase) is proven by a seized document.

& 519 to 521/JP/2025 Sunil Kumar Agarwal 2. Opportunity and Utilization: It is noteworthy that the assessee never made a specific request at assessment stage to cross-examine Shri Anshul Agarwal or Shri Nand Ram Meena. The assessment proceedings record indicates that the assessee was provided the gist of relevant statements and asked to explain the transaction, but no protest or request for summoning those persons was raised at that time. It is only at the appeal stage that this issue has been raised. Courts have held that if an assessee fails to seek cross-examination at the proper stage, he cannot later claim a natural justice violation as an afterthought. In any event, the assessee has not demonstrated what contradiction or rebuttal he would elicit from those persons if cross-examined. Mere theoretical denial of cross-exam is not enough - prejudice must be shown, which is absent here.

3. Assessee's Own Onus to Rebut: Importantly, the assessee could himself have produced Shri Nand Ram Meena (the ostensible purchaser) as his own witness to support his story that the land was independently purchased by Nand Ram. Nothing prevented the assessee from doing so. The fact that neither Nand Ram nor any evidence on his behalf was presented by the assessee speaks volumes. It suggests that cross-exam would not have aided the assessee; on the contrary, Nand Ram's testimony under oath (already on record) indicates the assessee's involvement. When a party withholds the best evidence available (here, failing to bring Nand Ram to confirm his independent ownership), an adverse inference may be drawn that the evidence would be unfavorable to that party's claim. The Revenue urges that such an inference is warranted here - the logical conclusion is that Shri Nand Ram would not support the assessee's claim of genuine ownership, consistent with the Department's position.

4. Distinguishing Case Law: The case laws cited by the assessee (such as Andaman Timber, etc., which stress cross-examination) are distinguishable on facts. Those cases involved scenarios where a sole third-party statement (often confessional in nature) was the basis of the addition, with the assessee kept completely in the dark or denied any chance to question the source. In the present matter, we reiterate that the addition is anchored in a seized document, not merely a statement. The assessee was informed of all materials and given chance to respond. Unlike the cited cases, here the third-party statements only corroborate a transaction evidenced elsewhere. Moreover, the statements in question were recorded under Section 132(4) (during a lawful search) and carry a presumption of truth. They were not casual, out-of-context remarks but part of a coordinated investigation into the assessee's financial dealings. Thus, the situation is far removed from a blind reliance on a tainted witness. The core ratio of the assessee's cited precedents - that unverified third-party allegations cannot form the sole basis of an addition. - does not apply here, since we have direct evidence and the assessee's own failure to refute it.

& 519 to 521/JP/2025 Sunil Kumar Agarwal In sum, no violation of natural justice has occurred that would nullify the assessment. The assessee's rights were respected - he was confronted with material, and he could have challenged the witnesses' version during the long duration of proceedings but chose not to. The addition is based on undisputed documents and unrebutted testimony. Therefore, this ground of appeal by the assessee is devoid of merit and should be rejected. The focus of adjudication should remain on the substance of the evidence, which clearly establishes the assessee's unaccounted investment.

Ground IV: Benami Property Findings & Burden of Proof under the Benami Transactions Act Assessee's Contention: The assessee contends that the AO's finding of the land being "benami" (purchased in Nand Ram's name for the assessee's benefit) is legally unsustainable. He argues that the Benami Transactions (Prohibition) Act, 1988 imposes a high burden of proof on anyone alleging a transaction to be benami, and that the Revenue has not discharged this burden. The assessee may also assert that, under the Benami Act, the real owner cannot be recognized in law, implying that the Department cannot both label the transaction benami and treat the assessee as owner for tax purposes. He likely cites the seminal case Jaydayal Poddar vs Bibi Hazra (SC) which held that the burden to prove benami lies on the accuser and must be strictly discharged with evidence. Revenue's Rejoinder: The Revenue submits that the finding of a benami transaction is amply supported in this case, and the burden of proof has been met. We address the legal and factual aspects point-wise:

1.

2. Burden of Proof - Discharged by Revenue: The Revenue is conscious that the burden of proving a benami transaction lies on the person alleging it. We respectfully submit that this burden has been successfully discharged through a combination of direct and circumstantial evidence. The classic criteria recognized & 519 to 521/JP/2025 Sunil Kumar Agarwal by courts for proving a benami transaction include: (a) source of funds, (b) possession and custody of the title documents, (c) relationship of the parties, (d) motive for the arrangement, and (e) conduct of the parties before and after the transaction. All these factors, applied to the present case, tilt decisively in the Revenue's favour: Source of Funds: Shri Nand Ram Meena had no independent source of income or savings that could fund the ₹4.20 lakh purchase. The assessee, on the other hand, had ample unaccounted cash transactions detected during the search (as evidenced by other papers and the very necessity of 153A assessment). The money trail (to the extent discernible) and the financial profile of parties indicate that the funds originated from the assessee. The assessee has not produced any evidence (like bank withdrawal by Nand Ram, etc.) to show Nand Ram paid the consideration. This satisfies the primary test that the real financing came from someone other than the ostensible owner. Custody of Documents: The sale deed was found in the premises of Shri Anshul Agarwal, a close associate of the assessee, rather than with Shri Nand Ram Meena. This fact is very telling it shows who was truly interested in and in control of the property. If Nand Ram were the genuine owner, ordinarily the title deed would be with him. Its recovery from the assessee group's domain is strong circumstantial proof of benami. As noted by the Hon'ble ITAT in a similar context, when the relevant documents are found with the alleged real owner and not the benamidar, it fortifies the inference of a benami purchase. Relationship of Parties: There is a clear link between the assessee and Shri Nand Ram Meena. Evidence on record suggests that Nand Ram was either an employee, distant relative, or otherwise under the influence of the assessee's family (the exact relation, as per case facts, is that he is a villager known to the assessee's group). This kind of relationship where the ostensible owner is a person of little means, friendly or beholden to the real owner - is a hallmark of benami arrangements noted in jurisprudence. It explains why Nand Ram lent his name to the transaction. Motive for the Arrangement: The assessee's motive for purchasing the land in another's name is apparent: to conceal his investment and possibly to circumvent legal restrictions on land purchase. Rajasthan (where this land is situated) has laws restricting purchase of agricultural land by non-agriculturists or entities; using a local individual's name would bypass such restrictions. Moreover, by keeping his name off records, the assessee intended to avoid detection of this asset and the associated income in his tax filings. This motive aligns with the evidence and gives a rational explanation for why the transaction was structured benami.

& 519 to 521/JP/2025 Sunil Kumar Agarwal Conduct Post-Purchase: After the purchase, the assessee's conduct has been consistent with ownership control. It has come on record that the subsequent dealings with the land (improvement, attempts to sell or develop, etc.) were all done at the behest of the assessee's family, not by Shri Nand Ram. Shri Nand Ram never asserted ownership benefits; he remained a figurehead. Such conduct is consistent with him being a benamidar. The assessee, notably, never disclosed this asset in his wealth statements or balance sheets, which is consistent with an intent to hide rather than an oversight -especially since he knew the property wasn't even in his name formally.

1. 1. That I am assessed to income with PAN-ABRPA9601M.

2. That a search was carried out on 29.06.2019 on my premises.

3. That during the course of search, several incriminating documents and other undisclosed income was found and on the basis of which I have surrendered undisclosed income in my hand.

4. That I have also surrendered/offered undisclosed income for taxation in my hand in various years in the return filed u/s 153A of the Income Tax Act, 1961 and u/s 139(1) of the Income Tax Act, 1961 for assessment year 2019-20 & 2020-21.

5. That once again I confirm and request to consider all the discrepancies and income regarding undisclosed assets, documents and seized materi only in my hand.

6. That I am alone responsible for all affairs of all group entities includir companies, partnership firms, HUF and all family members.

7. That I will not contest the issue of addition on the ground that the addition has been made in my hands pertains to others. d/- Sunil Kumar Agrawal deponent"

1. Sunil Kumar Agrawal, S/o Late Shri Kunj Behari Lal Agrawal, do hereby verify that the contents of this affidavit from para no. 1 to 7 are true and correct to the best of my personal knowledge and belief.

& 519 to 521/JP/2025 Sunil Kumar Agarwal Date: 18.09.2021 Place: Jaipur Sd/- Sunil Kumar Agrawal Deponent" And an letter was also filed by the AR of the assessee same is reproduced as under- "To Sub: Request for considering all the additions only in the case of Shri Sunil Kumar Agarwal 395, Narnoli Mansion, Outside Sanganeri Gate, Jaipur for the whole group and all entities Respected Madam, With reference to above, we would like to submit that a search was carried out on 29.06.2019 on the assessee's premises. During the course of search several incriminating documents and other undisclosed income was found. During the course of search also the undisclosed income was surrendered in the hands of Shri Sunil Kumar Agarwal, head of the family. He also owned all responsibilities and undisclosed income during the course of search. We have also surrendered/offered undisclosed income for taxation in the hands of Shri Sunil Kumar Agarwal in various years in the return filed u/s 153A of the Income Tax Act, 1961 and u/s 139(1) of the Income Tax Act, 1961 for assessment year 2019-20 & 2020-21 Therefore once again you are requested to consider all the discrepancies and income regarding undisclosed assets, documents and seized material only in the hands of Shri Sunil Kumar Agarwal. Shri Sunil Kumar Agarwal is alone responsible for all affairs of all group entities including companies, partnership firms, HUF and all family members. Kindly accept the above request and oblige. Thanking You, Date: 18.09.2021 Place: Jaipur Yours faithfully, XXX Counsel for the assessee" "The average higher GP rate is 7.89% and lower GP rate is 6.47% whereas the average higher NP rate is 3.74% and average lower NP rate is 2.84% and the mean of NP rate is 3.29%. Therefore, you are requested to adopt NP rate of 3.29% on unaccounted sales effected by the assessee group and oblige Thanking You, Date: 18.09.2021

Yours faithfully, xxxxxxx Counsel for the assessee" " Sub: Reply of your notice u/s 142(1) along with annexure in the case of Shri Sunil Kumar Agarwal 395, Narnoli Mansion, Outside Sanganeri Gate, Jaipur Respected Madam, With reference to above notice and as required by you, the explanation regarding source of properties purchased by the assessee group in the name of various individuals and other entities are given below in your required format: Annexure Exhibit Page No. A-1 AS-1 1 to 53 A-1 AS-2 54 to 81 A-1 AS-3 82 to 98 A-1 AS-4 99 to 153 A-1 AS-5 154 to 188 A-1 AS-6 189 to 204 Therefore you are requested to consider the same and oblige. Thanking You, Date: 15.09.2021 Place: Jaipur Yours faithfully, xxxxxxxx Counsel for the assessee" The Revenue respectfully submits that the assessee, Shri Sunil Kumar Agarwal, has himself voluntarily admitted and accepted complete responsibility for all discrepancies, undisclosed income, assets, and seized materials found during the search conducted on 29.06.2019. This is evidenced by the contemporaneous proceedings recorded in the note sheets dated 17.09.2021 and 24.09.2021, wherein the Authorised Representative (Sh. S. Poddar) categorically requested that any additions, whether arising out of accounting discrepancies or seized documents, be made only in the hands of Shri Sunil Kumar Agarwal, who is stated to be the owner of all such documents and the head of the group. This position was further affirmed by way of a duly sworn affidavit dated 18.09.2021, wherein Shri Sunil Kumar Agarwal solemnly declared under oath that the undisclosed income found during the course of search belonged to him, and that he had already offered the same to tax in his hands in the returns filed u/s 153A & 519 to 521/JP/2025 Sunil Kumar Agarwal and u/s 139(1) for AYs 2019-20 and 2020-21. Crucially, he also affirmed that he is solely responsible for the affairs of all group entities including companies, firms, HUF, and family members, and undertook not to contest additions made in his hands even if they pertain to others. Further, a letter dated 18.09.2021 submitted by his counsel reiterated the same request to tax all additions in his hands alone. In light of these express admissions, supported by documentary evidence and sworn affidavit, the Revenue humbly submits that the additions made in the hands of Shri Sunil Kumar Agarwal are fully justified in law and fact, and the assessee is now estopped from denying the same. The Hon'ble Tribunal may kindly uphold the assessment in his case view of the binding and voluntary nature of these declarations. Prayer: In light of the submissions above, the Revenue reiterates that all grounds of appeal raised by the assessee lack merit. The addition of *4,20,000 towards the benami purchase of land is legally and factually justified. We respectfully pray that the assessee's appeal be dismissed, the impugned addition be sustained, and the order of the assessing authority be upheld in this regard. Respectfully Submitted on Behalf of the Revenue Date: 05.08.2025 Place: Jaipur (Anita Rinesh) [Authorized Representative of the Revenue] SR DR-I, ITAT Jaipur

& 519 to 521/JP/2025 Sunil Kumar Agarwal Observation of the ld. AO “ In view of the statements recorded u/s 132(4) of the Income Tax Act, 1961, it was clear that the agricultural land discussed above was a benami property of Shri Anshul Agarwal and he had purchased it in the name of Shri Nand Ram Meena. The entire consideration to the seller has paid in cash. Therefore, there was no evidence to establish that the investment was actually made by Shri Nanda Ram Meena. The original sale deed of the property was found from the premises of Shri Anshul Agarwal, i.e. Plot No.5, Ahinsa Marg, Mahaveer Nagar, Jaipur. Had it been the property of Shri Nand Ram Meena, why original papers relating to it would have been found from the custody of Shri Anshul Agarwal.”

Be that it may the contention of the revenue or that of the assessee in the proceeding under the Prohibition of Benami Property Act whether based on the set of facts the addition made by the ld. AO and sustained by the ld. CIT(A) be sustained or not.

Record reveals that while making the addition ld. AO did not mention the section under which the addition was made in the hands of the assessee and while sustaining the addition we did not find the observation of the ld. CIT(A) as to under which section the addition can be made in the hands of the assessee. The facts on record reveals that since the assessee owned up all the transaction including that of the transaction done alleged to have been done by his Son Shri Anshul Agarwal was owned up by the assessee and thereby the alleged investment was considered in hands of the assessee have been made out of books and thereby the same was added. investment made by the assessee out of books on account of denial of having purchased any property by Shri Nanda Ram Meena, revenue has to considered the fact that whether the assessee was having the sufficient cash on hand at time of making the investment as alleged to have been made out of books or not and whether such type of the transaction which has not incriminating nature transaction and that too when the relevant assessment was not abated. The relevant issue has already been decided by the co-ordinate bench of ITAT Delhi benches in the case of

& 519 to 521/JP/2025 Sunil Kumar Agarwal 10. For the sake of conclusiveness, we have examined each and every sale deed which was filed by the Revenue in its paper book with details of transaction filed by the assessee during the course of scrutiny assessment proceedings. After due verification, we find that the copies of sale deed filed by the Revenue are the same which were considered by the Assessing Officer while framing assessment u/s 143(3) of the Act.

8 “The decision in CIT Vs. Anil Kumar Bhatia does not deal with a situation where, as in the present case, no incriminating material was found during the search conducted u/s 132 Nevertheless, it was interesting to note that in CIT Vs. Chetan Das Lachman Das the court underscored the need for department to have unearthed material during the search to justifying the assessment sought to be made. It was held that an assessment u/s 153A has to be made under this section only on the basis of seized material. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i) Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. 9 (iii) The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the ‘total income’ of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs “in which both the disclosed and the undisclosed income would be brought to tax”. (iv) Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment “can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.” (v) In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word ‘assess’ in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word ‘reassess’ to completed assessment proceedings. (vi) 10 Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any & 519 to 521/JP/2025 Sunil Kumar Agarwal other material existing or brought on the record of the AO. (vii) Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.”

In the result the appeal of the assessee in ITA no. (SS) 03/JP/2025 for assessment year 2015-16 is allowed.

In the result all the bunch of appeal are treated as disposed off as summarized herein below.

Order pronounced in the open court on 14/10/2025.

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 14/10/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Sunil Kumar Agarwal, Jaipur 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-02, Jaipur 3. vk;dj vk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA Nos. 513, 519 to 521/JP/2025 & ITSS No. 03/JP/2025) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत