NIIT TECHNOLOGIES LTD.,,NEW DELHI vs. DCIT, CIRCLE-18(2), NEW DELHI

This appeal by the assessee is emanating from the order of the Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur in Appeal No. CIT(A)- IV/11271/DCIT-CC/GZB/2015-16/59 dated 16.04.2018. The main issue is relating to sustaining the addition of Rs. 50,00,000/- made by the AO as unexplained advance.

Assessee’s AR filed Application dated 18.03.2025 which has been placed on record, under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 requesting for admission of following additional legal grounds in the instant matter which are purely legal and goes to the root of the matter and needs to be admitted, on the anvil of the decisions of the Hon’ble Apex Court in the case of CIT vs. Varas International, reported in 294 ITR 80 (SC), National Thermal Power Co. Ltd. vs. CIT reported in 229 ITR 383 (SC) and the Special Bench decision in DHL Operators, reported in 108 TTJ 152 (SB). i. That in view of the facts and circumstances of the case and in law, the assessment orders were passed under section 153A/143(3) without seeking mandatory approval under section 153D of the Act. ii. Without prejudice to the aforesaid, the approval under section 153D of the Act is mechanical, without any application of mind, without perusing the records of the case and has been passed in a haste therefore, the assessment orders passed by the AO under section 153A are void ab intio, jurisdictionally flawed, and deserve to be quashed. iii. That in view of the facts and circumstances of the case and in law, the approval under section 153d of the Act is a consolidated approval, which is not in accordance with the provisions of section 153D and violation of mandatory procedure laid down by the CBDT in Circular No. 03 of 2008 dated 12.03.2018.

At the time of hearing, none appeared on behalf of the assessee, despite issue of notice, hence, we are proceeding exparte qua the assessee.

After hearing the Ld. DR and perusing the records, we are of the considered view that as per settled law by the Hon’ble Supreme Court in the aforesaid cases, the aforesaid additional legal grounds in the instant matter deserve to be admitted, hence, we admit the same.

Brief facts of the case are that a search and seizure operation was conducted on 26.09.2014 at the premises of the KDP/MGI Group of cases where certain incriminating documents were found belonging to the assessee. Later on , notice u/s. 153A of the Act was issued. In response, assessee filed his return showing income of Rs. 11,10,060/-. Subsequently, notices u/s. 143(2) and 142(1) were issued. In the assessment, the AO made the addition of Rs. 50,00,000/- on account of unexplained advance received. Aggrieved with the action of the AO, assessee preferred the appeal before the Ld. CIT(A), who vide his impugned order dated 16.04.2018 sustained the addition by dismissing the appeal of the assessee. Against the order of the Ld. CIT(A), assessee is in appeal before us.

At the outset, it is noted that it was the contention of the assessee made in the grounds of appeal that Ld. CIT(A) has erred in not considering the assessee’s plea that since admittedly the “Ekrarname” on the basis of which an addition was made was found and seized from the premises of M/s KDP Infrastructure Pvt. Ltd., therefore, the assessment if any, could be made u/s. 153C of the Act and not u/s. 153A. It was the further contention of the assessee that Ld. CIT(A) wrongly sustained the addition despite the fact that assessee as well as Shri Vinod Tyagi in the sworn statement recorded u/s. 131(1A) has categorically stated that the only 3 | P a g e amount of Rs. 50 lacs was received from Sh. Vinod Tyagi was a sum of Rs. 50 lacs in cheque no. 00012 dated 04.07.2011 in M/s KDP Infrastructure Pvt. Ltd. against purchase of 3 flats. It was the further contention that Ld. CIT(A) was wrong in drawing the conclusion that the mode of payment was obviously the “cash” despite the fact that nothing about mode of payment either cash or cheque was mentioned in the seized agreement. It was the further contention of the assessee that Ld. CIT(A) has not considered the statement of Shri Vinod Tyagi whereby he explicitly denied the agreement and the signature appended on the said agreement and also overlooked the presumption u/s. 132(4A) r.w.s. 292C of the Act which squarely applies to the case of the assessee according to which if the amount is advance in the hands of the assessee, it cannot be taken to be an income.

Per contra, ld. CIT(DR) relied upon the orders of the authorities below.

Heard Ld. DR and perused the relevant records.

On the merits of the case, we find that AO has made the addition on account of advance cash received as per incriminating seized document ‘Annexure LP-6, Page No. 1 & 2’ found and seized, which represent an ‘Ekrarnama” or “Agreement” dated 28.07.2011 between the assessee and Shri Vinod Tyagi executed on judicial stamp paper valued Rs. 100/-, having the contents that an advance of Rs. 50,00,000/- has been received out of agreed consideration of Rs. 1,25,00,000/- by the assessee from Shri Vinod Tyagi for sale of his residential property situated at Home No. 18, Rama Krishan Colony, Model Town, Ghaziabad, which has been confirmed from the statement on oath of the assessee that, indeed advance of Rs.

As regards additional legal grounds are concerned, since we have decided the appeal on the merits of the case in favour of the assessee, as aforesaid, hence, we refrain from adjudicating upon the additional legal grounds, as reproduced in para 2 of this order. 6 | P a g e