PUSHPANJALI CONSTRUCTIONS PRIVATE LIMITED,PUSHPANJALI PALACE,DEHLI GATE,AGRA vs. DCIT, CEN CIR GHAZIABAD

PER S.RIFAUR RAHMAN,AM:

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u/s 153C of the Income Tax Act, 1961 are illegal, bad in law, without juri iction and time barred and as such the Assessment
Order passed in consequence thereof also become illegal, bad in law, without juri iction and barred by limitation

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8. That the assessment under s. 153C of the Act is void ab initio since barred by limitation as per the applicable provisions of third proviso to s. 153B(1) of the IT Act as that was made for an assessment year beyond the stipulated period as laid down under the applicable provisions of Section 153A and 153C of the Act.

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CIT(A)-3, Noida was to be filed on or before 31.10.2024. Ld. AR submitted that assessee was given to understand that the counsel had prepared the appeal and the challan towards appeal filing fees was also deposited on 16.10.2024 and even the draft appeal was also prepared after logging on the ITAT portal and a copy of the same is also filed, although, the same remained pending for filing due to some sudden exigencies in his family. In this regard, the affidavit of the counsel to this effect along with supporting documents is enclosed herewith. He submitted that the delay in filing the appeal is quite unintentional and arising out of unavoidable circumstances and there was a genuine, reasonable and sufficient cause for the delay in filing of appeal and the same may please be condoned. To support the same, ld. AR of the assessee relied on various judicial pronouncements. On the other hand, Ld DR objected to the condonation of delay,
3. We have heard both the counsels on the issue of condonation of delay. In our considered opinion, there was a reasonable cause for the delay in filing the appeal. Therefore, we condone the delay in filing the appeal before the Tribunal.
4. Ground Nos.1, 9 and 11 are general in nature, hence not adjudicated. At the time of hearing, ld. AR of the assessee has not pressed Ground Nos.2,
3, 7 & 8, relating to initiation of proceedings u/s 153C and DIN issues hence the same are dismissed as not pressed.
5. With regard to Grounds 4, 5,6 and 10, relevant facts are, the assessee is Private Limited Company engaged in the business of real estate and construction. A search and seizure operations u/s 132 of the Income Tax
Act, 1961 (‘the Act’) was conducted on 10.11.2017 at the premises of the assessee along with Sh. Rajeshwar Singh Yadav and others group of 5
cases including Sh. Ghanshyam Gupta, who are not part of the group of the assessee.

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“6. The assessee filed an appeal before the Worthy CIT (A) against the above addition, however, the same was dismissed vide order dated
20.08.2024. Now we are in appeal against the above order and out submissions are as under :-
The sequence of events for the purposes of explaining the facts of the case are as under :- a)
There was search and seizure operations on one Sh. Ghanshyam
Gupta, who is not related to assessee and independent ‘third party’ and during the course of search, from the independent premises of Sh. Ghanshyam Gupta, one agreement for purchase of 6.5545 hectares of land was found between the company owned by Sh. Ghanshyam Gupta, namely ‘M/s Jansewa Sehkari Awas Samiti
Limited’ and group of farmers, dated 31.07.2010. The said agreement was for a consideration of Rs.85,00,000 per bigha.
Copy of the agreement is being enclosed at Paper Book pages 245
to 261 and as per the said agreement, the company had paid a sum of Rs. 20,00,000/- in cash as per pages 251-254 of the ‘Paper
Book’. On the said agreement, there are signatures of Sh.
Ghanshyam Gupta and thumb impressions of the farmers and, from that, it is quite apparent that the farmers are mainly agriculturists and uneducated.
b)
Sh. Ghanshyam Gupta, on the basis of said agreement, dated
31.07.2010 as entered with the farmers wanted to make ‘extra money’ approached the assessee, contending that, he can facilitate the purchase of land from group of farmers and, accordingly, got an agreement, dated 02.05.2011 executed between the assessee and the same group of farmers, for the same land, measuring 6.5545 hectares, as a mediator, for a 7
consideration of Rs. 30.10 crores and copy of that agreement, is being enclosed herewith in the paper book at pages 75-76. The said agreement, duly signed was found from the residential premises of Sh. Ghanshyam Gupta, during the course of search from his premises and the assessee made payment of Rs. 1 crore as advance and out of which Rs. 45 lacs was paid through banking channel and Rs. 55 lacs was paid in cash, which have been duly recorded in the books of accounts of the assessee.
c)
The said agreement was executed on 02.05.2011 and the time of ‘one year’ was mentioned therein for finalization of ‘registration deed’ in favour of assessee concerned. However, the assessee got to know that Sh. Ghanshyam Gupta had been over charging the amount, which was actually to be paid to farmers and also that he had not informed the assessee, about the next date of payment for the purpose of execution said agreement and, therefore, the assessee directly approached the farmers and came to know that there is substantial difference on account of purchase consideration, as agreed, upon & settled as per agreement and the actual amount and, thus, the said agreement, dated 02.05.2011
was cancelled on 20.05.2011, copy of which is enclosed herewith in the paper book at pages 77-78. This agreement could not be found from the residential premises of Sh. Ghanshyam Gupta, since that agreement related to assessee and, therefore, was kept by the assessee only.
d)
That from the residence of Sh. Ghanshyam Gupta, a cancelled agreement was also found, dated 03.06.2011, copy placed at paper book, which was in consequence to the agreement, dated 31 July

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2010, which was entered into originally for a consideration of @
Rs. 55 lacs per bigha between Sh. Ghanshyam Gupta and farmers.
e)
Thus, since the assessee had now acquainted himself with the group of farmers and purchased 4.61 hectares of land, directly from the farmers for a total consideration of Rs. 17 crores, and the bifurcation of the same has been reproduced by the Assessing
Officer, at page 13 of the assessment order. It is worthwhile to mention here that on the major portion of the land, ‘High-Tension
Wires’ of the ‘Electricity Department’ were existing and nothing could be built below the said ‘High Tension Wires’ and due to the said disadvantage, the said wires were got shifted by the assessee concerned, by making a huge payment of Rs. 87,86,214/- to the Electricity department as per evidence enclosed in the paper book at pages 225-228, and the same was also furnished to the CIT(A).
Thus, since this task of shifting of ‘High Tension Wires’ was very tedious and lot of time and energy was involved and, therefore, after considering the amount of Rs.87,86,214/-, so paid for shifting of ‘High Tension Wires’ , the total cost for the land purchased by the assessee works out to Rs. 17,87,86,214 i.e.(17 crores +
87,86,214/-).The copies of the challans and relevant evidences were furnished before the CIT(A) and enclosed in the Paper Book at pages 227-228. 7. The core issue on account of above fact is that, the Assessing
Officer had adopted the consideration of 6.5545 hectares of land, for which, an agreement was entered into by the company with the group of farmers for a total consideration of Rs. 30.10 crores with Ghanshyam Gupta as a mediator. The Assessing Officer applied

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the same consideration of 30.10 crores even in respect of land purchased directly by the assessee concerned measuring, 4.61
hectares for a consideration of Rs. 17 crores, directly from the same farmers.
8. The Assessing Officer has grossly erred in assuming that consideration of Rs. 30.10 crores, which was for 6.5545 hectares, instead of 4.61 hectares and also without taking into consideration the fact that the assessee had dealt with groups of farmers directly and, thus, big chunk of margin, which the middleman Sh.
Ghanshyam Gupta was trying to siphon off was saved by the assessee company. Further, the assessee filed affidavits of the farmers, duly attested, and all of them confirmed the consideration of Rs. 17 crores for 4.61 hectares of land and copies of such affidavits duly attested are enclosed. Reliance is being placed on the judgement of Apex Court in the case of ‘Mehta Parikh” case reported in 30 ITR 181 and of the Hon’ble Gujarat High Court in the case of Glassline Equipment, reported in 253 ITR 454, in which, it has been held that contents of the affidavit cannot be disbelieved.
9. Further to that, it has not been appreciated by the lower authorities that lot of efforts were made, besides good amount of time was devoted by the assessee in getting ‘High Tension Wires’
shifted, for which, the evidence has been placed in the paper book at page 225-228 and which, the authorities below, have failed to appreciate. Further the value of land as on the date of purchase have to be considered on the basis of the fact that “High Tension
Wires’ were occupying the substantial portion of the land and the said land thus, could not have fetched the higher value of land

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and, which fact has not been appreciated by the authorities below.
The assessee for the purposes of the same have even furnished the ‘valuation’ report of the registered valuer and the copies of the challans of the payment of Rs.87,86,214 made to the electricity
Department, for removing of the wires and the same are again enclosed in the paperbook at pages 228. 10. Therefore, if we take into consideration the first agreement dated
31st July, 2010, between the company, owned by Sh. Ghanshyam
Gupta, namely ‘Jansewa Sehkari Awas Samiti Limited’ with the farmers vide agreement, placed at paper book at pages 245-261, then the rate, at which, we had purchased the land of 4.61
hectares directly from the farmers for a consideration of Rs. 17
crores is fully justified in view of the following working:-

Area of Land
Amount of consideration i)). Consideration agreed for 1 Bigha of land between Ghanshyam Gupta and farmers vide agreement, dated_____
85,00,000
ii) Rate of 1 hectare 85,00,000*4 (1 Hectare=4
bighas)
3,40,00,000
iii) Rate of 4.61 hectares of land at the same rates reflected in the agreement, dated 31.07.2010
15,67,40,000
Amount of consideration for 4.61 hectares of land between assessee and farmers
17,00,00,000

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higher price and which, eventually assessee got to know of the same. Both the cancelled agreements, i.e. dated 03.06.2011
entered, between the company owned by Sh. Ghanshyam Gupta and farmers was found from the residence of Sh. Ghanshyam
Gupta, during search and cancelled agreement, dated 20.05.2011, which was lying at the assessee’s premises has also been placed in the ‘paper book’ and which proves that the consideration paid by the assessee concerned was much higher than the original agreement @ Rs. 85 lacs per bigha is fully justified. The evidence in the shape of affidavit from farmers and Sh.Ghanshyam Gupta and the statement of Sh.Ghanshyam Gupta recorded post search duly substantiate the contention of the assessee.
12. Even, if we add the cost of shifting of high tension wire, the purchase cost of the land would work out to much higher and works out to Rs. 17,87,86, 214/- as mentioned above. Thus, in nutshell, there is no basis for adoption of consideration of 6.5545
hectares of land between the assessee and farmers, dated
02.05.2011, which was facilitated by Sh. Ghanshyam Gupta due to the reasons as mentioned above.

OTHER FACTS RELATED TO CONSIDERATION FOR THE PURCHASE OF LAND

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agreement, dated 20.05.2011, since the assessee directly approached the farmers and got the deal executed. The relevant questions answers are being reproduced regarding the statement of Sh. Ghanshyam Gupta, as under:

ÿij18- ³या आपम¤ पुÕपांजिल कंÖů³शन ÿा. िल. को जानते है तथा इ°न¤ आपके या। । आपके िकसी
कÆसनª से कोई समझौता हòआ है? चव Annexure A-7, का पेज नं. 01 से 72 जो आपके घर से
सचª के दौरान भीज हòआ था, को िदखा रहा हóँ। कृपया इसे देख कर बताएं िक इसम¤ लगे हòए बैनाम¤
आपके भर से ³यŌ िनले तथा कÌपनी Loadstar Intratac Pvt. Ltd. से आप का ³या संबंध
है तथा इसके Ĭारा िकए गए Source of Investment भी बताए?

उ°र- जो भूिम पातीराम आिद से पुÕपांजिल कंÖů³शन ने खरीदी है उस जमीन का पूवª म¤ एúीम¤ट हमारे
पास था। चूंिक वह भूिम िववािदत भी और िववाद नहé सुलझा पाए। इसिलए बाद म¤ यह भूिम म¤
पुÕपांजिल कंÖů³शन ÿा. िल. ने खरीदती था Annexure A-7, कापेजनं. 01 से 22 तक जो वैमना
म¤ लगे ह§ वह सब पातीराम तथा अÆना िकसानŌ से úाम िववाद तुत²गयात महमने कुछ जमीन
Loadstar Infratac Pvt. Ltd. के नाम से खरीदी थी। इससे संबंिधत Source of Investment के बारे म¤ म¤ बाद म¤ बता दूंगा।

Copy of said complete statement of Sh. Ghanshyam Gupta recorded during post search is placed in the paper book at pages
134-138. 14. It is worthwhile mention here that though, originally agreement at the behest of Sh. Ghanshyam Gupta was entered into on 02.05.2011 by the assessee and farmers but the land was finally purchased by the assessee, directly from the farmers majority in March 2012 as above and, thus, there was a gap of about one year and due to which, though, there may have been certain increase in the price of land, but still the assessee purchased the land at a very favourable rates and it is being mentioned here only to demonstrate that no ‘on money’, whatsoever, was paid in view of the above said facts and circumstances.

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15. Even, the affidavit of Sh. Ghanshyam Gupta was furnished during the course of appellant proceedings confirming the fact that the original agreement between the assessee and farmers was cancelled and he had returned back Rs. 55 lacs as cash to the assessee concerned and which, is further, proved from the fact that Sh. Ghanshyam Gupta was seriously involved as a mediator for the whole deal under consideration. Copy of the affidavit is enclosed in the Paper Book at page 80. ISSUANCE OF NOTICE U/S 153C

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i).
……

iv).
The 2nd issue mentioned in the satisfaction note, is about the agreement for purchase of land measuring 6.5545 hectares for Rs. 30.10, in which, 55 lacs had been paid in cash and Rs. 12 crores yet to be paid.

v).
Regarding these two things, it has been mentioned in the last paragraph of satisfaction note that since these are incriminating documents/material found and seized during search is to be verified/examined from the regular books of accounts of the assessee concerned, during assessment proceedings.

vi).
This finding clearly stipulates that notice u/s 153C had been issued only for verification, whereas section 153 clearly lays down as under:-

153-C.Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having juri iction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which 15
search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A :”

From the bare reading of the above section, it is very much clear that before assuming the juri iction u/s 153C, the AO has to be satisfied that the document seized from the searched documents, have a bearing on the determination of total income of such person, other than the searched person, which condition has not been satisfied in the present case by the Assessing Officer concerned, since nothing has been mentioned therein.

vii). Your goodself’s kind attention is invited towards the satisfaction note recorded by the Ld. AO in the case of the assessee enclosed in the PB at pages 202-203. From a perusal of the same, it is clear that the said so-called satisfaction note, neither bears any DIN nor the same has been dated, by the Ld. AO, implying that the said satisfaction note is invalid.

Further, in the last paragraph of the satisfaction note, the Assessing Officer mentioned as under:-

“The all above incriminating documents/material found and seized during the search action u/s 132 of the Income Tax
Act, 1961 need to be verified/examined form the regular books of account of M/s. Pushpanjali Constructions Pvt. Ltd.
during the assessment proceedings. Therefore, in view of the provisions of section 153C(1) read with section 153A of the Income Tax Act, 1961, I am satisfied that proceedings u/s 153C read with section 153A is required to be initiated in the case of M/s. Pushpanjali Constructions Pvt. Ltd..
Accordingly, notices u/s 153C read with section 153A of the Income Tax Act, 1961 are being issued.”

viii). From the above, thus, it is quite evident that how and in what manner, the AO had drawn the conclusion, that there is escapement of income on the basis of seized documents and it is also not mentioned that what is the undisclosed income, which is proposed to have not have been declared and, thus, very basis of initiation of the proceeding u/s 153C is devoid

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of any valid reasoning and, thus, the assessment as farmed on the basis of non-existing satisfaction note, deserves to be quashed since as per section 153C, such documents should have bearing on the determination of total income of six assessment years and no such finding has been recorded therein.

(ix)
Your goodself’s attention is invited to section 153C, which is equivalent to 148, where the AO assumes the juri iction over the completed assessment of assessee and before issue of notices, the AO, is mainly required to satisfy that how there is escapement and what is quantification of income is there on the basis of documents seized during the course of proceeding from third party and since nothing has been mentioned therein, the proceedings as initiated u/s 153C are bad.

x).
Further, it is also pointed out herewith the said satisfaction note does not specify the assessment year, for which, the information has been provided and with regard to the same, it is submitted that a valid satisfaction note should clearly specify the assessment year and should also quantify the ‘issue wise’ amount in respect of which, such satisfaction is proposed. However, from a perusal of the satisfaction note, it is clear that neither there is any mention of the assessment year, to which, the so called information relates and nor the amount of alleged escapement of income has been mentioned there and only things have been mentioned in a very casual manner.

xi).
Firstly, in Sl. 1 of the satisfaction note, the Ld. AO has merely stated the fact that the assessee has purchased land from ‘Sh. Pati Ram’ for a total consideration of Rs.1.7
crores and that the same is evident from the sale deed. With regard to the same, it is submitted that it is not debated that the assessee has purchased the same, and payment in respect of the same has also been made via banking channels and the same has also been disclosed in the books of accounts of the assessee. Therefore, there is nothing incriminating in the said evidence and the same nowhere suggests any escapement of income.

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xii). Then in SL. 2 again, the Ld. AO has stated non-debatable fact regarding agreement entered between the assessee and “M/s Jansewa Sehkari Awas Samiti Limited” and, for which, we have also admitted that the same was entered by the assessee and even payment of Rs. 1 crore has been paid against such an agreement. However, the said agreement was cancelled vide deed dated 20.05.2011, therefore, again there is nothing in the said document, which would suggest escapement of income or any incriminating material, whatsoever.

xiii). Then in Sl. 3 again, the Ld. AO has pointed out some document, which actually neither exists nor the same has ever been confronted to the assessee, either during the search proceedings or during the assessment proceedings.
Your goodself’s kind attention is also invited towards the Question 25 of the statement of Sh. Ghanshyam Gupta, wherein Annexure A-3 is has been confronted to him and it is submitted that said Annexure A-3 altogether different and from a perusal of the said statement, it is clear that the document A-3 confronted to Sh. Ghanshyam Gupta and A-3
alleged as above, by the Ld. AO are different. Moreover, no cognizance of the same has ever been taken in the assessment order, thus, the same does not represent any incriminating documents.

xiv). From a perusal of the above, it is clear that the so called satisfaction note does not represent any shred of information that the documents represent unexplained income of the assessee, therefore, in such a case, the satisfaction note is faulty and thus, the entire proceedings u/s 153C is invalid and void-ab-initio. Reliance is being placed on the following judgments:- a).
HIGH COURT OF DELHI Commissioner of Income-tax-7 v.
RRJ
Securities
Ltd. 62 taxmann.com 391,
Delhi
High
Court,(refer Para 35-39) b).
In Pepsi Foods (P.) Ltd. v. Asstt. CIT [2014] 367 ITR
112/52 taxmann.com 220/[2015] 231 Taxman 58 (Delhi), this 18
Court had explained that on a plain reading of Section 153C of the Act, a notice under that section could be issued only after two preceding conditions had been met. First of all, the AO of the searched person would have to arrive at a satisfaction that document or asset seized does not belong to the person searched but to some other person and secondly, the seized documents/assets are handed over to the AO having juri iction over that person, that is, the person other than the one searched and to whom the seized documents/assets are said to belong. (refer para 6– 11) c).
Maheshwari Coal Benefication& Infrastructure (P.) Ltd. v.
Dy.
Commissioner of Income-tax
[Central]
Circle-
1(1) 171 taxmann.com 842 (Nagpur - Trib.)-

b).
The Assessing Officer has also relied upon the fact that in view of the above agreement, the purchase of land for Rs. 17
crores for 4.61 hectare of land is the understatement in the registration deed.

c).
He has also relied upon certain loose/rough sheets not related to assessee at all and found from the premises of third party Sh. Ghanshyam Gupta, where certain names and discussion about the payment is there and which contains no mention of the assessee.

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a).
As regards, the said agreement is concerned, the said agreement stood cancelled as per agreement, dated 20.05.2011, which has not been doubted by the AO and further to that, the assessee had purchased 4.61 hectares of land for Rs. 17 crores and if we compare the area of the land and the consideration by way of agreement, dated 03.07.2010 and the land actually purchased as per facts mentioned above, we had paid rather more consideration and, if we, consider the amount paid for shifting of high tension wire, the amount further is increased manifold and, thus, how there is escapement of income, has neither been quantified and nor elaborated by the AO in the satisfaction note and, thus, the juri iction as framed u/s 153C is devoid of any valid consideration.

b).
As regards, the reliance placed by the AO on certain rough/loose sheets from the premises occupied by independent person namely
Sh. Ghanshyam Gupta, such loose slips have neither been written by the assessee nor found from the premises of assessee and further to that, there is no mention in the satisfaction note about such so called incriminating material, which can be said to be belonging to assessee. Thus, when basic condition for assuming the juri iction of the ‘incriminating document’ belonging to assessee have not been made, the same cannot be relied upon by the AO to draw adverse conclusion against the assessee and, for which, the following submissions may, please, be considered:- i)
At the outset, it is submitted that the entire additions have been made on the basis of the so called ‘loose slips’ found at the residence of Sh. Ghanshyam Gupta, third party and 20
which are reproduced on page 5-12 of the assessment order by AO.

ii).
It is submitted that the said slips/rough notings has been seized from third party and it does not belong to the assessee, as it neither contains the name of the assessee, any date and nor the same is in the hand writing of the assessee or any Authorized representative of the assessee.

iii)
Therefore, as per the provision of section 132(4A), it is deemed that any such document found during the course of search from the possession or control of the person searched shall belong to such person only.

iv)
It is further submitted that such rough documents is not supported by any corroborative material, evidence on record and it is also a fact on record that even the statement of Sh.
Ghanshyam Gupta was recorded during the course of post search and no statement was recorded against such rough documents and the same is evidenced from the copy of statements of Sh. Ghanshyam Gupta enclosed in the paper book at pages 134-138. v)
In question No. 18 of the statement of Mr. Ghanshyam Gupta he has been asked regarding agreement with the assessee and against which, he stated that due to various disputes between the farmers, the said agreement was cancelled and the assessee has purchased the land directly from the farmers (sellers) refer page 27 of the Appeal order and page
136 of PB.

vi)
It is submitted that Sh. Ghanshyam Gupta was also involved with the same farmers (sellers) for other part of the land as well and the same is evident from the statement of Sh.
Ghanshyam Gupta recorded post search and also enclosed in the PB at page 134-138. It has been stated by him that some part of land was purchased by some other company namely M/s Loadstar Infratac Pvt. Ltd. at the behest of Sh.
Ghanshyam Gupta which shows that Sh. Ghanshyam Gupta was involved with the farmers in respect of the other land deal as well.

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vii)
Therefore, no addition can be made on the basis of such rough/loose documents found from the third party as per the presumptions u/s 132(4) and reliance is being placed on the following case laws:- a).
CIT, Delhi (Central)-II v. D.K. Gupta [2008] 174
TAXMANN 476 (Delhi)-“Section 132 of the Income-tax Act,
1961 - Search and seizure - Block period 1-4-1995 to 18-3-
2002 - Assessee was a director in a company which was in business of property development and real estate - During a search conducted at business premises of said company, two diaries were seized from assessee - Notings in those diaries included appointments, reminders, noting/jottings, etc. - On being questioned, assessee explained that notings in said diaries were in connection with general property related discussions and had nothing to do with actual transactions -
Assessing Officer, however, raised a presumption against him in view of provisions of section 132(4A) and made addition on account of entries recorded in said two diaries -
On appeal, Commissioner (Appeals) deleted addition - On revenue's appeal, Tribunal held that provisions contained in section 132(4A) did not authorize Assessing Officer to raise such a presumption, particularly when assessee had offered explanation along with documents and evidences and had also furnished an affidavit to that effect - Tribunal further returned a finding of fact that there was no corroborative or direct evidence to presume that notings/jottings recorded in said two diaries had materialized into transactions giving rise to income which had not been disclosed in regular books of account - Tribunal, therefore, upheld order of Commissioner (Appeals) - Whether findings of facts recorded by Tribunal could be interfered with - Held, no”

b).
Ashwani Kumar v. ITO 39 ITD 183 (Delhi)-“Section 69A, read with section 132(4A), of the Income-tax Act, 1961 -
Unexplained moneys - Assessment year 1985-86 - Assessee was engaged in business of purchase and sale of cement -
During relevant accounting period a search was conducted at assessee’s business premises and department found an amount of Rs. 1,86,330 in cash - Assessee stated that it belonged to D and in which he was a partner and aforesaid

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amount was cash-in-hand - Whether in view of facts that assessee’s total sale was of Rs. 1,10,23,744 it could be said that amount found in search was cash-in-hand and, thus, same was not an unexplained money includible in assessee’s income - Held, yes

Section 69, read with section 132(4A), of the Income-tax Act,
1961 - Unexplained investment - Assessment year 1985-86 -
Whether in view of facts mentioned under above head
"Unexplained money", document which was found at time of search and which did not indicate whether figures referred to quantities of money or to quantities of goods, was a dumb document and, therefore, no addition could be made on basis of such document - Held, yes - Whether an addition could be made on basis of sample analysis report which showed that assessee sold adulterated cement - Held, no - Whether amount, which was mentioned in a slip found at residence premises of assessee’s father during search, could be treated as assessee’s income even though assessee denied it - Held, no Section 132(4A) of the Income-tax Act, 1961 - Search and seizure - Whether presumption arising under section 132(4A) is not restricted to proceedings under section 132(5) and could be raised in proceedings for regular assessment - Held, yes”

c).
S.P. Goyal v. Dy. CIT [2002] 82 ITD 85 (Mum.)-“Section 68
of the Income-tax Act, 1961 - Cash credits - Assessment year
1993-94 - Addition of Rs. 60 lakhs had been made by Assessing Officer on account of consignment sales on basis of entries found in loose sheets of diary belonging to assessee seized during course of search - Whether loose sheets of paper torn out of diary for 1992 could be considered as books for purpose of section 68 - Held, no -
Whether as it was a mere entry on loose sheet of paper and assessee claimed that it was only a planning, not supported by actual cash, then there had to be circumstantial evidence to support that entry really represented cash of Rs. 60 lakhs
- Held, yes - Whether where there was no such evidence found in form of extra cash, jewellery or investment outside

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book, explanation offered by assessee could not be rejected -
Held, yes - Whether addition made was on mere suspicion without any corroborative evidence and had to be deleted -
Held, yes”

d).
Pioneer Publicity Corpn. Dy. CIT [2000] 67 TT) (Delhi)
471-Where a diary was admittedly recovered and seized from the officer premises of the assessee-firm during the course of search, the same would have to be presumed to be belonging to the assessee-firm as per provisions of section 132(4A), and where there was nothing to prove that the diary belonged to a third person and not to the assessee-firm additions could be made on basis of entire in such diary.

Where household articles like airconditioners, colour TVs, etc. were found during search and purchase of these items had not been accounted for nor there were separate withdrawals shown for their purchase, in the absence of any evidence about the period of their purchase, the same would be deemed to have been acquired as on the date of search out of undisclosed income under the provisions of section 69A.

e).
K. Gupta v. CIT [1999] 63 TTJ (Delhi) 532-“The basis of addition in this case is a seized paper - p. 13, Annexure AI, relating to purchase/sale of property. The document bears the caption "Estimates". There seems some truth in the explanation of the assessee where it is alleged that the entries relate to some futuristic planning. Since the assessee is carrying on the business of estate agent, in the process of this business, he is required to discuss various plans, projects and proposals with various parties like brokers, builders, etc. These discussions generally take place before a project for purchase of development, plans are discussed as the assessee acts as an agent on behalf of the buyer or seller.
The basis of addition by the Revenue is entirely rests on the presumption of recovery of p. 13, Annexure A-1, and the presumption contained under s. 132(4A) of the IT Act. In this connection, we would like to mention here that presumption arising out of sub-section (4A) of s. 132 of the Act is available to the Revenue for the limited purpose of search

24
(1997) 89 ELT 16 (SC) the Hon’ble Supreme Court laid down that it is not the function of the Tribunal to enter the arena of making suppositions that are tantamount to evidence that the party has failed to lead.”

f).
CIT v. S.M. Aggarwal [2007] 162 Taxmann3/ 293 ITR 43
(Delhi) g).
K. Malhan v. Dy. CIT [2005] 91 TTJ (Delhi) 938

h).
ARN Infrastructure India Ltd. v. Assistant Commissioner of Income-tax, Central Circle-28, New Delhi, 81
taxmann.com 260 (Delhi) i). CIT v. Jai Pal Aggarwal [2012] 28 Taxmann.com
269/[2013] 212 Taxmann (Delhi) j).
ITA No. 765/CHD/2024- (Para 16) k). The DCIT, Central Circle-2 Ludhiana vs Amarjit Singh,
ITAT Chandigarh, ITA No. 774/CHD/2023- (refer Para
17)

(viii) Thus, on the basis of above said facts, the loose document which have been reproduced at different pages of the assessment order have no link or connection with the assessee, because the heavy onus lies on the department that the said document pertains to or belong to assessee

25
concerned. It is further, submitted on merits, that from the various documents found and it is clear that Sh. Ghanshyam
Gupta was, in fact, acting the mediator for arranging land of farmers to different parties and, thus, under what circumstances, such notings/abbreviation have been written on this loose document, is none of the concern of the assessee and the AO has only gone by wild guess that since the names of the farmers may be same, but since such farmers having sold the land to the other parties apart from Sh. Ghanshyam Gupta, acting as a mediator, the said document, cannot be said to be belonging to assessee at all.

(ix)
Further, it is submitted that as per the settled law as stated above document as found from the premises of third party, has to be considered in the hands of the person from whom such documents are found, because he is sole judge about the nature and source of such document and surprisingly, no adverse view has been drawn of such document in the hands of Sh. Ghanshyam Gupta, while framing his assessment u/s 153A and more particularly, the said document did not form the basis of drawing the satisfaction note against the assessee and, thus, the consideration of such document and drawing adverse inference against the assessee of having paid ‘on money’ which was neither proved from documents nor from the factual facts and circumstances as elaborated above, it is prayed that such finding of the authorities below does not stand to the test of scrutiny. The copy of the assessment order of Sh. Ghanshyam Gupta is enclosed in the paperbook at pages 231-244. 20. Further, it is also submitted that the assessee during the assessment proceedings vide reply dated 13.11.2019 has requested the AO to confront or cross examine the persons from whom such rough document were obtained and the same is evident from the copy of the reply enclosed in the PB at pages 154-159. 21. However, no opportunity to cross examine or cross verify the said third party evidence was ever provided to the assessee, which nullify the evidentiary value of the said rough documents. Reliance

26
in this regard is placed on the following judgments wherein it has been held that the Ld. AO is not justified in making addition in the hands of the assessee on the basis of third party statement/documents found from the premises of some third party:
774/CHD/2023 (06.03.2025) (Para 17) c). PCIT (Central) vs. DSG Papers (P.) Ltd as reported in [2024]
161 taxmann.com 586 (Punjab & Haryana) [09-11-2023]

d). Income-tax Officer, VII(2), Ludhiana vs. Dr. R.L. Narang as reported in [2008] 174 Taxman 96 (Chandigarh) e).
ACIT vs. Ms. Katrina Rosemary Turcotte [2017] 87
taxmann.com 116 (Mumbai) f). ACIT vs. Navaratna Estates & ANR as reported in 63 CCH
0015 Vishakhapatnam-Trib (08.09.2021) (Para 24) g). ACIT vs. Layer Exports (P) Ltd. as reported in 88
taxmann.com 620(Mumbai – Trib) (Para 33) h). Shri Vinit Ranawat vs. ACIT (ITAT Pune) in ITA No.
ITANos. 1105 and 1106/PN/2013
9(1)(1), Mumbai as reported in [2021] 124 taxmann.com 72
(Mumbai - Trib.) j). PRARTHANA CONSTRUCTION (P.) LTD. vs. DCIT as reported in [2001] 118 TAXMAN 112 (AHD.) (MAG.)

Mechanical approval granted by Addl. CIT (Central), Kanpur u/s 153D

27
22. It is submitted that before passing of assessment order, prior approval of the concerned Authority is required u/s 153D of the Act.
23. With regard to the same, your Honors kind attention is invited towards the approval u/s 153D accorded by Addl. CIT of Income
Tax (Central) Range, Meerut, which is marked to the Dy. CIT
(Central Circle), Ghaziabad and enclosed in the PB at page 204
and in the said approval the concerned Addl. CIT of Income Tax has referred to the application number
F.
No.
DCIT/CC/GZB/Rajeshwar Group/Approval/2019-20/2300 dated
12.12.2019. 24. This approval depicts that the Dy. CIT (Central Circle), Ghaziabad has requested for approval from Addl. CIT of Income Tax (Central)
Range, Meerut via letter No. F. No. DCIT/CC/GZB/Rajeshwar
Group/ Approval/ 2019-20/2300 dated 12.12.2019 for passing of the assessment orders in the case of the assessee for the A.Y. 2012-
13 to 2018-19 containing 7 volumes.
27. It is submitted that the approval of the same applications have been given by Addl. CIT of Income Tax (Central) Range, Meerut on the same date i.e. 12.12.2019, thereby implying that the concerned
Authority has perused the entire set of records for 6 assessment years contained in 7 volumes on the same day the same was forwarded to him which is impossible and it depicts merely a mechanical approval by the said authority without going through the facts of the case.
25. The Directorate of Income Tax has given a detailed procedure before giving of the approval u/s 153D and the same is given in Clause 9 of Manual of Office Procedure, Volume II (Technical)

28
February 2003 issued by Directorate of Income Tax on behalf of Central Board of Direct Taxes, Department of Revenue,
Government of India, page 44 read as under:
“9. Approval for assessment: An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT. (For the period from 30-6-1995 to 31-12-1996 the approving authority was the CIT.) The Assessing Officer should submit the draft assessment order for such approval well in time. The submission of the draft order must be docketed in the order- sheet and a copy of the draft order and covering letter filed in the relevant miscellaneous records folder. Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. Finally once such approval is granted, it must be in writing and filed in the relevant folder indicated above after making a due entry in the order-sheet. The assessment order can be passed only after the receipt of such approval. The fact that such approval has been obtained should also be mentioned in the body of the assessment order itself.”

29
significant additions to assessee's income for cash deposits and cash introduced through an entry operator - Assessing Officer incorrectly recorded returned income, leading to an erroneous total assessed income - ACIT approved assessment under Section 153D without reviewing assessment records or search material, missing key discrepancies - On appeal, Tribunal set aside assessment order on ground that ACIT’s approval was based only on draft assessment order and failed to review assessment records and search material - High Court upheld Tribunal’s finding -
Against said order revenue filed instant SLP - Whether having regard to peculiar facts of instant case, matter needed no interference and thus, SLP was to be dismissed - Held, yes [Para
2] [In favour of assessee]

ii).
Principal Commissioner of Income-tax v. MDLR Hotels (P.) Ltd.,
Delhi High Court- 166 taxmann.com 327 (Delhi) -Section 153D, read with section 153A, of the Income-tax Act, 1961 - Search and seizure - Prior approval for assessment - Tribunal quashed assessment order by holding that approval granted under section 153D was not valid as Competent Authority accorded approval to as many as 246 proposed assessments by way of single letter of approval without application of mind and approval so granted did not even refer to any seized material/assessment records or any other documents which could suggest that Authority had duly applied his mind before granting approvals - Whether in view of decision in Pr. CIT v. Pioneer Town Planners (P.)
Ltd. [2024] 160 taxmann.com 652/465 ITR 356 (Delhi), no question of law arose from Tribunal’s order - Held, yes [Para 5]
[In favour of assessee]

iii).
Ambika Alloys v. Principal Commissioner of Income-tax,
Central- ITAT Delhi, 172 taxmann.com 112 (Delhi - Trib.)-
Section 263, read with section 153D, of the Income-tax Act, 1961 -
Revision - Of orders prejudicial to interest of revenue (Approval under section 153D) - Assessment years 2013-14 and 2014-15 -
Whether where approval under section 153D is quite mechanical, passed without application of mind and lacks sufficient thoughtful process, resultantly assessment order followed by such approval lacks legitimacy and is ‘non-est’ and ‘null and void’ and liable to be quashed and revision under section 263 of said order is nullity and void ab initio - Held, yes [Para 23] [In favour of assessee]

30
iv).
Maheshwari Coal Benefication& Infrastructure (P.) Ltd. v. Dy.
Commissioner of Income-tax [Central] Circle-1(1) ITAT
NAGPUR BENCH, 171 taxmann.com 842- IV. Section 153C, read with section 153D, of the Income-tax Act, 1961 - Search and seizure - Assessment in Case Of (Approval under section 153D) -
Assessment years 2009-10 to 2013-14 - During course of search, documents pertaining to assessee were seized from searched person - Thereafter, notice under section 153C was issued to assessee and assessment was completed under section 153C read with section 143(3) for relevant assessment years- Assessing
Officer also sought approval from Addl. Commissioner under section 153D for making assessment under section 153C - It was noted that Addl. Commissioner did not mention anything in approval order passed under section 153D even though for each year separately, towards his process of deriving satisfaction so as to exhibit his due application of mind - Even approval did not refer to any seized material/assessment records/satisfaction note or any other documents - Whether said approval granting proceeding was a quasi judicial proceeding requiring application of mind - Held, yes - Whether since approval under section 153D was granted on same day on 31-3-2022 on basis of letter dated 31-3-2022 by Assessing Officer for seeking approval, proper procedure had not been followed by Assessing Officer as well as Joint Commissioner -
Held, yes - Whether thus, approval given under section 153D was invalid and consequently impugned order passed under section 153C read with section 143(3)/144 was to be quashed - Held, yes[Paras 61, 62 and 68] [In favour of assessee].

v).
Further reliance is being placed on the following judgments:- a)
ACIT vs. Serajuddin and Co. [2024] 163 taxmann.com
118(SC)[28-11-2023]

b)
ACIT vs. Serajuddin & Co. [2023] 150 taxmann.com 146
(Orissa)[15-03-2023]

c).
Principal Commissioner of Income-tax vs. Shiv Kumar
Nayyar [2024] 163 taxmann.com 9 (Delhi)[15-05-2024]

31
d).
2025 (3) TMI 994 - ITAT DELHI KEHAR SINGH VERSUS
DCIT, CIRCLE-27, NEW DELHI.

e).
2025 (1) TMI 970 - ITAT DELHI INDER CHAND BAJAJ AE
-17 VERSU CIT CENTRAL CIRCLE-32 DELHI f).
2025 (4) TMI 1132 - ITAT DELHI APPLE COMMODITIES
LIMITEDVERSUS DCIT, CENTRAL CIRCLE II, NOIDA g).
2024 (12) TMI 1107 - ITAT DELHI M/S AIRWILL INFRA
LTD. VERSU Y. COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE, NOIDA.

h)
2025 (1) TMI 175 - ITAT DELHI KAVITA JAIN, BIJENDER
KUMAR JAIN,SANDEEP JAIN, SMT. RAKHI JAIN,
NARENDER KUMAR JAIN, SURINDERKUMAR JAIN,
JAGDISH PRASHAD JAIN VERSUS DCIT CENTRAL
CIRCLEKARNAL i).
2025 (2) TMI 915 - ITAT DELHI GULZAR AHMED
VERSUS DCIT,CENTRAL CIRCLE, DEHRADUN j).
2024 (12) TMI 1553 - ITAT MUMBAI NILESH SHAMJI
BHARANIVERSUS DCIT, CC-4 (1), MUMBAI k).
No.140 to145/Chd/2024, AY 2013-14 to 2018-19

l)
Ganesh Builders vs. DCIT, ITA No. 422/CHD/2022 AY
2012-13 &452/CHD/2022 AY 2012-13 (Relevant discussion in this case have been given starting from para 16, page 37
and by relying upon various judgments final finding has been given in para 16.19. page 48 & 49 of the order) m)
Minda Capital Pvt. Ltd. vs. ACIT in ITA No.1390/Del/2020
vide order dated 13.06.2025. Thus, the confirmation of addition by the Ld. CIT(A) is not in order on the following facts:-

32
a).
No proper satisfaction not drawn u/s 153C because neither it mentions the basis of issuance of notice and how there is escapement of income by virtue of document found from third party.

b).
…

c).
No determination of the undisclosed income on the basis of documents seized from third party or any assessment year has been mentioned in the satisfaction note.

d).
Even, the document at Serial No.3 of the satisfaction note is not related to assessee at all and neither any adverse view has been taken by the AO and there is no discussion in the assessment order by the AO or by the CIT(A),.

e).
Further, loose/rough documents which have been found from the premises of third party, no adverse view has been drawn against the assessee without there being any mention in the satisfaction note regarding such document and, thus, the assumption of juri iction of such document by drawing adverse conclusion against the assessee deserves to be quashed.

f).
…

g).
Even on merits, the land ultimately was purchased by the assessee is far less as regard area of land as compared to agreement, dated 11.01.2010 and even compared with the rates as per agreement, dated 11.01.2010 and the area of land purchased, coupled with the amount paid for shifting of High
Tension Wire, the consideration paid by the assessee for purchase of land is much more than the consideration mentioned in agreement, dated July 2010. h).
Even. Sh. Ghanshyam Gupta have been found to be facilitating of sale of land to farmers to different parties and, thus, only to restrict the loose slip found from his premises being attributable/pertaining to assessee is not justified without there being any adverse inference have been drawn in the case of Sh.Ghanshyam Gupta.

i)
The presumption u/s 132(4) has mandatorily required to be considered in the hands of person from whom, the documents are found as per settled law.

j).
Even Sh.Ghanshyam Gupta in his post search statement agreed to the fact that the agreement, dated 02.05.2011 had been cancelled and that affidavit has been ignored summarily.

k).
Affidavit duly attested of the farmers filed and they were not summoned u/s 133(4)/131 and, thus, in view of the judgment of Hon’ble Apex Court in the case of Mehta Parikh, reported in 30 ITR 131 and Hon’ble Gujarat High
Court in the case of Glasslines Equipment reported in 253 ITR 454 that the contents of the affidavit have to be proved to be true if no other material is available on record.

33
Thus, in view of the above said facts and case laws, the addition as sustained by the CIT (A), may, please, be deleted.”

34
The Ld. CIT (DR) stated that the AO has correctly applied the rate of land on the basis of agreement, dated 02.05.2011 as per copy placed at pages 77 to 78 and relied upon the orders of AO/CIT(A.)
12. In rejoinder, ld. AR of the assessee submitted that there are no signatures of the farmers on the said agreement, dated 02.05.2011 as per page 75 to 76 of the Paper Book, though, the names of the farmers have been mentioned therein. Further, Sh. Ghanshyam Gupta is the key person of ‘Jan Sewa Sehkari Awas Samiti Ltd.’ and he entered into an agreement, dated 2.5.2011, as “agreement holder” only, which is mentioned therein.
Further, Sh. Ghanshyam Gupta is the key person of Jan Sewa Sehkari
Awas Samiti Ltd.’, and had entered into an agreement with same farmers on 31.07.2010, copy of which is placed at pages 245 to 261 of the ‘Paper
Book’ and relevant page is 250, where the name of society have also been mentioned. The agreement has been signed by Sh.Ghanshyam Gupta.
Further, the said agreement, dated 02.05.2011 was cancelled on 20.05.2011 and it bears the signatures of Sh. Ghanshyam Gupta, and the reason for cancellation was that the original owners were not ready to sign the agreement and also that there was some dispute about the ownership and land rates are on higher side as per facts stated in the cancellation agreement, dated 20.05.2011 as per copy placed at pages 77
to 78 of Paper Book. It has been further stated in that agreement that the rates of land are very much on the higher side and the actual rates are quite less. The existence of dispute is also substantiated in the statement of Sh. Ghanshyam Gupta recorded on 17.01.2018. Copy placed at Paper
Book pages 134 to 137 and relevant page is Question No. 18 and its answer at page 136, in which, he has again confirmed that there was some dispute and also he has confirmed that earlier agreement of same land was with him. Sh. Ghanshyam Gupta has furnished an affidavit also,

35
placed at page 80 of the ‘Paper Book’, confirming the cancellation of agreement, dated 20.05.2011 and the return of the amount has taken place as per agreement, dated 02.05.2011 as mentioned in the agreement, due to dispute, since the farmers could not agree to and, therefore, the agreement was cancelled on 20.05.2011. Thus, it was Sh. Ghanshyam Gupta, who was main key person.
13. It has been mentioned by the AO in a very casual manner in the assessment order, but there are no other title deeds related to assessee, which have been found during the course of search from the residence of Sh. Ghanshyam Gupta.
14. It is only a general remark given by the AO in his order, but there is no linking of any cheques payments as mentioned at pages 5 to 12 of the order of AO with the assessee as per entries in Annexure A-5, seized from the residence of Sh. Ghanshyam Gupta. Even, the assessee had filed the sources of investment in purchase of land for Rs. 17 crores as per evidences submitted to the AO and no adverse view had been drawn with regard to such investment and such cheques as mentioned in Annexure A-
5, do not tally with the books of accounts of the assessee at all and neither there is any linking made by AO in his order.
15. Further, even the satisfaction note, which has been drawn by the AO at page 202 to 203, there is no mention of Annexure A-5 as incriminating evidence as per copy of the ‘satisfaction note’ placed at pages 202 to 203
and, thus, when no satisfaction has been recorded by AO u/s 153C about
Annexure A-5, being belonging to assessee and, thus, mentioning of above facts by the AO, as relied upon by the Ld. CIT (DR) is not proper.
16. The satisfaction note was provided to the assessee vide letter, dated
05.08.2024 by the AO as per evidence placed at page 201 of Paper Book

36
and copy of the satisfaction note is duly certified and there is no date as per copy at page 202 to 203 of Paper Book.
17. It was stated by the Ld. Counsel of the assessee that satisfaction in 153C is equivalent to issuance of notice u/s 148 and both the provisions are ‘para materia’ and at page 203 of the Paper Book, which is a part of satisfaction note, it has been stated that notice u/s 153C is being issued for verification/examination and further no exact quantification of income, sought to be assessed or any quantification of ‘undisclosed income’ has been determined/mentioned in the satisfaction note and in the satisfaction note, the Annexure at Serial No.1, page 202 mentions only one registration deed of Rs. 1,70,00,000/- and there is no satisfaction with regard to 2nd registration deed, which have been placed at pages 96
to 121 of the paper book. Thus, when the satisfaction is not proper/valid, whole proceeding deserves to be quashed.
18. Even, there is mention at Serial No.3 of the satisfaction note at page 202, about certain Annexures, but such annexures did not belong to assessee at all and no adverse view have been drawn by the AO and the same was confirmed by Sh. Ghanshyam Gupta in his statement recorded on 17.01.2018 and relevant page is 134 and at page 136, in answer to question No.19, Sh. Ghanshyam Gupta reiterated that since the land was disputed and the dispute could not be resolved and, therefore, the agreement, dated 02.05.2011 was cancelled with M/s Pushpanjali
Construction Pvt. Ltd. Thus, the reliance on agreement, dated 02.05.2011
is not correct as relied by the AO/CIT(A).
19. This statement of Sh. Patiram is self contradictory as Patiram himself has executed the registered sale deed in favour of the Pushpanjali
Constructions Pvt. Ltd. and no credence can be given to such arguments of CIT (DR).

37
20. It was replied that it is a fact on record that agreement dated 02.05.2011
was cancelled, where the signatures of Sh. Ghanshyam Gupta are also there, affidavit of Sh. Ghanshyam Gupta, statement of Sh. Ghanshyam
Gupta, in which, he stated that the land was disputed and there were no signatures of the land owner on the agreement, dated 02.05.2011 and in ‘cancelled agreement’ at page 77 to 78, it has been mentioned clearly that the agreement, dated 02.05.2011 was drawn under some misconception and the assessee was misled. Thus, reliance on the cancelled agreement by the AO/CIT(A) is misconceived.
21. Further, the rate on which registration has been effected by the assessee for purchase of land, directly from the farmers is the same, for which, Sh.
Ghanshyam Gupta had entered into agreement with the farmers vide agreement, dated 31.07.2010 as per copy placed in Paper Book at pages
245 to 261 and further, there are affidavits of the farmers of land placed in the paper book at pages 122 to 124, stating that no ‘on money’ was received by them, nor any adverse view has been drawn in the cases of farmers. Further, the assessee had incurred a sum of Rs. 87,86,214/- for removing the ‘High tension Wire’ as per evidence placed at pages 227 to 228 of the Paper Book. Even, submitted the valuation reports, dated
09.05.2011, where the value of land was determined by the registered valuer, where the valuation was determined at less than Rs. 17 crores as per evidence placed at pages 229 to 230 of the paper Book. Further, no evidence of any cash payment was found.
22. Lastly, the rate at which, the assessee had purchased the land @
Rs.85,00,000/- per bigha is the same for which, Sh. Ghanshyam Gupta had entered into the agreement with the farmers as per agreement, dated
31.07.2010, copy placed at pages 245 to 261 of Paper Book. Thus, no adverse view can be drawn.

38
23. Considered the rival submissions and material placed on record. First we shall deal with the juri ictional issues raised by the assessee relating to first issue of satisfaction recorded by the AO to initiate the proceedings u/s 153C of the act, whether the satisfaction recorded by the AO is as per the provisions contained in the act or not. We observed that certain documents were found at the possession of Shri Ghanshyam, based on the above information, the case of the assessee was reopened by issue of notice u/s 153C by recording the satisfaction based on the information that the assessee had agreed to buy land of 6.5545 hectares for the total consideration of Rs. 30.10 crores. It is also brought to our notice that in the post search proceedings, Shri Ghanshyam was summoned by the investigation wing and statement was recorded, in which he had explained the transactions and reason for the non-execution of the agreement for sale. Based on the above information, the satisfaction note was prepared. In the satisfaction note, the AO records that based on the incriminating material found during the search need to be verified/examined from the regular books of account of the assessee during the assessment proceedings. Therefore, in view of the provisions of section 153C(1) read with section 153A of the Act, he is satisfied that proceedings u/s 153C read with section 153A is required to be initiated in the case of the assessee, accordingly the notices were issued. In our view, this is absolutely general and casual recording of satisfaction without any substance, there is no recording of details of escapement of income or quantification of escapement of income or any reference to the specific assessment year. We observed that the transaction of purchase was already recorded by the assessee in their books of account. The same was already available with the Revenue, the AO should have verified the same and should have recorded the satisfaction with more purpose. Further we

39
observe that the AO has with held certain information which were found during the search and failed to share with the assessee, even this information was not recorded in the satisfaction note. With the above observations, we are of the view that the AO has recorded the satisfaction not as per the statutory convention. In the case of RRJ Securities Ltd
(supra), the Hon’ble Juri ictional Court observed that the concluded assessments cannot be interfered with under revisions provisions unless there is incriminating material belonging the assessee has been seized.
There has to be some relevance to the documents seized with the assessee for the relevance assessment year or years. In the given case also, there is some relevance to the transaction but the AO failed to bring relevance to the income escaped in the given case. He just wanted to make enquiry rather than actually record the proper satisfaction. Further, in the case of Pepsi Foods P Ltd (supra) the similar view was expressed by the Hon’ble
Juri ictional Court and observed that the satisfaction note itself must display the reasons or basis for the conclusion that the AO of the searched person is satisfied that the seized documents belong to a person other than searched person. They expressed contents of the satisfaction note with the following expressions, we are unable to discern any satisfaction of the kind required u/s 153C of the Act. Considering the satisfaction note recorded in the present case, which is general and casual without application of mind, merely for the sake of recording the satisfaction note, deserves to be dealt as bad in law. Therefore, the entire assessment u/s 153C is vitiated and accordingly, we held it to be bad in law. In the result, grounds raised by the assessee in this aspect are allowed.
24. With regard to the second juri ictional issue of approval granted by the Addl CIT (Central) Kanpur u/s 153D is proper as per the provisions of the Act, we observed that the assessee had made detailed submissions before us. From the granted by ACIT, w sake of brevity, it is 40
ITA N e above submissions, we observe that t which is placed at page 204 of the pap s reproduced below :-
No.1001/DEL/2025

the approval was per book, for the 41
25. We find that Hon’ble juri ictional Allahabad High Court in the case of PCIT Central vs. Siddharth Gupta reported in 450 ITR 534 has decided the similar legal issue in favour of the assessee and against the Revenue, which was upheld by Hon’ble Supreme Court in SLP (Civil) (supra) and Hon’ble High Court held as under :-
“The approval of draft assessment order being an in-built protection against any arbitrary or unjust exercise of power by the Assessing
Officer, cannot be said to be a mechanical exercise, without application of independent mind by the Approving Authority on the material placed before it and the reasoning given in the assessment order. It is admitted by Sri Gaurav Mahajan, learned counsel for the appellant-revenue that the approval order is an administrative exercise of power on the part of the Approving Authority but it is sought to be submitted that mere fact that the approval was in existence on the date of the passing of the assessment order, it could not have been vitiated. This submission is found to be a fallacy, in as much as, the prior approval of superior authority means that it should appraise the material before it so as to appreciate on factual and legal aspects to ascertain that the entire material has been examined by the Assessing Authority before preparing the draft assessment order. It is trite in law that the approval must be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case.
The requirement of approval under Section 153D is pre-requisite to pass an order of assessment or re-assessment.
Section 153D requires that the Assessing Officer shall obtain prior approval of the Joint Commissioner in respect of "each assessment year"
referred to in Clause (b) of sub-section (1) of Section 153A which provides for assessment in case of search under Section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of "each assessment year" falling within six assessment years
(and for the relevant assessment year or years), referred to in Clause (b) of sub-section (1) of Section 153A. The proviso to Section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years).

42
The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment orders under Section 153A.

The authenticity of the order can be re-verified from Delhi High
Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/05/2024 at 21:34:51 that a letter dated 30.12.2018 was filed by the ld. AO before the ld. Addl. CIT seeking approval of draft assessment order u/s 153D of the Act. The ld. Addl. CIT has accorded approval for the said draft assessment orders on the very same day i.e., on 30.12.2018 for seven assessment years in the case of the assessee and for seven assessment years in the case of Smt.
NeetuNayyar. It is also pertinent in this regard to refer to pages
68 and 69 of the paper book which contains information obtained by Smt. NeetuNayyar from Central Public Information

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Officer who is none other than the ld. Addl. Commissioner of Income-tax, Central Range-S, New Delhi, under Right to Information Act, wherein, it reveals that the ld. Addl. CIT had granted approval for 43 cases on 30.12.2018 itself. This fact is not in dispute before us. Of these 43 cases, as evident from page
36 of the paper book which contains the approval u/s 153D, 14 cases pertained to the assessee herein and Smt.
NeetuNayyar. The remaining cases may belong to some other assessees, which information is not available before us. In any event, whether it is humanly possible for an approving authority like ld. Addl. CIT to grant judicious approval u/s 153D of the Act for 43 cases on a single day is the subject matter of dispute before us. Further, section 153D provides that approval has to be granted for each of the assessment year whereas, in the instant case, the ld. Addl. CIT has granted a single approval for all assessment years put together."
17. Notably, the order of approval dated 30.12.2020 which was produced before us by the learned counsel for the assessee clearly signifies that a single approval has been granted for AYs 2011-12 to 2017-18 in the case of the assessee. The said order also fails to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above.
18. Therefore, under the facts of the present case, considering the foregoing discussion and the enunciation of law settled through This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court
Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/05/2024 at 21:34:51 judicial pronouncements discussed hereinabove, we are unable to find any substantial question of law which would merit our consideration.”
27. We also find that ITAT Delhi Bench in the case of M/s Millenium
Vinimay (P) Ltd. vs. ACIT, ITA No.458/Del/2022 dated 31.5.2024 has dealt the similar legal issue and decided the same in favour of the assessee. The relevant findings of the Coordinate Bench are reproduced

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as under:-
“15. There are several decisions, which supports the view that approval granted by the superior authority in mechanical manner defeats the very purpose of obtaining approval u/s 153D of the Act.
Such perfunctory approval has no legal sanctity in the eyes of the law. The decision of the co-ordinate bench in Shreelekha Damani vs. DCIT 173 TTJ 332(Mum.) which has been approved by juri ictional High Court subsequently, reported in 307 CTR 218
affirms the plea of the Assessee, wherein the Hon'ble Bombay High
Court held as under:-
"1. This appeal is filed by the Revenue challenging the judgment of Income Tax Appellate Tribunal ("the Tribunal"
for short) dated 19th August, 2015. 2. Following question was argued before us for our consideration:
"Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that there was no 'application of mind' on the part of the Authority granting approval?

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the same can be granted. The approval should not be an empty ritual and must be based on consideration of relevant material on record.

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11. Upon considering the entire aspect of the matter, we find that the approval has been granted not separately for each assessment year for the assessee whereas the provision of Section 153D of the Act stipulates conditions that no order of assessment or reassessment shall be made by an Assessment Officer below the rank of Joint Commissioner in respect of each assessment year referred to in Clause (b) of Sub Section (1) of Section 153A of the Act or the assessment year referred to in Clause
(b) of Sub Section 153B of the Act except the prior approval of the Joint
Commissioner. It further appears from the approval dated 08.06.2018
that the same was a common and composite order whereas the Addl.
Commissioner is required to verify and approve that each of assessment year is complied with as well as procedural laid down under the Act.
Such fact clearly reveals non-application of mind on the part of the Learned Addl. Commissioner of Income Tax, Central Range-7, New
Delhi. Thus granting approval for all the common years instead of approval under Section 153B for each assessment year separately de horse the rules. The said approval is found to have been given in a mechanical and routine manner. We find that the order issuing authority has not discharged its statutory duties cast upon him even by assigning cogent reasons in respect of the issues involved in the matter. Thus granting approval in the absence of due application of independent mind to the material on record for each assessment year in respect of the assessee's case separately vitiates the entire proceedings; the same is found to be arbitrary and erroneous and therefore, liable to be quashed. We are also inspired by the ratio laid down in the Judgment narrated hereinabove passed by the Hon'ble Juri ictional High Court and respectfully relying upon the same with the above observation, we quash the entire proceeding initiated under Section 153C r.w.s 153A of the Act in the absence of a valid approval granted by the Learned Additional
Commissioner of Income Tax, Central Range-7, New Delhi.
12. In the result, appeal of the assessee is allowed.”

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29. Be that as may be, we proceed to adjudicate on the merit also involved in this case. We observe that the case of the assessee was revised by issue of notice u/s 153C based on the information and documents found in the search proceedings initiated in the case of Shri Ghanshyam Gupta, who is the director in the company namely, Jansewa Sehkari Awas Samiti
Limited (in short JSASL). A document namely agreement to sell was found and as per the agreement the assessee had agreed to purchase
6.5545 hectares of land from the company represented by Shri
Ghanshyam for the total consideration of Rs. 30.10 crores. Based on the above, it was observed that the assessee had paid advance both by cheque and cash to the extent of Rs. 1 crore. Further it was also observed that another agreement was also found at the possession of Shri Ghanshyam in which the company JSASL and group farmers had entered in agreement and the company agreed to buy the land from the farmers at a price of Rs. 85 lakhs per bigha of land. As per the above, the farmers were paid Rs. 20 lakhs in cash.
30. Meantime, Shri Ghanshyam entered into an agreement with the assessee to sell the same land at Rs. 1.15 crores per bigha of land. Subsequently, the assessee came to know about the mischief of Shri Ghanshyam and cancelled the above agreement and proceeded to buy the same land directly from the farmers to the extent of 4.61 hectares by paying the consideration at Rs. 85 lakhs per bigha as per the original agreement by Shri Ghanshyam with the farmers. With the above facts on record, the AO presumed that the assessee had entered into an agreement with Shri
Ghanshyam and paid huge cash which was not recorded by the assessee in their books of account. As per the facts on record, we observed that the assessee had cancelled the agreement of sale with Shri Ghanshyam and proceeded to buy the same land but not as per the agreement entered with 49
Shri Ghanshyam for the total quantity of land of 6.5545 hectares but purchased only 4.61 hectares at the same cost as entered by Shri
Ghanshyam with the farmers. The above fact was also confirmed by him in the statement recorded during post search proceedings. Apart from the agreement for sale found during the search and other documents collected from Shri Ghanshyam confirm that the agreement of sale was not acted upon due to the reason that the farmers rejected the proposal given by him which is much lesser compared to the actual purchase consideration offered by the assessee to farmers. Further we observe that the assessee also had not purchased the full quantity from Shri Ghanshyam and the actual land purchased was only 4.61 hectares. The presumption adopted by the AO on the basis of original agreement to sell that the assessee must have paid huge cash, however, there is no record with the AO to substantiate his findings or presumptions. All the documents submitted by the assessee prove that the assessee had originally entered into agreement with Shri Ghanshyam to buy land 6.5545 hectares, however it was later found that Shri Ghanshyam tried to make additional gain by selling the same piece of land to the assessee by purchasing the same for much lesser price that is Rs. 55 lakhs per Bigha land from the farmers compared to the agreement entered with the assessee to sell the same at Rs. 1.15 crores.
Therefore, the assessee cancelled the agreement and the same was also confirmed by Ghanshyam in his statement recorded during the post search proceedings. It is also fact on record that the assessee had purchased the land at the cost actually agreed by Shri Ghanshyam from the farmers without involvement of Shri Ghanshyam. The sale consideration paid by the assessee also matches with the valuation of the land. We observed from the calculation of the consideration submitted by the assessee that the total value of land for 4.61 hectares @ Rs. 85 lakhs

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per bigha comes to Rs. 17 crores (4.61 hectares equal to 20 bighas @ Rs.
85 lakhs). Considering all the facts on record, the factual matrix suggest that the assessee had actually purchased the land by paying only 17 crores directly to the farmers without there being any involvement of Shri
Ghanshyam proves that the statement recorded by him and relevant documents submitted by the assessee are matched and found to be true and genuine transaction, the allegation made by the AO on the basis of presumption is without any substance and without any cogent material at the disposal of the AO. The documents found at the place of search of Shri Ghanshyam were dead documents, which were not acted upon due to mi eed and greediness of Shri Ghanshyam to make extra money at the back of the assessee. Therefore, we are inclined to allow the ground raised by the assessee.
31. In the result appeal filed by the assessee is partly allowed.
Order pronounced in the open court on this 19th day of September , 2025 (SUDHIR KUMAR)
ACCOUNTANT MEMBER

Dated: 19.09.2025
TS