S. 153A : Assessment-Search-Alleged transfer of Development rights-Reassessment based on seized ledger account and third-party statement-No independent inquiry conducted by the AO-No evidence to link the assessee to the transaction-Addition is deleted. [S. 131, 147, 148, 153A, 153C]
The assessee has been a dormant firm since 2003 and received a reassessment notice u/s 147 r/w 148 based on information that a partner of the firm received large cash payments for the sale of Transferable Development Rights (TDR) by another entity. The AO alleged that the assessee was used to route these unaccounted funds. However, the ITAT observed that the seized materials, including a ledger account and the third-party statement, failed to establish a connection to the assessee. The AO did not conduct any independent inquiry or find corroborative evidence to support the claim that this dormant firm was used to route cash for a TDR transaction owned and executed by a separate joint venture. Thus, the additions were deleted by the ITAT on the grounds that they were based on speculation and assumptions, rather than concrete evidence that could establish the assessee’s involvement in the transactions. (I.T.A. No.5376/Mum/2024 dt. 23-05-2025) (AY. 2009-10)
M.K. Shelters v. ITO Ward (Mum.)(Trib.) www.itatonline.org.
[Coram : Shri Narender Kumar Choudhary, JM & Ms. Padmavathy S, AM]