No addition can be made based solely on loose papers from a third party without direct evidence against the assessee.

ORDER

PER VIJAY PAL RAO, VICE PRESIDENT:

This appeal filed by the Revenue is directed against the order dated 28.01.2025 of the Commissioner of Income Tax (Appeals) [“Ld.CIT(A)”] for the A.Y.2014-15.

2. The Revenue has raised the following grounds of appeal :

3. The solitary issue arises in this appeal of the Revenue is that whether in the facts and circumstances of the case the Ld.CIT(A) has erred in deleting the addition made by the AO while framing the assessment u/s 153C of the Income Tax Act, 1961 (“the Act”). The Ld.DR has submitted that there was a search and seizure operation u/s 132 of the Act conducted on 06.10.2015 and consequently, the AO issued notice u/s 153A of the Act. In response to which, the assessee filed return of income and accordingly, the assessment was completed u/s 143(3) r.w.s.153A of the Act at a total income of Rs.25,31,60,897/-. Subsequently, information was received by the AO that a search and seizure operation was carried out on 09.11.2017 in the case of M/s KLP Projects Pvt.Ltd., during which, some loose sheet pages including sale deed executed by the assessee in favour of one Shri T.Uday Kumar dated 24.02.2014 was found and seized from the office premises of M/s Landmark Housing Projects Chennai Private Limited, a subsidiary of M/s KLP Projects Pvt.Ltd. The sale deed was not considered as incriminating material as it was available with AO at the time of assessment framed u/s 153A. As per the said seized document, a list of names against which a total amount of Rs.10,72,00,000/- was found. The loose sheet was confronted with Shri T.Uday Kumar in his statement u/s 132(4) dated 15.12.2017 and it was admitted that he arranged the funds of Rs.10,72,00,000/- for the purchase of the property. The AO accordingly initiated the proceedings u/s 153C of the Act by issuing notice dated 22.03.2021. In response to the notice, the assessee filed its return of income on 29.10.2021, declaring income at Rs.23,67,22,200/- . The Ld.DR has submitted that the loose sheet found and seized in the search and seizure operation in the case of M/s KLP Projects Pvt.Ltd. clearly revealed that Shri T.Uday Kumar has paid cash of Rs.11 crores to the assessee, apart from the sale consideration of Rs.8 crores shown in the sale deed. The AO has recorded satisfaction for initiation of proceedings u/s 153C and consequently made addition of Rs.11 crores as on-money sale consideration received by the assessee. The transaction of payment of Rs.11 crore in cash by Shri T.Uday Kumar is evident from the seized material found during the said search, on the basis of which, the AO initiated the proceedings u/s 153C and it is also corroborated by the fact that the assessee sold the property at T.Nagar, Chennai to Shri T.Uday Kumar vide sale deed dated 24.02.2014 at a declared consideration of Rs.8 crores. Thus, the Ld.DR has submitted that once the transactions of cash receipt against the sale of property is established from the seized material, then the deletion of the said addition by the Ld.CIT(A) is not justified. He has referred to the CBDT Instruction No.1/2023 as well as the following judgements :

(a) Pr.CIT-Central 3 Vs. Abhisar Buildwell P.Ltd. in Civil Appeal No.4484 OF 2018 (b) ITO Vs. Vikram Sujitkumar Bhatia in Civil Appeal No.916 of 2022 (c) Dayawanti Vs. CIT in Civil Appeal No.10266 of 2017

4. The Ld.DR has thus submitted that the Hon’ble Supreme Court has dismissed the SLP filed against the decision of Hon’ble Delhi High Court in the case of Dayawanti Vs. CIT while passing the judgement in the case of PCIT Vs. Abhisar Buildwell Pvt.Ltd. He has referred to para 16 and 16.1 of the judgement of Hon’ble Su