Addition u/s 69 unsustainable without incriminating material seized from assessee or corroborative evidence; reliance solely on uncorroborated third-party statements and data violates natural justice by denying cross-examination opportunity.

ORDER

Per Kavitha Rajagopal, JM:

The captioned appeals are filed by the assessee, challenging the order of the Learned Commissioner of Income Tax [‘Ld. CIT(A)’ for short] passed u/s. 250 of the Income Tax Act, 1961 (‘the Act') pertaining to the Assessment Year (‘A.Y.’ for short) 2018-19 & 2019- 20. As the facts are identical, we hereby pass a consolidated order by taking ITA No.8655/M/2025 pertaining to A.Y. 2019-20 as the lead case.

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

“1. The Ld. CIT(A) failed to appreciate that the notice issued by the jurisdictional AO is bad- in-law and illegal;

2. The Ld. CIT(A) erred in upholding the validity of the notice issued and assessment framed under Section 153C of the Act. The Ld. CIT(A) failed to appreciate that provisions of section 147 r.w.s. 148 of the Act is applicable and not the provisions of section 153C. The issuance of the said notice and consequent assessment farmed u/s.153C is bad in law, illegal, without jurisdiction and void ab-initio;

3. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the AO has not referred to any incriminating material in the satisfaction note issued to the Appellant;

4. The Ld. CIT(A) erred in confirming the assessment order by not appreciating that the Assessing Officer (AO) had failed to provide the opportunity for cross-examination of the third party whose statement and/or material was relied upon to frame the assessment. Under the circumstances and in law, the Assessment Order passed u/s.153C is against the principal of natural justice, bad-in-law and liable to be quashed;

5.1 The Ld. CIT(A) erred in confirming the addition of Rs.4,90,350/- u/s.69 of the Income Tax Act, 1961 as unexplained investments on account of alleged cash payment towards the purchase of shop premises over and above the agreement value of shop. The Ld. CIT(A) failed to appreciate that the addition is based solely on the uncorroborated statement of third party/parties and there is no tangible and incriminating material on record. The addition confirmed is bad-in-law and based on surmises, conjectures and unreliable evidences and liable to be deleted;

5.2 The Ld. CIT(A) erred in confirming the addition of Rs.4,90,350/- made in the assessment year 2019-20 and failed to appreciate that no material is brought on record to establish that the alleged payment was made during the year under consideration. The appellant had neither purchased any property nor made any payment to the alleged party during the year under consideration. In the absence of any conclusive documentary evidence linking the date of transaction to the relevant assessment year, the addition is arbitrary, bad in law, and liable to be deleted.

6. The Ld. CIT(A) erred in confirming the tax computed as per the provisions of section 115BBE of the Act. The Ld. CIT(A) failed to appreciate that the AO has not invoked the provisions of section 115BBE of the Act in the Assessment order. However, in computation sheet, the AO has calculated tax invoking the provisions of section 115BBE of the Act. The application of the special tax rate is invalid and without jurisdiction, and therefore, the tax should have been computed at the normal applicable rates.”

3. Brief facts of the case are that the assessee is an individual and had filed her return of income dated 11.10.2019 declaring total income at Rs.21,86,150/-. Pursuant to a search and seizure action u/s 132 of the Act carried out in the group cases of M/s. Rubberwala Housing & Infrastructure Ltd. (‘M/s. RHIL’ for short) the Learned Assessing Officer (‘AO’ for short) issued notice u/s 153C of the Act d