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2026 Supreme(Online)(ITAT) 7377
INCOME TAX APPELLATE TRIBUNAL (HYDERABAD BENCH)
Vijay Pal Rao, Vice-President, Manjunatha G, Accountant Member
Prathima Infrastructure Limited – Appellant
Versus
Deputy Commissioner of Income-Tax, Central Circle – 2(4), Hyderabad – Respondent
I.T.A.Nos.1089 to 1095/Hyd/2025 | I.T.A.Nos.1125 to 1129/Hyd/2025
For the Appellants/Petitioners: Shri K.C. Devdas, C.A., Shri Poorna Chander Rao, C.A.
For the Respondents: Dr. Narendra Kumar Naik, CIT-DR, Dr. Sachin Kumar, Sr. A.R.
In joint search warrants, limitation u/s 153B is person-specific based on individual panchnama; additions from uncorroborated third-party documents deleted for lack of nexus.
Headnote:(A) Income-tax Act, 1961 - Sections 153A, 153B, 292CC - Time limit for search assessments - Joint warrant - Search concluded on 12.02.2020 for assessee as per its panchnama, though prohibitory order revoked later at director's residence on 23.07.2020 - Held, limitation person-specific; last panchnama for assessee determines execution date under Section 153B(2); assessments passed on 31.03.2022 beyond extended limit of 30.09.2021 (TOLA) quashed as time-barred. (Paras 16-21)
(B) Income-tax Act, 1961 - Sections 68, 69A, 115BBE - Additions based on loose sheets, emails, WhatsApp from third-party's personal account - No nexus, corroboration or enquiry - Held, dumb documents; secondary evidence inadmissible without originals/certification under Evidence Act Section 65B; additions deleted. (Paras 23-64)
(C) Income-tax Act, 1961 - Section 80IA(4) - Deduction to sub-contractor in infrastructure projects - Held, allowable following jurisdictional precedent, even if not direct contract with government. (Paras 106-114)
Facts of the case:
Search u/s 132 on 06.02.2020 concluded for assessee on 12.02.2020; assessments u/s 153A completed 31.03.2022. AO added unexplained income from third-party documents (cash sheets, emails, WhatsApp), treated sub-contracts bogus (1% commission), cash returns; disallowed 80IA(4). CIT(A) partly allowed assessee's appeal. Cross-appeals to Tribunal.
Findings of Court:
Assessments quashed as time-barred; all unexplained income additions deleted for lack of nexus/corroboration; sub-contracts genuine based on documents/banking; 80IA(4) deduction allowed.
Issues: Limitation u/s 153B for joint warrant; admissibility/nexus of third-party digital documents; genuineness of sub-contracts; eligibility for 80IA(4) deduction.
Ratio Decidendi: Under joint warrant, each person's last panchnama independently fixes limitation u/s 153B r.w.s 292CC; additions unsustainable absent ownership proof, corroboration, flow of funds; sub-contracts valid with documentation despite initial statements.
Result: Assessee's appeals allowed; Revenue's dismissed.
| Table of Content |
|---|
| 1. case details and assessee's grounds of appeal (Para 1 , 2) |
| 2. search, seizure, and assessment proceedings facts (Para 3 , 4 , 5) |
| 3. limitation under section 153b for joint warrant searches (Para 6 , 7 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21) |
| 4. additions from cash sheets in anil kumar's email deleted (Para 22 , 23 , 24 , 25 , 26 , 27 , 28) |
| 5. krishna reddy cash transactions additions unsustainable (Para 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36) |
| 6. cash scrolls additions deleted for lack of nexus (Para 37 , 38 , 39 , 40 , 41 , 42 , 43) |
| 7. bc soil land excel sheet proposals not taxable (Para 44 , 45 , 46 , 47 , 48 , 49 , 50) |
| 8. murali krishna commission additions deleted (Para 51 , 52 , 53 , 54 , 55 , 56 , 57) |
| 9. whatsapp messages uncorroborated, additions deleted (Para 58 , 59 , 60 , 61 , 62 , 63 , 64) |
| 10. 1% commission on sub-contracts presumptive, deleted (Para 65 , 66 , 67 , 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75) |
| 11. shantha constructions cash return uncorroborated (Para 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84) |
| 12. avexa sub-contract statement unreliable, deleted (Para 85 , 86 , 87 , 88 , 89 , 90 , 91 , 92 , 93) |
| 13. unexplained cash at shared premises deleted (Para 94 , 95 , 96 , 97 , 98 , 99 , 100 , 101) |
| 14. assessee appeals allowed (Para 102 , 103) |
| 15. revenue's unexplained income grounds dismissed (Para 104 , 105) |
| 16. section 80ia(4) deduction allowed to sub-contractor (Para 106 , 107 , 108 , 109 , 110 , 111 , 112 , 113 , 114) |
| 17. revenue appeals dismissed, final orders (Para 115 , 116) |
ORDER
PER BENCH :
The captioned appeals filed by the assessee and Revenue are directed against the separate, but identical orders of the learned Commissioner of Income Tax (Appeals) – 12, Hyderabad, dated 09.04.2025, pertaining to the assessment years 2014-15 to 2020- 21, respectively. Since facts are identical and common issues are involved in all these appeals, the same were heard together and are being disposed of, by this single consolidated order for the sake of convenience and brevity.
2. The assessee has more or less raised common grounds of appeal in all the captioned appeals. Therefore, for the sake of brevity, the grounds of appeal filed by the assessee in ITA.No.1089/Hyd/2025 for the assessment year 2014-15 are reproduced as under:
“1. The learned Commissioner of Income Tаx (Appeals) (for short - CIT(A) erred in law and on facts in upholding the additions made by the Assessing Officer. The additions are unjustified in law and liable to be deleted.
2. The learned CIT(A) erred in law and on facts in upholding the validity of the impugned assessment as being completed within the time limit prescribed under Section 153B read with Section 153A of the Income-tax Act, 1961, without appreciating the distinct legal implications arising from the issuance of a joint warrant in which the appellant-company was a separate person.
2.1 The learned CIT(A) failed to appreciate that the search in the case of the appellant-company was independently initiated on 06.02.2020 and conclusively completed on 12.02.2020, as evidenced by the Panchnama drawn on the said date; accordingly, the limitation for completion of assessment under Section 153B, after considering the extensions permitted under TOLA, expired on 30.09.2021, rendering the assessment completed in March 2022 time-barred.
2.2 The learned CIT(A) failed to correctly apply the provisions of Section 292CC, which categorically clarify that each person named in a joint warrant constitutes a distinct and separate assessee; hence, the search concluded in the case of the appellant-company on 12.02.2020 must be treated independently for the purposes of computing the limitation under Section 153B.
2.3 The learned CIT(A) erred in law in treating the Panchnama dated 23.07.2020, drawn at the residential premises of the appellant's Managing Director and his spouse, as relevant for computing the limitation period in the case of the appellant-company, disregarding that the said individuals are
