Income Tax Appellate Tribunal - Chennai
John Antony,Coimbatore vs Dcit, Ncc-2, Coimbatore on 28 April, 2026
आयकर अपील य अ धकरण 'ए' यायपीठ, चे नई।
IN THE INCOME TAX APPELLATE TRIBUNAL
'A' BENCH: CHENNAI
माननीया सु ी प ावती एस, ले खा सद ा एवं
माननीय ीमनु कुमार िग र , ाियक सद के सम
BEFORE MS. PADMAVATHY S, ACCOUNTANT MEMBER AND
SHRI MANU KUMAR GIRI, JUDICIAL MEMBER
आयकर अपील सं./ITA No 3500 & 3501/Chny/2025
नधारण वष/Assessment Year: 2009-10 & 2011-12
John Antony v. Deputy Commissioner of
13-15 KRG Nagar, 4th Street Ganapathy Income Tax Non Corporate
Coimbatore 641006 Circle - 2 Coimbatore-641018
[PAN: AEIPJ6043G]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ क ओर से//Assessee/Appellant by : Mr. T. Banusekar, Advocate
यथ क ओर से /Respondent by : Ms. Balamirtha, JCIT
सुनवाई क तार ख/Date of Hearing : 25.03.2026
घोषणाक तार ख /Date of Pronouncement : 28.04.2026
आदे श / O R D E R
PER MANU KUMAR GIRI, JM:
These two appeals filed by the assessee are directed against the separate orders of the ld. Commissioner of Income Tax (Appeals) both dated 18.09.2025 for Assessment Years 2009-10 and 2011-12. Since common issues are involved, both appeals are disposed of by this consolidated order.
2. Grounds of appeal raised by the assessee for AY 2009-10 in ITA No.3500/Chny/2025 are as below:
1. For that the order of Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case and is opposed to the principles of equity, natural justice and fair play.
ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 2 ::
2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing officer is without jurisdiction.
Legal Grounds
3. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing officer if at all could have initiated proceedings only by issue of notice u/s. 153A read with Section 153C and not u/s. 148 of the Income tax Act.
4. For that without prejudice to the above, the reopening is bad in law.
5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that there is no failure to fully and truly disclose all material facts on part of the appellant.
6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the reassessment is based on borrowed satisfaction which is bad in law.
7. For that the Commissioner of Income Tax (Appeals) failed to appreciate that there is no independent enquiry or application of mind by the Assessing officer to reopen the assessment of the appellant.
8. For that the reassessment was completed without complying with the statutory requirements of law.
Addition on account of purported Undisclosed Investment
9. For that the Commissioner of Income Tax (Appeals) erred in upholding Rs.50,00,000/- as undisclosed investment of the appellant.
10. For that the Commissioner of Income Tax (Appeals) failed to appreciate that loose sheet without any corroborative evidence have no evidentiary value.
11. For that the Commissioner of Income Tax (Appeals) erred in sustaining the addition merely based on sworn statements which were recorded under tremendous stress and duress without any corroborative evidence.
12. For that the Commissioner of Income Tax (Appeals) erred in not considering the retraction statements filed during the course of assessment proceedings.
13. For that the Commissioner of Income Tax (Appeals) ought to have appreciated that the failure to provide cross-examination of parties whose statements have been relied upon vitiates the assessment proceedings.
14. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the additions made by the Assessing Officer were based on guesswork, conjectures and surmises.
ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 3 ::
Interest u/s. 234A & 234B not leviable
15. For that the appellant objects to the levy of interest under section 234A and 234B of the Income Tax Act.
PRAYER For these grounds raised and such other grounds that may be raised, may be altered, amended or modified, with the leave of the Hon'ble Tribunal before or during the hearing of the appeal, it is most humbly prayed that the Hon'ble Tribunal may be pleased to:
1. Quash the order of reassessment and / or
2. Delete the addition of Rs. 50,00,000/- and/or
3. Pass such other orders as this Hon'ble Tribunal may deem fit.
3. Grounds of appeal raised by the assessee for AY 2009-10 in ITA No.3501/Chny/2025 are as below:
1. For that the order of Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case and is opposed to the principles of equity, natural justice and fair play.
2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing officer is without jurisdiction.
Legal Grounds
3. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing officer if at all could have initiated proceedings only by issue of notice u/s 153A read with Section 153C and not u/s. 148 of the Income tax Act.
4. For that without prejudice to the above, the reopening is bad in law.
5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the reassessment is based on borrowed satisfaction which is bad in law.
6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that there is no independent enquiry or application of mind by the Assessing officer to reopen the assessment of the appellant.
7. For that the reassessment was completed without complying with the statutory requirements of law.
Addition on account of Short Term Capital Gain
8. For that the Commissioner of Income Tax (Appeals) erred in upholding Rs.22,85,000/- as Short Term Capital Gain.
ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 4 ::
9. For that the Commissioner of Income Tax (Appeals) failed to appreciate that loose sheet without any corroborative evidence have no evidentiary value.
10. For that the Commissioner of Income Tax (Appeals) erred in sustaining the addition merely based on sworn statements which were recorded under tremendous stress and duress without any corroborative evidence.
11 For that the Commissioner of Income Tax (Appeals) erred in not considering the retraction statements filed during the course of assessment proceedings.
12. For that the Commissioner of Income Tax (Appeals) ought to have appreciated that the failure to provide cross-examination of parties whose statements have been relied upon vitiates the assessment proceedings.
13. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the additions made by the Assessing Officer were based on guesswork, conjectures and surmises.
14. Without prejudice to the above, the Commissioner of Income Tax (Appeals) erred in upholding Rs.22.85 lakhs as short term Capital gain as against Rs.4.95 lakhs actually reflected in the loose sheet.
Interest u/s. 234B not leviable
15. For that the appellant objects to the levy of interest under section 234B of the Income Tax Act.
PRAYER For these grounds raised and such other grounds that may be raised, may be altered, amended or modified, with the leave of the Hon'ble Tribunal before or during the hearing of the appeal, it is most humbly prayed that the Hon'ble Tribunal may be pleased to:
1 Quash the order of reassessment and/or
2. Delete the addition of Rs.22,85,000/- as Short Term Capital Gain and / or
3. Pass such other orders as this Hon'ble Tribunal may deem fit.
4. Brief facts of the case are that the appellant is an individual who works as an architect. In 2008, the appellant, along with six associates (Shri D. Srinivasan, Shri S. A. Anandakumar, Shri V. R. Gunasekaran, Shri V. R. Vasudevan, Shri R. K. Palanisamy, and Shri D. Senthilkumar), decided to invest in a property situated at ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 5 ::
Peelamedu. On 30.06.2008, these individuals executed a Memorandum of Understanding agreeing to collectively invest Rs. 640.17 lakhs in the said property and authorized Shri D. Srinivasan to acquire the property on their behalf. The appellant contributed Rs. 50 lakhs towards the total investment of Rs. 640.17 lakhs, which was paid via cheque. Subsequently, on 15.11.2010, the group sold the property to J. Nagendran and two others for Rs. 4 crores.
On the same date, through another Memorandum of Understanding, the sale proceeds were distributed among the parties mentioned earlier (copy enclosed, refer pages 6 to 10 of the paper book index). The appellant's case for the Assessment Year 2009-10 was selected for scrutiny under CASS, and an assessment under Section 143(3) was completed through an order dated 04.11.2011, determining the appellant's income at Rs.10,00,770 as against the declared income of Rs.7,07,980/-.
5. The ld.AR for the assessee submitted that the assessment should have been made under Section 153A read with Section 153C, and not under Section 148 (Ground No. 3). Reference is invited to the recorded reasons for reopening, which clearly indicate that the proposed addition is based on information pertaining to the appellant that was discovered during a search conducted under Section 132 in the case of M/s. Sree Annapoorna Sree Gowrishankar Hotels Pvt. Ltd. and its group entities. It is contended that where an assessment is founded on information or material relating to the assessee that is unearthed during a search carried out on another person, such assessment can only be initiated under Section 153A ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 6 ::
read with Section 153C, and not under Section 148. In the present case, the reassessment of the appellant appears to have been made solely on the basis of material seized during a third-party search, as is evident from the recorded reasons for reopening (copy of reasons enclosed; see pages 3 and 5 of the paper book index).
6. The reasons for reopening for A.Y.2009-10 is reproduced hereunder:
"During the course of a search u/s, 132 of the Income Tax Act conducted in the case of M/s.SreeAnnapoornaSreeGowrishankar Hotels P. Ltd. and group of cases, Coimbatore, on 08-09-2015, the Department got credible information that you and six others jointly made investment of Rs.814 lakhs in a land situated at Peelamedu, Coimbatore. Out of this, it is seen that, as your share, you have invested Rs.100 lakhs (Rs.50 lakhs in Cheque and balance Rs.50 lakhs in cash, being on-money). This was in the Financial Year 2008-09. The above on-money of Rs.50 lakhs has to be treated as your unaccounted / unexplained investment for the Asst. Year 2009-10. Notice u/s. 148 was therefore served on you."
7. The reasons for reopening for A.Y.2011-12 are reproduced hereunder:
"During the course of a search u/s.132 of the Income Tax Act conducted in the case of M/s.
SreeAnnapoomaSreeGowrishankar Hotels P. Ltd. and group of cases, Coimbatore, on 08-09-2015, the Department got credible information that even though you and six others had jointly sold the land situated at Peelamedu, Coimbatore, to Shri.N.Nagendran and two others of M/s. Hotel Vijay Paradise, ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 7 ::
Coimbatore, for a sale consideration of Rs.4 crores as per Registered Sale Deed, the land was actually sold for Rs.10 crores. Out of this, Rs.6 crores was received in cash over and above the value of Rs.4 crores. Vide this transaction, it is seen that you have earned a profit of Rs.22.85 lakhs, which has to be taxed in the Asst. Year 2011-12. Notice u/s. 148 was therefore served on you."
8. Further he referred to paras 2 to 4 of the impugned assessment orders, from which it is amply clear that the addition is based on documents and loose set found during the course of third party search. Paras 2 to 4 of the impugned assessment orders are as below:
2. The assessee is an Architect by profession. During a search Operation by the Income-Tax Department in the case of M/S Sree Annapoorna Gowrishankar Estates and Constructions Pvt.
Ltd. certain incriminating documents were seized from the residential premises of Shri Sivasubramanian, their Finance Manager. In the above action, documents containing information about purchase and sale of a land located in Peelamedu by Shri D Srinivasan, Shri John Antony, Shri C.R. Vasudevan, Shri Gunasekaran, Shri S.A.Anandhakumar, Shri Senthilkumar and Shri R.K.Palanisamy were obtained.
2.1 In the above documents, it is seen that on behalf of all the above persons, Shri D Srinivasan of Hotel SreeAnnapooma Group Coimbatore, had entered into sale agreements with Shri D Rajmohan and others for Rs.640.17 lakhs on 03-07-2008 (Before doing so, all the seven members have signed a Memorandum of Understanding towards investing jointly in a landed property and authorized Shri D Srinivasan to do the transaction). The amount of Rs.640.17 lakhs was paid by way of cheque during the FY 2008-09. Instead of registering the ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 8 ::
sale deed Shri Rajmohan gave Power of Attorney in favour of Shri D Srinivasan.
3. It is evident from the loose sheet seized that Shri John Antony and six others jointly made investment of Rs.814 lakhs in the land situated at Peelamedu (i.e.. Rs.640.17 lakhs by way of cheque and Rs.173.83 lakhs by way of cash). On behalf of all the above persons, Shri. D. Srinivasan had paid Rs.814 lakhs to Shri. Rajmohan after getting the Power of Attorney in respect of the said land.
4. As per the tabulated data contained in the loose sheet, it is seen that out of the total investment of Rs.814 lakhs, Rs.100 lakhs was invested by the assessee Shri.John Antony, l.e.Rs.50 lakhs by way of cheque and Rs.50 lakhs by way of cash. Since the investment made by the assessee in cash of Rs.50 lakhs was not disclosed to the department, his case was reopened under section 147 of the Income-Tax Act, in respect of Asst. Year 2009-10, after getting the required approval from higher authorities."
9. The sole basis for reopening the assessment is stated to be the material discovered during the search conducted in the case of M/s. Sree Annapoorna Sree Gowrishankar Hotels Pvt. Ltd. and its group concerns, particularly from the residence of Shri Sivasubramanian, who serves as the Finance Manager.
10. It is submitted that any assessment concerning a person other than the one subjected to the search can be undertaken only in accordance with the provisions of Section 153A read with Section ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 9 ::
153C. In support of this contention, reliance is placed on the following judicial decisions:
ACIT v Gopal Prasd Gupta [2026] 183 taxmann.com 384 (SC)
- Attention is drawn to S.No. 1 of Index of Caselaws - 2 Gopal Prasad Gupta v ACIT in D.B.CivilW.P.No. 12509/2022 (Raj) -Attention is drawn to S.No. 2 of Index of Caselaws - 2
11. It is further submitted that the Hon'ble Rajasthan High Court, in the case of Gopal Prasad Gupta v. ACIT (D.B. Civil W.P. No. 12509/2022, Rajasthan), has distinguished the decision in Saloni Kumar Prakash v. ITO [2023] 458 ITR 452 (Mad), and the relevant extract is reproduced below:
"The decision of the Madras High Court in the case of Saloni Prakash Kumar(supra) is of no help to the respondents. The High Court held that Section 153C does not preclude issuance of notice under Section 148. The field of applicability of two sections was not the issue before the Court."
12. In light of the above submissions and judicial precedents, the ld.AR for the assessee contended that the reopening of the assessment under Section 148 is invalid in the present facts and circumstances and is liable to be set aside, as the appellant's case ought to have been assessed in accordance with the provisions of Section 153A read with Section 153C.
13. Without prejudice to the foregoing submissions, it is further contended that the reopening is barred by limitation, as it has been initiated beyond four years from the end of the relevant Assessment Year 2009-10, and there was no failure on the part of the appellant ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 10 ::
to make a full and true disclosure of material facts. In the present case, the notice under Section 148 was issued on 14.03.2016 (copy enclosed; see page 2 of the paper book), whereas the four-year period from the end of Assessment Year 2009-10 expired on 31.03.2014.
Even assuming, without admitting, that the Assessing Officer had reason to believe that income had escaped assessment, no material has been brought on record to demonstrate any failure by the appellant to disclose fully and truly all relevant facts during the original assessment proceedings completed under Section 143(3). Reliance is placed on the judgment of the Madras High Court in CIT v. Schwing Stetter India Pvt. Ltd. [2015] 378 ITR 380 (Mad), wherein it has been clearly held that the recorded reasons must specifically indicate the omission or failure on the part of the assessee to disclose material facts. In the appellant's case, such a requirement has not been satisfied (refer Serial No. 4, Para 22, Page 64 of the Index of Case Laws).
Further, the reasons recorded under Section 148 dated 30.03.2017 do not allege any failure on the part of the appellant to disclose material facts, nor do they specify what particular facts were not disclosed during the original assessment proceedings. Even in the reassessment order, there is no mention of any such failure. In view of the above, it is submitted that both the reassessment notice and the consequent reassessment proceedings are liable to be quashed. The learned Authorised Representative also raised a contention based on the principle of equality, stating that co-owners must be treated uniformly. In the present case, the appellant and six other ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 11 ::
co-owners jointly purchased and later sold the property situated at Peelamedu. According to them, the property was acquired for Rs. 6.40 crores in 2008 and subsequently sold for Rs. 4.00 crores in 2011. The reopening of the appellant's assessment was based on information regarding this transaction, which was allegedly found during a search conducted under Section 132 in the case of M/s.
Sree Annapoorna Sree Gowrishankar Hotels Pvt. Ltd. and its group concerns. The assessment status of the other co-owners for Assessment Years 2009-10 and 2011-12 is as follows:
Sr. Name of the AY 2009-10 AY 2011-12
No Co-owner
1 D. Srinivasan Settlement Commission Settlement
Commission
2 Vasudevan 148 Notice-issued beyond No Assessment
4 years Assessment
dropped
3 Gunasekaran No Assessment No Assessment
4 Anandha Kumar No Assessment No Assessment
5 Senthil Kumar No Assessment Assessment
completed by
adding a sum of Rs.
1.25 Cr
6 R.K. Palanisamy No Assessment No Assessment
From the above table, it is clear that no assessments were completed in the cases of Mr. Gunasekaran, Mr. Anandakumar, and Mr. R.K. Palanisamy. In the case of Mr. Vasudevan, for Assessment Year 2009-10, a notice under Section 148 was issued beyond the prescribed four-year period, and accordingly, the reopening proceedings were dropped; for Assessment Year 2011-12, no assessment was made. In the case of Mr. Senthil Kumar, no ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 12 ::
assessment was framed for Assessment Year 2009-10, while for Assessment Year 2011-12, an addition of Rs. 1.25 crores was made based on a sworn statement recorded from him on 07.02.2011. In the case of D. Srinivasan, the matter was taken to the Settlement Commission.
From these facts, it is evident that the Revenue has not applied the principle of equality in dealing with the appellant and the other co- owners concerning the purchase and sale of the Peelamedu property. In light of the above, it is respectfully submitted before this Hon'ble Tribunal that the appellant has not been treated on par with the other co-owners under similar circumstances. It is further contended that imposing a higher tax burden on one co-owner, when others similarly placed have been treated differently, is unjustified. Reliance in this regard is placed on the following judicial decisions:
CIT v KumararaniSmt.Meenakshi Achi [2007] 292 ITR 624 (Mad) Attention is drawn to S.No. 5 Para 5 & 6 Page 67 of Index of Caselaws-2 Attention is drawn to Ashok Jain v ITO in ITA No.2736/CHNY/2018 S.No.6-Para 10 page 82 & 83 of Index of Caselaws - 2
14.On Merits:
The appellant, along with six associatesShri D. Srinivasan, Shri V.R. Gunasekaran, Shri V.R. Vasudevan, Shri S.A. Anandakumar, Shri R.K. Palanisamy, and Shri D. Senthilkumarjointly decided to invest in a property situated at Peelamedu.On 30.06.2008, these individuals entered into a Memorandum of Understanding, agreeing ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 13 ::
to collectively invest Rs. 640.17 lakhs in the said property and authorizing Shri D. Srinivasan to acquire it on their behalf. The appellant contributed Rs. 50 lakhs out of the total investment, which was paid by cheque.Subsequently, on 15.11.2010, the group sold the property to J. Nagendran and two others for Rs. 4 crores. On the same date, through another Memorandum of Understanding, the sale proceeds were apportioned among the co-owners.The Assessing Officer, relying on a tabular entry in a loose sheet (reproduced at page 4 of the assessment order) allegedly found during a search conducted in the case of M/s. Sree Annapoorna Gowrishankar Estates and Constructions Pvt. Ltd. group, concluded that the appellant had paid Rs. 50 lakhs as unaccounted "on- money" for the purchase of the property in 2008. Further, based on the same document, it was alleged that the actual sale consideration was Rs. 10 crores, as against Rs. 4 crores recorded in the sale deed, and accordingly, an addition of Rs. 22.85 lakhs was made as undisclosed short-term capital gains in the hands of the appellant.The Assessing Officer also relied on the addition of Rs. 6 crores made in the case of J. Nagendran towards alleged on-money payment and on the statement of Shri Senthil Kumar, one of the co- investors, who had purportedly admitted receipt of Rs. 6 crores. He submitted that Shri Senthil Kumar subsequently retracted his earlier statement admitting receipt of on-money, and both his original statement and retraction have been placed on record (refer pages
15 to 21 of the paper book index).Further, J. Nagendran, in his sworn statement recorded on 15.02.2011, categorically denied having paid any on-money in connection with the purchase of the ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 14 ::
Peelamedu property (refer pages 25 to 29 of the paper book index).Additionally, a statement recorded from Shri D. Srinivasan, one of the co-owners, clearly explains the entire transaction and confirms that Rs. 6.4 crores was paid for the purchase of the property and Rs. 4 crores was received upon its sale after two years (refer pages 22 to 24 of the paper book index).It is further submitted that the Assessing Officer has failed to produce any independent evidence demonstrating either the alleged payment or receipt of on-money by the appellant in relation to the said transaction.Moreover, the tabular entry relied upon by the Assessing Officer constitutes a "dumb document," as it merely reflects differences in cheque components and does not logically explain why such entries would be recorded after the completion of the transaction.In view of the above, it is submitted that the addition is based solely on an uncorroborated loose sheet, which lacks evidentiary value and cannot form the sole basis for making additions. Reliance is placed on the following judicial precedents:
•Common Cause v. Union of India [2017] 394 ITR 220 (SC) •DCIT v. Sunil Kumar Sharma [2024] 469 ITR 271 (SC) • Sunil Kumar Sharma v. DCIT (2022) 448 ITR 485 (Kar) • CBI v. V.C. Shukla [1998] 3 SCC 410 In light of the above submissions and judicial authorities, he contended that, in the absence of any independent corroborative evidence, the additions of Rs. 50 lakhs for Assessment Year 2009- 10 and Rs. 22.85 lakhs for Assessment Year 2011-12 are unsustainable, arbitrary, and liable to be deleted.
ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 15 ::
15. The ld.DR for the revenue ground wise submitted as below:
Ground relating to reopening of assessment:
i. The appellant has contended that the reassessment was initiated without proper recording of reasons. ii. However, in paragraph 6.3 on page 28 of the order dated 18.09.2025, the learned CIT(A) has specifically noted that information regarding the appellant's cash investment, received from the Investigation Wing, was not disclosed in the original return of income, thereby establishing failure on the part of the appellant to fully and truly disclose all material facts.
iii. The Assessing Officer recorded reasons for reopening based on evidence gathered during the search in the case of M/s. Sree Annapoorna Sree Gowrishankar Hotels Pvt. Ltd. and its group concerns, including the Memorandum of Understanding, ledger accounts maintained by Shri D. Srinivasan reflecting cheque transactions, and statements recorded during the search proceedings.
iv. Accordingly, it is submitted that the reopening is not based on borrowed satisfaction, as the Assessing Officer independently applied his mind and duly recorded reasons; hence, the reassessment proceedings are valid.
2. Ground relating to initiation under Section 148 instead of Section 153A read with Section 153C:
i. The appellant has argued that proceedings ought to have been initiated under Section 153A read with Section 153C of the Act.
ii. In paragraph 6.3.1 on page 26 of the order dated 18.09.2025, the learned CIT(A) rejected this contention by relying on the judgment of the Hon'ble Delhi High Court in Principal Commissioner of Income Tax v. Naveen Kumar Gupta (168 taxmann.com 574), wherein it was held that the non obstante clause in Section 153C does not completely override Section 147, and reassessment proceedings under Section 147 can still be initiated even where Section 153C could have been invoked.
ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 16 ::
iii. Therefore, the dismissal of the appellant's ground by the CIT(A) is justified.
3. Ground relating to equal treatment of co-owners:
i. The Revenue submits that the case laws relied upon by the appellant are distinguishable and not applicable to the present facts.
ii. In CIT v. Kumararani Smt. Meenakshi Achi [292 ITR 624 (Mad)], the Assessing Officer adopted different market values for co-owners, and in Ashok Jain v. ITO (ITA No. 2736/CHNY/2018), inconsistent treatment was given regarding the nature of land among co-owners.
iii. In the present case, as per the appellant's own submission, the co-owners' cases were not selected for scrutiny. Hence, the claim that they were treated differently is not tenable.
iv. It is further submitted that the appellant's case must be adjudicated based on the material available on record and the findings of the Assessing Officer.
4. Ground relating to addition on account of unaccounted investment:
i. The appellant has challenged the addition made on the basis of a loose sheet, describing it as a "dumb document"; however, the Revenue submits that the document is supported by independent evidence obtained during the search proceedings.
ii. The Assessing Officer corroborated the contents of the loose sheet with multiple evidences and relied upon statements recorded during the search.
iii. The appellant himself, in a statement recorded under Section 131, admitted the correctness of certain columns (Nos. 2, 5, and 8) in the document, as noted by the Assessing Officer in point (iv) on page 6 of the assessment order.
iv. The Assessing Officer reasoned that if certain entries are accepted as genuine, the remaining entries cannot be dismissed as fictitious.
v. Further, as noted in point (ix) on page 6 of the assessment order, an identical loose sheet containing ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 17 ::
similar entries was found at the premises of Shri Senthil Kumar, one of the parties to the Memorandum of Understanding, during a survey conducted on 27.01.2011. The presence of similar documents with multiple parties indicates that the document cannot be treated as a "dumb document," nor can its contents be regarded as imaginary.
vi. In addition, Shri Senthil Kumar, in his statement recorded during the survey, confirmed receipt of cash payments.
vii. In view of such corroborative evidence, the appellant's contention that the addition is based solely on a loose sheet is incorrect.
viii. Therefore, since the loose sheet is supported by substantial independent evidence, the decision of the CIT(A) in sustaining the addition on account of unaccounted investment is justified and in accordance with law.
16. We have carefully considered the rival submissions and perused the material placed on record. Our issue-wise findings:
A. COMMON ISSUE - VALIDITY OF REASSESSMENT U/S148:-
The primary legal challenge of the assessee is that the reassessment ought to have been initiated under Section 153A read with Section 153C and not under Section 148, since the entire addition is based on material unearthed during a search under Section 132 in the case of a third party group, namely M/s. Sree Annapoorna Sree Gowrishankar Hotels Pvt. Ltd.
It is an admitted position that the reassessment is founded on information arising from search proceedings conducted in the case of another assessee group, wherein documents, including a ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 18 ::
Memorandum of Understanding, ledger extracts and loose sheets, were found and relied upon.The assessee contends that in such circumstances, the exclusive route for assessment is under Section 153C. However, the Revenue has placed reliance on judicial precedents, including the decision of the Hon'ble Delhi High Court in PCIT v. Naveen Kumar Gupta (168 taxmann.com 574), to argue that initiation under Section 147/148 is not barred merely because Section 153C could also be invoked.
We note that there is divergence of judicial views on this issue; however, the law as it stands permits initiation under Section 147 where the Assessing Officer forms independent satisfaction based on tangible material, even if such material emanates from third-party search.
In the present case, the Assessing Officer has referred to specific seized materials, statements and documents and recorded independent reasons for reopening. Therefore, it cannot be held that the reopening suffers from lack of jurisdiction merely on the ground that Section 153C could have been invoked.Accordingly, the legal challenge to reopening is rejected.
B. REOPENING BEYOND FOUR YEARS - FULL AND TRUE DISCLOSURE:
For AY 2009-10, the reassessment notice under Section 148 was issued on 14.03.2016, beyond four years from the end of the relevant assessment year.In such cases, the proviso to Section 147 requires the Revenue to establish failure on the part of the assessee ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 19 ::
to disclose fully and truly all material facts.We observe that the reasons recorded refer to information received from the Investigation Wing pursuant to search proceedings, indicating alleged cash investment of Rs.50 lakhs.However, the reasons do not explicitly demonstrate or record any specific failure of disclosure by the assessee in the original assessment proceedings under Section 143(3). The mere reference to information received post-search is not sufficient, in absence of a clear finding of failure to disclose material facts.In view of the settled legal position laid down in CIT v. Schwing Stetter India Pvt. Ltd. [378 ITR 380 (Mad)], the jurisdictional requirement under the proviso to Section 147 is not satisfied.Therefore, the reassessment for AY 2009-10 is also vitiated on jurisdictional grounds of limitation.
C. MERITS - ADDITION OF Rs. 50 LAKHS (AY 2009-10): The addition is based primarily on a loose sheet allegedly seized during search in the case of a third party group, showing investment figures including alleged cash component. It is the case of the Revenue that:
• The assessee invested Rs.50 lakhs in cash as on-money; • The document is corroborated by statements of co-investors; • Identical loose sheets were found from another person involved in the transaction;
• Certain portions of the document were admitted by the assessee in statement under Section 131.
The assessee, on the other hand, disputes the evidentiary value of the loose sheet, contends that it is a dumb document, and relies upon:
ITA 33500 & 3501 Chny 2025 (AYs 2009-10 & 2011-12) John Antony Vs DCIT, NCC-2 :: 20 ::
• Retraction of statements by co-owners;
• Denial by purchaser (J. Nagendran) of any on-money payment;
• Statement of co-owner confirming only cheque consideration; • Absence of any direct evidence of cash flow. We find that while loose sheets can constitute corroborative evidence, they cannot, by themselves, form the sole basis of addition unless supported by independent, reliable and cogent material establishing the transaction conclusively.In the present case:
• There is contradiction in statements of key parties; • Retraction has not been effectively rebutted; • No direct evidence of cash payment or receipt by the assessee has been brought on record;
• The alleged inference is largely presumptive.
The principle laid down by the Hon'ble Supreme Court in CBI v. V.C. Shukla and Common Cause v. Union of India makes it clear that loose sheets, unless corroborated, have limited evidentiary value. Accordingly, we hold that the addition of Rs.50,00,000 for AY 2009- 10 is not sustainable and deserves to be deleted.
D. MERITS - ADDITION OF Rs. 22.85 LAKHS (AY 2011-12):
The addition is made on the premise that:
• The property was actually sold for Rs.10 crores instead of Rs.4 crores;
• Rs.6 crores was received in cash over and above registered sale consideration;
• The assessee's share of undisclosed profit works out to Rs.22.85 lakhs.
The entire basis is again the same loose sheet and statements recorded during search and survey proceedings. However, we note:
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• The purchaser has denied payment of any on-money in sworn statement;
• The co-owner has explained the transaction as fully recorded at Rs.6.4 crores purchase and Rs.4 crores sale; • The statement of another co-owner has been retracted; • No documentary evidence of cash trail has been established; • The figure of Rs.10 crores remains unsubstantiated by independent material.
While the Revenue relies on corroboration between two loose sheets, we find that such internal consistency cannot substitute independent corroborative evidence, particularly when major stakeholders deny the alleged cash component. The estimation of undisclosed capital gains is therefore based on conjecture rather than evidence.Accordingly, the addition of Rs.22,85,000 for AY 2011-12 is also not sustainable and is directed to be deleted.
E. PRINCIPLE OF EQUALITY - CO-OWNERS:
The assessee has demonstrated disparity in assessment treatment among co-owners.While some cases were not assessed, one case was settled, and another resulted in partial addition based on statement, the assessee alone has been subjected to full additions.However, we hold that taxation cannot be determined solely on parity when each assessment is based on individual evidence and proceedings. Nevertheless, selective reliance on material without uniform corroboration does raise concerns of consistency, though our decision on merits already renders this issue academic.
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17. In the result, both the appeals of assessee are allowed as discussed above.
Order pronounced on the 28th day of April, 2026, in Chennai.
Sd/- Sd/-
(प ावती एस) (मनु कुमार िग र)
(PADMAVATHY S) (MANU KUMAR GIRI)
लेखा सद%या/ACCOUNTANT MEMBER &या यक सद%य/JUDICIAL MEMBER
चे&नई/Chennai,
(दनांक/Dated: 28th April, 2026.
SNDP, Sr. PS
आदे श क त)ल*प अ+े*षत/Copy to:
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकरआयु /CIT, Chennai / Madurai / Salem / Coimbatore.
4. िवभागीय ितिनिध/DR
5. गाडफाईल/GF