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TMI Blog2016 (5) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, proceedings under section 263 of the Act on the same matter in issue could not be resorted to in view of the Explanation (c) of sub section (1) of section 263 of the Act. In this case, the Assessing Officer examined the seized document at the assessment stage and his order has been set aside by the appellate authorities, therefore, there is no question of considering his order to be erroneous in so far as prejudicial to the interests of the Revenue. In this case, when the seized document itself was not relied upon by the appellate authorities, the copy of the same agreement as was received through independent sources, as stated by the learned Principal Commissioner of Income-tax would not make any difference in favour of the Revenue. - Decided in favour of assessee. - I. T. A. No. 421/Chd/2015 - - - Dated:- 15-1-2016 - Bhavnesh Saini (Judicial Member) And Rano Jain (Accountant Member) For the Petitioner : Sudhir Sehgal For the Respondent : Sushil Kumar ORDER Bhavnesh Saini (Judicial Member) 1. This appeal by the assessee is directed against the order of the learned Principal Commissioner of Income-tax (Central), Ludhiana, dated February 26, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this agreement. This agreement also indicates that this is a cancelled agreement wherein there are many cross have been mentioned therein. It is pertinent to mention here that the said document, i.e., pages 34 and 35 have not been confronted at the time of search and also during the post-search enquiries. These documents does not pertains to the applicant and we do not know from where this document have come on my business premises. Therefore, from the abovesaid facts and circumstances no adverse inference can be drawn in this regard. Moreover, we would also like to mention that on the basis of third party documents in which our company name of their directors name is not mentioned anywhere and the documents is a crossed documents and each page is crossed and cancelled. The company recorded the actual amount in the land account as paid to the parties from whom the land was purchased. Out of which 4 bighas 10 biswas was purchased from Sh. Sumit Gupta, S/o Sh. Bhola Nath, as per the title deed for ₹ 5,62,500. The document as per pages 34 and 35 is between the third parties and nowhere the name of the company or group members is written or signed by any of the directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of search operation with regard to any payment made over and above what is recorded in the sale deed. It was the cancelled document. The Revenue preferred the appeal before the Income-tax Appellate Tribunal, Chandigarh Bench, on the same matter in issue in I.T.A. No. 1135 of 2013 assessment year 2007-08 and the Tribunal, vide order dated December 12, 2014, dismissed the Departmental appeal. The order of the Tribunal is reproduced as under : *** See Deputy CIT v. R. P. Import and Export P. Ltd. [2015] 38 ITR (Trib) 436 (Chandigarh) 5. The learned Principal Commissioner of Income-tax (Central), Ludhiana, after passing of the order by the Income-tax Appellate Tribunal dated December 12, 2014, issued a show-cause notice to the assessee under section 263 of the Income-tax Act dated January 8, 2015, stating the same facts and noted that document pages 34-35 of annexure A-9 was seized from M/s. Narain and Co. which is the sale agreement of the land between Shri Rajinder Puri and others and Shri Bhola Nath. The Assessing Officer made addition of ₹ 23,62,500 in respect of 4 bighas 10 biswas purchased by the assessee from one Shri Sumit Gupta. However, no additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led for the details of the lands purchased through registered sale deeds. PB-6 is the reply of the assessee before the Assessing Officer in which the assessee explained that the land of 49 bighas situated at village Salani was purchased by the assessee and the total amount paid by the assessee-company to the buyers amounting to ₹ 68,36,500 as per the registration deed, copies of the documents were also filed and details of the persons from whom properties have been purchased was also explained. The assessee also explained the seized paper in question did not belong to the assessee and even no name of the assessee has been mentioned in the same seized document. Since the seized document also indicates that it is cancelled agreement and it did not belong to the assessee, therefore, no addition could be made on the basis of the same. PB-10 is the land account showing purchase of land for ₹ 68,36,500. PB-11-58 are the registered sale deeds and PB-39 belongs to Shri Sumit Gupta. PB- 61-62 is the seized paper in question which is cancelled document as was found during the course of search. He has submitted that on the same matter in issue, the learned Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer should have made the entire addition including 44 bighas of the land purchased in the same village. 8. We have considered the rival submissions. Section 263 of the Income- tax Act reads as under : 263.(1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988, by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been considered in appeal and decided by the appellate authorities, the same could not be subject matter of revision under section 263 of the Income-tax Act. It is not explained when the original seized document has already been considered by the appellate authorities against the Revenue, how the copy of the same is admissible in evidence in subsequent revision proceedings under section 263 of the Income-tax Act. 10. The hon'ble Madhya Pradesh High Court in the case of CIT v. Shalimar Housing and Finance Ltd. [2010] 320 ITR 157 (MP) held as under (headnote) : A search was conducted in the assessee's group and a block assessment was passed with several additions against the assessee. The Commissioner (Appeals) allowed the appeal of the assessee in part. The assessee and the Department preferred appeals which were pending disposal before the Tribunal. Meanwhile, the Commissioner under section 263 of the Income-tax Act, 1961, revised the order of the Assessing Officer on the grounds that (i) from the project-wise analysis it was perceptible that work-in-progress as per the seized documents amounted to ₹ 26,83,97,827 as against ₹ 8,42,62,301 as arrived at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax (Appeals) and the addition has been deleted, would clearly show that the matter in issue remained in subject matter in appeal before the learned Commissioner of Income-tax (Appeals) prior to the initiation of the proceedings under section 263 of the Act. Not only this, when the Department has preferred an appeal before Tribunal, the Tribunal also dismissed the Departmental appeal, vide order dated December 12, 2014 (supra). The Tribunal in the finding has specifically observed that the assessee is not party to the agreement to sell in question and none of the persons relating to the assessee- company also connected with the said agreement in question. It was also noted that no evidence was found during the course of search to prove if any over and above consideration have been paid in respect of any property purchased by the assessee-company. Even during the course of search, no adverse material was found against the assessee. It was also noted that since the agreement in question is cancelled document and did not relate to the assessee directly or indirectly, therefore, the Assessing Officer has merely inferred that the assessee might have paid some more consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement which is referred to by the learned Principal Commissioner of Income-tax was not seized during the course of search. Therefore, how this could be relevant in proceedings under section 153A of the Act was not at all explained. It is admitted fact that during the course of search, the seized paper as was recovered, was a cancelled/crossed document. Therefore, there is no question of considering the same against the assessee, that too when the same is not signed by the assessee-company. Furthermore, when the original seized document pages 34-35 of annexure A-9 was considered and discussed in detail and it is held by the appellate authorities that no addition could be made on the basis of the same cancelled document against the assessee, there is no question of considering the same against the assessee on the basis of copy of the same seized document. When the matter in issue has already been examined by the appellate authorities, prior to the proceedings under section 263 of the Act, the learned Principal Commissioner of Income-tax should not have resorted to the present proceedings under section 263. When the order of the Assessing Officer is merged with the orders of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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