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TMI Blog2016 (11) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. Therefore, Ld. CIT(A) has rightly held that the addition made based on the papers seized from the computer at the residential premises of Sh. Sandeep Singh Khinda and Smt. Samta Khinda are not in accordance with law and was therefore rightly deleted by the Ld. CIT(A). Also reference to the name of person in the seized document cannot be the basis to come to the conclusion that the document belonged to the said person. Proceedings initiated on the basis of the such assumption u/s. 153C were held to be without jurisdiction. See Vijaybhai N. Chandrani Versus Assistant Commissioner of Income-tax [2010 (3) TMI 770 - Gujarat High Court] - Decided against revenue Addition unaccounted income or receipt during the year under consideration on sale of Property applying Sec 292C - non reference to DVO - Held that:- There is thorough lack of corroborative and confirming evidence and thorough lack of enquiry on the part of AO where all cases were with him only. No attempt is made to make reference to DVO by AO or CIT-A. There is no examination of any concerned witness/party to transaction. Only suspicion has weighed to make the colossal addition. There is no hidden bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of ₹ 74 lacs is a case of application of income already brought to tax on substantive basis in case of Sh. Sandeep Singh Khinda. Accordingly, he directed the AO to delete the protective addition of ₹ 74 lacs in the case of assessee i.e. M/s Habitat Royale Projects P Ltd. made by AO. However, as aforesaid, in the case of Sandeep Singh Khinda vide for the assessment years 2007- 08 and 2008-09, we have already deleted the addition of ₹ 3.50 crores and ₹ 17.50 crores respectively, therefore, the question of deletion of addition of ₹ 74 lacs does not arise as the investment in cash for ₹ 74 lacs was forming part of the cash of ₹ 3.50 crores - Decided against revenue - I.T.A. Nos. 617 & 618/DEL/2012, I.T.A. Nos. 334 & 335/DEL/2012, I.T.A. Nos. 619 & 620/DEL/2012 - - - Dated:- 29-11-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Department : Sh. I.P.S. Bindra, CIT(DR) For The Assessee : S h. Anil Kumar Gupta, CA ORDER PER H.S. SIDHU : JM The Department has filed 04 appeals and Assessee have filed 02 appeals against the separate impugned Orders of Ld. CIT(A)-III, New Delhi pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent have been reflected in the books of the assessee, she cannot deny the cash portion mentioned therein. 7. On the facts and in the circumstances of the case, without prejudice to the ground no.1, the CIT(A) himself has confirmed the above mentioned addition of ₹ 3.50 Crores made on protective basis in the hands of Sh. Sandeep Khinda thus validating the transaction recorded in the seized document and the stand taken by the Assessing Officer. 8. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 9. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before: or during the course of the hearing of the appeal. 3. The grounds raised in Revenue s ITA No. 618/Del/2012 (AY 2008-09) read as under:- 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 17,50,00,000/- made by the Assessing Officer on substantive basis on account of unaccounted income from sale of property by holding that the seized document does not belong to the assessee 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is having income from other sources. Search and seizure nu/s 132 of the I.T. Act was carried out at the business and residential premises of Nimitaya and Khinda group during which the residential premises of Sh. Sandeep Singh Khinda and his wife Ms. Samta Khinda were also searched on 6.11.2008 wherein certain documents were found and seized. In view of the same notice u/s. 153C of the Act was issued on 25.1.2010 and in response thereto the assessee filed return on 26.11.2010 at the income of ₹ 4,42,920/- as declared in the original return. /- and accordingly, the notice u/s. 143(2) of the Act and 142(1) of the Act alongwith detailed questionnaire was issued on 26.11.2010 and served on the assessee. In response to these notices assessee s AR attended the proceedings and filed the submissions from time to time. Thereafter, the assessee return was assessed at ₹ 4,54,42,920/- u/s. 153C/143(3) of the I.T. Act, 1961 vide AO s assessment order dated 31.12.2010 and made the addition of ₹ 3.50 crores on account of unaccounted income in cash from sale of property and ₹ 1 Crore on account of investment in Farm House at GWG. 5. Aggrieved by the aforesaid order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee from MIs Nimitaya Properties Ltd., a company which is under control of Sh. Sanjeev Mahajan, are legally belonging to the appellant. The fact however remains the there is no absolute or limited ownership of the assessee over the seized documents apart from the fact that the transactions recorded therein pertain to properties owned by the assessee. Now the requirement under the law is not regarding the ownership of the properties mentioned in the seized document but it is regarding the ownership of the document itself. As there is no intimate connection between the contents of the seized document and the appellant and neither there is any other corroborative evidence to the effect that the appellant had received the cash portion recorded in the seized document therefore the requirement under the law of the fact that the seized document should belong to the assessee for initiation of proceeding uls 153C of the IT Act are not fulfilled in the case of the appellant. Accordingly, I am constrained to hold that the addition made for ₹ 3.50 Crores as well as ₹ 1 Crore based on the papers seized from the computer at the residential premises of Sh. Sandeep Singh Khinda a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has filed a Petition under Rule 27 ITAT Rules to support the Ld. CIT(A) s order on legal ground of recording of specific and explicit satisfaction by particular AO of particular raided party. For the sake of clarity we are reproducing the Satisfaction Note for initiation proceedings u/s. 153C of the I.T. Act as well as the contents of the Petition filed u/r 27 of the ITAT Rules as under:- Satisfaction note for initiating proceedings u/s 153C of the I.T. Act 1 During the course of search proceedings page no. 1 to 6 of annexure A-1 party G-3 which is a computer printout page was found from residential premises of Shri Sandeep Singh Khinda and Smt. Samta Khinda. The data contained on these pages are also stored in the hard disk annexurised as A-9 of part G-3. On perusal of seized documents, it is seen that the Farm House at Grand Westend Greens (GWG) has been sold by M/s Nimitaya Properties Ltd. to Ms. Sudiksha Singh for a total consideration of ₹ 10 Crores out of which amount registered as per the sale deed dated 25.5.2007 is ₹ 4 crores vide pages 97 to 192 of the Annexure A-5 of Party G-3. As per the chart on page no. 1 of Annexure A-1 party G-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Central Circle-22, New Delhi PETITION UNDER RULE 27 ITAT RULES TO SUPPORT CIT-A ORDER ON LEGAL GROUND OF RECORDING OF SPECIFIC AND EXPLICIT SATISFACTION BY AO OF PARTICULAR RAIDED PARTY. The aforesaid appeals have been filed by revenue challenging order of CIT-A on ground of validity of proceedings u/s 153C qua captioned assessee where Ld CIT-A has given relief on count of document seized does not satisfies the criteria of belongs to as per stated provision. Assessee has also raised before the CIT-A another related issue of recording of valid satisfaction u/s 153C which is jettisoned by him in impugned order. In the interregnum, assessee has already filed two separate no raising the issue of recording of valid satisfaction u/s 153C which are re-enclosed herewith for sake of completeness. The copy of purported satisfaction is also re-enclosed . To support the aforesaid plea of non recording of valid and requisite satisfaction u/s 153C, this petition is filed as a matter of abundant caution, under rule 27 of ITAT rules, which as per below mentioned decisions is fully maintainable: 9.2 We have heard both the parties and perused the records available with us esp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment). Crux of the matter is that the order appealed against can be challenged by the Assessee only qua the aspects of the issue decided against him in deciding such overall issue against the appellant, which has been assailed in the appeal. It means that there is an inherent limitation on the power of the Assessee in not challenging the order appealed against under rule 27 de hors the ground decided against the appellant. This shows that if a particular independent issue has been decided against the assessee in the order appealed by the appellant on another independent issue decided against him, then the assessee under rule 27 has no power to challenge the correctness of such independent issue decided against him before the tribunal, while arguing for upholding the order on the issue decided against the appellant. Coming to the facts of the instant case, we find that the ld. Counsel for the assessee has invoked rule 27 by challenging the decision of the Ld. CIT(A) on the legal issue, as aforesaid. 9.5 In view of the above, we are of the considered opinion that the Assessee can invoke Rule 27 of the ITAT Rules which permits the respondent to support the order appealed ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 has observed as under:- 29. It was contended on behalf of the Revenue that the hard disk contained data pertaining to the assessee and, therefore, it was rightly held that the hard disc belong to the assessee. Concededly, this contention would not be sustainable in view of the principles laid down by this Court in Pepsico India Holdings Pvt. Ltd. vs. ACIT (2015) 370 ITR 295 with regard to the interpretation of the words belongs to in Section 153C of the Act. The hard disk was recovered from the computer belonging to M/s BK Dhingra Co. which contained soft copies of working papers and balance sheet pertaining to the assessee for its income tax filing. It has been contended that BK Dhingra is a Chartered Accountant and had the data pertaining to the assessee in his professional capacity. Merely because such data pertained to the assessee (who claims to be a client of M/s BK Dhingra and Co.) the hard disk could not be stated to belong to the assessee. 30. It is not disputed that the said hard disk also did not contain any incriminating material as the data on the hard disc only supported the return filed by the assessee. This apart, as the hard disc did not belong to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on sale of Property D-17 Pushpanjali. 2) The Learned CIT ( Appeals) has grossly erred in law and on the facts of the case in appreciating the factual matrix of the case while confirming the impugned addition of ₹ 17.50 crores (Seventeen crores fifty lacs) as unaccounted income or receipt on sale of property D-17 Pushpanjali in the hands of the assessee even when the appellant is not the owner of the subject sold property. 3) The Learned CIT (Appeals) has grossly erred in law and on the facts of the case in applying Sec 292C of the Income Tax Act merely because some papers were found from the premises of the assessee while ignoring vital facts and contentions of the assessee. 4) The appellant craves leave to add, alter, demand, supplement or raise fresh grounds of appeal, if considered expedient and advisable at the time of hearing of appeal. It is prayed that the appellant appeal be allowed. 13. The brief facts of the case are that the Search and Seizure U/s 132 of the I.T. Act was carried out at the business and residential premises of Nimitaya and Khinda group during which the residential premises of Sh. Sandeep Singh Khinda and his wife Ms. Samta Khinda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92C of the Act, whereas the underlying property i.e. D-17, Pushpanjali, New Delhi is not owned by the assessee, just on the basis of Hon ble Supreme Court of India ruling in the case of Sumati Dayal 214 ITR 801 which is plainly bad because non owner cannot be made as beneficial owner on the basis of limited presumptions, for making protective / substantive addition vis- -vis on money where revenue has accepted capital gains on same property in the hands of other assessee i.e. Smt. Sudhiksha Singh. 16.1 There is thorough lack of corroborative and confirming evidence and thorough lack of enquiry on the part of AO where all cases were with him only. No attempt is made to make reference to DVO by AO or CIT-A. There is no examination of any concerned witness/party to transaction. Only suspicion has weighed to make the colossal addition. There is no hidden bank a/c so as to transact the given money. There is no bayana agreement or any other adversarial document found during extensive search operation specific to charge made. The charge made against the assessee only resolves around a single piece of Paper which is not handwritten from any of the transacting parties. Even if the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come tax, it may in any proceedings under this act, be presumed- 1) That such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; 2) That the contents of such books of account and other documents are true. 16.3 Considering the language of See 292C of the Income Tax Act, there is a presumption that the contents of the documents are true as document was found from the premises of the assessee. However, nowhere in the Section has been mentioned that the amount represented undisclosed income and be taxed in the hands of the assessee from whose premises the said paper has been seized. The presumption as envisaged in section 292C is limited to the correctness of the documents found at the time of search or survey, but that presumption has not been extended by the statute to be presumed to be the income of the assessee. Taxing statues have to be interpreted strictly. In deeming provision what is prescribed is to be deemed and deeming provision cannot be extended beyond the legislative scope. The presumption under see 292C is a rebuttable presumption and all the facts are to be considered before drawing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the CIT(A) has erred in law and on facts in holding that source of investment of ₹ 74,00,000/- is part of the addition of ₹ 3.50 Crores made in the hands of Sh. Sandeep Singh Khinda in the asstt. year 2007-08, which has been confirmed by him without appreciating the fact that neither Sh. Sandeep Singh Khinda nor the assessee has accepted such position. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in not appreciating the settled position of law that the seized document should be read in totality and when the payments by cheque mentioned in the document have been reflected in the books of account of the assessee, it cannot deny the cash entries mentioned in the same document and hence, the addition on this account is to be made in the hands of the assessee only. 4. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 5. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 19. We find that Ld. CIT(A) has deleted the addition in dispute vide his order dated 29.11.2011 (AY 2007-08)- M/s Hab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed. Revenue appeal No. 620/Del/2012 (AY 2008-09) 21. The grounds raised by the Revenue in the appeal read as under:- 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 6,78,00,000/- made by the Assessing Officer on account of unexplained investment in property. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that source of investment of ₹ 6,78,00,000/- is part of the addition of ₹ 17.50 Crores made in the hands of Sh. Sandeep Singh Khinda in the asstt. year 2007-08, which has been confirmed by him without appreciating the fact that neither Sh. Sandeep Singh Khinda nor the assessee has accepted such position. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in not appreciating the settled position of law that the seized document should be read in totality and when the payments by cheque mentioned in the document have been reflected in the books of account of the assessee, it cannot deny the cash entries mentioned in the same document and hence, the addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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