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TMI Blog2018 (3) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... SRI MAHAVIR SINGH, JM AND SRI MANOJ KUMAR AGGARWAL, AM For The Revenue : M.C. Omi Ningshen, DR For The Assessee : Govind Javeri, AR ORDER PER MAHAVIR SINGH, JM: These cross appeals are arising out of the order of Commissioner of Income Tax (Appeals)-9, Mumbai, [in short CIT(A)] in appeal No. CIT(A)-9/ITO-5(2)(2)/231/2010-11 dated 26.12.2012. The Assessment was framed by the Income Tax Officer, Ward- 5(2)(2), Mumbai (in short ITO) for the assessment year 2004-05 order dated 30-12-2010 under section 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The only issue in this appeal of Revenue is against the order of CIT(A) quashing the assessment completed under section 153C of the Act. For this Revenue has raised the following grounds: - 1. Whether, on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in annulling the assessment completed under section 153C of the IT Act, 1961? The prays that the order of the Ld. CIT(A) be set aside and the order of the AO be restored. 3. Briefly stated facts are that a search action under section 132 of the Act was conducted at the business and residentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases on 15-03-2008. The CIT(A) annulled the assessment by observing in Para 8.2 and 8.3 of the appellate order as under:- 8.2. Having carefully and dispassionately considered all the aforesaid facts and circumstances and also the judicial pronouncements and the relevant provisions of sec,153 C of the Act. Earn of the firm view that (i) Satisfaction must be recorded by the Assessing officer of Bharat Shah or Bharat Shah group of cases that money, bullion, jewellery or other valuable article or thing or books of account or documents seized from the premises of Shri Bharat Shah or its group of cases during search operations belonged to the present appellant. (ii) Such books of accounts or the documents or assets seized and belonging to the present appellant were required to be handed over to the present LAO before issuance of notice u/s.153 C of the Act in the present case. 8.3 No material nor any evidences were placed before me, neither by the appellant nor by the LAO, to prove that the aforesaid mandatory conditions were fulfilled in the present case. In view of the above and in the light of previously mentioned judicial decisions and in accordance with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully considered the rival submissions. Factually speaking, it is quite clear that the present proceedings have been initiated by the Assessing Officer on the strength of section 153C of the Act. It is also clear that the recourse to section 153C of the Act has been taken by the Assessing Officer based on the search action under section 132(1) of the Act, which had taken place in the case of Bharat Shah Group of cases. Before us, the Ld. Departmental Representative has referred to an information dated 21/12/2009 forwarded by the Assessing Officer of Bharat Shah Group of cases, which reads as under:- Sub:- Information in case of Kranti Impex Pvt.(PAN AACCK 3044P) Search operation under section. 132 was conducted on the premises of Bharat Shah group, in which loose papers 1 to 19, contained in annexure A-1, were seized from 55, Gamdevi 2nd Floor, Panchshil Plaza, Mumbai on 15/03/2008. Copy of which were annexed herewith. These loose papers are systematic records related to actual sales transactions in Legend project promoted by Layer Exports Pvt. Ltd. situated in Walkeshwar, Malabar Hill, Mumbai 400 006. Most of the said papers contains details of flat numbers, flat size ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the group companies of Bharat Shah, in whose case Search Seizure action was conducted on 15.03.2008. Information has been received that M/s. Mangalam Gems Pvt. Ltd. an assessee of this charge, has purchased property from Layer Exports Pvt. Ltd. and the payments towards the said property include cash elements also. In this regard copy of seized loose papers 1 to 19 has been forwarded in Annexure A-1 as evidence by the Asstt. CIT, Central Cir.24 26, Mumbai, vide letter No.ACIT-24 26/information/200910 dated 21.12.2009. The page No.11 of the seized loose paper specifically shows some figures of the transaction details of the assessee without dates, in coded word wherein Q represents cheque and SF represents cash. The total of such cash part as ascertained by the ACIT 24 26. Mumbai on the basis of this loose paper comes toRs.2,06,32,051/-. Therefore, in view of the information available on record, the undersigned is satisfied that the documents seized relates to the assessee and that the purchase consideration of the properties involves cash elements, and that these are out of the books of the assessee and therefore such portion of income is to be brought to tax. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pertinent in the present case also. 7.2 In the present case, the information sent by the Assessing Officer of the searched person to the Assessing Officer of the assessee was based on certain notings on a loose paper found in the premises of Bharat Shah Group of cases. Quite clearly, even the Assessing Officer of the searched person, as manifested by the information sent to the instant Assessing Officer, which we have extracted above, does not conclude much less makes a charge that the loose papers belong to the assessee. There is no averment that loose papers do not belong to the searched person. In fact, even the satisfaction note canvassed by the Ld. Departmental Representative before us, which has been extracted above, does not say that the loose paper belong to a person other than the searched person. At best, the only charge made out is that the documents seized relate to the assessee and that purchase consideration of the properties involve cash element At this stage, it would be pertinent to go back to the legal position explained by the Hon'ble Delhi High Court in the case of Pepsico India Holdings (P.) Ltd (supra), wherein it is held that the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduced u/s 132 of the Act is to unearth hidden income or property or get hold of books of account or documents which has not been or will not be otherwise produced by the assessee in regular course on issue of summons or notice. In the assessee's case, as stated above, the purported search action did not lead to discovery of any unaccounted money, bullion, jewellery or other valuable article or thing. Further, no books of account revealing any undisclosed transactions of the assessee were found during the course of search. The entire assessment order revolves around scribbling in loose sheets of papers seized from premises of another person in course of search action on such other person. It is a fact that the said rough loose sheets of papers scribbled by some anonymous person and seized in course of search of another person cannot be termed as 'documents'. having any evidentiary value within the meaning of section 132 or section 132A of the Act. Thus, the entire assessment u/s 153A of the Act in case of the assessee rests on shaky and incorrect foundation and thus deserves to be quashed. Copies of the 19 loose sheets of papers marked as Annexure A-1 seized from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce cannot be admitted. 6.6 If we consider the said piece of paper seized during search in light of the definition of the word document as given in the Indian Evidence Act and General Clauses Act and the truthfulness of the contents thereof in light of the aforesaid decisions of the Hon'ble Supreme Court we find that the said paper contains jottings of certain figures but the same does not describe or express the substance of any transaction and even if the said paper has been seized from the possession of the assessee the contents thereof are not capable of describing the transactions the way the AO has deciphered them without support of corroborative evidence of the parties attributed to the alleged transaction. The said paper, therefore, does not come within the compass of the definition of the word document to be used as any evidence. The paper seized, therefore, has no evidentiary value and accordingly the same cannot form the basis for assessing the undisclosed Income. In light of the aforesaid judgment, we are of the view that the impugned loose sheets of papers cannot come within the ambit of definition of the word document to be used as evidence and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of no use, value or consequence. What is the significance and importance of a signature on any document can be found in the judgment of Hon'ble Calcutta High Court in the case of B.K Gooyee v. CIT [1966] 62 ITR 109. In that case the Assessing Officer issued a notice under section 34 of the Income-tax Act, 1922 but did not sign it. When the matter came up before the Hon'ble High Court at Calcutta it was held by their Lordships that the unsigned notice issued by the ITO was invalid and consequently equal to no notice. If we are to agree with the contention of the revenue that though the MOU is unsigned the same should form the basis for making additions as per the presumptive provision contained in section 1 32(4A)(ii) of the Income-tax Act, 1961 then there will be harsh, highpitched and unreasonable assessments leading to absurd results and miserable consequences on the taxpayers. The provisions of section 132(4A) will become oppressive if applied in this manner and surely this is not the purpose or intention of the Legislature in enacting section 132(4A) in Income-tax Act. Like any other provision of a statute the provisions of section 132(4A) also have to be applied and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the right side of the slip represent incomes earned by the assessee. It was conceded by the learned Departmental Representative that no such evidence has been brought on record.......Therefore the additions cannot be sustained and they are hereby deleted. (Emphasis supplied). 38. In view of the aforesaid judgments, it is submitted that since the impugned seized papers are undated, have no acceptable narration and do not bear the signature of the assessee or any other party, they are in the nature of dumb documents having no evidentiary value and cannot be taken as a sole basis for determination of undisclosed income of the assessee. When dumb documents like the present loose sheets of papers are recovered and the Revenue wants to make use of it, the onus rests on the Revenue to collect cogent evidence to corroborate the noting therein. The Revenue has failed to corroborate the noting by bringing some cogent material on record to prove conclusively that the noting in the seized papers reveal the unaccounted on-money receipts of the assessee. Further, no circumstantial evidence in the form of any unaccounted cash, jewellery or investments outside the books of account was fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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