9911796707
TMI Blog2020 (7) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... nsinh Nanubhai Zala 2. The assessee has raised the following grounds of appeal in the CO bearing No. 10/RJT/2018. "1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another. 2.0 The ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the "CIT(A)"] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961. 2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed." 3. The Revenue has raised the following grounds of appeal bearing No. 15/RJT/2018. "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 2,55,88,999/- being on-money paid on the purchase of agricultural land. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 3,94,631/-. 3. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that there was a search and seizure operation carried out at the premises of ADPL dated 16 October 2014. As a result of search various documents incriminating in nature were found including two file bearing BOOK1(1) and BOOK1(2) which were extracted from the hard disk drive of the computer of the searched person. These documents were excel sheets containing various details such as survey numbers, size (vigha), amount paid and legal status etc. On the top of excel sheet date was mention i.e. 14 April 2014. Out of various survey numbers mentioned in the excel sheet, two survey numbers bearing 1214 and 1215 were representing the lands purchased by the assessee. The AO on verification of the sale deeds of the impugned survey numbers found that the amount mentioned therein viz a viz the amount mention in the seized document does not match. As such the amount mentioned in the seized documents was greater than the amount mentioned in the sale deeds. Accordingly he was of the view that the assessee has made investment in the impugned lands without recording the same in the books of accounts. Accordingly, the AO initiated the proceedings under section 153 C of the Act. From the prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant assessment year or years referred to in sub-section (1) of section 153A] :] From the above it is transpired that the document found during the search at the place of searched party must belong to the assessee for initiating the proceedings under section 153C of the Act. The word belong used in section 153C requires that there has to be control and possession of the assessee (person other than searched person) on such document even though the assessee is not legal owner. As such the document found in the case on hand from the premises of the 3rd party, the assessee had no control of whatsoever on such document. Therefore in our considered view such document cannot be termed as belonging to the assessee. Once a document does not belong to the assessee as mandated under the provisions of section 153C of the Act, prior to the amendment, does not authorize the AO to initiate the proceedings against the assessee. In this connection we draw support and guidance from the judgment of Hon'ble Delhi High Court in the case of Pepsico India Holding (P.) Ltd. vs ACIT reported in 370 ITR 295 wherein it was observed that: "the Assessing Officers should not confuse the expression 'bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessment proceedings u/s 153C for AY 2014-15 and 2015-16 are hereby disposed off." In view of the above finding of the AO, the 2nd controversy arises whether the amendment brought under the provisions of section 153C of the Act, where the word 'belong' was replaced with the word 'pertain' is applicable for the year under consideration. The amended provisions of section 153C of the Act reads as under: 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwarded the material to the Assessing Officer of the other person, had issued notice under section 153C of the Act prior to the coming into force of the amended provision. The notice under section 153C of the Act was challenged before the appropriate forum on the ground that the seized material does not belong to such other person and such issue was decided in favour of such person on a finding that the seized material does not belong to the other person. Thereafter, in view of the amendment in section 153C (1) of the Act, since the books of account or documents did not belong to the other person but did pertain to him or the information contained therein related to him, can the Assessing Officer of the searched person once again record satisfaction as contemplated under the amended provision and forward the material to the Assessing Officer of such other person. The answer would be an emphatic "no" as the Assessing Officer of the searched person after recording the earlier satisfaction would have already forwarded the material to the Assessing Officer having jurisdiction over the other person, therefore, there would be no question of his again forming a satisfaction as required un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue: 10. At the outset it is pertinent to note that we have already held that initiation of the proceeding under section 153C of the Act, in the case of the assessee is not valid vide paragraph No. 8 of this order. For the detailed discussion please refer the relevant paragraph. Once, the proceedings initiated under section 153C of the Act have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these not required to be adjudicated separately. Hence the appeal filed by the Revenue is dismissed as infructuous. 11. In the result the appeal filed by the revenue is dismissed as infructuous. 12. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the revenue is dismissed as infructuous. Coming to the IT(SS)A No. 16/Rjt/2018 by Revenue and CO No. 21/Rjt/2018 by the assessee in the case of Smt. Monaben Harikishanbhai for A.Y. 2014-15 13. The assessee has raised the grounds in the cross objection as detailed under: "1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another. 2.0 The ld. Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the revenue is dismissed as infructuous. 18. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the revenue is dismissed as infructuous. Coming to the IT(SS)A No. 17/RJT/2018 by Revenue and CO No. 26/RJT/2018 by the assessee in case of Shri. Akshayrajsinh V Gohil for A.Y. 2014-15 19. The assessee has raised the grounds in the cross objection as detailed under: "1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another. 2.0 The ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the "CIT(A)"] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961. 2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed." 20. The Revenue has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 3,38,75,060/- being on-money paid on the purchase of agricultural land. 2. On the facts and in the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edabad [hereinafter referred to as the "CIT(A)"] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961. 2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed." 26. The Revenue has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 2,47,36,148/- being on-money paid on the purchase of agricultural land. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 9,42,859/-. 3. The CIT(A) has erred in facts in observing that name of the village is not matched by failing to appreciate that Lagdana and Kalyangadh are adjacent villages and the fact that the survey number matches exactly. 4. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 5,50,22,256/- being on-money paid on the purchase of agricultural land. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 9,65,298/-. 3. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date. 4. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the statements." 33. At the outset it is pertinent to note that in identical facts and circumstances in the case of Late Shri Parvin sinh Nanubhai Zala in CO No. 10/RJT/2018, we have already held that initiation of the proceedings under section 153C of the Act, are not valid vide paragraph number 8 of this order. For the detailed discussion please refer the relevant paragraph. Therefore respectfully following the same and in order to maintain parity with fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the statements." 39. At the outset it is pertinent to note that in identical facts and circumstances in the case of Late Shri Parvin sinh Nanubhai Zala in CO No. 10/RJT/2018, we have already held that initiation of the proceedings under section 153C of the Act, are not valid vide paragraph number 8 of this order. For the detailed discussion please refer the relevant paragraph. Therefore respectfully following the same and in order to maintain parity with finding we hold that the proceedings initiated under section 153C of the Act are not sustainable. Hence, the objection filed by the assessee is allowed. 40. Once, the proceedings initiated under section 153C have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these are not required to be adjudicated separately. Hence the appeal filed by the Revenue is dismissed as infructuous. 41. In the result the appeal filed by the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter of the searched person. These documents were excel sheets containing various details such as survey numbers, size (vigha), amount paid and legal status etc. On the top of excel sheet, the date was mentioned i.e. 14 April 2014. Out of various survey numbers mentioned in the excel sheet, one survey bearing No. 1223 was representing the land purchased by the assessee. The AO on verification of the sale deeds of the impugned survey Nos. found that the amount mentioned therein viz a viz the amount mentioned in the seized document does not match. As such the amount mentioned in the seized documents was greater than the amount mention in the registered documents. Accordingly he was of the view that the assessee has made investment in the impugned lands without recording the same in the books of accounts. Accordingly, the AO proposed to make the following additions by issuing a show cause notice dated 10th December 2016: "6. Further as per your submission for AY 2015-16 you have also purchased survey number 1223 and 1242 at village Gangad during the year. As per the seized data the average on-money figure per "bigah" is arrived at Rs. 12,58,700/-. Therefore the average on-money pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the assessee by observing as under: "9. The reply of the assessee is persued and the same is not found convincing. The point wise rebuttal to the assessee's submission is given in the ensuing paragraphs. 9.1. The assessee contended that he was not allowed the opportunity to crossexamine. In this connection, it may be stated that request for cross-examination was made at the fag end of limitation period and the deponents have in their statements specifically stated that assertions made in the statements are true and correct without any threat or coercion. Therefore, the statements recorded in post-search enquiries carry high evidentiary value, which cannot be brushed aside simply because of an opportunity of cross-examination was not availed. 9.2. The assessee also submitted the affidavits of the seller parties denying the receipt of on-money. These affidavits are verified, but it is observed that averments made in the affidavits are contrary to the facts, statements recorded of some sellers in post-search enquiries and excel sheet seized during the search and therefore, such affidavits are nothing but afterthought story. Therefore, this stand of the assessee fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during the search carries high evidentiary value and therefore, the department has no option except to take the base of seized excel sheet to determine correct quantum of on-money paid by the assessee and therefore, data contained in excel sheet is considered the actual value of the land purchased by the assessee. 9.6. In respect of agricultural land purchased by the assessee at Survey No. 1223, the assessee submitted that on-money payment worked out is on the basis of hypothetical figure of average on-money per bigha and therefore, addition proposed in the show cause notice is on arbitrary manner, In this regard, it can be stated that the excel sheet seized from the premises of ADPL reflects "token money" paid by the assessee of Rs. 4,50,000/- in respect of land at Survey No. 1223. This infers that at the time of preparation of excel sheet, full money was not paid by the assessee to the seller. Further, on verification of the registered sale deed, it observed that the land at Survey No. 1223 was purchased vide sale deed registered on 21.02.2015, i.e., after the search in the case of ADPL and there is no reference of the amount paid of Rs. 4,50,000/- in the said sale deed. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, such decisions could not come to the help of the assessee. The assessee relied upon the recent decision of Hon'ble Supreme Court of India in the case of PIL filed by the lawyer Prashant Bhushan, wherein, Hon'ble Court refused to order any inquiry against the politicians on the basis of documents recovered by department during searches conducted at Birla & Sahara offices. In this connection, it is seen that Hon'ble Supreme Court has directed the petitioner and the department to come with "better material" to support the allegations, in this context, in the instant case, the department is having sound proof in the form of excel sheet having reference of name of village, survey number, amount paid etc., which is the important piece of evidence against the assessee. Further, corroborative evidences in form of statements recorded of sellers of land in post-search enquiries strengthens the stand of the Department that the assessee, indeed has paid on-money for purchase of agricultural lands. 9.9. Now, moving towards the quantum of such on-money payment, I believe that nothing shall be better than the excel sheet seized from the premises of ADPL. The content in the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h survey number on account on money as alleged by the AO. Accordingly the learned CIT (A) deleted the addition made by the AO. 48. Being aggrieved by the order of the learned CIT (A), the revenue is in appeal before us. 49. Both the learned DR and the AR before us relied on the order of the authorities below as favorable to them. 50. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion we note that the addition has been made by the AO on the basis of the excel sheet found during the course of search in the case of ADPL which is 3rd party and has no connection either directly or indirectly with the assessee. Furthermore, there was enquiry conducted with the seller of the land who accepted to have received on money from the assessee. First of all, we find that there was no mention/reference of survey No. 1242 in the excel sheet found during the course of search, therefore we are of the view that there cannot be any addition on account of on money. It is because there was no iota of evidence available with the AO suggesting that there was any on money paid by the assessee. Regarding the land bearing s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961. 2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed." 52. The Revenue has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 5,35,51,897/- being on-money paid on the purchase of agricultural land. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 6,02,218/- and Rs. 2,00,000/-. 3. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date. 4. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the statements." 53. At the outset it is pertinent to note that in the identical facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that "In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon'ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon'ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed "while calculating the time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly". The extraordinary steps taken suo motu by Hon'ble jurisdictional High Court and Hon'ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words "ordinarily", in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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