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TMI Blog2020 (7) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... annot 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 - See PEPSICO INDIA HOLDINGS PRIVATE LIMITED [ 2014 (8) TMI 898 - DELHI HIGH COURT]. There cannot be any question of initiating the proceedings under section 153C of the Act, until and unless the documents found during the course of search from the premises of the 3rd party belongs to the assessee. Whether the amendment brought under the provisions of section 153C where the word belong was replaced with the word pertain is applicable for the year under consideration? - Provisions of section 153C as applicable on the date of search will be applied to the proceedings initiated therein. Thus there remains no ambiguity to the fact that the provisions of section 153C of the Act prior to the amendment therein, will be applicable in the case on hand which requires the AO to arrive at a satisfaction that the documents found from the premises of the 3rd party in the course of search belongs to the assessee. We have already expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : The captioned appeals and cross objections have been f i led at the instance of the Revenue and assessee. First we take IT(SS)A No 15/RJT/2018 and CO No. 10/RJT/2018 in case of Late Shri Parvinsinh 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 ₹ 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. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R vehemently supported the order of the authorities below. 8. We have heard the rival contentions of both the parties and perused the materials available on record before us. The facts in brief as culled out from the order of the authorities below 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant 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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO stands as under: 8. As far as case laws quoted by you in support of your claim kindly note that all these case laws are related to assessment completed prior to amendment in the section 153C and therefore will not be applicable in this case. In view of the above your objections 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the amended provisions, a hypothetical example may be taken. The search is carried out in the case of HN Safal group on 4.9.2013. If the Assessing Officer of the searched person had recorded satisfaction that some of the seized/requisitioned material belongs to a person other than the searched person and forwarded 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew the proceedings under section 153C of the Act, cannot be initiated. Hence, the assessee succeeds on his technical ground of appeal. Accordingly the technical ground raised by the assessee is allowed. 9. In the result the CO. filed by the assessee is allowed. Coming to the IT(SS)A No. 15/RJT/2018 an appeal by the Revenue: 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 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. 17. In the result the appeal filed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal filed by the Revenue is dismissed as infructuous. Coming to the IT(SS)A No. 19/Rjt/2018 by Revenue and CO No. 9/Rjt/2018 by the assessee in case of Shri. Ketanbhai G Shobhana for A.Y. 2014-15 25. 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. 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred 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. 32. 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 ₹ 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 ₹ 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition made on account of unexplained expenditure of ₹ 2,97,847/-. 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 Keshardi 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, and in relying on affidavits of the sellers submitted by the assessee at a much later date. 5. 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1223 and 1242 at ₹ 27,75,000/- and ₹ 58,40,000/- respectively. The assessee purchased both the plots dated 21st February 2015. The assessee claimed that the area of the plots bearing No. 1223 and 1242 consists of the area 8.21 and 17.31 Bigha respectively. However, the AO during the assessment proceedings found 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 excel sheets 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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has purchased agricultural lands at different dates which vary much before and much later from the date mentioned in the seized document. ii. There was no opportunity of cross-examination provided to the assessee of the seller ( Mohd. Khan Gulab khan Pathan) of the land bearing survey No. 1223 wherein it was accepted that the assessee has paid on money. The assessee also filed the affidavit of the seller denying the fact to have received any on money. iii. There was no evidence available on record suggesting that the assessee has paid any on money on the purchase of such pieces of lands. iv. There was no reference about the land bearing survey No. 1242 in the excel sheet found during the course of search as discussed above. Accordingly, there is no question of making any addition on account of on money in the purchase of such pieces of land. However, the AO disregarded the contention 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 opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgument of the assessee is not acceptable in view of the fact that some of the assessee's family members have purchased flat, which was constructed by ADPL. Therefore, it is established that the assessee was in business relationship with ADPL and its directors / owners. Thus, this itself proves that an excel sheet found from the premises of ADPL is important piece of paper, which carries high evidentiary value. 9.5. The assessee further stated that there is difference in on-money payment as stated in excel sheet and as per the statement of sellers of land and therefore, the data contained in excel sheet has no relation with the actual deal and no conclusion can be drawn on the basis of some casual noting. The contention of the assessee is not correct and misleading, because, acceptance by the sellers of agricultural land of higher consideration in cash itself suggest the involvement of on-money. Further, excel sheet recovered 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and deal is not found in the excel sheet seized. However, looking to the fact that the assessee has paid on-money in the other lands purchased in the same vicinity and sellers of such other lands have accepted the receipt of on-money, it is illogical that the assessee has not paid any on-money in the land purchased at Survey No. 1242. Therefore, the on-money payment in the impugned land is worked out on scientific basis by applying the on-money rate per bigha in the other lands purchased by the applicant, reference of which is found in the seized excel sheet. Hence, the onmoney payment determined is on scientific basis and not on the basis of hypothetical figures. 9.8. The assessee placed reliance on various decision of the ITAT, High Courts and Supreme Courts. All such cases are given due consideration, but the facts of the cases relied upon by the assessee are totally different from the facts of the case on hand and are distinguishable. Therefore, 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 refus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual area of the land is at 8.21 and 17.31 bighas. The learned CIT (A) after considering the submission of the assessee directed the AO to provide the opportunity for cross-examination to the assessee and accordingly called for the remand report. The AO in his remand report has submitted that Mohd. Khan Gulab Khan Pathan, the seller of the land bearing No. 1223 has retracted from his earlier statement furnished on 7 November 2014 during the cross-examination for having received any on money from the assessee. However the AO in his remand report has commented that the retraction statement of the party should not be accepted which was given after the gap of 2 years and 8 months. The learned CIT (A) after considering the submission of the assessee and the remand report arrived at the conclusion that there was no evidence available on record suggesting that there was any on money paid by the assessee to the seller of the land. Similarly there was no mention about the survey number bearing 1242 in the excel sheet found during the course of search. Therefore there cannot be any addition with respect to such survey number on account on money as alleged by the AO. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or handwriting of the assessee to corroborate the above making of payment by the assessee was found during the course of the search. Merely recording made by a third party or statement of a third party could not be treated as so sacrosanct so as to read as a positive material against the assessee. Therefore, addition in the hands of the assessee on account of 'on-money' was not justified. In view of the above we find no infirmity in the order of the learned CIT (A). Accordingly we decline to interfere. Hence the ground of appeal of the Revenue is dismissed. Coming to the IT(SS)A No. 23/Rjt/2018 by Revenue and CO No. 11/Rjt/2018 by the assessee in the case of Smt. Seemaben Ashokbhai Satikunver for A.Y. 2014-15 51. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that the clause of rule 34 of the Appellate Tribunal Rules 1963 requires the bench to make endeavour to pronounce the order within 60 days from the conclusion of the hearing. However the period of 60 days can be extended under exceptional circumstances but the same should not ordinarily be further extended beyond another 30 days. In simple words the total time available to the Bench is of 90 days upon the conclusion of the hearing. However, during the prevailing circumstances where the entire world is facing the unprecedented challenge of Covid 2019 outbreak, resulting the lockdown in the country, the orders though substantially prepared but could not be pronounced for the unavoidable reasons within the maximum period of 90 days. In such circumstances we find that the Hon ble Mumbai Tribunal in the case of JSW Limited Vs Deputy Commissioner of Income Tax in ITA No. 6103/MUM/2018 vide order dated 14-5-2020 extended the time for pronouncing the order within 90 days of time by observing as under: 9. Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon ble Prime Minister of India took the bold step of imposing a nationwide loc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an ordinary period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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