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TMI Blog2021 (4) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer and sustained by the Ld. CIT (A) is hereby deleted. Assessment u/s 153C - AR submitted that the impugned assessment order framed under S. 143(3) - as submitted that the search took place on UPDA and Radico Khaitan on 14.02.2006, and the alleged incriminating material / documents pertaining to Financial Year 2005-06 were also recovered - HELD THAT:- As decided in LORDS DISTILLERY LIMITED, VERSUS DCIT, DELHI [ 2018 (12) TMI 1606 - ITAT DELHI] assessment ought to have been framed u/s 153C r.w.s 153A of the Act which is the mandate of relevant provisions relating to assessment in the case of search and seizure operation. The present assessment order is framed u/s 143(3) of the Act and is, therefore, bad in law. Accordingly, we do not have any hesitation in annulling the assessment order. Since the assessment order has been annulled, all the subsequent happenings get vitiated X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer in concluding the assessment proceedings of the assessee u/s 153C r.w.s. 153A of the Income Tax Act when there is no material to support the allegations that the documents relied upon the Assessing officer belonged to the assessee. 2. The Learned Commissioner of Income Tax Appeals has erred in law and facts of the case in confirming the action of the AO in concluding the assessment without providing an opportunity to cross examine Shri RK Miglani and M/s Radico Khaitan. The Assessment has been framed on surmises and conjectures totally alien to any cogent proof, in the absence of proof of generation of funds, and their absence either the identity of the so called beneficiary officials and politicians and without stating any reason as to why such payments were being made. 3. The Learned Commissioner of Income Tax Appeals has erred in law and facts of the case in confirming the action of the AO who has relied on dumb documents , loose sheets , diaries and jottings of third parties even though they could not be relied upon to make any additions in the case of the assessee and in stating that the assessee was a part of the core committee which is factually incorrect. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be framed u/s 153C of the Act." Ground 5:"That the additions made are illegal and bad in law as the Assessee was denied the opportunity to cross-examine Sh. R.K. Miglani, based on whose statement the subject addition has been made." Ground 6:"That without prejudice, the additions have been on the basis of dumb documents and the same are liable to be deleted" 3.0 At the time of hearing, the Ld. AR for the Assessee submitted that there is a delay of 44 days in filing the appeal for AY 2006-07 before the Tribunal, for which necessary application for condonation of delay along with affidavit has been filed at the time of filing of the appeal explaining reasons for delay in filing appeal. The Ld. AR for the Assessee, further, submitted that the Assessee had received impugned order on 29.12.2011 and the last date for filing of the appeal before this Tribunal was 27.02.2012. The Ld. AR submitted that the Ld. authorized representative appearing before the Appellate Commissioner, suffered from Acute Hepatitis Viral from 15.02.2012, and was advised complete bed rest for 8 weeks. It was further submitted that the delay was neither intentional nor deliberate. The Ld. AR placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had requested an opportunity to cross examine the witness who had deposed against him, then if such request in denied and a reasonable opportunity is not granted for cross examination, the resultant additions made were unjustified. 6.2 The Ld. AR referred to page number 20 of the order passed in the case of Lords Distillery Ltd. (supra) and pin-pointed item number 14 (being assessee's name) of the common satisfaction note recorded by the Assessing Officer. It was his contention that while referring to the satisfaction note, the Assessing Officer has to record a firm finding that the books of account or documents seized do not belong to the person searched. It was submitted that the documents recovered from Shri R.K. Miglani and UPDA are dumb documents and hence no additions can be made in the Assessee's case. It was argued that the said documents contained only the names of the distilleries and the amounts mentioned against each distillery and that no details of actual payment/s, mode of payment/s, nature of payment/s, beneficiaries etc. can be gathered from such documents. 6.3 It was also submitted that the Assessing Officer and the Ld. CIT (A), while passing the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace at his residence. The Tribunal upheld the order of the Assessing Officer which was affirmed by the Hon'ble High Court of Delhi. But this was in the context of provisions of section 12AA of the Act, and, therefore, cannot be stretched to the proceedings u/s 153C of the Act in respect of 11 distilleries. A judgment has to be considered in the context in which it was delivered. 46. The Assessing Officer, during the course of assessment proceedings, has heavily relied upon the entries found in the impounded documents. But, there is not even a single finding by the Assessing Officer which could suggest that the corresponding entries were found in the regular books of account of any of the distillery. This shows that no independent verification/examination was done by the Assessing Officer who simply relied upon the seized material supplied to him by the Investigation Wing. 47. The Revenue has strongly contended that the seized documents are such documents which belong to the captioned assessees. In our understanding of the facts and on perusal of the seized documents, this assertion of the Revenue is completely and wholly misplaced in law. The concept of the term "belong to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sized that the document 114 of Annexure A-1 bears the signature of two employees but we have to say that during the course of assessment proceedings, these employees were never questioned by the Assessing Officer to verify whether they actually put the signatures on those documents. In our considered opinion, such documents are only hearsay evidence. 54. Another theory propounded by the Revenue is that every distillery had to contribute ₹ 20/- per case and had thus contributed such a sum is entirely unsupported by any material. It is not known who had collected the alleged sum to have been contributed and what is the destination of such sum. In none of the documents, name of the payee, any public servant or politician appears. This itself establishes that the documents are dumb. 55. Before us, the ld. DR has supplied the copies of the documents which form Annexure of the seized documents, but has failed to demonstrate the basis on which such documents belonged to the distilleries or any of the distilleries. The emphasis was on the names appearing in such loose sheets without there being any corroborative material. Therefore, these documents do not stand the test of judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the statement recorded u/s 132(4) of the Act and has relied upon several judicial decisions to support his contentions. The ld. DR further relied upon the provisions of section 132(4A) of the Act and 292C of the Act. These sections read as under: "Section 132(4) in The Income- Tax Act, (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is fond to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income- tax Act, 1922 (11 of 1922 ), or under this Act. 1 Explanation.- For the removal of doubts, it is hereby declared that the examination of any person under this sub- section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income- tax Act, 1922 (11 of 1922 ), or under this Act.] Section 132(4A) in The Income- Tax Act, 1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control of that person in the course of a search u/s 132." 67. A plain reading of the aforementioned sections would show that the presumption is available in the case of a person who was found in the possession or control i.e. the 'searched person'. Therefore, the presumption may be good against Shri R.K. Miglani or UPDA. But not in the cases of "the other person" which are the distilleries in the present appeals. Therefore, the judicial decisions relied upon by the ld. DR are misplaced and, therefore, needs no specific mention. 68. At this stage, it would not be out of place to point out that the premises of Shri R.K. Miglani were searched, which means that Shri R.K. Miglani was the 'searched person' and all the presumptions were available against him in respect of the seized documents/notings in the seized documents and other things. 69. Surprisingly, the assessments of Shri R.K. Miglani have been made on the returned income which will be clear from the following table Assessment Year Returned income Assessed income u/s 2000-01 177080 177080 153A 2001-02 194615 194615 -do- 2002-03 191652 191652 -do- 2003-04 343219 343219 -do- 2004-05 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds 3 and 4 (already reproduced above) in ITA No. 1713/DEL/2012 for AY 2006-07. It was submitted by the Ld. AR that the additional grounds raised are purely legal grounds which go to the root of the matter and no new facts are required to be investigated or placed on record for adjudicating the same. In this regard, the Ld. AR placed reliance on the case of National Thermal Power Company Ltd 229 ITR 383 (SC) and (ii) the Hon'ble Delhi High Court in Gedore Tools Pvt. Ltd reported in 238 ITR 268 (Del); Lords Distillery Ltd. (Supra) and also Mohan Meakin Ltd (supra) Para 74. 10.0 The Ld. Department representative objected to the admission of additional ground. 11.0 Having heard both the parties, we are of the considered opinion that the additional grounds raised by the Assessee relate to a legal issue which goes to the root of the matter and, therefore, we admit the same. 12.0 The Ld. AR submitted that the impugned assessment order framed under S. 143(3) of the Act is illegal, bad in law and without jurisdiction owing to the fact that the same was required to be passed u/s 153C of the Act. It was submitted that the search took place on UPDA and Radico Khaitan on 14.02.2006, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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