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TMI Blog2022 (9) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... mber And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri Aseem Thakkar, A.R. For the Revenue : Shri Alok Kumar, CIT-D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by Revenue and Cross Objection filed the assessee against the order of the ld. Commissioner of Income Tax (Appeals)- 12, Ahmedabad in Appeal no. CIT(A)-12/AHD/10279/DC C-3(3)/2018-19 vide order dated 15/03/2021 passed for the assessment year 2013-14. 2. The Department has raised the following grounds of appeal: 1. The Ld.CIT[A) has erred in law and on facts in deleting the addition of Rs.2,00,00,000/- made by the Assessing Officer on account of unexplained income. 2. On the facts and circumstances of the case, Ld CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of Ld CIT(A) may be set aside and that of the Assessing Officer be restored. 3. The assessee has raised the following grounds of cross objection: 1. The Ld. A.O. erred in law and in fact of the case in assessing the income of Rs. 2,00,00,000/- as unexplained income without mentioning under which provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P Shah from his bank account no.17910400002994 to Sunderdeep Builders were paid by cheque against the cash receipt. Further, Shri Rajesh Vaswani, the main person of Venus Group is proprietor of Sunderdeep Builder. All these sequence of facts found from the seized materials clearly established that the transaction was not purely of unsecured loan as stated by the assessee in his reply. In fact, the cheque issued and receipt is against the cash. The transaction of cash of Rs.2,00,00,000/- made in F.Y.2012-13 relates to cash payment and cash receipt by the Venus Group and assessee is one of the beneficiary. The source of cash transaction of Rs.2,00,00,000/- remains unexplained in view of the facts mentioned herein above. Therefore, the amount of 20,00,000/- is added to the total income of the assessee as his unexplained income. The penalty proceedings is initiated u/s. 271(l)(c) for furnishing inaccurate particulars of income. (Addition of Rs.2,00,00,000/-) 4. Before Ld. CIT(Appeals), the assessee made three contentions: first, the assessment of the assessee for assessment year 2013-14 was already framed under section 143(3) and no incriminating material was found during s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustained. The Jurisdictional Gujarat High Court has held in the case of Anilkumar Gopikrishna Agrawal vs ACIT 418 ITR 25 (Guj) as under: While it is true that section 153C of the Act is also a machinery provision for assessment of income of a person other than the person searched, in the opinion of this court, this is not a case where by virtue of the amendment, there is merely a change in the procedural provisions affecting the assessees who were covered by the unamended provision. By the amendment, a new class of assessees are sought to be brought within the sweep of section 153C of the Act, which affects the substantive rights of the assessees and cannot be said to be a mere change in the procedure. Since the amendment expands the scope of section 153C of the Act by bringing in an assessee if books of account or documents pertaining to him or containing information relating to him have been seized during the course of search, within the fold of that section, this question assumes significance, inasmuch as in the facts of the present case, as on the date of search, it was only if such material belonged to a person other than the searched person, that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under the amended provisions of section 153C of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Ld. CIT(Appeals) allowed the assessee s appeal with the following observations: DECISION: 6.1 I have considered the facts of the case and the submission of the appellant carefully. Though on legality of the addition made by the AO by resorting to section 153C, it has been decided in the preceding grounds of appeal that AO had no jurisdiction to make addition in the absence of any incriminating documents belonging to appellant, for the sake of completeness of the decision on merits of the grounds taken , I have considered the facts on record and submission made by the appellant on above grounds. I find that the AO has made some presumption that the appellant who had taken a loan in earlier year i.e. A.Y. 2012-13 on various dates by way of cheque from Sunderdeep Builder must have paid cash against such loan and when in the year under appeal , the said loan was returned by appellant, he would have been paid back the cash and such cash transaction was unexplained. The appellant's contention that there is no such clinching evidence of any .cash being exchanged for receipt of loan and repayment thereof. Had it been so then such vouchers could have been found is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals). The assessee has also filed its Cross objections against the aforesaid order. 9. Before us, the Ld. DR has reiterated the observations made by the Ld. Assessing Officer in the assessment order. In response, the counsel for the assessee has relied upon the observations made by Ld. CIT(Appeals) in the appellate order. The primary contention of the counsel for the assessee is that the assessment order passed under section 143 (3) r.w.s. 153C of the Act is unsustainable for the reason that the search operations were conducted prior to the insertion of amendment to section 153C, and therefore since it has been specifically noted by the AO that documents found during search pertain /relate to the assessee and did not belong to the assessee, the assessment order framed under section 143 (3) r.w.s. 153C of the Act is void ab initio. Further, on merits, the counsel for the assessee relied upon the order passed by the Ahmedabad Tribunal in the case of DCIT v. Zodiac Mediquip Ltd in ITA number 1646/Ahd/2019, wherein on similar set of facts, addition was deleted by the Ahmedabad ITAT by holding that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res received by the assessee was duly explained and recorded in the books of accounts. Thus, the question of applying the provisions of section 68 of the Act in the given facts and circumstances does not arise. It is the reason that the entry in the account was duly recorded and the source of money was duly explained by the assessee which was also accepted by the Revenue. 9.7. Without prejudice to the above, it is also significant to note that the source of the transaction of Rs. 6 crores representing the payment was made by the assessee through the banking channel. Thus it is implied that source of Rs. 6 crores was never in doubt for the reason that it was carried out through the banking channel and no addition of whatsoever was made by the authorities below with respect to such amount. Now, the entire flow of cash transaction was out of such transactions of Rs. 6 crores. Thus, it appears to us there was no unaccounted money involved in the entire flow of Transaction whether it was the receipt of cash of Rs. 6 crores or payment of cash of Rs. 5.25 crores as all these transactions pertains to the source of money of Rs. 6 crores which was never doubted. Thus, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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