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TMI Blog2022 (12) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer by taking recourse to provisions of S. 153C of the Act ought to have been declared as not in accordance with law and, as such, null and void. 2. The learned CIT(A) ought to have held that the order passed by the Assessing Officer was bad in law as no notice u/s. 143(2) of the Act was issued as required under the law. 3. The learned CIT(A) has erred in law and on facts in upholding the order passed by the Assessing Officer without appreciating that the Assessing Officer had not obtained valid approval u/s. 153D of the Act. 4. The learned CIT(A) has erred in law and on facts in upholding the action of the Assessing Officer in taxing Long Term Capital Gain of Rs. 10,89,14,692/- as business income and enhancing the same to Rs.11,11,62,469/-. 5. The learned CIT(A) has erred in law and on facts in upholding the action of the Assessing Officer in taxing Short Term Capital Gain of Rs. 2,05,75,672/- as business income. 6. The learned CIT(A) has erred in law and facts in upholding the action of the Assessing Officer in making addition of Rs. 10,84,00,000/- on account of alleged income from sell of car parking. 7. The learned CIT(A) has erred in law and on facts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er concern in the same city. Accordingly, he determined sum of Rs. 10,84,00,000/- as unaccounted sale of car parking. v. The Assessing Officer also found that the group is also accepting on money on sale of flat. Statement of employees of the assessee was recorded on 10.01.2011 and on basis of this statement, ld. AO made an addition of Rs.16,78,31,372/-. The quantum of the above sum was determined by the sale at the highest rate and any flat which is sold at the rate less than the highest value, ld. AO considered the difference between highest rate and transacted rate as unaccounted sales as on money. 07. Accordingly, assessment order was passed on 28.03.2013 u/s. 153A r.w.s. 153C r.w.s. 143(3) of the Act determining the total income of the assessee at Rs.37,94,31,080/-. 08. The assessee aggrieved with assessment order preferred appeal before the learned CIT(A) challenging the order on jurisdiction, approval and on the merits of the addition. i. On the issue of absence of incriminating material, the ld. CIT(A) held that there are enough indications of the evidence of incriminating material particularly unaccounted cash discovered during the course of search belonging to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p, there is no reason to disturb the return of income already filed for impugned assessment year. He relied on several judgments on this issue. iii. It was also submitted that all the additions in this case are made by the ld. AO are without any incriminating material found during search. Therefore, the order passed u/s. 153 (C) of the Act is bad in law. iv. On the order of the ld. CIT(A) on the "satisfaction Note‟ he referred to the Page No. 19 of the paper book and submits that the "satisfaction Note‟ also does not suggest any incriminating material with respect to the assessee specifically. It merely says that the documents are related to the group therefore, same cannot be used against the assessee. v. Appeal of the assessee for A.Y. 2010-11 in ITA No. 1574/MUM/2020 is decided on 09.02.2022 wherein the issue of receipt of on money on sale of car parking, sale of flats and on the issue of Notice u./s 153C qua incriminating material is decided in Para No. 16-30. He therefore submitted that, in absence of any incriminating material as well as in view of the decision of the co-ordinate bench in assessee own case for A.Y. 2011-12, addition deserves to be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvoking the jurisdiction u/s. 153 of the Act. Thus, it was stated that ld. CIT(A) is correct in holding the proper assumption of jurisdiction by the ld. AO u/s. 153C of the Act. ii. With respect to the addition on account ofsale of car parking of Rs. 10.84 Crores. He relied on Para No. 11.7 of the ld. CIT(A) he extensively referred to the various statements. He specifically said that all various employees. It was submitted that the assessee company is collecting parking charges by cheques in the name of other concerns operated by other parties. iii. With respect to the receipt of on money on sale of flats, he referred Para No. 12.10 of the order ld. CIT(A), he referred to Para No. 13 of the appellate order also. Accordingly, he submitted that ld. Assessing Officer is correct in making the addition and the ld. CIT(A) is also correct in upholding the jurisdiction as well as the addition on merits of the case. He therefore, submitted that addition deserves to be upheld. 012. In rejoinder the ld. Authorized Representative extensively referred the submission made before ld. CIT (A) as well as order of the co-ordinate bench in assessee‟s own case for A.Y. 2011-12 and submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial much less incriminating material relating to the assessee found in the search. The authorities below are also referring to statements given by the employees of Lodha group. There is no mention that these employees were that of the assessee‟s company. There is much importance given to the statement of Shri Abhinandan Lodha. The ld.CIT(A) has mentioned that the said person is a director in the assessee company. This has been disputed by the assessee even before the ld.CIT(A) that the said person is not a director of the assessee company. The assessee company has also mentioned that it has separate legal entity and the term Lodha group cannot be used against it without identifying the specific material belonging to it. The ld.CIT(A) has ignored this aspect despite reproducing the assessee submission before him in his appellate order. When the said person is not a director in the said company his statement by no stretch of imagination can be said to be applicable or binding upon the said company. In such eventuality, the said material cannot be said to be any material much less incriminating material found during search giving jurisdiction to the AO for assessment under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not germane and hence, the addition on merits is also not sustainable. In this regard, we also note that the ld.CIT(A) has given the elaborate reference to case laws regarding the evidence Act and evidentiary value of statements obtained. 25. In this regard, we note that none of the statement referred here are identified to be belonging to the assessee company. In these circumstances, we note that none of the case laws referred by ld.CIT(A) expound that statement of persons not belonging to the assessee company can be an evidence against the assessee and which can be the basis of addition of undisclosed income. In this regard, it may also be relevant to refer to the material found in the search at other places and on the basis of which these statements have been obtained. The materials found in search mentioned is the retrieval of deleted file stored in computer system. In this connection, the law in this regard has been elaborately dealt with by the larger Bench Hon‟ble Supreme Court in the case of Arjun Panditrao Khotkar vs Kailash Kushanrao Gorantyal and ors in civil appeal No. 2407 of 2018, vide order dated 14.07.2020. The said larger Bench of Hon‟bel Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the words "under Section 62 of the Evidence Act," With this clarification, the law stated in paragraph 24 of Anvar P.V. (supra) does not need to be revisited. (c) The general directions issued in paragraph 62 (supra) shall hereafter be followed by courts that deal with electronic evidence, to ensure their preservation, and production of certificate at the appropriate stage. These directions shall apply in all proceedings, till rules and directions under Section 67C of the Information Technology Act and data retention conditions are formulated for compliance by telecom and internet service providers. (d) Appropriate rules and directions should be framed in exercise of the Information Technology Act, by exercising powers such as in Section 67C, and also framing suitable rules for the retention of data involved in trial of offences, their segregation, rules of chain of custody, stamping and record maintenance, for the entire duration of trials and appeals, and also in regard to preservation of the meta data to avoid corruption. Likewise, appropriate rules for preservation, retrieval and production of electronic record, should be framed as indicated earlier, after considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no incriminating material with respect to sale of car parking or on money on sale of flats with respect to this assessee. 019. Honorable Supreme court in case of CIT V Sinhgad Technical education society (2017) 156 DTR 0161 (SC), (2017) 297 CTR 0441 (SC), (2017) 397 ITR 0344 (SC), (2017) 250 TAXMAN 0225 (SC) has held that "18. The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is argument by the assessee before the ld.CIT(A) that notice u/s. 143(2) has not been issued is not factually correct. Hence, the said issue by the assessee is dismissed." 022. Accordingly Ground no 2 of the Appeal is dismissed. 023. Ground no 3 was not at all argued before us, therefore same is dismissed. 024. Ground no 4 & 5 are with respect to capital gain shown by assessee on sale of land and development rights, treated by it its computation of income as income chargeable to tax under the Head " capital gains‟ but learned AO considered it as "income from Business and Profession." Neither the ld. AO, nor the ld. CIT (A) and ld. DR before us could not show above any incriminating material found during the course of search. In absence of incriminating material, we hold that orders of the ld. Lower Authorities are non-sustainable in view of the decision of honorable supreme court in case of Sinhgad Technical education society [2017] 397 ITR 344 (SC) . Hence we allow ground no 4 and 5 of the Appeal. 025. Ground no 6 is with respect to addition of on money income on account of sale of car parking and Ground no 7 is on account of taxation of on money on sale of flats. We fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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