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TMI Blog2018 (10) TMI 1987X X X X Extracts X X X X X X X X Extracts X X X X ..... ial question of law arising from such an order and which alternatively considers the merits of the case as well. As a result of the above conclusion, we cannot agree with the learned Additional Solicitor General that we can pass a different order and entertain these Appeals for the current year of the search, namely, the Assessment Year 2009-10. That was based on the argument that the action under Section 153C for this year is an incorrect conclusion. All the earlier orders in these Appeals having being noted by us, we have no hesitation in concluding that despite sufficient opportunity being given to the Revenue, it has not been able to satisfy this Court that a different view can be taken. There is also a distinction between loose papers found from the possession of assessee and similar documents found from a third person. In the present case, impugned documents were not found from the possession of the assessee but was found from the possession of a third person - Mere mention of the names of the villages where the companies may have purchased lands would not give any basis to assume/presume/surmise that the name of the companies are mentioned in the impugned documents. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed by the learned A.O. in the assessment order are entirely different. The learned A.O. has also made no reference of these evidences while reaching his conclusion in the assessment order. The issues and evidences relating to the land companies are therefore irrelevant and out of context so far as the appellant is concerned. It is prayed that the evidences not related to the appellant's case, may kindly be ignored. Ground No.4: On the facts and rn the circumstances of the case and in law, the learned CIT(A) erred in confirming an addition of Rs.7,98,02,500 by wrongly interpreting the seized material at page no.231 found from the office at Embassy Centre, which is an IOM by Shri Dilip Dherai. The appellant prays that the said addition may kindly be deleted and appellant's explanation submitted before the Authorities may kindly be accepted. Ground No.5: On the facts and in the circumstances of the case and in law, the learned CIT(A} erred in holding that a cash payment of Rs.50.58 crore has been made for all the land transactions entered into by 52 land companies and the appellant. Out of this, Rs.38.40 crore has been added back in the case of 52 lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in law, the learned CIT(A) erred in confirming the charge of interest u/s.234B of the Act, having regard to the fact of the case. The appellant denies its liability for payment of interest u/s.234B of the Act. The appellant craves leave to add, omit or alter grounds of appeal before or during the hearing of the appeal. 3. Following grounds have been taken by the Revenue:- (1) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in not confirming the addition of unexplained cash expenditure of Rs.9,28,72,5007- made on account of the assessee's land purchases in Nevali village which was added on the basis of specific entries in seized/impounded records unearthed during the course of search and seizure operation? (2) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that cash component used in purchase of land cannot exceed 40% when no such claim or argument was made by the assessee? All the conclusions in this regard are drawn by the Ld. CIT(A) himself in his impugned order even when the assessee has neither raised any such ground of appeal before him nor any submission, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the ratio of cheque and cash payment columns of page nos. 190 and 196 gives a very unreasonable picture when in para 4.19 of his impugned order he himself has discussed the case of another company of the same Jai Corp Group viz. M/s. Iconic Realtors Ltd. where in one of its land transactions only Rs.3.25 crore of the purchase cost was reflected in books of account and the related unexplained cash expenditure was a huge amount of Rs.10.65 crore? It is important and relevant to highlight that recipient of this unaccounted cash has made categorical admission in this regard and has paid the tax also in this respect. (7) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that the figures of cash payments appearing in last column of the MIS/status report (i.e. the aforesaid page nos. 190, 196 and 197) -are progressive figures for whole land purchased for 52 land companies of this Group and the land purchased by the assessee company? Such findings of the Lei. CIT(A) are perverse and factually incorrect also due to the following reasons -(i) On top of the above page nos. 190, 196 and 197 (MIS reports/status reports of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im in his this impugned order. Therefore, the aggregate of Rs.43.45 crore and Rs.12.59 crore as calculated by the Ld. CIT(A), is Rs.56.04 crore which has no correlation whatsoever with the figure of Rs.50.58 'crore appearing in the last column of the above page no. 196. The appellant prays that the order of Commissioner of Income-tax (Appeal) on the above ground be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 4. Rival contentions have been heard and record perused. 5. Facts in brief are that a search and seizure operation u/s. 132 of the I.T. Act was carried out on 05.03.2009 in the case of Jai Corp Group of companies and employees and close associates who were closely involved in the process of acquiring land in the name of 52 group companies newly formed for this purpose. During the course of search and seizure operation, number of documents were found and seized as reflected in the Panchnama which shows the Sl. No., Name of the village, Area registered, Cutoff, Payments and cash payments. The important documents as per Annexure A-l -page (22) (23), Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16, 42 43 of the Paper book , when none of these documents have been found from the possession of the assessee, these documents have been found from the possession of either Shri Dilip Dherai or M/s. Jai Corp Ltd. These documents are either in the handwriting or addressed by, or addressed to Shri Dilip Dherai or other person and not by assessee or any office Director. Questioning the satisfaction note, the Ld. Counsel submitted that there is no evidence whatsoever to conclude that any of these documents belong to the assessee or other land companies. Moreover, these seized documents do not even mention the name of the assessee or any other land company. The Ld. Counsel further pointed out that the entire assessment revolves around the search and seizure operation conducted in the residential premises of Shri Dilip Dherai and his statement recorded during the course of search and thereafter. However, the said Shri Dilip Dherai has no connection whatsoever with the assessee. Infact, while framing the assessment, the AO himself has given a finding that the seized documents belong to Shri Dilip Dherai. It is the say of the Counsel that the onus lies on the AO to establish that the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se documents reflect total registered area, payment amounts and future requirements for amount for purchase of land. These sheets have been prepared on 28.11.2008. These sheets were in connection with land acquired till 20.11.2008, as indicated in Column 3 of Pgs 22-23. This sheet also incorporates budgeted requirement for land which has been reflected in highlighted portion in column 6 7 of these documents. These estimations were arrived at after discussion with Central Leadership Team of Jai Corp Group. The figures mentioned in column 6 7 reflect the projected fund requirement for future acquisition of land. This statement was made for indicating fund requirement at later date. MK JT mentioned on Pgs 22-23 are merely indicators of the discussion took place on different sites before the said date. For MK JT Villages, a map showing the land taken upto date and land available for contiguity of land along with the details of Survey No., Area and land owners name from which we need to acquire the balance land for which we have issued the cheques in favour of Brokers! Agents to show the landowners for acquisition of their lands were also submitted to the A.O. 5. The seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orative evidences, additions on the basis of slips, loose sheets cannot be upheld. (i) The ITAT Delhi Bench 'C in Third Member s decision in the case of Amarjit Singh Bakshi (HUF) v. ACIT 263 ITR 75, 81 TTJ 169 while deliberating on the loose sheets of paper held that there is no documentary evidence to support the passing of cash. (ii) In the case of CIT v. Anil Bhalla (2010) 38 DTR (Del.) 113, 322 ITR 191, Tribunal held that until there are independent evidences exist, the addition on the basis of notings, jottings cannot be upheld. (iii) The reliance is also placed on the following decisions, wherein it has been held that additions made on dumb entries/ documents without corroborative evidences are not sustainable. a) Atul Kumar Jam v. CIT (1999) 64 TTJ 786 (Delhi) b) Rakesh Goyal v. ACIT (2004) 87 TTJ 151 (Delhi) c) Rakesh Kumar lain v. DCIT (2004) 89 TTJ 203 (Delhi) d) N.R.Malhan v. DCIT (2004) 91 TTJ 908 (Delhi) e) Amarjit Singh Baxi v. ACIT (2004) 263 ITR (AT) 75 f) ACIT v. Ashokkumar Vig (2008) 15 SOT 85 (Ranchi) g) MM Financiers v. DCIT (2007) 17 SOT 5 (Chennal) h) Pankaj Dayabhai Patel HUF v. ACIT (1999) 63 TTJ 790 (Ahd.) I) Radhe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered is whether such materials or evidence RELATES to another assessee or not which may or may not lead to an assessment against that other person. Here too, the Hon ble Kerala High Court has used the word 'relates interchangeably with the word 'belong - and this should be taken note of by the Hon ble Bench. Hence, the plea that the reasons for satisfaction are vague and extraneous is NOT legally acceptable. II. The next issue is that the marginal note to Section '153C very clearly states - Assessment of Income of any other person - that is -this section is concerned with the Assessment of Income of other person - and as held by Hon ble Supreme Court in the case of K.P. Varghese Vs. CIT 131 ITR 597(SC) wherein it has clearly been held that the 'marginal note of the section can be referred to remove any ambiguity if any - as it explains the 'Drift of the section and its purpose and intention - in this case the purpose and intention being to avoid multiplicity of proceedings u/s 153A and 153C of I.T. Act - and also by removing the expression 'undisclosed income from section 158BA - making it simple for initiating action u/s 153C - on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated - contended and affirmed that the loose papers are signed by Mr. Dilip Dhenia and are in his handwriting hence as per observations of Hon ble Supreme Court in the case of Padma Sundar Rao 255 ITR 143 (SC) - even a small difference in our fact will make a world of difference - to the conclusion - hence this difference in facts - should make the conclusion different. IV. Also, the decision of Hon ble Bangalore ITAT in the case of P. Srinivas Naik Vs. ACIT, CC-1(2), Bangalore (2009) 117 ITD 201 (Bang) - clearly holds the following TEST for 'belong - the 'term belonging implies something more than the idea of a casual association. It involves the notion of continuity and indicates one more or less intimate connection with the person over a period of time. The books of account or documents seized during the course of search had a close association with the group concern of 'R . It recorded the transaction carried out by that group. It did not record the transaction carried out by the assessee. Under the Wealth Tax Act, 1957 assets belonging to the assessee were taxable. The expression 'belonging to the assessee - connotes both the complete ownership and limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by Section 153A. Hence, the above judgement also supports Revenue s position that the assessment need not be based only and purely on seized material but also on other relevant and attendant evidences -hence the word 'belongs to must be read and understood accordingly - permitting the above. Hence, a harmonious interpretation is needed. VII. Lastly, reliance on the decision in the case of Prithvi Prakashan by Ld. Counsel is not relevant since it relates to Section 158BD and not Section 153BC - as Section 153C is materially different from Section 1S8BD as it does not deal with 'undisclosed income as the old Section 158BD does hence is of no avail. Also, reliance placed by Ld. Counsel on Wealth Tax decisions for understanding the meaning of the word 'belongs are of no relevance as they are out of context - the sense and purpose in Wealth Tax is entirely different from the sense and purpose of section 153C which is to Assess Income based upon seized documents 'belonging to another person and NOT questions of ownership etc. - hence, the word 'belongs as used in section 153C can only mean 'relates or 'pertains to the other person as expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.] 12. Before proceeding further let us also consider the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... looking at the documents at page 1 2, the AO could foresee that these lands belong to 52 land companies without even knowing their names at the time of recording the satisfaction. Even in the satisfaction note while concluding his discussion at para 1.6 the AO concluded as under . In view of the above, I am satisfied that the above mentioned seized documents belong to a person i.e. the assessee (which is included in the above mentioned 52 companies) other than the person referred to in Sec. 153A within the meaning of provisions of Sec. 153C of the Act. Accordingly, proceedings u/s. 153C of the Act are initiated in the case of the assessee . 14. After carefully going through this satisfaction note, a logical question is flashing in our mind and which is when the assessment proceedings are concluded and all other consequential proceedings are completed, it is mandatory to release the seized material to the assessee. The question is - when these seized documents would be released , who will be the recipient? The obvious answer is Shri Dilip Dherai because the impugned documents were seized from his premises. Therefore the seized documents cannot belong to 52 companies beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (c), as the case may be, of subsection(1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132.] 15. It is the say of the Ld. DR that in the light of the decision of Kerala High Court 333 ITR 281 when the AO of the person searched u/s. 153A is the same as for the other person covered u/s. 153C. There is no need to record this satisfaction u/s. 153C of the Act. That decision is only to override the procedural part because the 'sender AO and the 'receiver AO of the seized documents being the same. But it cannot be said that no satisfaction is required prior to proceeding u/s. 153C of the Act. Had this being the legislative intent, the legislature could have provided in the section itself that when the search cases are centralized, there is no need for recording any satisfaction. That being not the case, we do not accept the submission of the Ld. DR on this point. The Ld. DR has further relied upon the decision of the Hon ble Delhi High Court 346 ITR 177 according to which at the time of recording satisfaction only prima facie grounds have to be mentioned and not that there are conclusive evidences wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. We find that in this decision of the Hon ble Gujarat High Court, even when impugned documents had reference to the assessee, the Hon ble High Court quashed the proceedings u/s. 153C of the Act. In our case, there is not even a reference to the assessee except the name of the village in which the assessee has purchased the lands. Coming back to the provisions of Sec. 153C vis- -vis 158BD as pointed out earlier both the sections are similarly worded section. With a marked distinction such as the marginal heading of 158 BD is undisclosed income of any other person and that of 153C is assessment of income of any other person. Further u/s. 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account seized or requisitioned belong to such other person, whereas all that is required u/s. 158BD is that the undisclosed income should belong to any other person. 18. Thus it is clear that before issuing notice u/s. 153C, the primary condition has to be fulfilled and which is that the money, bullion, documents etc., seized should belong to such other person. If this condition is not satisfied, no proceedings could be tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53C of the Act is bad in law. 20. Now coming on to the merits of the case, which is without prejudice to our findings hereinabove, the submissions of the Ld. Sr. Counsel have been incorporated hereinabove to which the Ld. DR in addition to his oral arguments filed a written submission. The Ld. DR has mainly relied upon the findings of the AO. So far as payments outside the regular books of accounts are concerned, in his written submission, the Ld. DR has explained the modus operandi of the assessee relying upon various documents seized from the premises of Shri Dilip Dherai and M/s. Jai Corp group. The Ld. DR strongly contended that the retraction of Shri Dilip Dherai is only self serving and has to be rejected as an afterthought. For this preposition the Ld DR relied upon several judgements . It is the say of the Ld. DR that the statement of Shri Dilip Dherai was recorded u/s. 132(4) of the Act on 5.3.2009 whereas Shri Dilip Dherai has filed an affidavit on 14.5.2009 retracting from his admission on 5.3.2009. The Ld. DR pointed out that after 5.3.2009 Shri Dilip Dherai appeared before the DDIT on 6.4.2009, 8.4.2009, 20.4.2009, 22.4.2009 8.5.2009 and none of these appearances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails of area, village, payments made through cheque alongwith payments made through cash is shown very clearly in the chart. The highlighted portion reflects the cash payments disbursed through Jaicorp Office at Maker and Jai Towers. The same has been mentioned separately. The cash payment from Maker adds upto Rs. 28.01 Cr and cash payment from Jai Towers adds upto Rs. 10.43 cr. All these cash were received for these projects from Jaicorp Ltd. and the total of all these amounts works out to Rs. 38.45 Cr in cash. I was provided with these cash as and when required by Shri Sanjay Punkhia 22. However, subsequently Shri Dilip Dherai has retracted from his statement which has been strongly objected by the Ld. DR in his submission. The entire dispute revolves around the alleged cash payment amounting to Rs. 43 crores approx. and which has been added u/s. 69C of the Act. Sec. 69C of the Act reads as under: Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the AO, satisfactory, the amount covered by such expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxmann 43 which is relied upon by the Ld. DR. In that case, the assessee purchased the property allegedly for Rs. 6 lakhs. The vendor in her statement confirmed that the sale consideration of said property was Rs. 45 lakhs and paid tax thereon. In view of vendor s statement, the AO made an addition of Rs. 39 lakhs to the income of the assessee towards unexplained investment. The action of the AO was justified and the additions were confirmed. Thus in view of the aforesaid decision, in the present case, none of the sellers have been examined by the AO to strengthen his views that cash has been paid over and above the registered amount. There is not even a single document/evidence of parties involved in the sale of land at different villages brought on record to show that an amount other than the payment of consideration has exchanged hands. No confession from the sellers have been brought on record. The entire additions have been made merely on the strength of loose papers found during the course of the search not supported by any independent authority. Considering the entire addition, in the light of the provisions of Sec. 69C, as per A.O s own interpretation, investments in purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould submit that the questions proposed by the Revenue at page nos. 6 to 9 of the paper book of Income Tax Appeal No. 72 of 2014 are substantial questions of law and hence, the Appeal deserves to be admitted. 4. He would submit that the Tribunal has noted that Jai Corp group is a partner in 'Mumbai Special Economic Zone' and 'Navi Mumbai Special Economic Zone' projects of India. This group has floated various companies to purchase large chunks of land in the vicinity of Special Economic Zones. The group's real estate operations were being handled by Viredra Jain, Gaurav Jain and Dilip Dherai. Dilip Dherai was also managing land deals outside Mumbai Special Economic Zone. The assessee in Income Tax Appeal No. 72 of 2014 is one of the companies floated by this group to purchase land outside Mumbai Special Economic Zone. 5. On 5th March, 2009, a search action under Section 132 of the Income Tax Act, 1961 (for short, the IT Act ) was carried out in the case of this group, it's employees and close associates. They were involved in the process of acquiring land. During search of Dilip Dherai's residence, certain incriminating documents were seized and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the Commissioner of Income Tax (Appeals) pertaining to the Assessment Year 2008-09 holding that the action under Section 153C of the IT Act was bad in law. 7. It is this conclusion of the Income Tax Appellate Tribunal which is assailed in this Appeal by the Revenue. Mr. Singh would submit that right from the beginning, the facts were clear. If the Income Tax Appellate Tribunal proceeded on an erroneous assumption that the Revenue is not disputing the position as pointed out by the assessee, then, that foundation for the ultimate conclusion is bad in law and on the face of it. There is no question of any consent or 'no objection' by the Revenue when the facts were clear. If the conclusion is de hors the facts, it denotes complete error of jurisdiction. It is in these circumstances that relying upon the findings in the order of the Assessing Officer and the Commissioner of Income Tax (Appeals), Mr. Singh would submit that the grounds raised by the Revenue in the present Appeal should be entertained and appropriate orders to subserve the larger interest of justice be passed. 8. On the other hand, Mr. Joshi appearing on behalf of the assessees in all these Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther on the facts and in the circumstances of the case and in law, the Tribunal was justified in quashing the order made under Section 143(3) of the Act by holding that Shri Dilip Dherai is an unrelated person to the assessee when the evidences discovered in the course of search operation and statements recorded under Section 132 (4) of the Act and other facts marshaled, as brought out in the assessment order and appellate order or the Ld. CIT (A) clearly show that Shri Dilip Dherai was actually working for and on behalf of the assessee as part of a larger common group with a common agenda? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the additions made under Section 69C of the Act both on merits and point of law? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in making incorrect observation that the Revenue has not brought on record a single statement of the vendors of land and sellers, and have not examined to substantiate the claim of extra cash actually changing hands, where as the independent evidences gathered and statements recorded in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed challenges the quashing of the order of the Assessing Officer under Section 143(3) of the Act by the Tribunal. Similarly he relies upon the challenge to the deletion of the addition made under Section 69C of the Act on merits and on point of law. The aforesaid questions do not bring out the challenge to the issue of jurisdiction. Nor is there any ground in support of the same. 6. We expect the Commissioner of Income Tax to examine this issue and put a record how this has happened and the corrective measures being taken by them to ensure that a considered view is taken in respect of the orders of the Tribunal which are being challenged before this Court. This casual attitude in filing of appeals leads to uncalled for harassment of the assessee and undue encroachment on scarce judicial time in the context of the large number of pending appeals. 7. The Registry is directed to forward a copy of this order to the Principal Chief Commissioner of Income Tax. 8. These appeals are at the request of the Revenue adjourned to 11th July, 2016. 10. Then these Appeals were placed on 1st August, 2016. On 1st August, 2016, after hearing both sides, this Court made the following o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 153C of the Income Tax Act, 1961 ( the Act ) are without jurisdiction. Therefore, the further questions raised on merits of the assessment appeared to be academic. In the above view, the appeals were adjourned so as to enable the Revenue to bring on record whether the decision to not challenge the finding of the Tribunal with regard to applicability of Section 153C of the Act, was an informed decision or not. Further, if it was an informed decision, then why challenge the other issues when the lack of jurisdiction has been accepted. We had also directed the Registry to forward a copy of the order to the Principal Chief Commissioner of the Income Tax. 3 Thereafter appeals reached hearing on 25th July 2016 for admission. At that time, the Revenue again sought time and appeals were adjourned to 1 August 2016. On 1 August 2016, an affidavit dated 25th July 2016 by Principal Commissioner of IncomeTax, (Central)III was tendered. However, the Court found that the affidavit dated 25 July 2016 of the Principal Commissioner of Income Tax did not address the issues raised in its order dated 27 June 2016.Thus all the appeals adjourned to 9 August 2016 with direction to the Revenue to fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further questions raised on merits of the assessment appeared to be academic. In the above view, the appeals were adjourned so as to enable the Revenue to bring on record whether the decision to not challenge the finding of the Tribunal with regard to applicability of Section 153C of the Act, was an informed decision or not. Further, if it was an informed decision, then why challenge the other issues when the lack of jurisdiction has been accepted. We had also directed the Registry to forward a copy of the order to the Principal Chief Commissioner of the Income Tax. 3 Thereafter appeals reached hearing on 25th July 2016 for admission. At that time, the Revenue again sought time and appeals were adjourned to 1 August 2016. On 1 August 2016, an affidavit dated 25th July 2016 by Principal Commissioner of IncomeTax (Central)III was tendered. However, the Court found that the affidavit dated 25 July 2016 of the Principal Commissioner of Income Tax did not address the issues raised in its order dated 27 June 2016.Thus all the appeals adjourned to 9 August 2016 with direction to the Revenue to file a detailed affidavit addressing the issues raised in order dated 27 June 2016. 4 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all the Appeals relating to the Assessment Year 2009-2010 alongwith the other Assessment Years on the basis that the Section 153C of the Act, would apply. Therefore, the Revenue ought to have raised the issue with regard to Tribunal being incorrect in holding that Section 153C of the Act applies to the Assessment Year 2009-2010. 4. In view of the above, the learned Additional Solicitor General seeks to add following additional question of law in all Appeals relating to Assessment Year 2009-10 i.e. Income Tax Appeal Nos. 72/2014; 114/2014; 122/2014; 124/2014, 225/2014 and 226/2014 for our consideration: Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT, Mumbai was right in holding that the action taken u/s. 153 C was bad in law, also for the 7th year/current year of the search i.e. A.Y. 2009-10 even when it does not fall under the ambit of provisions of section 153C of the IT Act, 1961. 5. The Respondents Assessee contests the claim made by the Revenue. In particular, it is pointed out that in all these Appeals relating to the Assessment Year 2009-10, the Commissioner of Income Tax (Appeals) has held that the provision of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue desires to move the Income Tax Appellate Tribunal under Section 254(2) of the IT Act. That is obviously a power vested in the Tribunal so as to correct the errors in its orders. Rather, that is a jurisdiction vesting in the Tribunal enabling it to rectify any mistake apparent from the record if that is brought to its notice by the assessee or the Assessing Officer. 16. It is apparent that this jurisdiction of the Tribunal can be exercised by it, now, within 6 months from the end of the month in which the order was passed, but prior to such insertion by Finance Act, 2016 w.e.f. 1st June, 2016, it could have been corrected within four years from the date of the order. 17. We are surprised that the Revenue was advised to move the Tribunal to seek rectification of the alleged mistake appearing on the face of the record in it's final order. However, prior to that, it was maintained by the Revenue before the Division Bench of this Court that no such application is necessary and even if any ground which was not raised by it before the Tribunal can now be raised in this Court for the first time if that is raising a pure question of law. We do not see any reason for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent from the record, the Appeals of the assessees pertaining to the Assessment Years 2007-08, 2008-09 and 2009-10. These Appeals were directed against the order of the learned Commissioner of Income Tax (Appeals) dated 27th October, 2011. The representatives of both sides, by consent, stated that there are 67 appeals pertaining to 52 different assessees, including the one before the Tribunal, which have been decided on identical facts. The issues are also common. That is how the Tribunal clubbed all the appeals together for the convenience sake. 20. The Tribunal noted the grounds of Appeal. It also noted the facts pertaining to the search and seizure action under Section 132and the statement of Dilip Dherai. The Tribunal noted the fact that the entire land acquisition was looked after by Central Leadership Team of which Mr. Dilip Dherai, Mr. Anand Jain, Mr. Sanjay Punkhia and Mr. Ajit Warthy are key members. The Tribunal also referred to the seized documents. The Tribunal then referred to the order passed by the Commissioner of Income Tax (Appeals). Then the Tribunal noted the arguments of both sides. These arguments were noted in great details. Then, the Tribunal, in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ' Other Person ' without recording any basis [ satisfaction ] for his action. Therefore this plea of the Ld DR cannot be accepted. 19. Considering the entire facts and circumstances in the light of the impugned seized documents, we have no hesitation to hold that action taken u/s. 153C of the Act is bad in law. 21. Thereafter, in paragraph 20, the Tribunal considered the merits and once again, at great length. The particular argument revolving around the statement of Dilip Dherai and his answer to question No. 24 was also considered in paragraph 21 of the impugned order. Then, in paragraph 22, the Tribunal refers to the additions made under Section 69C. After reproducing Section 69C and adverting to the fact that Dilip Dherai has retracted his statement, the Tribunal arrived at the conclusion that merely on the strength of the alleged admission in the statement of Dilip Dherai, the additions could not have been made. The concurrent findings of fact would demonstrate that the essential ingredients of Section 69C of the IT Act enabling the additions were not satisfied. This is not a case of 'no explanation'. Rather, the Tribunal concluded that the alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo assessees involved in Income Tax Appeal Nos. 83 of 2014 and 150 of 2014, then, a different conclusion is not possible. We do not think that the shift in the stand of the Revenue carries its case any further. We are of the opinion that the Revenue has rightly been faulted for its approach by the Tribunal. The above are pure findings of fact and consistent with the material placed on record. Thus, the jurisdiction and vesting in the Assessing Officer could have been exercised and the satisfaction in that regard was enough, are not matters which can be decided in the further appellate jurisdiction of this Court. It is not possible for us to reappraise and reappreciate the factual findings. The finding that Section 153C was not attracted and its invocation was bad in law is not based just on an interpretation of Section 153C but after holding that the ingredients of the same were not satisfied in the present case. That is an exercise carried out by the Tribunal as a last fact finding authority. Therefore, the finding is a mixed one. There is no substantial question of law arising from such an order and which alternatively considers the merits of the case as well. 23. As a result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther retraction by Dilip Dherai through affidavit dated 07.03.2009. The AR (of the ITAT proceedings of 52 Land Companies] bought to attention that it is mentioned in the submission that the affidavit was notarized immediately after search and therefore the contention of lower authority that it is an afterthought is not valid. Page 41, Para 20: This para gave a reference to argument by the Ld. DR at the ITAT proceeding of 52 Land Companies. The Ld. DR has mainly relied upon the findings of the AO. So far as payments outside the regular books of accounts are concerned, in his written submission, the Ld, DR has explained the modus operand! of the assessee relying upon various documents seized from the premises of Shri Dilip Dherai and M/s. Jai Corp group. The Ld. DR strongly contended that the retraction of Shri Dilip Dherai is only self-serving and has to be rejected as an afterthought For this preposition the Ld DR relied upon several judgments. The Ld. DR concluded that the affidavit filed by Shri. Dilip Dherai is just an afterthought because the statement of Shri Dilip Dherai recorded u/s. 132(4] of the Act never stated that his statement on oath recorded on 5.3.2009 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The following para of the HC order were bought to the notice of the Members: Page 5, Para 4, 5 and 6: These paragraphs were introductory and gave a brief of issue involved. Page 23, Para 20: This paragraph deals with the decision given by the Tribunal. In this para a reference was made of tribunal order of 52 land companies, para no. 18 and 19, which reads as under:- .................There is also a distinction between loose papers found from the possession of assessee and similar documents found from a third person. In the present case, impugned documents were not found from the possession of the assessee but was found from the possession of a third person i.e. Shri Dilip Dherai. Mere mention of the names of the villages where the companies may have purchased lands would not give any basis to assume/presume/surmise that the name of the companies are mentioned in the impugned documents. The very foundation of Sec. 153C has been shaken by not fulfilling the condition precedent/or the issue of notice. It is the say of the Ld PR that in the present case there is no need for recording of the satisfaction. If this plea of the DR is accepted then the legislative i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared after the date of registration of 4.42 acre of land, it says that 4.42 acre of land is yet to be registered. Therefore, both the seized materials are ambiguous about the date of registration of the property. Pg 25 and 27 are actual sale deed evidencing the registration date as 16.07.2008 mentioned supra 12. We had duly deliberated on the relevant para to which our attention was invited wherein we found that all the issues raised in this appeal are duly covered by the order of the Tribunal. No contrary decision was placed by learned DR. Respectfully following the order of the Tribunal in the group case of the assessee which was duly confirmed by the Hon ble High Court, we do not find any merit in the addition so made by the AO, part of which was confirmed by the CIT(A). ITA No.4833/Mum/2014 13. This is an appeal filed by the assessee against the order of CIT(A) confirming the penalty imposed u/s.271AAA. As discussed hereinabove, we have already deleted all the additions made by the AO by following the order of the Tribunal in the group case of the assessee, penalty so imposed has no legs to stand. Accordingly, penalty so levied is deleted. 13. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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