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TMI Blog2025 (1) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... multaneous addition based on such entries in the hands of other entity militates against action of the revenue and erodes the very foundation of the impugned additions.
Substantial merit in the plea of the assessee on both counts namely lack of jurisdiction u/s 153A for making impugned additions dehors any incriminating material as well as additions being devoid of any merit in the absence of any credible corroboration that such entries unflinchingly relates to the assessee company in exclusion to other entities. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in sustaining addition to the extent of Rs. 1,05,50,000/- without appreciating the fact that similar addition was also made in the hands of Antriksh Developers & Promoters Pvt. Ltd. on the basis of same seized documents, which is bad in law and liable to be deleted. 6. That the grounds of appeal are independent and without prejudice to each other." 4. As emerges from record, the assessee company namely Colourful Estates Pvt. Ltd. [Colourful Estates] is engaged in the business of development of real estate projects in the name 'Golf View Project-II' sector 78 Noida. Another project namely 'Golf View project -I is also being developed in the adjoining plot by another company namely Antariksh Developer and Promoters (P) Ltd [Antriksh Developers]. One of the directors namely Mr. Rakesh Kumar Yadav is stated to be a common director in both the companies. A search and seizure action under s. 132 together with survey proceedings under s. 133A were conducted at the residential as well as business/office premises of Antriksh Group including residential premises of Shri Rakesh Kumar Yadav on 05.02.2014. In search operations, various incriminating documents allegedly pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from alleged unaccounted receipts. 6. Aggrieved by the additions sustained by the Ld.CIT(A) to the extent of INR 1,05,50,000/- towards undisclosed income which stemmed from loose documents/diary etc. found from the residential premise of Shri Rakesh Kumar Yadav ["RKY"], the assessee preferred appeal before the Tribunal. 7. When the matter was called for hearing, the Ld. Counsel for the assessee made wide ranging submissions to counter the impugned additions of INR 1,05,50,000/- sustained by the Ld.CIT(A). The assessee raised a legal objection and contended that (i) no valid search has occurred in the case of the assessee co. (ii) the assessment in the instant case stood concluded prior to search on 5/02/2014 and consequently in the absence of any incriminating material found in the course of search qua the assessee, the addition made by the AO under s. 153A is devoid of any legitimacy. For making assessment towards undisclosed income in the hands of the assessee co. in such concluded and unabated assessment, it was incumbent upon the AO to establish some connection / link of so called entries found recorded in some diary or loose paper etc. [ marked as Annexure A-12 & Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises of the assessee company have not been searched and no seizure thus took place from the premises of the assessee co.. No statement under s. 132(4) was recorded of any person in the capacity of representative of the assessee company. The statement of Shri Rakesh Kumar Yadav recorded under s. 132(4) do not provide any nexus of such loose papers/diary to the company. There is nothing on record to corroborate the so called entries to be belonging to the assessee co. A reading of statement under s. 132(4) as obtained by the authorised person do not implicate Golf View I or Colourful Estate in any manner on such entries. Shri Rakesh Kuamr Yadav has however not stated anything to implicate the assessee in relation to so called entries detected in search. Shri Rakesh Kumar Yadav being connected to Golf View I, Noida project also, the seized documents found from his residential premises cannot be presumed to be relatable to the assessee company in exclusion to other entities where the business interests of RKY are paralely involved. There being total absence of any tangible evidence or statement to this effect, the action of revenue is unsubstantiated. The Ld. Counsel for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order pertaining to 'Antariksh Developer and Promoters (P) Ltd.' The AO himself states that such entries include entries relating to Golf View I (M/s. Antariksh Developer and Promoters (P) Ltd. ). The imputations on entries which are not identifiable to the assessee is wholly unjustified in a scenario where Shri Rakesh Kuamr Yadav is having business stakes in multiple companies. 7.5 Besides, as pointed out, no adverse statement is referred in the assessment order or first appellate order as may have been recorded under s. 132(4) of the Act at the time of search on such entries found from the residential premises of Shri Rakesh Kuamr Yadav. Hence, the statutory presumptions available under s. 132(4A) r.w.s. 292C of the Act are not available against the assessee co.. In the instant case, neither the documents were found from the premises of the assessee nor any adverse statement is available to invoke such statutory presumptions. Besides, statutory presumption under s. 132(4) is not absolute but a rebuttable presumptions in the absence of any adverse statement or any corroboration of entries found from the premises of third person. No adverse presumption can be fastened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abbreviated name of 'Shri Rakesh Kumar Yadav' or some person found in the business premises of the assessee company. The sanctity of the panchnama thus cannot be dislodged. 8.1 On a query put by the Bench in the course of hearing towards statement under s. 132(4) of the Act, the Ld.CIT DR submitted that statement under s. 132(4) of Shri Rakesh Kumar Yadav is being placed on record although not referred in the assessment order or in the first appellate order. The Ld.CIT DR submitted that once a diary/other paper etc. has been found from the possession of the Director of the assessee company, the presumption under s. 132(4A) in the course of search as well as presumption under s. 292C in the course of assessment continues to be available to the Revneue and hence additions made in the absence of any concrete evidence to the contrary, cannot be faulted. 8.2 The Ld.CIT DR thus submitted that no interference with the first appellate order is called for. 9. We have carefully considered the rival submissions and perused the first appellate order and the assessment order. The material referred to and relied upon has been considered in terms of Rule 18(6) of the Income Tax Appellate (Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discovered from the premises of a person who holds business interests in other independent companies simultaneously and is also assessable in his personal capacity also. It is also the case of the assessee that for applicability of section 153A, it is not only the initiation of search on assessee which is mandatory but also actual conduct of search at the premises of the assessee which is equally material. The assessee claims that no search was actually carried out at the premises of the assessee. 12.2 Indisputably, in the instant case, the diary containing entries which is the foundation for making additions have been found from the residential premises of RKY who not only happens to be Director of the assessee company (Golf View II project) but is also a Director of Antariksh Developer and Promoters (P) Ltd. (Golf View I project) and other cos. Besides, RKY is also a taxpayer in his personal capacity. Hence anything and everything found from the premises of such person cannot be automatically linked to all companies where he happens to be a Director or a key person per se. The primary onus thus lies on the revenue to show that the impugned entries found in the diary bears a liv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries except INR 1,50,000/- do not relate to the assessee company deserves to be accepted. 12.3 The presumption under s. 132(4A) as well as s.292C is plausible against the assessee only in the event where such documents/diaries etc. are found from the business premises of the assessee company. The documents found from the resident of a Director of the assessee company who also simultaneously holds similar status and business interests in multiple companies will not ipso facto gives rise to statutory presumption against all companies where he is a Director or a key person. Manifestly, the Revenue has proceeded on conjectures and surmises without bringing any concrete evidence against the stance of the assessee such as statement under s. 132(4) or identification of entries by RKY even post-search or any other direct or circumstantial evidence. The statutory presumption under s. 132(4A) thus did not trigger against the assessee co. at any point of time in the course of search. Likewise, the presumption under s. 292C in the course of assessment is also not available for identical reasons. In the peculiar circumstances, the presumption if any, is plausible against the custodian of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unflinchingly relates to the assessee company in exclusion to other entities. 17. In the result, the appeal of the assessee is allowed. ITA No.2205/Del/2023 [Assessment Year : 2012-13] 18. We shall now advert to appeal of the assessee i.e. ITA No.2205/Del/2023 for the Assessment Year 2012-13. 19. The grounds of appeal raised by the assessee read as under:- 1. "That on the facts and circumstances of the case, Assessment Order passed u/s 153A(1)(b) of the Act by the Deputy Commissioner of Income Tax, Central Circle -1, Gurgaon on 31.05.2023 for the assessment year 2012-13, is bad in law and liable to be quashed as no search action u/s 132 of the Act was carried out at the premises of the appellant company and no Panchnama was served to the appellant company. 2. Without prejudice to the Ground of Appeal No. 1, the learned CIT(A) has erred both on facts & in law in sustaining addition to the extent of Rs. 2,40,37,564/- by disregarding the contention of the appellant that the assessment in case of relevant assessment year has already been concluded which could not abate on the date of search as per second proviso of Section 153A of the Act and no such additions were made on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-13 in question. The assessee has thus raised identical arguments as that of AY 2011- 12. Broadly speaking, it is the case of the assessee that the nature of entries are obscure and unrelatable to the Assessee co. herein. The assessee had already accounted for such entries relating to Golf View II Project in its books of accounts. The rest of entries possibly relate to Golf View I Project belonging to Antariksh Developer. The Assessee further refers to and rely on the observations of the AO in the assessment order dated 29/03/2016 passed by the same AO in relation to AY 2012-13 in the hands of Antariksh Developer as placed in the paper book and contends that it is an admitted position by the AO himself that the multiple entries include entries relating to Golf View I Project also. Thus, making additions of all entries in the hands of the assessee is wholly unjustified and opposed to the basic facts and premises available on record. The assessee also contends that no adverse material has been brought against the assessee in relation to impugned entries by way of statement under s. 132(4) or other statements of any other stakeholder or any independent corroborative material. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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