TaxTMI 
TaxTMI 
2014 (10) TMI 777
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....ny such addition in the case of appellant. (iii).That having accepted the fact that details in the said annexure contain property transaction by third party, whole basis of addition is illegal, arbitrary and misconceived. 2 That the details of alleged cash payment in the seized annexure is neither related to any investment or trading activities and as such there could be no basis to contemplate any addition on the basis of same in the case of appellant. 3.That impugned addition is based on presumption and surmises and without proper application of mind and same is not sustainable under the law." 2. We have heard and considered the arguments advanced by the parties in view of orders of the authorities below and material available on record, and the decisions relied upon. 3. The facts in brief are that search and seizure operation u/s 132 of the Act was carried out in case of Shri Surender Modi on 19/6/2009. During the course of the search at their residential/business premises certain documents belonging to the assessee were seized and proceedings u/s 153 C read with Section 153 A of the Act were initiated. In response to notice issued u/s 153C the assessee filed its return of ....
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.... submitted that from the satisfaction note, it is evident that the documents allegedly belonging to the assessee were seized from the possession of some other person searched u/s 132 of the Act. The sole addition amounting to Rs. 4,80,97,125/- being alleged cash payments said to be made by the assessee company to farmers as advance against purchase of property on the basis of Annexure A-29 page 66 made available at page NO. 24 of the Paper Book was seized during the course of search at the premises of Shri Surender Modi. He submitted that the satisfaction note recorded u/s 153C which forms basis of assessment does not support the case of the AO as there is no reference to Annexure A-29 page 66. The other documents seized during the course of search and refer to the satisfaction note are of general nature and are part of regular books of accounts and there is no dispute about correctness of the same or any adverse inference in respect of the same. The Ld. AR submitted further that satisfaction note is the basis of assuming jurisdiction u/s 153C of the Act. In the present case, since the satisfaction note itself failed to make reference to the seized Annexure A-29 Page 66 on the basi....
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....66 belong to Inmon Buildcon (P) Ltd. He submitted that all the bank drafts were purchased through Bank Account No. CD2846(Indian Overseas bank) which belongs to Inmon Buildcon (P) Ltd as per copies of cheques found during search. He submitted that the Ld. CIT(A) having accepted the fact that the cheque and stamp purchase transactions referred to Annexure A-29 page 66 are in respect of the property purchased by Inmon Buildcon (P) Ltd, hence there is no basis for sustaining the addition in respect of alleged cash transactions referred to the in the Annexure A-29 page 66 in the hands of the assessee. The Ld. AR reiterated that the assessee has not purchased any property during the year under reference or in subsequent years and factual position to this effect he supported from the copy of the audit balance-sheet made available at Page Nos. 16 to 21 of the paper book. He submitted that in respect of addition of Rs. 30,04,559/- made by the A.O during the year under consideration refer to in Annexure A-29 page 66 the transactions were duly recorded in the books of accounts and correctness of the same were duly verified by the Assessing Officer during the assessment proceedings and there ....
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....rse inference may be drawn, itself goes to show that there is an implied admission that the impugned document belongs to the assessee and that the payments and income as mentioned therein also are attributable to the assessee company, submitted the Ld. DR. Had it not been so there was no occasion for the assessee to cover its (Page No. 66) contents with the surrender made of Rs. 20 crores u/s 132(4) of the Act. The Ld. DR drew out attention to the contents of Page No. 12 of the First Appellate Order, wherein the Ld. CIT(A) has recorded its finding that the presence of the original copy of the Board Resolution of Inmon Buildcon (P) Ltd appointing an authorized signatory to get the lands registered in its name, amounts shown in the seized records(Page 67 of A-29) further buttresses the inference about the appellant company's primary involvement in these transactions. He pointed out that the above finding of the Ld. CIT(A) is uncontroverted. It clearly shows that the assessee company and Shri Surender Modi were not the stranger to the land transactions undertaken for and on behalf of Inmon Buildcon (P) Ltd. This coupled with the fact that the assessee company had made advance payments....
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.... payments in the hands of Inmon Buildcon (P) Ltd does not become conclusive i.e it is not challenged further in appeal etc by Inmon Buildcon (P) Ltd in whose hands, these very sums would be taxed by the AO, the action of the Assessing Officer cannot be faulted. In this regard, the Ld. DR drew out attention to Page NO. 22 of the paper book which is a copy of letter dated 27/2/2006 by the assessee company to Inmon Buildcon (P) Ltd from which modus operandi of acquisition of properties would become clear. As per this letter, initially the payment of Rs. 30,04,559/- was made by Swapnil Properties (P) Ltd on behalf of Inmon Buildcon (P) Ltd and thereafter re-imbursement of the advances given by the assessee out of own funds, was claimed. He submitted further that this letter goes to establish that like the payment of Rs. 30,04,559/- cash payment as recorded on Page Nos. 66 of Rs. 4.84 crores was also initially made to various parties by the assessee and when it was so, this payment which might have been claimed as reimbursement from Inmon Buildcon (P) Ltd, was necessarily required to be considered in the hands of the assessee and it was the assessee to explain the sources of this cash p....
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.... action u/s 153(C) written, the addition made by the AO cannot be opposed for the simple reason that firstly the impugned document was also found during the course of search at the premises of Shri Surender Modi, Director of the company and secondly, because this document has direct contribution to the affairs of the assessee company and hence was required to be considered for the purpose of framing the assessment. He reiterated that there is no law that in the proceedings u/s 153C addition has to be necessarily restricted to the documents on the basis of which satisfaction to initiate action u/s 153(C) was taken. 12. The Ld. DR submitted that it needs too be appreciated that the document was found from the office/residence premises of Shri Surender Modi, Director of the Company. If Shri Surender Modi or the assessee had nothing to do with these documents it would not have been found from their possession. Very fact that Shri Surender Modi was found in possession of these documents goes to indicate that these documents belongs to the assessee company. He submitted that possession is the prima facie evidence of the title of ownership. Apart from the possession even the contents (na....
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....resent appeal there is no such controversy or ground of appeal involved, contended the Ld. CIT DR. He submitted further that copies of certain documents (Bearing No. 48, 49, 50 & 51) being the photo copies of some cheques issued by Inmon Buildcon (P) Ltd furnished by the assessee before the Tribunal. The Ld. DR submitted that these documents were neither filed before the AO nor before the Ld. CIT(A) and hence are in the nature of additional evidences which cannot be considered without following the provisions of Rule 29 of the I.T Rules 1962. 16. Considering the above submissions made by the parties we find that there are certain undisputed material facts in the present case. These facts are that the seized document marked as Annexure A-29 page 66 was not found from the premises of the assessee nor was it signed by the employee of the assessee nor the name of the assessee was appearing in this seized document on the basis of which addition in question of Rs. 4,80,97,125/- was made by the AO in the assessment framed u/s 153C read with section 153A of the Act. It also remained undisputed fact that proceedings u/s 148 of the Act in relation to the alleged cash transaction of Rs. 4,80....
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....e are of the view that the Ld. CIT(A) was not justified in sustaining the addition in question made by the AO in proceedings u/s 153C read with section 153A of the Act on the basis of inference remotely drawn. Supporting the action of the authorities below Ld. CIT DR before us has however tried to draw an inference to justify the additions in question with this submission that the averment of the assessee in reference to contents of impugned document made before the AO that Shri Surender Modi had made a declaration of Rs. 20 crores during his statements recorded u/s 132(4) of the Act in respect of undisclosed income undisclosed investment etc. does not absolve the assessee, rather it itself goes to show that there is an implied admission that the impugned document belongs to the assessee and that the payments and income as mentioned therein also are attributable to the assessee and that had it not been so there was no occasion for the assessee to cover its (page No. 66) contents with the surrender made of Rs. 20 crores u/s 132(4) of the Act. The Ld. CIT DR has also taken assistance of the observation of the Ld. CIT(A) made at page No. 12 of the first appellate order that the presen....