TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 1356
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.... and 5% share respectively. The office of the assessee is located at Shailesh Building, Linking Road, Santacruz (West), Mumbai. During the years under consideration, the assessee was developing a project named "Poona, Residency" at Mira Road and was also undertaking construction contracts for other group company. 4. The revenue carried out search and seizure operations u/s 132(1) of the Act at the residence and business premises of the assessee group on 16.10.2008. During the course of search at the residence of Shri Harshad Doshi located at A-103/104, Rajshree Apartment, Royal Complex, Eskar Road, Boriveli (W), Mumbai a paper (numbered as Page 98 in Annexure A-I) was found which contained following noting:- POONAM RESIDENCY No. of flats - 104 & Shops Area of Flats - 76,960 Sq. ft. Area of Shops - 5,700 Sq. ft. Received cash upto 31.3.2008 3/20 + Area of flats - 53,910 Sq.ft. Area of Shops - 700 Sq.ft. Received cash 11/50 TOTAL 14/70 At the time of search conducted at the residence of Shri Harshad Doshi, he was not available and hence other member of AOP Shri Dilesh Shah was called and he was examined after taking power of attorney from Shr....
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....nducted inspite of the fact that the appellate name appears in the warrant of authorisation and search has taken place in the residential premises of the member of the appellant AOP as mentioned in the warrant of authorisation. However, it is very significant to note that the appellant in its submission vide para 21 admitted that the premises where search has taken place were partly used by the appellant's business, however it was contended that no panchanama was drawn in the case of appellant." Further, the Ld CIT(A) placed reliance on the decision rendered by Hon'ble Delhi High Court in the case of MDLR Resorts Pvt. Ltd (W.P (civil) No.823/2013 dated 20.12.2013), wherein the Hon'ble High Court has held that the non-reference to the name of the assessee in the Panchanama and the failure to note the time of suspension/conclusion of the search are lapses, i.e., they are failures to comply with the requirements of the search and seizure manual. They do not affect the validity of the search or assessment order u/s 153A. Accordingly he dismissed the legal claim of the assessee. 7. We have heard the parties on this legal issue. The contention of the assessee is that though the search....
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....the provisions of sec. 153A would show that that assessing officer can issue notices u/s 153A of the Act only when a search is initiated under section 132 or requisition is made u/s 132A after the 31st day of May, 2003. He is required to assess or reassess total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Hence, in order to invoke jurisdiction u/s 153A of the Act, there should be initiation of search and thereafter there should be actual conducting of search. 9. The expression "search is initiated" was explained by Hon'ble Karnataka High Court in the case of CIT Vs. Wipro Finance Ltd (323 ITR 467) and the head notes read as under:- "Held, allowing the appeals, that while assigning meaning to any expression in any provision of a statute, the context in which the particular expression is used had to be borne in mind. The expression "search initiated" had to be interpreted to mean the "Commencement and conducting of the initial search", i.e., the first search in the case. The search in these cases was initiated on January 3, 1997 and January 8, 1997, because it was o....
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....ssessee herein are two different assessees. Since the impugned document was considered to belong to the assessee, at the most, the AO should have initiated proceedings u/s 153C of the Act, provided all the conditions prescribed in sec. 153C were complied with. That is not the case here and hence on that count also, the assessment order passed for AY 2008-09 becomes illegal. 12. In view of the foregoing discussions, we set aside the order passed by Ld CIT(A) for AY 2008-09 and quash the assessment order passed u/s 153A of the Act for that year. 13. We shall take up the appeal filed by the assessee for AY 2009-10. We have noticed that the assessment for that year, being the year of search, has been completed u/s 143(3) of the Act. We have also noticed that the addition of Rs. 11.50 crores plus 0.30 crores has been made in this year on the basis of page no.98 of Annexure I seized in the hands of Shri Harshad Doshi and the admission made by Shri Dilesh Shah, which is being contested by the assessee in this appeal. Hence the decision taken on this issue would automatically cover the validity of addition of Rs. 3.20 crores made in AY 2008-09. 14. The contention of the assessee is that....
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....of attorney from Shri Harshad Doshi, when Shri Dilesh Shah is also a member of assessee AOP with 5% share and he is equally authorised to explain the transactions relating to the assessee AOP. The very fact that the search officials have insisted upon taking a power of attorney from Shri Harshad Doshi shows that Shri Dilesh Shah was not in possession or control of the impugned document. It is pertinent to note that the statement u/s 132(4) can be recorded under oath only from a person who is found to be in possession or control of books of accounts, document, money, bullion, jewellery or other valuable article or thing. Hence, the reliance placed by the revenue on the said statement is also being questioned. Further, it was submitted that the impugned document (Page no.98 of Annexure I) was a dumb document and hence the revenue should not have placed reliance on it. 17. We shall now examine as to whether the revenue can place reliance on the page no.98 of Annexure I and the admission made in the sworn statement taken from Shri Dilesh Shah. We notice that the assessing officer has stated in his remand report that the admission given by Shri Dilesh Shah is corroborated by the Page n....
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....IT(A) has also upheld the analysis made by the AO. 18. On a careful perusal of the analysis made by the AO would show that the same suffers from many infirmities. The AO himself has noticed that Shri Malpani has stated the cash component as Rs. 1.75 lakhs and if it is taken into consideration, then the cash component for the project developed by the assessee works out to only Rs. 1.82 crores (104 flats x Rs. 1.75 lakhs). Further it is not shown by Shri Malpani that the cash received by the group concern was not accounted for by it. We notice that the AO has also not taken any step to ascertain as to whether the cash component mentioned in the project developed by the group concern was not accounted at all, i.e., he did not make any enquiries either with the purchasers of the flat or the Group concern in this regard nor did he examine the books of accounts of the group concern to vindicate his stand. Further it is not also established that the accounting methodology followed by the group concern is same as that of the assessee. Thus, we notice that the AO has only drawn adverse inferences from the advertisement and statement given by Shri Malpani, a real estate broker, who is not c....
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.... Hence we are unable to agree with the observation of Ld CIT(A) that the AO has corroborated the noting made in page no.90 with outside materials. 22. Now we shall examine as to whether the page no.90 is a reliable document or dumb document. The assessee has pointed out the area or extent of built up area mentioned in the loose sheet were not correct. The assessee has explained the same as under:- As per Seized paper As per Books Area of flats booked upto 31.3.2008 76,960 93,970 Area of flats booked after 31.3.2008 53,910 1,100 Area of shops booked upto 31.3.2008 5,700 5,663 Area of shops booked after 31.3.2008 700 138 The assessee has also pointed out the average rate of cash received per sq.ft. computed from the figures stated in the loose sheet show wide variation:- Total area (both flats & shop) Cash received Rate per Sq.ft. Upto 31.3.2008 (82660 Sq.ft.) 3.20 crores Rs.387/- After 31.3.2008 (54610 Sq.ft.) 11.50 crores Rs.2,105/- 23. These discrepancies pointed out by the assessee have not been addressed by the tax authorities. Further, the contention of the assessee is that the page no.90 itself was prepared by Shri Dilesh Shah ....
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....idnight) on 17.10.2008 and continued upto 1.00 am (again mid night) on 18.10.2008. We have noticed earlier that Shri Dilesh Shah was called upon to the residence of Shri Harshad Doshi. The copy of sworn statement furnished in page no.2 of the paper book shows that the search officials did not record the time at which the recording of statement was commenced, even though the sheet contained a column for recording the time. Hence there could be merit in the contentions of the assessee that the statement was recorded at the fag end of the search and Shri Dilesh Shah was exhausted and he was constrained to admit the additional income. Further, we have noticed that the noting found in the loose sheet did not tally with the entries made in the books of account. No other material was brought on record by the AO to corroborate the noting made in the loose sheet. None of the buyers of the flat was examined to ascertain the truth. Under these set of facts, we are of the view that the loose sheet referred above cannot be considered to be a document that could be relied upon. Further, the facts and circumstances show that Shri Dilesh Shah was under some compulsion to admit additional income. T....