TaxTMI 
TaxTMI 
2020 (3) TMI 469
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.... CIT (A) erred in law and on facts in holding that the onus of explaining the seized document was not on the assessee as the property can easily be identified from details mentioned in the loose sheet and thus onus was on the assessee. 3. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. 4. That the grounds of appeal are without prejudice to each other." 2. The facts in brief are that the assessee-company was carrying on the business of real estate developers and have constructed commercial projects for sale. The ld. Assessing Officer observed that a letter was received along with related seized document from the office of ld. ACIT, Central Circle-21, New Delhi along with satisfaction note dated 01.12.2011 for issuance of notice u/s.153C. Further, on examination of the seized documents found from the premises of Shri Lalit Modi, the Assessing Officer of the assessee was satisfied that the seized Annexure A-1 is related to the assessee-company and after recording the reasons, the Assessing Officer has completed the assessment u/s. 143(3) on 28.03.2013. The ld. Assessing Officer observed that as per the seized document, ....
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.... the Tribunal in his case. The relevant observation of the Ld. CIT(A) in this regard reads as under: "11.4 During the assessment proceedings, statement of Mr. KK Chaurasia was recorded, who categorically denied of making any payments to the appellant other than what agreed upon as per the registered agreement and other dues for this transaction. An addition was made for the said amount in the hands of Mr. KK Chaurasia also as unexplained investment for having given such amount to the appellant otherwise than by cheque, which was deleted by the CIT(A)-12, New Delhi vide her order in A.No.417/2013-14 dated 21.11.2013 on the reason that it is a jotting on the loose sheet, without any basis and made in the absence of any corroborative material. 11.5 Further, since the document was found and seized from the premises of Mr. Lalit Modi therefore it is to be explained by him only as per the provisions of section 292C. He explained this to be a rough paper having some jottings and of no relevance. As mentioned earlier, during assessment proceeding also he denied having any relation with the appellant and confirmed of having no such transaction. No business linkage....
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....e, the entire addition of Rs. 7,62,92,143/- is based on some computer generated loose sheets which was seized and found from the computer of Mr. Lalit Modi who has categorically denied of any such transaction. It is also an admitted fact that name of the assessee nowhere appeared in the said document albeit the name of Shri Kamal Kishore Chaurasia that he has entered into an agreement for sale of commercial property in Cross River Mall has been mentioned. Apart from that, the aforesaid finding of the Ld. CIT(A) that this addition cannot be made in the hands of the assessee for the reason that, firstly, the name of the assessee is not mentioned in the seized document; secondly, there is no corroborative evidence or any statement that the payment has been received by the assessee other than cheque amount as entered in the sale agreement; and lastly, on the bare perusal of the document it cannot be inferred or concluded that seized document belongs to or has any nexus with the assessee. Here, in this case, as pointed out by the ld. counsel similar matter had come for consideration before Tribunal in the case of Mr. Kamal Kishore Chaurasia where exactly same addition has been mad....
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.... 7. However, the AO was not satisfied with the said reply. The AO who incidentally was the common AO for both Mr. Lalit Modi and the Assessee recorded the following satisfaction note for issuance of a notice to the Assessee under Section 153C of the Act: "30.6.2011Satisfaction note for issue of notice u/s. 153C of the IT Act. Name of the Assessee Smt. Vinita Chaurasia PAN: AAFPC4589D Search and seizure action under Section 132 of the I.T. Act was carried out on 19th June 2009 at the residential as well as business premises of Shri Lalit Modi at Lajpat Nagar- II, New Delhi. During the course of pendency of assessment proceedings in the case of Shri Lalit Modi for AY 2004-05 to 2010-11 (u/s.153A/143(3) the material seized from the ITA Nos. 1004 of 2015 & 1005 of 2015Page 5of 14premises of the Assessee has been examined. After examining such seized material I am satisfied that the following seized documents belong to persons other than Shri Lalit Modi. The detail of such paper is as under: Annexure No. Page No. of Annexure Brief description of documents Person to whom the document belongs Ann A-1 5 These papers contai....
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....reby initiated. (Addition Rs. 19,02,68,289/-) With the above remarks, total income of the assessee is computed as under:- Income as declared Rs. 2,20,19,780/- Add: Addition as discussed above Rs. 19,02,68,289/-in the order at para 5. Total taxable income rounded off Rs. 21,22,88,069" 9. The Assessee's appeal was disposed of by the CIT (A) by an order dated 25th March, 2013. The appeal was allowed in part. The operative portion of the order of the CIT (A) read as under: "15. Thus considering the receipt and the payment side of the unaccounted transactions on the seized paper, identified as page 5 of Annexure A-1 the total addition to be made in the case of the appellant are as follows: In AY 10-11, addition of Rs. 21,93,41,222 (Rs. 22,59,11,969 - Rs. 65,70,747). This comprises of Rs. 16,42,68,522, which is the cash component of the total sale consideration of Rs. 32,85,37,354; and Rs. 59,56,943 appearing as 'to Refund' and Rs. 4,91,15,757 appearing as 'To Pay', which had remained to be added by the AO and in respect of which the notice for enhancement was issued." 10. The net re....
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....8/2017). 16. At the outset, it requires to be noticed that the search in the present case took place on 19thJune 2009 i.e., prior to the amendment in Section (1) of the Actwith effect from 1st June 2015. Therefore, it is not open to the Revenue to seek to point out that the document in question, 'pertains to' or 'relates to' the Assessee. The example given by this Court in Pepsico India Holding Ltd. (supra) is that of a photocopy of a sale deed which contains the names of the vendor and the vendee being found with the broker. The mere fact that such photocopy of the sale deed was found with the broker would not lead to the conclusion that such a document 'belongs to' either the vendor or the vendee. While in the present case the AO in his satisfaction note does record that the document in question does not belong to Mr. Lalit Modi i.e. the searched person, he does not indicate on what basis he proceeds as if the document belonged to the Assessee. 17. In this context, it requires to be noticed that a very detailed interrogation of Mr. Lalit Modi in relation to this document took place, the relevant portions of which have been extracted by the ITAT in the impugn....
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.... said proposal materialized, I would have earned brokerage income. Since no such transaction took place, no commission was earned by me." 19. What is evident from the above reply of Mr. Lalit Modi is that even according to him the document in question did not belong to the Assessee. He appears to suggest that the document was a proposal delivered at his residence by some other broker and which proposal remained with him before it could be forwarded to the Assessee. In the meanwhile, the search and seizure operation took place. 20. There is no material whatsoever placed on record by the Revenue before the CIT (A) or the ITAT to justify the invocation of Section 153C of the Act against the Assessee on the basis that the above document belonged to her. 21. Turning to the decisions cited by Mr. Shivpuri it is seen that in Principal Commissioner of Income tax-8 v. Super Malls (P.) Ltd. (supra), a pen drive was recovered from the residence of Mr. Ved Prakash Bharti who was a Director of the Assessee. The AO recorded "during the statement of Sh.Ved Prakash Bharti at the time of search, he has also stated that these documents (contained in the pen drive)....
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....acted viz.,that the contents of the document should be presumed to be true. His submission that the said presumptions have not been rebutted by the Assessee and, therefore, whatever was said in the document should be taken to be sufficient proof of concealment of the income by the Assessee. 27. The Court is unable to accept the above submission of Mr. Shivpuri. The Court in this regard notices that the detailed interrogation of Mr. Modi revealed the source of the document and the fact that Mr. Modi was not the author of the document. Mr. Modi had suggested that it was some other broker who had given him the said document as a "proposal‟. There appears to have been no attempt made by the AO to enquire into the matter further to find out if at all there was any such other broker who had prepared the document. Further, there is no attempt also made to ascertain whether the prevalent market value of the space purchased by the Assessee could at all fetch the value indicated in the document which is Rs. 32,85,37,354. This was too fundamental an issue to be left un-investigated. The AO appears to have proceeded purely on conjectures as regards what the document has stated w....