2023 (1) TMI 898

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... as Ld. A.O.) completed the assessment proceedings vide order dated 28.03.2013 passed u/s 153C/143(3)of the Act. In the said order the Id. A.O, made the additions of Rs.5,97,50,000/- to the returned income of the appellant company on the following grounds:- Addition u/s 69 towards alleged unexplained investment in property at Chandigarh Rs. 5,75,00,000/- Addition u/s 69 towards alleged unexplained investment in payment of commission for purchase of aforesaid property Rs. 22,50,000/- Total Rs. 5.97.50.000/- 3. Aggrieved by the above, the appellant filed an appeal before the Hon'ble Commissioner of Income Tax (Appeals)-IV, Kanpur (hereinafter referred to as 'Id. CIT (A)') who vide order dated 10.02.2016, has dismissed the appeal of the appellant by confirming the addition of Rs.4.65,00,000/- in the hands of appellant as against the addition of Rs.5,75.00,000/- and directing the A.O. to make addition of Rs.1,10,00,000/- in the hands of the director of the company Shri Bhupendra Singh Bajwa, who was a party to the alleged agreement for purchased seized by the department and has confirmed the addition of Rs.22.50.0Q0/- in the hands of appellan....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ler) received a sum of Rs. 1,10,00,000/- (Rupees one crore ten lacs only) vide cash from S. Bhupender Singh Bajwa s/o late Sh. Gurbachan Singh r/o A-151, defence Colony, Meerut(U.P) (hereinafter referred to as the purchaser) as an earnest money against sale of house no. 11, Sector 9, Chandigarh measuring 1800 sq. yards RP. No. 332. Thai the total sale price of the above mentioned property has been fixed at Rs. 11,25,00,000/- (Rupees eleven crores twenty five lacs only). This Receipts cum Agreement to Sell a signed by Amarjeet Singh Randhawa (on revenue stamp) on behalf of sellers and Sh. Bhupender Singh Bajwa on behalf of purchasers. It also bears signature of two witnesses." 6. A further receipt is exhibited at page 4 of the assessment order which bears no signature of the purchaser and the same is as under: 7. Based on the afore-stated seized documents, the Assessing Officer was convinced that actual sale consideration paid for the impugned property being House No. 11, Sector 9, Chandigarh was Rs. 11.25 crores instead of Rs. 5.5 crores claimed by the assessee and by the sellers and treated the difference of Rs. 5.75 crores as expenses out of undisclosed sources u/s....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Hon'ble Supreme Court in the case of Singhad Technical Education Society 397 ITR 344, Dreamcit Buildwell Pvt Ltd 417 ITR 617 of the Hon'ble High Court of Delhi and also in the case of Ankit Gupta ITA No. 41/2017 dated 05.09.2017. 15. Per contra, the ld. DR stated that since subsequently the property was purchased by the assessee, therefore, it can be safely concluded that the impugned documents belonged to the assessee and there is no error or infirmity in application of section 153C of the Act. 16. We have given thoughtful consideration to the orders of the authorities below. We have carefully perused the impugned seized documents which are at pages 3 and 4 of the assessment order. Page 3 is the receipt cum agreement to sell wherein a consideration of Rs. 1.10 crores is mentioned. It is true that the name of the assessee is not mentioned in the said receipt. In our considered opinion, assuming that the said receipt pertained to the assessee but does not belong to the assessee as per section 153C of the Act as they stood at that point of time. 17. The said receipt is dated 28.03.2009 and as per the Certificate of Incorporation, the appellant company came into exis....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... is correct. 8. Consequently, this Court rejects the contention of the learned counsel for the Revenue that even prior to 1st June 2015 at the stage of initiation of proceedings under Section 153C of the Act, it is sufficient if the seized document 'pertained to' the other person and it is not necessary to show that the seized material 'belonged to' the other person. This legal position has been explained by this Court in its recent decision dated 10th July 2017 ir. W.P. (C) No. 3241/2015 (Canyon Financial Services Ltd. v. Income Tax Officer). 19. Similar view was taken by the Hon'ble High Court of Delhi in the case of Dreamcit Buildwell Pvt. Ltd 417 ITR 617. The relevant findings read as under: "In the present case the search took place on 5th January 2009. Notice to the Assessee was issued under Section 153 C on 19th November 2010. This was long prior to 1st June, 2015 and, therefore, Section 153C of the Act as it stood at the relevant time applied. In other words, the change brought about prospectively with effect from 1st June, 2015 by the amended Section 153C (1) of the Act did not apply to the search in the instant case. Therefore, the onus w....