TaxTMI 
TaxTMI 
2018 (10) TMI 1987
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....nd No.2: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in rejecting the appellant's contention that invoking of provisions of section 153C of the Act was bad-in-law in view of the fact that there was no money, bullion, jewellery or other valuable articles or things or books of account or documents seized which are belonging or belonged to the appellant and which disclosed that the appellant had incurred unaccounted expenditure. Ground No.3: ' On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in relying on the seized materials purported to be pertaining to land companies. Thus, has mixed up the issues involved in the land companies with the facts of the appellant's case. The issues involved and discussed by the learned A.O. in the assessment order are entirely different. The learned A.O. has also made no reference of these evidences while reaching his conclusion in the assessment order. The issues and evidences relating to the land companies are therefore irrelevant and out of context so far as the appellant is concerned. It is prayed that the evidences not related to....
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.... conclusion in the assessment order. These evidences are, therefore, irrelevant and out of context so far as the appellant is concerned. It is prayed that these evidences may kindly be ignored. Ground No. 8: . . On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in relying on the decision of Hon'ble Delhi High Court in the case of Malik Bros (P) Ltd vs. CIT (162 Taxman 43) and Shri Naresh Kumar Aggarwala (198 Taxman 194). In the appellant's case, none of the land owners from whom land has been purchased by the appellant confirmed the receipt of cash payment. These remarks of the Hon'ble CIT(A) is erroneous remarks. It is therefore prayed that these erroneous remarks of the Hon'ble CIT(A) may kindly be deleted. Ground No. 9: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the charge of interest u/s.234B of the Act, having regard to the fact of the case. The appellant denies its liability for payment of interest u/s.234B of the Act. The appellant craves leave to add, omit or alter grounds of appeal before or during the hearing of the ap....
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.... (5) "Whether on the facts and circumstances of the case and in faw, the Ld. CIT(A) was justified in applying the ratio of 60 : 40 to determine the amount of unaccounted cash payments towards the assessee's land purchases in Nevali village ignoring figures/entries of actual amount of cash payments available on specific documents gathered as a result of the search and seizure action? Some of such specific documents include page nos. 190, 196 and 1"97 of Annexure A-5 impounded on 06.03.2009 from the office at Jai Tower, CBD Belapur, Navi Mumbai, page no. 16 of Annexure A-1 seized as per panchanama dated 05.03.2009 from the residence of Mr. Dilip Dherai, page nos. 60 and 66 of Annexure A-1 seized as per panchanama dated 05.03.2009 from the residence of Mr. Dilip Dherai, etc." (6) "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that the ratio of cheque and cash payment columns of page nos. 190 and 196 gives a very unreasonable picture when in para 4.19 of his impugned order he himself has discussed the case of another company of the same Jai Corp Group viz. M/s. Iconic Realtors Ltd. where in one of its land t....
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.... in paras 5.2 and 5.3 of his order has worked out total of "progressive figures" of cash payments by 52 land companies and the assessee wherein he has arrived at a figure of Rs.50.99 crore (Rs. 38.40 crore by 52 land companies + Rs.12.59 crore by the assessee) and he has made an attempt to match this figure of Rs.50.99 crore with the figure of Rs.50.58 crore appearing in the last column of the above page no.196. But, it is important and relevant to highlight that the "progressive figure" of Rs.50.99 crore as calculated by the Ld. CIT(A), itself is factually incorrect because in the cases of 52 land companies the amount of unexplained cash expenditure was Rs.43.45 crore (Rs.38.45 crore appearing on page nos. 22 and 23 of Annexure A-1 + Rs.5 crore appearing on other pages seized from Mr. Dilip Dherai) which has been confirmed also by the Ld. CIT(A) himself in those cases, and not Rs. 38.40 crore as assumed by him in his this impugned order. Therefore, the aggregate of Rs.43.45 crore and Rs.12.59 crore as calculated by the Ld. CIT(A), is Rs.56.04 crore which has no correlation whatsoever with the figure of Rs.50.58 'crore appearing in the last column of the above page no. 196." ....
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....y the CIT(A). The ITAT vide its order dated 22/03/2013 deleted the addition both on merit as well as on legal ground. Our attention was invited to various parts of the order of the Tribunal. He further placed on record the order of the Bombay High Court wherein the appeal filed by the Revenue against the order of Tribunal was dismissed by the Hon'ble High Court both on legal as well as on merit. 8. We have gone through the orders of the authorities below as well as the order of the Tribunal and High Court and found that the Tribunal vide its order dated 22/03/2013 has deleted the addition after having the following observation. "9. The Ld. Senior Counsel vehemently questioned the validity of the order u/s. 153C of the Act. The Ld. Counsel challenged the very basis of the satisfaction note. It is the say of the Ld. Sr. Counsel that the AO has relied upon four documents which are exhibited at pages 17, 19, 20, 16, 42 & 43 of the Paper book , when none of these documents have been found from the possession of the assessee, these documents have been found from the possession of either Shri Dilip Dherai or M/s. Jai Corp Ltd. These documents are either in the handwriting or a....
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....has been apportioned in 52 land companies where 67 appeals have been filed. 2. The addition of Rs.38.45 crore is based on Pg Nos.22 & 23 of Annexure A-1 and Rs.5.02 crore is based on other seized documents. 3. While analyzing the contents of Pg. No. 22 & 23, the A.O. has relied on Q No. 24 of statement of Dilip Dherai recorded on date of search i.e. 05.03.2009. However, the same has been retracted through an Affidavit dated and notarized on 07.03.2009 i.e. immediately after the search. It was submitted before the Income Tax Dept. on 14.05.2009 as Mr. Dilip Dherai was in great tension due to the massive search and seizure action. The contention of the lower authorities that it is after thought is thus without any merit as it has been notarized immediately after search. 4. As regards Pg Nos.22-23 of Annexure A seized from the residence of Shri Dilip Dherai, an explanation was offered to the A.O. as well as to the Ld.CIT(A) that these documents reflect total registered area, payment amounts and future requirements for amount for purchase of land. These sheets have been prepared on 28.11.2008. These sheets were in connection with land acquired till 20.11.2008....
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....s.5.O1 crore, it is submitted that this alleged unexplained expenditure has been computed on the basis of seized material, referred to above, as per Annexure A-1. Again these documents do not indicate the names & address of the recipients of amounts. The contents of the seized material were duly explained during assessment proceedings as well as before the Ld. CIT(A). Thus, even this addition is also not based on the fact that there is no mention of name & address of the recipients. The appellant as well as other associate companies have engaged in the purchase of land and during such activities, a number of rough notings were made by staff members, brokers! agents etc. However, as already stated, the documents do not reveal anything which prove that the appellant has incurred any cash expenditure to the tune of Rs.5.O1 crore as alleged by the A.O. 7. The appellant placed reliance on the following decisions wherein the courts have held that in the absence of corroborative evidences, additions on the basis of slips, loose sheets cannot be upheld. (i) The ITAT Delhi Bench 'C' in Third Member's decision in the case of Amarjit Singh Bakshi (HUF) v. ACIT 263 ITR 75....
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....atisfaction is NOT a sine qua non as AO is the same - then whatever has been recorded by AO - cannot be used ADVERSE TO REVENUE as the LAW does NOT require it. Hence, the 'satisfaction note' as recorded by AO is of no legal consequence vis-a-vis the issue of notice u/s 153C of I.T.Act and it cannot be assailed to invalidate the proceedings u/s 153C as AO being the same - it is NOT required. 2. The judgement of Hon'ble Delhi High Court in S.S.P. Aviation 346 ITR 177 (Del) also makes it very clear that at the time of recording satisfaction only prima fade grounds have to be mentioned and NOT that there is conclusive evidence with AC at this stage of unrecorded income etc. - which is not required at all. 3. Further, the judgement of Hon'ble Kerala High Court in the case of Dr. K.M. Mehaboob Vs. Dy.CIT, Circle 2(1), Kozhikode (2012) 26 Taxmann.com 54(Ker.) is very clear on this and it states that u/s 153C unlike Section 158BD - there is no need whether seized evidence etc. represents or proves undisclosed income of another assessee - and all that is required to be considered is whether such materials or evidence RELATES to another assessee or not - which may or ma....
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.... - you have to see the 'context' in which it is used and the 'purpose and intention' it seeks to achieve etc. - hence the word 'belong' cannot be interpreted strictly by a Dictionary meaning - but the context in which it is used and the purpose for which it is used and the intention of achieving the above. Any interpretation which fails in the above should be eschewed and the interpretation that achieves it should be preferred. Ill. The decision of Hon'ble Gujarat High Court in the case of Vijaybhai N. Chandrani V. ACIT 333 ITR 436 - relied upon by the Ld. Counsel for the appellant - clearly states that 'Held, allowing the petition, that admittedly, the three loose papers recovered during the search proceedings did not belong to the petitioner. It was not the case of the Revenue that the three documents were in the handwriting of the petitioner - in the circumstances, when the condition precedent for issuance of notice was not fulfilled action taken u/s 153C of the Act stood vitiated. The above case stands distinguished on facts - because in the present case Revenue has always stated - contended and affirmed that the loose papers are signed by Mr. Dilip Dhe....
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....in the case of ITO Vs. Arun Kumar Kapoor (2012) 50 SOT 87 (ASR) - is in favour of Revenue wherein on similar facts Hon'ble ITAT Did NOT permit action u/s 148 of I.T. Act - but directed Revenue to take recourse to proceedings u/s 153C of I.T. Act, 1961. Hence, Hon'ble ITAT, Mumbai may kindly follow this decision. VI. The decision of Hon'ble Andhra Pradesh High Court in the case of Gopal Lal Bhadruka Vs. DCIT (2012) 346 ITR 106 (AP) also helps the Revenue - as it clearly states that u/s 153A and 153C - AO can take into consideration material other than what was available during the search and seizure operation for making an assessment of the undisclosed income of the assessee. It shows that the satisfaction note is not the end all and AO can take action u/s. 153C based upon 'other materials' also as connected with the search proceedings. Also, Hon'ble Delhi High Court in the case of CIT-VII Vs. Chetan Das Lachman Das (2012) 211 Taxmann 61 (Del) 254 CTR 392 (Del) has also clearly held that 'seized material' can also be relied upon to draw inference that there can be similar transactions throughout the period of six years covered by Section 153A. Hence, the ab....
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....on 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A :][Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to 97[subsection (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person.] (2) Where books of account or documents or assets seized or requisitioned as re....
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....r thing or books of account or documents seized or requisitioned belongs or belonged to a person other than the person referred to in Sec. 153A. The distinction is clear and obvious. In the erstwhile provisions of Sec. 158BD the emphasis was on "undisclosed income" whereas under the present provision the emphasis is on money, bullion, documents etc. belonged to a person other than the person searched. In the light of the aforesaid distinction and the provisions of Sec. 153C all that has to be seen is whether the document seized from the possession of Shri Dilip Dherai belong to the assessee and whether on the strength of these documents has the AO recorded the satisfaction in consonance with the letter and spirit of the provisions of the Act. A careful perusal of the documents marked as page 1 & 2 of our order show that there is not a single mention of any company. It appears that the AO was in possession with the mythological power of the "Divyadrishti" possessed by Sarathi Sanjay in Mahabharat by which he could foresee and narrate the exact happenings at the Kurushetra sitting in the room of King Dridharashtra. Our reference to this mythological character is not without any basis....
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....ntrol of any person in the course of a search under section 132 [or survey under section 133A], it may, in any proceeding under this Act, be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] 26[(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person....
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....long used in the section. It is the say of the Ld. DR that even if there is a causal relationship, it can be said that the document belong to other person. 16. On the contrary, the reliance of the assessee on the decision of the Hon'ble Gujarat High Court in the case of Vijaybhai Chandrani Vs ACIT 333 ITR 436 is well founded wherein the Hon'ble Gujarat High Court has held that " allowing the petition, that admittedly, the 3 loose papers recovered during the search proceedings did not belong to the petitioner. It was not the case of the Revenue that the 3 documents were in the handwriting of the petitioners. In the circumstances, when the condition precedent for issuance of notice was not fulfilled, action taken u/s. 153C of the Act stood vitiated. The Hon'ble High Court in its order considering the usage of a document has made the following observations: "A perusal of the said documents indicates that the same contain details of members of Samutkarsh Co-Operative Hsg. Soc. The said document undoubtedly is not a document which belongs to the petitioner though there is a reference to the petitioner in one of the loose papers under the heading Samutkarsh Members. Det....
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....equired to be supported/corroborated by other evidence. There is also a distinction between loose papers found from the possession of assessee and similar documents found from a third person. In the present case, impugned documents were not found from the possession of the assessee but was found from the possession of a third person i.e. Shri Dilip Dherai. Mere mention of the names of the villages where the companies may have purchased lands would not give any basis to assume/presume/surmise that the name of the companies are mentioned in the impugned documents. The very foundation of Sec.153C has been shaken by not fulfilling the condition precedent for the issue of notice. It is the say of the Ld DR that in the present case there is no need for recording of the satisfaction .If this plea of the DR is accepted then the legislative intent of inserting sec.153C in the Act would get defeated because the AO will get unstoppable powers to reopen assessments for 6 years in the case of the ' Other Person 'without recording any basis [ satisfaction ] for his action .Therefore this plea of the Ld DR cannot be accepted . 19. Considering the entire facts and circumstances in the....
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....accepted that the 6th & 7th column do not belong to the assessee company. This view has been accepted by the Ld. CIT(A). The Ld. DR finally concluded that in view of all the surrounding facts and circumstances, it is very clear that cash payments have been made and an addition has to be made on this account. To substantiate his claim, the Ld. DR has also referred to seized materials 101 to 108. According to the Ld. DR, these seized materials described the modus operandi of the group. The Ld. DR in his written submission has tried to explain the nature of transaction recorded in the seized documents 101 to 108. 21. We have considered the rival submissions on merits and perused the orders of the lower authorities. The entire assessment revolves around the statement of Shri Dilip Dherai recorded u/s. 132(4) of the Act on the date of search i.e. 5.3.2009. The relevant question which has been relied upon by the AO and the Ld. CIT(A) is as under: "Q. 24.Please note page No. 22 and page No. 23 which is kept before you. As I understand these are the statement as on 28th November, 2008 for the land purchased herein list of accounted payments are provided against each villa....
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....by one Shri Sanjay Punkhia CEO of SEZ Project. Shri Dilip Dherai is not even remotely related to the assessee company .It is also not the case of the Revenue that Dilip Dherai was acting as agent of the assessee company. Merely on the strength of this admission, it cannot be said that the assessee has incurred certain expenditure over and above what has been recorded in its books of account. We find that the ultimate conclusions drawn by the AO and the Ld. CIT(A) have been reached merely on the entries found on loose sheet of papers for which Shri Dilip Dherai has stated that they are only estimates / budgetary figures. However, the allegations made by the lower authorities are not supported by actual cash passing hands. The entire additions are based on the seized documents and no other material has been adverted to and which could conclusively show that the huge amount of the magnitude mentioned in the seized documents travelled from, one side to the other. The Revenue authorities have not brought a single statement on record of the vendors of land in different villages. None of the seller has been examined to substantiate the claim of the Revenue that extra cash has actually cha....
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....sons, who are alleged, to have made cash payments. Even on that count, the additions cannot be sustained in the hands of the assessee. In our considerate view, there being no evidence to support the Revenue's case that a huge figure, whatever be its quantum , over and above the figure booked in the records and accounts changed hands between the parties, no addition could therefore be made u/s. 69C of the Act to the income of the assessee. Considering the entire facts brought on record, we have no hesitation to hold that even on merits, no addition could be sustained. 26. Since we have allowed the issue in the case of the present assessee on both counts i.e. on legal issue and on merit and the issues involved in all other appeals of other assessees are similar and identical, though quantum may differ, for similar reasons, we quash the assessments and delete the additions on merit as well as on point of law in all other cases also. 27. In the result, the appeals filed by the assessees are allowed" 9. Appeal was filed by revenue against above order of Tribunal, the Hon'ble High Court vide its order dated 23/06/2017 has confirmed the order of the Tribunal after hav....
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....sment Years. On 7th December, 2010, a show cause notice was issued to the assessee informing that Rs.38.45 crores, which is a sum reflected from the documents seized from Dilip Dherai's residence, and Rs.4 crores in addition, which is evidenced by loose documents in the form of cash receipts, were found during search and seizure proceedings. The assessee was called upon to explain and show cause as to how these amounts should not be treated as 'unexplained expenditure' under Section 69C of the IT Act, since the assessee did not provide any explanation with regard to the documents seized under Section 132 of the said Act for the Assessment Years from 2003 to 2009 and for 2009-10. The Assessment Order was passed and additions were made. The amount of unexplained expenditure was apportioned to all the land companies floated by Jai Corp Group who had purchased land in these villages in ratio of the cost of land purchased up to 28th November, 2008. This Assessment Order was passed on 29th December, 2010 and was upheld by the Commissioner of Income Tax (Appeals) on 28th October, 2011. He held that the Assessing Officer had rightly issued notice under Section 153C of the IT Ac....
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....or consideration in these Appeals. The Appeals deserve to be dismissed. 9. With the assistance of the learned counsel appearing for both sides, we have perused the memo of Appeals and the common order of the Tribunal. From the questions proposed, it is clear that the essential argument of the Revenue is that it was justified in making the additions under Section 69C of the IT Act. By the present Appeals, an attempt was made to challenge the common order dated 22nd March, 2013. When these Appeals were placed before a Division Bench of this Court on 27th June, 2016, the Division Bench passed the following order : "1. These Appeals under Section 260A of the Income Tax Act, 1961 (the Act) challenge the common order dated 22nd March, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). 2. We find that the common impugned order disposed of the appeals in favour of the respondent assessee (who were Apellants before it) on the following two grounds: (a) The Assessing Officer does not have jurisdiction to pass the assessment order in view of Section 153C of the Act not being satisfied; and (b) There is no warrant to add the alleged cash paymen....
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....ext of degree of evidences relating to unaccounted cash transactions, and failing to lift the corporate veil in the present case and see the facts in their proper perspective?" There is no specific question raised with regard to the impugned order being wrong/incorrect in holding that the Assessing Officer did not have jurisdiction to proceed under Section 153C of the Act. Moreover we also notice that no ground is urged in the memo of appeal with regard to the issue of jurisdiction. 4. In view of the fact that no specific grievance had been made by the revenue with regard to the finding of the Tribunal on applicability of Section 153C of the Act, the other questions raised and urged before us becomes academic. However, we are not certain that the revenue has taken an informed decision to not challenge the finding in the impugned order of the Tribunal with regard to Section 153C of the Act. The counsel for the Revenue was also not certain, when specifically asked. If the decision not to challenge the issues of jurisdiction was informed we are unable to understand why all these appeals were filed to raise academic issues. 5. It may be pointed out that after....
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....affidavit as filed does not address the issue raised by us in our order dated 23rd June, 2016. 3. Mr. Kotangle has also tendered a copy of the file noting date 23rd July, 2013 maintained by the Income Tax Department containing record of the notes of Income Tax Officers leading to the filing of the present appeal. Both affidavit dated 25th July, 2016 as well as the file notes dated 23rd July, 2013 tendered by Mr. Kotangle are taken on record. 4. The Revenue is directed to file a detailed affidavit addressing the issues raised in our order dated 27th June, 2016 duly supported by evidence 5. These appeals are adjourned to 9th August, 2016." 11. The matter was then placed on 11th and 25th August, 2016 on which date the learned Additional Solicitor General was requested to appear. 12. On 14th September, 2016, the Revenue's Advocate sought adjournment. However, the Division Bench was most unhappy with the manner in which the Revenue was proceeding with the Appeals and was constrained to pass the following order on 14th September, 2016: "Mr. Kotangle, learned Counsel appearing for the Appellant Revenue seeks one more adjournment. T....
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....iled. The affidavit dated 25 July 2016 of the Principal Commissioner of Income Tax did not address the issues raised. Thereafter, the Revenue has been seeking time on one pretext or other. We grant adjournment of the appeals subject to costs of Rs.25,000/being paid by the Appellant - Commissioner of Income Tax to the Tata Memorial Cancer Hospital on or before 30 September 2016. 6. Appeals are now kept for hearing on 5th October 2016 at the request of the Counsel. It is made clear that on the next occasion, the appeals would be heard only on condition precedent of paying costs of Rs.25,000/being satisfied. Further it is made clear that no adjournment would be granted on the next occasion and appeals would be heard on the basis of available record. 7 Stand over to 5 October, 2016." 13. Thereafter, the Appeals were placed on 20th October, 2016 and the Division Bench was pleased to pass the following order: "1. On 14th September, 2016, we (Coram : M. S. Sanklecha & S. C. Gupte, JJ.) have passed the following order : "Mr. Kotangle, learned Counsel appearing for the AppellantRevenue seeks one more adjournment. This time the adjournmen....
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.... 25 July 2016 of the Principal Commissioner of Income Tax did not address the issues raised. Thereafter, the Revenue has been seeking time on one pretext or other. We grant adjournment of the appeals subject to costs of Rs.25,000/being paid by the Appellant - Commissioner of Income Tax to the Tata Memorial Cancer Hospital on or before 30 September 2016. 6 Appeals are now kept for hearing on 5th October 2016 at the request of the Counsel. It is made clear that on the next occasion, the appeals would be heard only on condition precedent of paying costs of Rs.25,000/being satisfied. Further it is made clear that no adjournment would be granted on the next occasion and appeals would be heard on the basis of available record. 7 Stand over to 5 October, 2016." 2. Consequent to the above, the Appellant Revenue hascomplied with the aforesaid order and paid the cost of Rs.25,000/to the Tata Memorial Cancer Hospital by 30th September, 2016. 3. Further an affidavit dated 04th October, 2016 of Mr. D.P. Semwal, Principal Commissioner of Income Tax (Central)3, Mumbai21, has been filed. In the affidavit, it is stated that the Appeals relating to the a Assessmen....
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....pondents that the aforesaid issue which is now being sought to be raised, does not arise out of the order of the Tribunal and it should not be entertained. 6. In fact we may also record the fact that on 27th June, 2016, when these appeals reached hearing, the Revenue referred to the question raised in the Income Tax Appeal No. 72 of 2014 as being common question in all appeals. 7. On the other hand the learned Additional Solicitor General states that he will be able to satisfy the court that when a question raised is pure a question of law, it is open to the party to raise that question in appeal before the High Court. This, he submits even if it was not urged before the Tribunal. However, time is sought by him to address us on the above issue. 8. In any event, the question is whether in an appeal from the order of the Tribunal could the appellant raise a question before the High Court when it was not urged/raised before the Tribunal. This question would be decided by us while considering the question as now formulated. Therefore, at this stage, we permit the Revenue to amend the Appeal Memos with additional question as raised herein and serve the amended....
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.... General appearing on behalf of the Appellant Revenue, on instructions, seeks adjournment for a period of six weeks from today to enable the Revenue to move the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961. At his request, appeals are adjourned to 27th March, 2017." 3 We note that in spite of the fact that appeals were adjourned on 7th February, 2017, the Revenue did not file any application for rectification till 6th March, 2017. If the Revenue is seriously interested in prosecuting rectification application, they ought to have expedited the filing of the application before the Tribunal, with a request to it for early hearing. This is particularly so, as the impugned order on which rectification is sought, is dated 22nd March, 2013. Moreover, these appeals are pending for hearing since 2014 before us and have been adjourned from time to time since 27th June, 2016, when it first reached hearing. 4 In the above view, we do not accept Mr. Kotangle's request that the appeals be adjourned to 1st week of May, 2017. We adjourn the consideration of these appeals to 17th April, 2017. We expect the Revenue to atleast now expedite the h....
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....air to the Revenue that it cannot be in the handwriting of the assessee since the assessee is a legal person, so to extend our observation, the seized documents are not even in the handwriting of any person related with the assessee because Shri Dilip Dherai is neither a Director nor a shareholder/member nor even an employee of the assessee company. We may mention at this stage that the provisions of the Indian Evidence Act are not strictly applicable to the proceedings under the Income Tax Act, but the broad principles of law of evidence do apply to such proceedings. Further an entry in the books of account maintained in the regular course of business is relevant for the purpose of considering the nature and impact of a transaction, but noting on slip of papers or loose sheet of papers are required to be supported/ corroborated by other evidence. There is also a distinction between loose papers found from the possession of assessee and similar documents found from a third person. In the present case, impugned documents were not found from the possession of the assessee but was found from the possession of a third person i.e. Shri Dilip Dherai. Mere mention of the names of the vill....
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....nces that the Tribunal found that on both counts, namely, the legal issue, as also merits, the additions cannot be sustained. Eventually, the Tribunal held in paragraph 25 (page 188) as under: "25. A perusal of the balance sheet of the assessee show that the authorized, issued and subscribed paid up capital is at Rs. One lakh and the assessee had not done any business during the year under consideration. With such a small corpus and no business activity, nor any has been brought on record by the Revenue, it is not acceptable that the company may have incurred such huge expenditure outside its books of account. Further in his entire assessment order, the AO himself has pointed out time and again different persons, who are alleged, to have made cash payments. Even on that count, the additions cannot be sustained in the hands of the assessee. In our considerate view, there being no evidence to support the Revenue's case that a huge figure, whatever be its quantum, over and above the figure booked in the records and accounts changed hands between the parties, no addition could therefore be made u/s. 69C of the Act to the income of the assessee. Considering the entire facts....
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.... view can be taken. 24. As a result of the above discussion, and when it is conceded that all these Appeals involve identical issue and challenge, we proceed to dismiss them but without any orders as costs. 10. We had carefully gone through the orders of the authorities below as well as order passed by Tribunal in the group case of the assessee which was duly confirmed by Hon'ble Bombay High Court. We had also deliberated on the judicial pronouncements referred by lower authorities in their respective orders as well as cited by learned AR and DR during the course of hearing before us. 11. For Ground Numbers 3 to 9 (Except 6) the AR placed reliance on the ITAT order dated 22.03.2013 of the 52 land companies of the Jai Corp Group. The following page numbers and para were brought to the notice of the members:- "Page 18, Para 4.1: The AR bought to the notice of the member Para 4.1, Page 18 wherein the discussion of Assessing officer (AO) in relation to pg. no. 22 and 23 of the loose paper folder marked as Annexure-1 seized from the premises of Dilip Dherai was discussed. Page 20, Para 4.3: This para gives reference to the conclusion gi....
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.... of the assessee company. * The conclusion given by the AO is entirely on the basis of the loose paper for which Shri. ^Dilip Dherai has stated that they are only estimates/ budgetary figures. Also, all trhe allegations made by the lower authority are not supported by actual cash passing hands. * The Hon'ble ITAT made reference to the decision given by the Delhi High Court in case of Malik Brothers Pvt Ltd. Vs. CIT which was relied by the Ld. DR. In the aforesaid case the assessee purchased the property allegedly for Rs. 6 lakhs. The vendor in her statement confirmed that the sale consideration of said property was Rs. 45 lakhs and paid tax thereon. In view of vendor's statement, the AO made an addition of Rs. 39 lakhs to the income of the assessee towards unexplained investment. The action of the AO was justified and the additions were confirmed. Thus in view of the aforesaid decision, in the present case, none of the sellers have been examined by the AO to strengthen his views that cash has been paid over and above the registered amount. * The entire addition was made on the basis of loose paper found at the time of search. Considering the entir....
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....aken u/s. 153C of the Act is bad in la w." Page 25, Para 21: This para gives reference to the tribunal order of 52 land companies. It states that the tribunal has gone through the merits of the case once again in para 20 of its order. The decision of the Tribunal is discussed at length in the said paragraph. Page 28, Para 23: This paragraph gives the conclusion of the Hon'ble High Court which reads as under: "23. As a result of the above conclusion, we cannot agree with the learned Additional Solicitor General that we can pass a different order and entertain these Appeals for the current year of the search, namely, the Assessment Year 2009-10. That was based on the argument that the action under Section 153C for this year is an incorrect conclusion. All the earlier orders in these Appeals having being noted by us, we have no hesitation in concluding that despite sufficient opportunity being given to the Revenue, it has not been able to satisfy this Court that a different view can be taken." Thereafter, kind attention of the members was invited to the paper book on seized material found at the time of search. * Pg No....