TaxTMI 
TaxTMI 
2023 (7) TMI 1255
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....or other appeals also. The grounds raised by the assessees are as under :- ITA NO. 1279/JP/2019 : 1. The impugned order u/s 147/143(3) dated 28.09.2016 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. The ld. CIT (A) erred in law as well as on the facts of the case in confirming the addition made by the AO of Rs. 6,32,500/- as unexplained investment. The addition so made and confirmed by the CIT (A), being totally contrary to the provisions of law and facts of the case, kindly be delete in full. 3. The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234B of the Act and as also. The appellant totally denies its liability of charging of interest. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 4. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. ITA NO. 08/JP/2020 : 1. The impugned addition made in the order u/s 143(3)/148 of the Act dated 24.12.2016 is bad ....
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....haustive submissions offered on this point. Thus, the addition so made by the ld. AO and confirmed by the CIT (A) deserves to be deleted. 3. The appellant craves to add, amend or withdraw any of the ground of appeal either before or at the time of hearing of appeal. ITA NO. 1123/JP/2018 : 1. That the re-assessment proceedings are ab-initio void, illegal and contrary to the facts available on record. 2. That the re-assessment order dated 13.12.2016 is per se illegal, arbitrary and runs counter to the facts on record and therefore deserves to be annulled. 3. That the Commissioner of Income-tax (Appeals) has grossly erred in upholding the addition of Rs. 4,66,660/- on account of alleged unexplained investment by application of provisions of section 69B on the basis of presumptions made on solitary evidence of exparte statements of Madan Mohan Gupta. 4. That the rough notings/entries made in the diary cannot be made basis for addition in absence of corroborative evidence proving the genuineness of the transaction. 5. That the Humble assessee craves leave of this Tribunal to add to, amend, alter and or delete all or any of t....
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.... money payment of Rs. 4,00,000/- to the seller Madan Mohan Gupta besides apparent sales consideration of Rs. 1,150 per square yard for purchase of plot of land in revenue residency measuring 2000 square yards. 5. That the learned CIT (Appeals) failed to note that addition u/s 68 made by the AO is unjust and against law because addition u/s 68 could be made where the assessee maintains regular books of accounts but the fact remains in this case is that no regular books of accounts are maintained by the assessee nor is she required to maintain any books of accounts because her income is from agriculture and not from any business activity. 6. That the impugned order is not a speaking order and as such it is liable to be cancelled. ITA NO. 1345/JP/2019 : 1. Under the facts & circumstance of the case, the order passed u/s 147 is illegal & bad in law. 2. The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 8,00,000/- u/s 69 of IT Act made by AO on account of unexplained investment in land by adopting the value of plot allotted to the assessee at Rs. 3,150/- per sq. yd. as against the actual value of Rs. 1,150/- per s....
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....s of Sh Madan Mohan Gupta on 23-05-2013 who had been working as a deed-writer. During the course of search several incriminating papers/documents were found and seized from the various premises covered in search. On being confronted with the incriminating documents / papers so found and seized, Sh. Madan Mohan Gupta, admitted and surrendered undisclosed income. The seized documents reflect that, the assessee Sh. Kailash Chandra Gehlot had purchased one plot (Plot No. 134) measuring 200 Sq. Yard in the residential project "Revenue Residency" (NiziKhatedar Residential Scheme) at Village-PeeplaBharatsingh, (Jaisinghpura-Muhana Road), Bhankrota, Tehsil Sanganer, Jaipur developed by Sh. Madan Mohan Gupta in F.Y. 2008-09 (relevant to A.Y. 2009-10). The name of the assessee Sh. Kailash Chandra Gehlot is appearing at S.No. 134 in the seized register Annexure-AS (Unique ACCOUNT BOOK register) Exhibit-3 seized from the office premises of Shri Madan Mohan Gupta. Shri Madan Mohan Gupta has accepted and honoured on-money receipt on sale of plots in 'Revenue Residency' scheme, which is Rs. 2000/- per Sq. Yd. as per seized paper. Meaning thereby, the assessee, Sh. Kailash Chandr....
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....of the IT Act and not under section 147/148 of the Act. The ld. Counsel has reiterated the submissions as made before the ld. CIT (A) and further submitted as under :- " 1.1 At the outset it is submitted that the very issuance of the impugned notice u/s 148 of the Act, was completely without jurisdiction in as much as a valid and legal course for the ld. AO was to have invoked Sec. 153C and not Sec. 147/148. 1.2 For better appreciation, the relevant provision is being reproduce here under verbatim: "S.153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates 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....
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.... appellant, reflecting some undisclosed income belonging to the appellant (3rd Person). The AO specifically stated that: "....The name of assessee Sh. Kailash Chandra Gehlot is appearing at S.No. 134 in the seized register Annexure AS (Unique ACCOUNT BOOK register) Exhibit-3 seized from the office premises of Shri Madan Mohan Gupta...." Further referring to the statement of Sh. Gupta recorded u/s 132(4), the ld. AO alleged that the appellant paid own money towards the purchase of the plot no. 134 measuring 200 square yards in the "Revenue Residency" during the year under consideration. 1.5 From the admitted facts, the legal position and submissions, it is clear that the notice to the assesse in this case, could be issued only u/s 153A r/w S. 153C of the Act by the jurisdictional AO, and the impugned reassessment proceedings initiated u/s 147 were illegal and void in as much as the Assessing Officer did not follow the mandatory procedure laid down u/s 153C. Therefore, the impugned notice issued u/s 148 and reassessment proceedings deserves to be quashed. 1.6. Supporting case law: 1.6.1 The above proposition of law is fully and directly co....
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....ch as permitting the AO to proceed u/s 147 will tantamount to permit him to make roving enquiries. Admittedly, there was no search carried out in the case of the assessee and no evidence has been brought on record showing the assessee suppressing the purchase consideration. Admittedly, the seized register (Annexure AS exhibit 3) relied upon by the AO was prepared by Shri Gupta in his own handwriting and the assessee neither made any entry nor signed and there is nothing found written in the handwriting of the assessee in any other document/s seized from Shri Gupta including the register. Even statement of Shri Gupta were recorded at the back of the assessee, remaining uncrossed by the assessee in absence of opportunity. 2.3 Applying the ratio, on the facts of the present case, at the outset, it is submitted that the assessee purchased a plot no. 134in a Residential Scheme namely "Revenue Residency" (Nizi Khatedar Residential Scheme) for a consideration of Rs. 2,32,500/- which is duly evidenced by the official receipt no. 11 (PB 1) dated 22.06.2008 issued by the Seller and supported by the Possession Letter dated 22.06.2008 (PB 2) which is in accordance wi....
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....edings under section 153C/153A of the Act." When challenged by the Revenue, the Hon'ble Rajasthan High Court affirmed the same in case of PCIT Vs. Kalyan Buildmart (P.) Ltd. [2021] 127 Taxmann.Com 280 (Raj.) (II DPB 72-74). Before the Hon'ble Rajasthan High Court, the revenue was aggrieved by the orders of the ITAT on two grounds: Firstly, on account of the quashing of the reassessment order under section 147/148 (as aforesaid) and Secondly, on account of upholding the order of the CIT(A) which had directed cancellation of the assessment made on protective basis and its correctness. Taking note of the decision in cases of Madan Mohan Gupta and Navratan Kothari in para 2 thereafter, in para 3 the Hon'ble High Court took note of the fact that assessee's appeal with respect to reopening of assessment was allowed by ld. CIT(A) holding reassessment notice as invalid and further observed that The ITAT in its elaborate order discussed the validity of reassessment notice and upheld the order of the CIT(A). Notably, the ITAT did not deal with other grounds of appeal once they had already upheld the CIT(A) order in quashing the reassessment notice. The Hon'ble court thereafter, in p....
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....tiating proceeding under section 148 of the Act. The fact of the case of the Revenue in that case and in this case being similar the action of AO in issuing notice under section 147/148 is correct. 5. We have considered the rival submissions as well as relevant material on record. During the previous year relevant to assessment year under consideration the assessee purchased a plot no. 134 situated at Revenue Residency Scheme at village Peepla Bharat Singh, Bhankrota, Tehsil Sanganer, Jaipur for total consideration of Rs. 2,32,500/- vide Receipt dated 22.06.2008 issued by Shri Madan Mohan Gupta, Revenue Residency and Allotment Letter from JDA along with Registered Deed issued by Sub Registrar, Jaipur-VII dated 18.02.2009 as per copies of documents placed on paper book. Subsequently, a search and seizure operation under section 132 of the IT Act, 1961 was conducted on Shri Madan Mohan Gupta on 23-05-2013 by the Investigation Wing, Jaipur of the Income Tax Department. During the course of search and seizure operation on Shri Madan Mohan Gupta, a register Annexure-AS (Unique Account Book register) Exhibit-3 along with some incriminating documents were found and seized. During the c....
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....500/- had remained undisclosed and had escaped assessment." Thus the Assessing Officer has proceeded on the premises that the assessee has purchased the property by paying 'on money' amounting to Rs. 4,00,000/- to Shri Madan Mohan Gupta in assessment year 2009-10 to purchase Plot no. 134 in Revenue Residence Scheme at village Peepla Bharat Singh, Bhankrota, Tehsil Sanganer, Jaipur whereas the impugned plot was actually purchased for a consideration of Rs. 6,32,500/- as per register seized along with incriminating documents found in possession of Shri Madan Mohan Gupta. The register found from the possession of Shri Madan Mohan Gupta allegedly contained dealings in respect of certain properties purchased by the assessee. The details recorded in the seized register found from the possession of Shri Madan Mohan Gupta allegedly revealed the purchase value of the plot at Rs. 6,32,500/-. The statement of Shri Madan Mohan Gupta was recorded by Investigation Wing in which he has explained the transactions of land purchased by the assessee. The assessee has denied having purchased the plot at Rs. 6,32,500/- other than amount of Rs. 2,32,500/- mentioned in the Receipt dated 22.06.2008 iss....
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....5 are as under :- " 11. The controversy in issue pertains to the interpretation of the provisions of s. 153C the Act which reads thus: "153C. Assessment of income of any other person - Notwithstanding anything contained in s. 139, s. 147, s. 148, s. 149, s. 151 and s. 153, where the AO 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 s. 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO 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 s. 153A." 12. On a plain reading of the aforesaid provisions it is apparent that ss. 153A, 153B and 153C lay down a scheme for assessment in case of search and requisition. Sec. 153A deals with procedure for issuance of notice and assessment or reassessment in case of the person where a search is initiated under s. 132 or books of account, o....
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....dent for issuance of notice is not fulfilled any action taken under s. 153C of the Act stands vitiated. 15. For the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned notices dt. 7th Oct, 2009 issued by the respondent under s. 153C of the Act are hereby quashed and set aside. Rule is made absolute accordingly with no order as to costs." Since in this case there is no direct material related or pertained to the assessee but the information and disclosure based on the incriminating documents suggest that information came to the knowledge of the AO based on the incriminating documents revealed during the search. Therefore, we are of the view that in this case considering the peculiar circumstances, notice is correctly issued under section 148/147 of the IT Act and we are of the view that there is no direct evidence for issue of notice u/s. 153C of the Act in this case and the condition as prescribed u/s. 153C is reiterated here in below for the sake of convenience : "Section 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is s....
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....e of human probabilities and surrounding circumstances, on the contrary strongly support the case of the assessee. Therefore, the entire impugned addition deserves a complete deletion." Hence the impugned addition deserves to be deleted in full. 2. No opportunity of cross examination though relied: 2.1. It is an admitted fact that the AO had strongly relied upon the statements of Madan Mohan Gupta during assessment at his place to which the appellant was not a party. Unfortunately, despite using the same against the assessee, the assessee was never confronted and even the statements of such person were not fully reproduced in the impugned order, what to talk of giving an opportunity of cross examination. 3. Supporting Case law: 3.1 A useful reference can be made to State of Kerala v/s K.T. Shaduli Grocery dealers, etc. AIR 1977 SC 1627, held that "It can hardly be disputed that cross- examination is one of the most efficacious methods of establishing truth and exposing falsehood. Here, it was not disputed on behalf of the Revenue that the assessee in both cases applied to the Sales-tax Officer for summoning Hazi Usaman Kutty and other wh....
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....scredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only bas....