TaxTMI 
TaxTMI 
2024 (10) TMI 1702
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....61 dated 28.09.2021 is non-est as the same was passed without any document identification number (DIN) as mandated by Circular No. 19/2019 dated 14.08.2019 and thus the said order deserves to be quashed. 3 That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming the addition u/s 69A of the Income Tax Act, 1961 without properly appreciating the facts of the case and the submissions made before him. 4 That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming the addition without giving assessee company an adequate opportunity of cross examination, which is in violation of principles of natural justice. 5 The appellant craves leave to add, amend, modify. or withdraw any of the grounds of appeals at the time of hearing." 3. The assessee company is engaged in the business of builders and developers. During the years under consideration the assessee company continued to be in the business of construction, development and sale of residential houses. The assessee has also entered into a Joint Venture Agreement (JVA) with Amrit Homes Pvt. Ltd (AHPL) & Amrit Coloniser....
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....ins the entries of residential units sold by M/s. ACPL and the payments received from the customers. Therefore, even if it is presumed that the cash was collected from the customers by AHPL/ACPL that itself would not lead to the conclusion that the said cash was received by the assessee. Hence, Ld. AR has submitted that prima facie the incriminating documents as referred in the satisfaction note do not reveal that the cash was received by the assessee company. There is no correlation/connection between the seized material and the assessee company as nothing incriminating is found in the seized material. Therefore, the assumption of jurisdiction u/s 153C of the Act by the A.O is bad in law for want of conclusive satisfaction based on the alleged seized material. The satisfaction note dated 10.03.2021 is not in accordance with the provisions contained in Section 153C of the Act. He has further pointed out that the AO has disposed off the objections filed by the assessee vide order dated 22.09.2021 wherein he has referred to page 36 of LPS-7 but the said seized document was nowhere mentioned in the satisfaction note. Therefore, there is no reference of seized documents marked as LPS-7....
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....s of documents seized from the possession of a third party and also based on the statement of third person but neither the seized document nor the statement was confronted with the assessee before the same was made basis of the addition by the A.O. Therefore, in the absence of giving an opportunity to the assessee to cross examine Shri Dileep Gupta the addition made by the A.O based on his statement is not sustainable and liable to be deleted. He has further contended that even in the statement of Shri Dileep Gupta nothing incriminating has been disclosed against the assessee. He has also relied upon the decision of this Tribunal in case of ACIT (Central)-2, Bhopal Vs Shri Sanjeev Agrawal ITA No. 87/Ind/2021. 4.1 Ld. AR has further contended that the alleged excel sheet used by the A.O for the addition was found from the laptop of Shri Dileep Gupta in a separate and distinct search proceedings therefore, this document falls in the category of electronic evidence. He has referred to Section 65B(2) of the Evidence Act and submitted that it envisages that unless a certificate required u/s 65B(4) of the Act is not produced, secondary electronic evidence being computer printout ....
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....the A.O for making these additions. 6. We have considered rival submissions as well as relevant material on record. There was a search and seizure operation carried out u/s 132(1) of the Act in case of Asnani Group on 16.05.2018. During the search and seizure action some documents were found/seized and marked as LPS-7. Page 36 of the document was considered by the A.O as related to the assessee however, in the entries at page-36 of the LPS-7 pertains to the financial year 2011-12 and prior to that. The A.O has recorded his satisfaction u/s 153C of the Act placed at page No. 5 to 9 wherein the A.O has made reference to the seized material as under: 6.1 Thus it is clear that the A.O has made reference to (i) LPS 14,19 and 23 found and seized from the office of Asnani Group (AHPL). (ii) The documents marked as LPS 1&2 found and seized from the residence of Mr. Dinesh Gupta (iii) The documents seized and marked as LPS 5,6,7 from the residence of Shri Shubham Gupta. 6.2 On the basis of these 3 sets of seized documents the A.O came to the conclusion that the assessee along with Amrit Homes Pvt. Ltd and Amrit Colonizers Pvt. Ltd entered into a Join....
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....eized laptop, was recorded u/s 131 of the Income Tax Act, 1961 by the DDIT(Inv)-1, Bhopal on 26.04.2018. He was asked to explain the nature and content of information contained in the MS Excel Workbooks of his laptop. This statement of Shri Dileep Kumar Gupta dated 26.04.2018 in response to question no. 47 and 48 is reproduced below: Q. 47) Shri Dileep Kumar Gupta was required to explain the nature and purpose of preparing above data found from the excel workbook of his laptop LS-01. Ans. Shri Dileep Kumar Gupta stated that he had entered into agreements with Amrit Homes Pvt Ltd and Amrit Colonisers Pvt Ltd for marketing of the houses built by these companies, on commission basis. He further stated that according to the data of excel workbook, total cash received from the sale of houses built under Pebble Bay Project was Rs. 48,48,88,222/- till January 2018. Q 48) Shri Dileep Kumar Gupta was asked to furnish the duration in which total cash of Rs. 48,48,88,222/- was received from the sale of houses built under Pebble Bay Project. He was also asked to furnish the name of the persons who collected such sale proceeds in cash from the customers. ....
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.... the condition of live link between the incriminating material and undisclosed income of the assessee for the assessment years under consideration. The Hon'ble Supreme Court in case of CIT V/s Sinhgad Technical Education Society 397 ITR 344 upheld the judgments of Hon'ble High Court as well as the decision of the Tribunal and held in para 14 to 22 as under: "14. We have bestowed our due consideration to the respective submissions of the counsel for the parties. 15. At the outset, it needs to be highlighted that the assessment order passed by the AO on August 7, 2008 covered eight Assessment Years i.e. Assessment Year 1999-2000 to Assessment Year 2006-07 As noted above, insofar as Assessment Year 1999-2000 is concerned, same was covered under Section 147 of the Act which means in respect of that year, there were re-assessment proceedings. Insofar as Assessment Year 2006- 07 is concerned, it was fresh assessment under Section 143(3) of the Act. Thus, insofar as assessment under Section 153C read with Section 143(3) of the Act is concerned, it was in respect of Assessment Years 2000-01 to 2005- 06. Out of that, present appeals relate to four Assessment Years, namely,....
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....ould not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred. 19. We, thus, find that the ITAT rightly permitted this additional ground to be raised and correctly dealt with the same ground on merits as well. Order of the High Court affirming this view of the Tribunal is, therefore, without any blemish. Before us, it was argued by the respondent that notice in respect of the Assessment Years 2000-01 and 2001-02 was time barred. However, in view of our aforementioned findings, it is not necessary to enter into this controversy. 20. In so far as the judgment of the Gujarat High Court relied upon by the learned Solicitor General is concerned, we find that the High Court in that case has categorically held that it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referr....
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....he machinery provided under section 153C read with section 153A equally facilitates inquiry regarding existence of undisclosed income in the hands of a person other than searched person. The provisions have been referred to in details in dealing with a challenge to the legality and validity of the seizure and action founded thereon. We do not find anything in this judgment which would enable us to hold that the tribunal's understanding of the said legal provision suffers from any error apparent on the face of the record. The Delhi High Court judgment, therefore, will not carry the case of the revenue any further." We, thus, do not find any merit in these appeals. 22. We now advert to the implication of the fact which has been emphasised in para 15. As pointed out in the said para, the assessment order passed by the AO covers eight Assessment Years. Assessment done in six Assessment Years is under Section 153C of the Act. Assessment order is set aside only in respect of four such Assessment Years that too on the technical ground, noted above. This objection pertaining to the four Assessment Years in question does not relate to the other two Assessment Years, na....
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....3C of the Act in respect of those assessment years relating to which no undisclosed income is revealed or deducted during the course of search or from the seized document allegedly belonging to the assessee. The CIT (A) has accepted this fact that LPS-7 does not belong to the assessment years under consideration and therefore, there is no link or live connection or correlation between the alleged seized material and the undisclosed income of the assessee for these assessment years. The assessee has also taken an objection about the admissibility of the Excel sheet taken from the laptop of Shri Dileep Kumar Gupta seized during the course of search and seizure action dated 12.01.2018 not related to the initiation of proceedings u/s 153C of the Act which is pursuant to the search and seizure action dated 16.05.2018. 6.6 The Ld. AR has also raised a strong objection against the admissibility of excel sheet as an evidence in view of Section 65B of the Evidence Act which requires that the evidence in the form of electronic record can only be used in the proceedings if a certificate u/s 65B(4) of the Evidence Act is produced. In the case in hand the department has not disputed that no ....
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....of original. Accordingly, while handling any digital evidence, the procedure has to be in consonance of these provisions." 40. Further, we find that section 65B(2) of the Indian Evidence Act clearly specifies the following conditions with respect to obtaining of Digital Evidence both for primary and secondary evidences. The relevant extract of section 65B(2), (3) and (4) are as follows: "(2) The conditions referred to in sub-section (1) in respect of a computer output shall be the following, namely: (a) the computer output containing the information was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over 181 that period by the person having lawful control over the use of the computer; (b) during the said period, information of the kind contained in the electronic record or of the kind from which the information so contained is derived was regularly fed into the computer in the ordinary course of the said activities; (c) throughout the material part of the said period, the computer was operating properly or, if no....
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....e provisions of section 65B(2)(d) as extracted above was not followed by the Revenue. The Revenue failed to identify the primary system giving particulars of the device involved in the production of the data was produced by a computer. 42. Further, we have also considered the cases referred to by the Ld. AR. In the case of Vetrivel Mineral (supra) the Hon'ble Madras High Court has observed as under: "24. As contended by the writ petitioners, when the entire assessment has been framed only on the basis of the so-called electronic record which are said to be copies of Excel Sheet, Excel work note book etc., non-compliance of section 65(B) of the Indian Evidence Act renders the document inadmissible in the eye of law as held by the Supreme Court in the judgment Anvar P.V. case (supra). ''14. Any documentary evidence by way of an electronic record under the Evidence Act, in view of sections 59 and 65A, can be proved only in accordance with the procedure prescribed under section 65B. Section 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a....
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....upying a responsible official position in relation to the operation of the relevant device. 16. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tampering, alteration, transposition, excision, etc. without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. 17. Only if the electronic record is duly produced in terms of section 65B of the Evidence Act, the question would arise as to the genuineness thereof and in that situation, resort can be made to section 45A opinion of examiner of electronic evidence. 18. The Evidence Act does not contemplate or permit t....
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....contained in the "computer" in which the original information is first stored - and the computer output containing such information, which then may be treated as evidence of the contents of the "original" document. All this necessarily shows that section 65B differentiates between the original information contained in the "computer" itself and copies made therefrom - the former being primary evidence, and the latter being secondary evidence. 32. Quite obviously, the requisite certificate in sub-section (4) is unnecessary if the original document itself is produced. This can be done by the owner of a laptop computer, a computer tablet or even a mobile phone, by stepping into the witness box and proving that the concerned device, on which the original information is first stored, is owned and/or operated by him. In cases where "the computer", as defined, happens to be a part of a "computer system" or "computer network" (as defined in the Information Technology Act, 2000) and it becomes impossible to physically bring such network or system to the Court, then the only means of proving information contained in such electronic record can be in accordance with section 65B(1), tog....
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....n contained in the seized pendrive is could not be considered as admissible evidence as per the provisions of section 65B of Indian Evidence Act. Therefore, we are of the considered view that such inadmissible seized material is not sustainable in the eyes of law. Thus, the assessment order passed in the case of the assessee on 31-3-2022 is not a valid assessment order in the eyes of law and it deserves to be set aside." 6.7 Therefore, the said seized document in the shape of excel sheet taken from the laptop of Shri Dileep Kumar Gupta cannot be considered as an admissible evidence in the absence of the procedure followed as required u/s 65B(4) of the Evidence Act.. In view of the facts discussed above we are of the considered view that the A.O has recorded the satisfaction to initiate the proceedings u/s 153C of the Act only on the presumption that the assessee has earned unaccounted income in the shape of cash receipt on sale of residential units and not on the basis of any tangible material reveal any undisclosed income of the assessee on this account. Accordingly we hold that the initiation proceedings u/s 153C of the Act are bad in law and without jurisdiction. 6.8 On th....
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....hat purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit 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." 6.9 Therefore, there....
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....-14, 19 and 23 found and seized from the office of AIIPL, located ul 17, Zone-2, M.P. Nagar, Bhopal. (ii) Some other relevant documents marked as LPS-01 & 02 found and seized from the residence of Shri Dinesh Goswami. (iii) LPS-5, 6 & 7 seized from the residence of Shri Shubham Gupta situated at 57, B Phase - I, Chhetrashal Nagar, Awodhpuri, Bhopal. Also, during the course of search action, statement of Shri Shubham Gupta S/o Shri Dinesh Kumar Gupta was recorded u's 132(4) of the Income Tax Act, 1961 on 16.05.2018. In his statement, Shri Shubham Gupta stated that documents seized and inventoried as LPS-05 from his residence belonged to Amrit Colonisers Pvt. Ltd and its contents were prepared by Shri Dileep Kumar Gupta. He further stated that and LPS -7 (pages 65 to 75) contained the details of residential units sold by Amrit Coloniacrs Pvt. Ltd. and payments received from the customers. He was unable to explain the reasons of possessing those documents ut his residence. 1 A search and seizure action was conducted at the business premises of Shri Dileep Kumar Gupta at 158. Zone -II, M P Nagar, Bhopal, on 12.01.2018, in connection with search and seizure action in the ....