TaxTMI 
TaxTMI 
1999 (12) TMI 97
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....April, 1998. Subsequently when the mistake was discovered the assessee filed the present appeal before the Tribunal on 7th July, 1998. Pleading for condonation of delay it is prayed that the bona fide of the assessee are clearly manifested in the fact that the original appeal before the CIT(A) has been filed within time and the mistake in choosing the correct appellate form has arisen due to bona fide lack of knowledge on the part of the chartered accountant. In the circumstances of the case we condone the delay and admit the present appeal. 3. A few facts may be stated at the outset. Search and seizure operations under s. 132 of the IT Act, 1961 were carried out by the IT authorities in the case of M/s Gokul Corpn and its partners viz. Shri Sureshbhai A patel and Shri Deepak Mehta on 21st Sept, 1995. During the course of search operation certain documents were seized containing inter alia details or various land transactions which pertained to the assessee-company also. Accordingly the requisite information regarding these transactions was communicated to the AO and proceedings under s. 158BC r.w. s. 158BD were initiated. On 4th March, 1997, the assessee furnished the return fo....
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.... 7. Back side of page No. 22 contained a number of entries with dates. The relevant entry for the purposes of this appeal appears on the right hand side which reads as under: "Paid to prarthna on account of Kundan Nagar Land) 5,00,000 1-10-1994 (Pankaj) 20,00,000 16-10-1994 (Pankaj) 25,00,000 Statements of Sureshbhai A. Patel have been recorded under s. 132(4) on 22nd Sept., 1995 and subsequently under s. 131(1A) dt. 30th Oct., 1995, wherein Shri Sureshbhai A. Patel has explained the nature of the transactions recorded on p. 22 of the Annexure A-l seized from his residence. The gist of these statements, as appea....
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....transaction is for land situated near Ocean Park, Satellite, Ahmedabad belonging to Kundan Nagar Co-operative Housing Society. Accordingly to the AO a token amount of Rs. 25 lakhs paid by Shri Govind C. Patel to the assessee-company in instalments Rs. 5 lakhs on 1st Oct., 1996, and Rs. 20 lakhs on 16th Oct., 1994. This payment was made to Shri Pankaj Shah as a representative of the assessee-company. On the basis of the statements of Suresh A. Patel as well as the Annexure A-1/22 referred to above the AO has stated that the amount of Rs. 25 lakhs was made by Shri Govind C. Patel through Shri Suresh A. Patel out of the cash received on account of Silver Arc Scheme. Later on this land was sold to Shri Mahesh Sharma by Shri Govind C. Patel an amount of Rs. 11 lakhs was received from him as per the notings made in the document A-1/22. The AO has further referred to loose documents being pp. 1 to 10 of Annexure A-1 of the Panchnama. seized from the office of Shri Suresh' Patel which relate to Kundan Nagar Co-operative Housing Society. According to Shri Suresh Patel, as per his statement dt. 10th Oct., 1995, these papers were given to by Shri Deepak Mehta for settlement of the problems of....
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.... the AO observed at p. 12 as under: "Certain evidences relating to settlement of members of Silver Arc Association have also been seized from the residence of Shri Deepak Mehta on 21st Sept., 1995, itself. In the statement under s. 132(4), dt. 21st Sept., 1995, of Shri Deepak Mehta has stated that this land was belonging to Shri Kashyap Thakore of H.K. Corporation who sold it to Shri Govind C. Patel of Ganesh Housing who in turn sold it to Shri Manoj Vadodaria and further the deal was struck with Shri Manoj Vadodaria and Prarthana Construction. While explaining his role in deal. Shri Deepak Mehta has stated that he was also one of the brokers in finalisation of the deal between Shri Manoj Vadodaria and Shri Govind C. Patel. Further he had done a job of arranging meeting between Shri Manoj Vadodaria and Shri Nimesh Shah of M/s Prarthana Construction. Importantly, his statement is also self-inflicting in the sense that he has admitted to have earned unaccounted brokerage from these deals which leaves him also open for taxation, and accordingly the evidential value comes even more. Therefore, his statement also points to the involvement of the assessee-company in this deal during t....
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....serves to be confirmed. The learned Departmental Representative further submitted that statements recorded by the tax authorities have been duly communicated to the assessee and thus constitute admissible evidence in support of the impugned additions made by the AO. 12. We have given our thoughtful consideration to the facts and circumstances of the case and also considered the rival submissions made before us. It appears that the main stay of the Department's case for making the impugned additions of Rs. 45 lakhs is the documents appearing at Sri. No. 22 of Annexure A-1 of the Panchnama found from the residence of Sureshbhai A. Patel who is a partner of Gokul Corpn. as well as other documents found during the search on 21st Sept., 1995. The first issue which falls for consideration before us is whether these documents and loose papers constitute admissible and relevant evidence in support of the Department's case or not. It is a settled proposition, as held by various judicial authorities, that rigours of the rules of evidence contained in the Evidence Act are not applicable to income-tax proceedings. However the principles contained in the Evidence Act, incorporated from Rules....
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....ts of the assessee a sum of Rs. 25 lakhs has been paid by cheque on 8th May, 1995 to Govind C. Patel in respect of Silver Arc deal. If that being so, the return of Rs. 20 lakhs in cash on 20th Sept., 1994, does not fit in with the sequence of events. There also appears to be some confusion regarding the identity of the parties with whom the Silver Arc deal has been entered into by the assessee. According to Shri Deepak Mehta, in reply to question No. 77 in the statement dt. 27th Sept., 1995, the Silver Arc Deal was entered into by the assessee-company with Shri Adani whereas the return of Rs. 20 lakhs in cash on 20th Sept., 1994, appears to have been made by Shri Govind C. Patel to the assessee. The statements of Shri Sureshbhai and Deepakbhai do not bring out full facts with regard to the transactions relating to Silver Arc as well as Kundan Nagar involving the assessee-company. The learned Departmental Representative has filed before us photocopies of block assessment orders made by the Tax authorities in the case of Shri Govind- C. Patel and Shri Gautam Adani Management & Consultancy Services Ltd. From these orders we find that in the case of Silver Arc addition has been made on....
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....the case of the assessee on the basis of the statement of Shri Ramanbhai Patel and Subhash Pandey recorded under s. 131(1A). According to the learned counsel any such addition would be beyond the scope of s. 158BD r/w s. 158BC since no search operations have been conducted at the premises of the said persons. The learned counsel further submitted that the statements relied upon has been recorded at the back of the assessee and cannot, therefore, be utilised against the assessee without opportunity of cross-examination afforded to the assessee. The learned counsel further pointed out that Shri Ramanbhai has retracted from the statement and, therefore, the statement should not be relied upon by the Tax authorities. The learned counsel submitted that the assessee has paid a sum of Rs. 20.50 lakhs to the Hasunagar Society for acquiring development rights and in the circumstances there was no occasion for the assessee to pay a sum of Rs. 28 lakhs in cash to Shri R.B. Patel for his services of liaison work. Without prejudice to his main contentions, the learned counsel took up the alternative plea that even if the assessee has paid a sum of Rs. 28 lakhs to Shri Patel, and the expenditure....