TMI Blog2014 (10) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... urender Modi – Decided in favour of assessee. - ITA No. 2063/Del/2013 - - - Dated:- 29-1-2014 - SHRI G.D. AGRAWAL AND SHRI I. C. SUDHIR, JJ. For The Appellant : Shri R.S. Singhvi, Advocate For The Respondent : Shri Ramesh Chandra, CIT DR ORDER PER I.C. SUDHIR, JUDICIAL MEMBER The assessee has questioned first appellate order on the following grounds:- 1.(i) That on the facts and circumstances of the case, the Ld. CIT(A) was not justified in sustaining addition of ₹ 4,80,97,125/- towards alleged cash payment said to be made by the appellant company to various farmers based on the seized annexure from Sh. Surender Modi which did not belong to the appellant company and could not be made basis for addition u/s 153C of the Income Tax Act. (ii).That the seized annexure contains details of property purchase transaction by the third party with reference to draft payment and stamp duty charges and these facts having been verified by AO and CIT(A), the said annexure could not be attributed to the appellant in terms of provisions of Section 153 (C) or could be basis for any such addition in the case of appellant. (iii).That having accepted the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Kumar Bhatia 24, Taxman.com 98 (Delhi). CIT Vs. Chetan Das 25 Taxman.com 227 (Delhi) SSP Aviation Ltd. Vs. DCIT 346 ITR 177 (Delhi). 5. Ld. AR has reiterated the submissions made before the authorities below. He submitted that the assessment proceedings for the year under appeal was not pending on the date of recording of satisfaction u/s 153 C, hence the proceedings did not abate and also that the Assessing Officer was not justified in making addition in the absence of seized material relating to the assessee. The Ld. AR also referred Page No. 25 and 26 of the paper book filed on behalf of the assessee i.e copy of the satisfaction note for issuance of notice u/s 153C of the Act to the assessee. He submitted that during the course of pendency of assessment proceedings in the case of Shri Surender Modi for the A.Y 2004-05 to 2010-11 u/s 153A read with Section 143 (3) of the Act, the material seized from the premises of the assessee was examined. The A.O has written his satisfaction note that after examining seized material, he was satisfied that some documents belong to persons other than Shri Surender Modi. The Ld. AR submitted that from the satisfaction note, it is evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of other transactions in the said annexure relating to cheque/draft payment amounting to ₹ 2,07,04,754/- and stamp purchasing worth ₹ 15,62,280/- however, as per reply dated 3/1/2013 to the Ld. CIT(A) in the context of enhancement notice u/s 251 (2), the Ld. CIT(A) made detailed enquiry and recorded the finding that the draft payment and stamp purchases are relating to M/s Inmon Buildcon (P) Ltd and accounted for by M/s Inmon Buildcon (P) Ltd. For a ready reference he drew our attention on Para Nos. 6.7 of the First Appellate Order. He submitted further that on the basis of verification of contents of Annexure A-29, Page 66, the Ld. CIT(A) has dropped the enhancement proceedings and has also observed about enhancement in the case of Inmon Buildcon (P) Ltd in respect of alleged cash transactions referred to in the years in Annexure A-29 , Page 66. He submitted that the copies to draft by Inmon Buildcon (P) Ltd have been made available at Page 49 to 59 of the paper book which buttresses the fact that all the payments through drafts were made by Inmon Buildcon (P) Ltd. Thus, it supports the case of the assessee that Annexure A-29 Page 66 belong to Inmon Buildcon (P) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Finance 32 SOT 80 (Luckn) Kusum Gupta vs. DCIT ITA No. 4873/D/2009 ors. Order dated 28.3.2013 6. The Ld. CIT DR on the other hand placed reliance on the orders of the authorities below. He pointed out that neither before the Ld. CIT(A) nor before the Tribunal statement of facts have been filed by the assesssee, the grounds of appeal preferred by the Ld. CIT(A) suggest that the assessee has shifted its stand before the Tribunal. The specific grounds questioning the assessment on the basis that Section 153C was not maintainable because on the date of recording satisfaction no proceedings were pending, that Section 153C assessment is to be restricted to assessment in respect of the seized documents and the AO has ignored legal objections filed before him, have not been raised before the Tribunal. The averment of the assessee in reference to contents of impugned document i.e Annexure A-29 Page 66 made before the AO that Shri Surender Modi had made a declaration of ₹ 20 crores during his statements recorded u/s 132(3) of the Act in respect of undisclosed income, undisclosed investment etc particularly papers containing notings on loose papers seized no adverse inference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow tacit acceptance on Revenue s part that the document and its contents do not belong to the assessee, the Ld. DR submitted that firstly this is a bald assertion made by the assessee because there is not documentary evidence placed before the Tribunal proving the initiation action qua this very impugned document. 8. Further, it is presumed that Revenue has takne action u/s 148 in the case of Inmon Buildcon (P) Ltd qua the document (A-29/66) it would not ipso facto nullify the addition made in the hands of the assessee because as seen from the cheque payments first being made by the assessee and later claimed as reimbursement from Inmon Buildcon (P) Ltd which logically prove that even the cash payment was first made by the assessee only. From which sources this cash payment was made is not explained and hence addition was rightly made by the A.O. 9. Without prejudice to above submission, the Ld. DR submitted that so long as there is no admission on the part of Inmon Buildcon (P) Ltd that it was it which made the cash payment to M/s Swapnil Properties to be made to various parties finding mentioned on impugned Page NO. 66 or that the action qua the taxability of these very pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of action in the hands of Inmon Buildcon (P) Ltd does not affect adversely taxability of the impugned sum in the hands of the assessee, submitted the Ld. DR. 10. The Ld. DR submitted further that during the course of hearing before the Tribunal the Ld. AR had averred that seized Page Nos 66 on the basis of which addition has been made by the AO is not the part of the documents referred to in the satisfaction recorded u/s 153 and hence it was not permissible for the AO to treat addition on the basis of the documents on the basis of the satisfaction has not been recorded u/s 153(C) of the Act. Against this contention of the assessee the Ld. DR submitted that the contention does not merit consideration because there is no such law that in the proceedings initiated u/s 153(C) documents other than ones mentioned in the satisfaction note cannot be considered. 11. Against the contention of the assessee that Page No. 66 is not the part of the satisfaction note, hence, on this ground also addition confirmed by the Ld. CIT(A) needs to be deleted, the Ld. DR submitted that even if Page 66 of Annexure A-29 is not mentioned in the documents on the basis of which the satisfaction note fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Ld. CIT DR also tried to distinguish the facts of the cases cited by the Ld. AR in the cases of ACIT Vs. Therapeutic India (P) Ltd (ITA No. 4514 4515/Del/12 DSL Properties (P) Ltd Vs. DCIT (ITA No. 1344/Del/12). He submitted that decision in the case of ACIT Vs. Therapeutic India (P) Ltd (Supra) is distinguishable on facts as well as law. In that case, the controversy was in reference to documents/books of accounts which were prima facie not indicative of unaccounted/unrecorded transactions. As against this it would be notice that there is no such challenge by the assessee further addition has been made by the AO on the basis of documents which was seized during the search which clearly indicated unaccounted/unrecorded transactions. 15. Likewise, the decision in the case of DSL Properties (P) Ltd. Vs. DCIT (Supra) is distinguishable on facts as well as of law. In that case, the assessee had raised the grounds arguing that the documents being audit profit and loss account and balance-sheet belonging to share holder Director on the basis of which proceedings u/s 153(C) was initiated was not belonging to it to which the Tribunal agreed and allowed the appeal. It would be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the cheque and stamp purchase transaction referred to annexure A 29 page 66 are in respect of the property purchased by Inmon Buildcon P. Ltd., there is no basis for sustaining the addition in respect of alleged cash transactions referred to in the Annexure A 29 page 66 in the hands of the assessee. The Ld. AR also reiterated that the assessee has not purchased any property during the year under reference or in subsequent years and in support he has made available the copy of the audit balance sheet at page Nos. 16 to 21 of the paper book. Further submissions of the assessee also remained that in respect of addition of ₹ 30,04,559/- made by the AO during the year under consideration referred to in the said annexure, the transactions were duly recorded in the books of accounts and correctness of the same were duly verified by the AO during the course of assessment proceedings and there is no case of any dispute or adverse inference in respect of the same. The submission of the assessee also remained that there is no direct or indirect nexus between the assessee and Inmon Buildcon P Ltd. nor is there any common director or share holding. In absence of rebuttal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. the assessee to be made to various parties finding mentioned on impugned page No. 66 (A-29) or that the action qua the taxability of these very payments in hands of Inmon Buildcon (P) Ltd. does not become conclusive. In the letter dated 27.2.2006 by the assessee company to Inmon Buildcon Ltd. it has been stated that initially the payment of ₹ 30,04,559/- was made by the assesee on behalf of the Inmon Buildcon (P) Ltd. and thereafter reimbursement of the advances given by the assessee out of own funds was claimed. This letter goes to establish that like the payment of ₹ 30,04,559/- cash payment as recorded on page No. 66 of the annexure 29 of ₹ 4.84 crores was also initially made to various parties by the assesee and when it was so, this payment which might have been claimed as reimbursement from Inmon Buildcon (P) Ltd. was necessarily required to be considered in the hands of the assessee and it was the assessee to explain the sources of this cash payment. We do not find substance in the submissions of the Ld. CIT(DR) in absence of evidence in support especially in a case of search where onus is heavy on the AO to establish that the documents seized not from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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