TMI Blog2007 (4) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Dr. M.C. Gupta, but neither during the course of search nor even thereafter the Department has tried to record his statement to substantiate their stand that document was belonging to any of the companies in whose hands the addition was made. This document indicated transaction in respect of 3 big has of land, alleged to be purchased from three persons, but in the books of none of the assessees there was any such transaction for 3 bighas, so as to corroborate the same with seized document. Furthermore, the Department itself has carried out the valuation of the land shown by the assessee in their regular returns, by its own valuation cell, which has also valued the same near to the price at which these were shown by the assessee in their books of account. The registering authorities have also registered the land purchased by the assessee at the price shown in the sale deed. Thus, neither the State Government being the registering authorities supports the value taken by the AO on the basis of dumb document, nor the valuation cell of the IT Department itself supports the rate of land shown in the document so found. Applying the propositions laid down by the various authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. in computing the total cost of land purchased at Chawla by holding that the same have not been shown in the return but paid as per seized document without appreciating the fact the amount incurred by the appellant on the stamp duty etc. amounting to Rs. 2,59,185 at the time of purchase of land at Chawla includes the actual amount paid for commission, mutation charges, NOC charges etc. Therefore, addition of Rs. 50,000 made by the AO as unexplained investment in land is liable to be fully deleted. 4. On the facts and in the circumstances of the case, the AO had no jurisdiction to pass an assessment order under s. 158BD of the IT Act, 1961, since no search had taken place in the case of the appellant and satisfaction as required by s. 158BD of IT Act, 1961 had not been recorded. The order of AO being without jurisdiction requires to be cancelled on this ground. 5. On the facts and in the circumstances of the case, the AO has erred in initiating penalty proceedings under s. 158BFA(2) of IT Act, 1961. The same is liable to be dropped. 6. The CIT(A) has erred in law in confirming the addition made on account of purchase of land at Village Chawla. The transaction was done at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act, 1961, since no search had taken place in the case of the appellant and satisfaction as required by s. 158BD of IT Act, 1961 had not been recorded. The order of AO being without jurisdiction requires to be cancelled on this ground. 5. On the facts and in the circumstances of the case, the AO has erred in initiating penalty proceedings under s. 158BFA(2) of IT Act, 1961. The same is liable to be dropped. 6. The CIT(A) has erred in law in confirming the addition made on account of purchase of land at Village Chawla. The transaction was done at arm's length at prevailing prices at the time of purchase and copy of lease deed executed in the same locality at these prices had also been furnished. 7. A document seized at the time of search could not form the basis for forming opinion on cost of purchase which had taken place a few years back. 8. The circle rates of these properties even now are at much lower rates. 9. The appellant craves leave to amend, modify or alter any of the (grounds of) appeal stated above either before or at the time of hearing of the appeal. Grounds in IT(SS)A No. 345/Del/2005: 1. On the facts and in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of lease deed executed in the same locality at these prices had also been furnished. 7. A document seized at the time of search could not form the basis for forming opinion on cost of purchase which had taken place a few years back. 8. The circle rates of these properties even now are at much lower rates. 9. The appellant craves leave to amend, modify or alter any of the grounds of appeal stated above either before or at the time of hearing of the appeal. Rival contentions have been heard and record perused. In all these appeals, grounds are common and the additions have. been made while framing assessment under s. 158BD r/w s. 158BC, on the basis of very same document marked as Annex. AD-46. We have, therefore, heard all the appeals together and are now disposing the same by this consolidated order for the sake of convenience and brevity. Facts in brief are that the search action under s. 132 of the IT Act, 1961 was carried out on 14th Feb., 2001 at various premises pertaining to companies belonging to Usha Group promoted by Shri Anil Rai and Shri Vinay Rai. During the course of search number of loose documents were found and seized, few of which also pertain to as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany was asked to show-cause as to why the difference between Rs. 20 lakhs per acre, the acquisition price as shown on seized document and the acquisition price per acre as shown by the assessee company in the IT returns should not be added as unexplained investment for the block period. 3. The assessee filed its reply vide letter dated 17 th May, 2004 and it was contended that the document was seized during the course of search of a third party. Also, the document is neither signed nor dated and no name is mentioned on this document. Therefore, the noting made on this document cannot in anyway be related to the assessee company. Also, it was submitted that it is not known as to what does P.A as mentioned on the seized document stands for. The legal presumption under s. 132(4A) of the IT Act, 1961 regarding the document/books of account, etc. found during the course of search is available against the person in whose possession or control such documents were found during the course of search. Since the document was found during the course of search at premises A-41, MCIE, Badarpur, New Delhi, therefore, it cannot be presumed that the document belongs to the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal and the Hon'ble High Court as contained in the paper book placed on the record. 8. On the other hand, learned CIT (Departmental Representative), Shri L.M. Pandey, contended that during the course of search at Usha Group of companies, in the premises situated at A-41, MCIE, Badarpur, which Was used as a corporate office of Usha Group, where corporate office of all the concerns of Usha group were located, this important document marked as Annex. AD-46 was found. Furthermore, this document was seized from the office of Dr. M.C. Gupta, who was looking after the real estate division of the group, the importance of this document cannot be underestimated. As per learned Departmental Representative, this seized document clearly indicates the prevailing market rate of land situated at Village Chawla and a further bifurcation has been done with reference to the amount at which registration is to be done and entry to be made in the books of account, vis-a-vis the amount which was paid in cash over and above the value recorded in books of account. As per the learned Departmental Representative, the entire document is to be considered and it is a well known fact that in real estate b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter the question of gathering any material information would arise based on search inquiry/material. The undisputed facts in the instant case are also that the document so found during the course of search marked as Annex. AD-46, on the basis of which addition was made by the AO, was neither signed nor dated, on this document no name was mentioned so as to relate the same to some person. It was also not known as to who had written or prepared the said document. As per provisions of s. 158BD, where the AO is satisfied that any undisclosed income belongs to any person other than a person with respect to whom search was made, their the document seized shall be handed over to the AO having jurisdiction over such other person for proceeding against such other person. Thus, prima facie, the AO is required to be satisfied with the document found during search as belonging to some other person. Unless the name of such other person is noted on the document so found and seized, or any noting is found on such document which can reasonably be co-related with such other person, such dumb document cannot be made the basis for making addition in the hands of such other person under s. 158BD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o extra stamp duty was imposed while registering the land on the plea of higher value than the value at which land was actually purchased as per sale deed entered between the assessee and owner of land. Valuation cell of the IT Department is entrusted with the responsibility to find out fair market value of capital asset, as and when any reference is made by the AO. AO may refer the valuations of capital asset to a Valuation Officer when he finds that the value of the asset as claimed by the assessee is less than fair market value. In the instant case to find out the fair market value of land, so as to co-relate the same with the rate of land stated in the document so found, the AO had referred the matter to its valuation cell, however instead of supporting the AO's allegation, the Valuation Officer indicated the fair market value of land at the price recorded by the assessee in its books of account, that was the reason that AO did not give copy of such valuation report, in spite of written request of the assessee. The assessee vide its letter dated. 17 th May, 2004, asked the AO to give copy of valuation report, however the AO declined to give copy of valuation report prepare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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