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TMI Blog2017 (5) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of disallowance of payment of sinking funds; Rs. 29,73,830 on account of disallowance of maintenance security and Rs. 65,70,747 on account of disallowance of commission. 3. The background facts are that the Assessee filed her return of income for the AY in question on 2nd August, 2010 declaring an income of Rs. 2,20,19,780 under the heads income from house property, short terms capitals gains and income from other sources. The assessment for the AY in question was completed under Section 143(3) of the Act with the AO passing an assessment order dated 29th December, 2011 at a total income of Rs. 21,22,88,069 against the return income of Rs. 2,20,19,780. 4. On 19th June, 2009, a search and seizure operation was undertaken in terms of Section 132 of the Act on the premises of Mr. Lalit Modi, a real estate broker. During the course of the search at his premises at L-48, Lajpat Nagar-II, New Delhi a document described as Annexure A-1 was found. The said document which is computer-generated, reads as under: 5. The aforementioned document dated 18th May, 2009 contained the name of the Assessee showing the area in the Vasant Square Mall as 39561.06 sq.ft. with the 'ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; Annexure No. Page No. of Annexure Brief description of documents Person to whom the document belongs Ann A-1 5 These papers contain detail of transaction entered in by Smt. Vinita Chaurasia for acquisition of property at Vasant Square Mall. Smt. Vinita Chaurasia 2. On the basis of document found and seized enquiries were conducted during the course of post search proceedings and it has come to notice that the property was acquired by the Assessee for a consideration of Rs. 32,85,37,3541 out of which only Rs. 16,42,68,832 has been paid by cheque and recorded in books of accounts by the buyer as well as seller. Apart from the above certain other payments representing Sinking Fund, Maintenance Security, Freehold charges and commission etc. have been paid by the Assessee. As such amount of Rs. 19,02,68,289 is required to be assessed in the hands of Assessee as undisclosed investment on the basis of entries mentioned on seized documents. 3. In view of the facts stated above, it is evident that documents belonging to the Assessee have been seized from a person covered under search u/S 132 of the I.T. Act, 1961. Hence, proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the notice for enhancement was issued." 10. The net result was that there was an enhancement of the assessable income by of the Assessee by Rs. 5,50,72,700. 11. Both the Revenue and the Assessee filed appeals before the ITAT which came to be disposed of by the impugned order. Interestingly it may be also mentioned that Revenue's appeal in the case of Mr. Lalit Modi was also heard along with these two appeals. The Revenue's appeals were dismissed and the Assessee's appeal was allowed. 12. The ITAT held that the initiation of proceedings against the assessment under Section 153C was bad in law. It also proceeded to discuss the merits of the additions made by the AO and the CIT (A) and found them to be unsustainable in law. 13. It may be mentioned at the outset that as far as the dismissal of the Revenue's appeal by the ITAT in the case of Mr. Lalit Modi is concerned, the Revenue filed ITA No. 992/2015 in this Court which was dismissed by an order dated 16th August, 2016. The very same document which has been relied upon by the Revenue in the case of the present Assessee was discussed by the Division Bench ('DB') in the aforementioned order. The order of the ITAT was upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order. Question No. 25 posed to Mr Modi and his answer thereto reads as under: "Q.25. I am showing you page no. 5 to 8 of Annexure A-1, please explain the contents. Ans: Pages no. 5 to 8 are rough planning on page 5 proposal from Vasant Square Mall for sale was received and the deal did not materialise through me." 18. The above statement was made in the course of the search. In the assessment proceedings in the case of Suncity Project Ltd. allegedly involving Mr. Lalit Modi, a specific question was put to him and his answer thereto was recorded on oath on 15th March, 2013 under Section 131 of the Act reads as under: "Q.3. During the course of search proceedings at your residence at L-48, Lajpat Nagar-II, New Delhi, loose papers were found and seized vide annexure A-1. I am showing you page No.5 of the said Annexure A-1. Kindly explain the transactions mentioned in it. Ans. The Chaurasia family is known to me. At the time of execution of sale deed in favour of Mrs. Vinita Chaurasia by M/s Suncity Projects Ltd. in respect of commercial space purchased in Vasant Square Mall, I was present as a witness and signed on the documents Conveying titles as a witness before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he is Director." It is on the basis of the above facts that this Court rejected the Assessee's contention that the said documents could not be said to belong to the Assessee. 22. As regards the decision in Principal Commissioner of Income Tax (Central)-2 v. Nau Nidh Overseas Pvt. Ltd. (supra), the searched person Mr. Jatinder Pal Singh, was one of the Directors of the Assessee. As noted by the Court in the course of the search, he clearly stated that some cash seized in those transactions belonged to the Assessee. 23. In Principal Commissioner of Income Tax, Circle-II v. Satkar Fincap (supra), again, this Court noted in para 4 of its order that "during the course of hearing it was suggested to the Respondent/Assessee through its counsel that having regard to the categorical statement in a note that "During the course of search &seizure documents/papers page 1to 31 of Annexure A-28 seized by Party R-2, Annexures A-56, A-57 and A-58 seized by party 04 are found to belong to of M/s Satkar Fincap Ld., (), Ramdutt Enclave, Uttam Nagar, New Delhi. I have examined the above mentioned documents/papers and provision of section 153 C is invokable in this case", the ITAT's findings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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