TMI Blog2017 (7) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Additional Solicitor General that we can pass a different order and entertain these Appeals for the current year of the search, namely, the Assessment Year 2009-10. That was based on the argument that the action under Section 153C for this year is an incorrect conclusion. All the earlier orders in these Appeals having being noted by us, we have no hesitation in concluding that despite sufficient opportunity being given to the Revenue, it has not been able to satisfy this Court that a different view can be taken. - Income Tax Appeal No. 72 of 2014, Income Tax Appeal No. 114, 122, 124, 225, 226, 423, 425, 426 of 2014 - - - Dated:- 23-6-2017 - S. C. Dharmadhikari And Prakash D. Naik, JJ. For the Petitioner : Mr. Anil Singh, Additional Solicitor General, a/w Mr. Ashok Kotangle, Ms. Geetika Gandhi, Ms. Padma Divakar and Mr. ArunNagarjun Mr. Ashok Kotangle a/w Ms. Padma Divakar and Mr. Arun Nagarjun For the Respondents : Mr. Nitesh Joshi a/w Mr. Raj Darak Mr. R. Murlidharan a/w Mr. Raj Darak JUDGMENT Per Court 1. These Appeals by the Revenue challenge the order passed by the Income Tax Appellate Tribunal, Mumbai in Income Tax Appeal No. 8228/Mum/2011. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for all the Assessment Years. On 7th December, 2010, a show cause notice was issued to the assessee informing that ₹ 38.45 crores, which is a sum reflected from the documents seized from Dilip Dherai's residence, and ₹ 4 crores in addition, which is evidenced by loose documents in the form of cash receipts, were found during search and seizure proceedings. The assessee was called upon to explain and show cause as to how these amounts should not be treated as 'unexplained expenditure' under Section 69C of the IT Act, since the assessee did not provide any explanation with regard to the documents seized under Section 132 of the said Act for the Assessment Years from 2003 to 2009 and for 2009-10. The Assessment Order was passed and additions were made. The amount of unexplained expenditure was apportioned to all the land companies floated by Jai Corp Group who had purchased land in these villages in ratio of the cost of land purchased up to 28th November, 2008. This Assessment Order was passed on 29th December, 2010 and was upheld by the Commissioner of Income Tax (Appeals) on 28th October, 2011. He held that the Assessing Officer had rightly issued notice unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich arises for consideration in these Appeals. The Appeals deserve to be dismissed. 9. With the assistance of the learned counsel appearing for both sides, we have perused the memo of Appeals and the common order of the Tribunal. From the questions proposed, it is clear that the essential argument of the Revenue is that it was justified in making the additions under Section 69C of the IT Act. By the present Appeals, an attempt was made to challenge the common order dated 22nd March, 2013. When these Appeals were placed before a Division Bench of this Court on 27th June, 2016, the Division Bench passed the following order : 1. These Appeals under Section 260A of the Income Tax Act, 1961 (the Act) challenge the common order dated 22nd March, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). 2. We find that the common impugned order disposed of the appeals in favour of the respondent-assessee (who were Apellants before it) on the following two grounds: (a) The Assessing Officer does not have jurisdiction to pass the assessment order in view of Section 153C of the Act not being satisfied; and (b) There is no warrant to add the alleged cash payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences relating to unaccounted cash transactions, and failing to lift the corporate veil in the present case and see the facts in their proper perspective? There is no specific question raised with regard to the impugned order being wrong/incorrect in holding that the Assessing Officer did not have jurisdiction to proceed under Section 153C of the Act. Moreover we also notice that no ground is urged in the memo of appeal with regard to the issue of jurisdiction. 4. In view of the fact that no specific grievance had been made by the revenue with regard to the finding of the Tribunal on applicability of Section 153C of the Act, the other questions raised and urged before us becomes academic. However, we are not certain that the revenue has taken an informed decision to not challenge the finding in the impugned order of the Tribunal with regard to Section 153C of the Act. The counsel for the Revenue was also not certain, when specifically asked. If the decision not to challenge the issues of jurisdiction was informed we are unable to understand why all these appeals were filed to raise academic issues. 5. It may be pointed out that after the appeal was argued for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by us in our order dated 23rd June, 2016. 3. Mr. Kotangle has also tendered a copy of the file noting date 23rd July, 2013 maintained by the Income Tax Department containing record of the notes of Income Tax Officers leading to the filing of the present appeal. Both affidavit dated 25th July, 2016 as well as the file notes dated 23rd July, 2013 tendered by Mr. Kotangle are taken on record. 4. The Revenue is directed to file a detailed affidavit addressing the issues raised in our order dated 27th June, 2016 duly supported by evidence. 5. These appeals are adjourned to 9th August, 2016. 11. The matter was then placed on 11th and 25th August, 2016 on which date the learned Additional Solicitor General was requested to appear. 12. On 14th September, 2016, the Revenue's Advocate sought adjournment. However, the Division Bench was most unhappy with the manner in which the Revenue was proceeding with the Appeals and was constrained to pass the following order on 14th September, 2016: Mr. Kotangle, learned Counsel appearing for the Appellant-Revenue seeks one more adjournment. This time the adjournment is sought so as to enable the Revenue to file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress the issues raised. Thereafter, the Revenue has been seeking time on one pretext or other. We grant adjournment of the appeals subject to costs of ₹ 25,000/being paid by the Appellant Commissioner of Income Tax to the Tata Memorial Cancer Hospital on or before 30 September 2016. 6 Appeals are now kept for hearing on 5th October 2016 at the request of the Counsel. It is made clear that on the next occasion, the appeals would be heard only on condition precedent of paying costs of ₹ 25,000/being satisfied. Further it is made clear that no adjournment would be granted on the next occasion and appeals would be heard on the basis of available record. 7 Stand over to 5 October, 2016. 13. Thereafter, the Appeals were placed on 20th October, 2016 and the Division Bench was pleased to pass the following order: 1. On 14th September, 2016, we (Coram : M. S. Sanklecha S. C. Gupte, JJ.) have passed the following order : . Mr. Kotangle, learned Counsel appearing for the AppellantRevenue seeks one more adjournment. This time the adjournment is sought so as to enable the Revenue to file further affidavit in support of its appeals. 2 These app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing time on one pretext or other. We grant adjournment of the appeals subject to costs of ₹ 25,000/being paid by the Appellant Commissioner of Income Tax to the Tata Memorial Cancer Hospital on or before 30 September 2016. 6 Appeals are now kept for hearing on 5th October 2016 at the request of the Counsel. It is made clear that on the next occasion, the appeals would be heard only on condition precedent of paying costs of ₹ 25,000/being satisfied. Further it is made clear that no adjournment would be granted on the next occasion and appeals would be heard on the basis of available record. 7 Stand over to 5 October, 2016. 2. Consequent to the above, the AppellantRevenue has complied with the aforesaid order and paid the cost of ₹ 25,000/to the Tata Memorial Cancer Hospital by 30th September, 2016. 3. Further an affidavit dated 04th October, 2016 of Mr. D.P. Semwal, Principal Commissioner of Income Tax (Central)3, Mumbai21, has been filed. In the affidavit, it is stated that the Appeals relating to the a Assessment Years 200304, 200405, 200506, 200607, 200708 and 200809 do raise a jurisdictional issue as regards applicability of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entertained. 6. In fact we may also record the fact that on 27th June, 2016, when these appeals reached hearing, the Revenue referred to the question raised in the Income Tax Appeal No. 72 of 2014 as being common question in all appeals. 7. On the other hand the learned Additional Solicitor General states that he will be able to satisfy the court that when a question raised is pure a question of law, it is open to the party to raise that question in appeal before the High Court. This, he submits even if it was not urged before the Tribunal. However, time is sought by him to address us on the above issue. 8. In any event, the question is whether in an appeal from the order of the Tribunal could the appellant raise a question before the High Court when it was not urged/raised before the Tribunal. This question would be decided by us while considering the question as now formulated. Therefore, at this stage, we permit the Revenue to amend the Appeal Memos with additional question as raised herein and serve the amended copy upon the Respondent-Assessee on or before 15.11.2016. 9. In view of the above, at the request of the Revenue all these Appeals are adjourned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 254(2) of the Income Tax Act, 1961. At his request, appeals are adjourned to 27th March, 2017. 3 We note that in spite of the fact that appeals were adjourned on 7th February, 2017, the Revenue did not file any application for rectification till 6th March, 2017. If the Revenue is seriously interested in prosecuting rectification application, they ought to have expedited the filing of the application before the Tribunal, with a request to it for early hearing. This is particularly so, as the impugned order on which rectification is sought, is dated 22nd March, 2013. Moreover, these appeals are pending for hearing since 2014 before us and have been adjourned from time to time since 27th June, 2016, when it first reached hearing. 4 In the above view, we do not accept Mr. Kotangle's request that the appeals be adjourned to 1st week of May, 2017. We adjourn the consideration of these appeals to 17th April, 2017. We expect the Revenue to atleast now expedite the hearing of its application for rectification, and obtain orders from the Tribunal, before the next date. 18. When the Appeal was placed thereafter, this Court was repeatedly informed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the assessee because Shri Dilip Dherai is neither a Director nor a shareholder/member nor even an employee of the assessee company. We may mention at this stage that the provisions of the Indian Evidence Act are not strictly applicable to the proceedings under the Income Tax Act, but the broad principles of law of evidence do apply to such proceedings. Further an entry in the books of account maintained in the regular course of business is relevant for the purpose of considering the nature and impact of a transaction, but noting on slip of papers or loose sheet of papers are required to be supported/ corroborated by other evidence. There is also a distinction between loose papers found from the possession of assessee and similar documents found from a third person. In the present case, impugned documents were not found from the possession of the assessee but was found from the possession of a third person i.e. Shri Dilip Dherai. Mere mention of the names of the villages where the companies may have purchased lands would not give any basis to assume/presume/surmise that the name of the companies are mentioned in the impugned documents. The very foundation of Sec. 153C has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the assessee show that the authorized, issued and subscribed paid up capital is at Rs. One lakh and the assessee had not done any business during the year under consideration. With such a small corpus and no business activity, nor any has been brought on record by the Revenue, it is not acceptable that the company may have incurred such huge expenditure outside its books of account. Further in his entire assessment order, the AO himself has pointed out time and again different persons, who are alleged, to have made cash payments. Even on that count, the additions cannot be sustained in the hands of the assessee. In our considerate view, there being no evidence to support the Revenue's case that a huge figure, whatever be its quantum, over and above the figure booked in the records and accounts changed hands between the parties, no addition could therefore be made u/s. 69C of the Act to the income of the assessee. Considering the entire facts brought on record, we have no hesitation to hold that even on merits, no addition could be sustained. 22. We do not think that this case is any different from the one considered by the Division Bench in the case of M/s. Arpit Lan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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