TMI Blog2020 (3) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase consideration -There was no material available with the revenue suggesting that there was any payment of cash made by the assessee to the concerned parties as discussed above. It is also pertinent to note that the AO during the assessment proceedings has not verified the veracity of the impugned draft deed from the parties namely Laxmanji Son, Bhagvatiji and Vikramji. As such the land in dispute was purchased by the assessee from the other parties namely Shri Sanjay Jayntilal Patel, Dhirajbhai Bharatkumar Patel and Urmilbhai Gandhibhai Patel. Thus in our considered view there cannot be any addition based on such draft deed in the hands of the assessee in the given facts and circumstances. In view of the above, we are not convinced with the finding of the authorities below. Accordingly, we set aside the finding of the learned CIT (A) and direct the AO to the addition made by him. Hence the ground of appeal of the assessee is allowed. Unexplained investment in jewellery - Assessee has declared sufficient income in her income tax return for the year under consideration. Therefore, the amount of investment in the jewellery, being a meager amount, can be easily explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming the addition of ₹ 1,82,49,065/- as unaccounted profit in respect of land transactions. 3.2 The Ld.CIT(A) has grievously erred in law and on facts in holding that the appellant had failed to produce documents in respect of purchase and sale of land. 3.3 The Ld.ClT(A) has grievously erred in law and on facts in holding that there was unaccounted profit of ₹ 5,47,47,196/- in respect of lands at Sarkhej Village with appellant's 1/3 share at ₹ 1,82,49,065/- and the diversion to the books of RJD Impex Pvt. Ltd. was a sham transaction as well as explain satisfactorily the impugned amount as well as make request for admission of additional evidence. It is, therefore, prayed that the addition of ₹ 1,82,49,065/-and validity u/s.153A(1) upheld by the CIT(A) may kindly be deleted. 3. The preliminary issue to be decided in this appeal is as to whether in respect of unabated assessments (no pending proceedings) as on the date of search, the AO could frame the search assessment u/s 153A of the Act by making additions without any incriminating materials found during the course of search. 4. The brief facts appearing in this case are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival contentions. We find that it would be necessary to address the preliminary issue, whether assessment could be framed u/s 153A of the Act in respect of concluded proceeding without the existence of any incriminating materials found during the course of the search. The scheme of the Act provides for abatement of pending proceedings as on date of search. It is not in dispute that the assessment year under consideration falls under the ambit of unabated assessment as on the date of search. There is no differentiation as found in the intent of the legislature to differentiate whether the assessments were originally framed u/s 143(1) or 143(3) or 147 of the Act. As such we note that the addition made by the AO based on the search proceedings represents the items of the regular assessments being income from the sale of the land bearing survey Nos. 522/3, 520, 523, 525 and 526 along with Shri Rajeshbhai Jivraj Desai and Rameshbhai Jivraj Desai located at Sarkhej Village, Ahmedabad which was disclosed in the income tax return. Therefore, if any incriminating material is not found during the course of search related to the concluded assessment year, the Act does not confer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider the issues raised on merits in the proposed questions becomes academic. 12. We also place reliance on the judgment of Hon ble Gujarat High Court in the case of Principal Commissioner of Income Tax vs. M/s. Saumya Construction Pvt. Ltd. reported in 387 ITR 529 has decided the issue in favor of the assessee by observing as under: 16. Section 153A bears the heading Assessment in case of search or requisition . It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Rajnibhai Jivraj Desai In IT(SS)A No. 106/AHD/2017 for A.Y. 2011-12, the Grounds of appeal raised by the assessee are as follows: 1.1 The order passed u/s.250 on 27.01.2017 for A.Y.2011-12 by CIT(A)-7, Abad upholding the validity of proceedings u/s.153A of the Act as well as alleged suppressed purchase price of ₹ 1,41,12,238/- in respect of lands at village: Makarba and addition of ₹ 48,793/- in respect of loose papers is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned additions. 2.1 The Ld.CIT(A) has grievously erred in law and on facts in confirming the validity of proceedings as well as notice u/s.153A dated 19.11.2013 for A.Y.2011- 12, though the conditions precedents were not fulfilled. Therefore, the notice as well as proceedings u/s.153A(1) were wholly illegal and unlawful in view of no incriminating material found during the course of search for this year. 2.2 That in the facts and circumstances of the case as well as in law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. The assessee had originally filed his return of income for the year under consideration under section 139 of the Act dated 25-09-2011 declaring total income of ₹ 4,59,64,640/- The time limit for the issuance of notice under section 143(2) of the Act for the scrutiny assessment was up-to 30-9-2012 but no such notice was issued upon the assessee. Thus as on the date of search i.e. 03.01.2013, the assessment year under consideration became unabated. The 1st issue arises for our consideration whether the assessment in dispute can be considered as unabated in the given facts and circumstances. The answer stands in favour of the assessee. It is because the time permitted under the statute for selecting the case under scrutiny was up to 30 September 2012 but there was no notice issued for the scrutiny assessment. In this regard we find support and guidance from the order of Kolkata Tribunal in the case of Krishna Kumar Singhania Vs. DCIT reported in 88 taxmann.com 259 wherein it was held as under: Hence now the only issue which is left to be addressed is the preliminary issue of whether the addition could be framed under section 153A in respect of a concluded proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the search is dump document and therefore the same cannot be relied upon. 23. It is also pertinent to note that the AO during the assessment proceedings has not verified the veracity of the impugned draft deed from the parties namely Laxmanji Punaji Thakor, Bhagvatiji Punaji Thakor and Vikramji. Punaji Thakor but used the same for the impugned addition in the hands of the assessee. As such, we are of the view that the contents of the deed cannot be relied upon by the AO until and unless the same is verified from the parties involved therein. In this respect, we would like to discuss the judgment passed by the Hon ble Delhi High Court in the matter of CIT, C-1-vs-Vatika Landbase Pvt. Ltd reported in 67 taxmann.com 372. In that matter, the Assessing Officer did not make any enquiry from the employee or from buyers of flats in respect of actual price paid by them. In that circumstances of the case the impugned addition made merely on the basis of unsigned and undated seized document has been held to be unsustainable in the eye of law. Thus, the proposition made by the revenue towards making addition on the basis of the figures mentioned on the said draft deed, thus, cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase the balance lands at ₹ 1,55,41,000/- . As such the rate per square meter comes at ₹ 4,800.00 only. 32. In view of the above, the AO was of the view that the assessee has purchased the land from Shri Shabbir Qureshi and from Sanjay Jayntilal Patel others at a price of ₹ 5,65,21,514/- which was not disclosed in the books of accounts. Accordingly the AO treated such amount as suppressed purchase consideration for ₹ 1,41,12.238/- and added to the total income of the assessee. 33. Aggrieved assessee preferred an appeal to the learned CIT (A) was confirmed the order of the AO by observing as under: 6.1 After a careful perusal of the A.O's observation and finding in the assessment order and the various submissions made by the appellant, which have also been reproduced above, I am inclined to agree with the decision taken by the A.O. During appellate proceedings, the appellant has merely stated that since no incriminating material was found during the search, the impugned addition could I' not have been made. However, this contention of the A.O cannot be accepted as it is factually | incorrect. It is on the basis of a draft sale deed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aft deed in the hands of the assessee in the given facts and circumstances. In view of the above, we are not convinced with the finding of the authorities below. Accordingly, we set aside the finding of the learned CIT (A) and direct the AO to the addition made by him. Hence the ground of appeal of the assessee is allowed. 38. The 3rd issue raised by the assessee in ground number 4 is that the learned CIT (A) erred in confirming the addition of ₹ 48,793 on account of unexplained investment in jewellery. 39. The AO during the assessment proceedings based on some retail invoice found that the assessee has purchased jewellery amounting to ₹ 48,793/-. But the assessee failed to justify the source of cash for the purchase of the jewellery. The AO further observed that the assessee has neither filed wealth tax nor shown the jewellery in books of account. Accordingly the AO added the same to income of the assessee u/s 69B of the Act, in absence of satisfactory explanation. 40. Aggrieved assessee carried the matter before learned CIT (A) who confirmed the order of the AO. 41. Being aggrieved by the order of the learned CIT (A) assessee is n appeal before us. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- as unaccounted profit in respect of land transactions. 3.2 The Ld.CIT(A) has grievously erred in law and on facts in holding that the appellant had failed to produce documents in respect of purchase and sale of land. 3.3 The Ld.CIT(A) has grievously erred in law and on facts in holding that there was unaccounted profit of ₹ 5,47,47,196/- in respect of lands at Sarkhej Village with appellant's 1/3 share at ₹ 1,82,49,065/- and the diversion to the books of RJD Impex Pvt. Ltd. was a sham transaction as well as explain satisfactorily the impugned amount as well as make request for admission of additional evidence. It is, therefore, prayed that the addition of ₹ 1,82,49,065/-and validity u/s.153A(1) upheld by the CIT(A) may kindly be deleted. 47. At the outset we note that the technical issue raised by the assessee in ground 1 2 challenging the validity of the assessment framed under section 153A of the Act is identical to the issue raised in the case of Shri Rajnibhai Jivraj Desai in ITA No. 104/AHD/2017 which has been decided by us in favour of the assessee vide paragraph No.14 15 of this order. For the detail discussion please refer th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove and respectfully following the order as discussed aforesaid and to maintain parity with the findings, we dismiss the grounds of appeal of the Revenue without going into the merit of the case. 52. In the result the appeal of the Revenue is dismissed. 53. In IT(SS)A No. 108/AHD/2017 for A.Y. 2009-10, the Grounds of appeal raised by the Assessee are as follows: 1.1 The order passed u/s.250 on 26.12.2016 for A.Y.2009-10 by CIT(A)-7, Abad upholding the validity of proceedings u/s.153A of the Act as well as the addition of ₹ 3,83,40,000/-as unaccounted profit in respect of land transactions 6t bad debts of ₹ 94,14,513/-is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned addition. 2.1 The Ld.CIT(A) has grievously erred in law and on facts in confirming the validity of proceedings as well as notice u/s.153A dated 19.11.2013 for A.Y.2009- 10, though the conditions precedents were not fulfilled. Therefore, the notice as well as proceedings u/s.153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hai Jivraj Desai In IT(SS)A No. 110/AHD/2017 for A.Y. 2008-09, the Grounds of appeal raised by the assessee are as follows: 1.1 The order passed u/s.250 on 27.12.2016 for A.Y.2008-09 by CIT(A)-7, Abad upholding the validity of proceedings u/s.153A of the Act as well as the addition of ₹ 1,82,49,065/- as unaccounted profit in respect of land transactions is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned addition. 2.1 The Ld.CIT(A) has grievously erred in law and on facts in confirming the validity of proceedings as well as notice u/s.153A dated 19.11.2013 for A.Y.2008- 09, though the conditions precedents were not fulfilled. Therefore, the notice as well as proceedings u/s.153A(1) were wholly illegal and unlawful in view of no incriminating material found during the course of search for this year. 2.2 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld the validity of proceedings as well as noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as notice u/s.153A dated 19.11.2013 for A.Y.2009- 10, though the conditions precedents were not fulfilled. Therefore, the notice as well as proceedings u/s.153A(1) were wholly illegal and unlawful in view of no incriminating material found during the course of search for this year. 2.3 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld the validity of proceedings as well as notice u/s.153A dated 19.11.2013 for A.Y.2009-10. 3.1 The Ld.CIT(A) has grievously erred in law and on facts in confirming the addition of ₹ 5,35,63,900/-as unaccounted profit in respect of land transactionswithRs.M/s Raj Corporation as unaccounted profit in respect of land transactions. 3.2 The Ld.CIT(A) has grievously erred in law and on facts in holding that the appellant had failed to produce documents in respect of purchase and sale of land. 3.3 The Ld.CIT(A) has grievously erred in law and on facts in holding that there was unaccounted profit of ₹ 5,35,63,900/- in respect of lands at TragadVillage which was the diversion to the books of RJD Impex Pvt. Ltd.( correct is M/s Raj Corporation) was a sham transaction a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arba. 3.2 The Ld.CIT(A) has grievously erred in law and on facts in holding that the appellant had failed to produce documents in respect of purchase and sale of land. 3.3 The Ld.CIT(A) has grievously erred in law and on facts in holding that there was suppressed purchase price of ₹ 1,41,12,238/- in respect of lands at village: Makarba. It is, therefore, prayed that the addition of ₹ 1,41,12, 238/-and validity u/s.153A(1) upheld by the CIT(A) may kindly be deleted. 63. At the outset we note that the identical issued raised in the case of Shri Rajnibhai Jivraj Desai in ITA No. 106/AHD/2017 which has been decided by us in favour of the assessee vide paragraph No. 20 to 24 and 37 of this order. For the detail discussion please refer the relevant paragraph as discussed above. Therefore respectfully following the same and to maintain parity with the findings, we allow the technical ground raised by the assessee in his favour without going into the merit of the case. 64. In the result the appeal of the assessee is allowed. 65. In the combined result, in IT(SS)A No. 104/Ahd/2017 Assessee s appeal is partly allowed, IT(SS)A No. 106/Ahd/2017 Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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