TMI Blog2021 (2) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 10,00,000 was paid as per the agreement, and an amount of ₹ 8,00,000 was deposited in the bank account of the sellers. Similarly, upto 10.12.2010, ₹ 40,00,000 was to be paid and ₹ 37,00,000 was deposited nearing to that date. Further, upto 10.04.2011 ₹ 50,00,000 was to be paid as per the agreement; and ₹ 29,99,000 was deposited on 31.03.2011 and ₹ 24,70,000 was deposited between 15 to 18 April 2011. Similarly, upto 10.08.2011 ₹ 4,03,00,000 was to be paid; and between Aug. and Sept. 2011, all payments were done and sale deed was also registered in the favour of M/s. Agrawal Buildcon. Considering the entirety of the facts, so far as the payments made, the nexus between amount received from M/s. Agrawal Buildcon and payment to Smt. Rekha Bai and others can be established. Since it is proved that the consideration of ₹ 4,03,00,000/- which included both the accounted and unaccounted consideration has been paid by M/s Agrawal Buildcon for the purchase of land in question from the sellers namely Smt. Rekha Bai and others, revenue authorities are free to carry out necessary exercise/ verification in the case of M/s Agrawal Build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mon issues and almost identical facts are involved and as requested by both the parties it is decided to adjudicate the issues raised in these appeals by framing common order for the sake of convenience and brevity. 3. In respect of the quantum appeal, the assessees have raised following grounds of appeal:- IT(SS)A 111/Ind/ 2016 - Pradeep Sharma,A.Y. 2011-12 1. That on the fats and in the circumstances of the case, the impugned order passed by the ld. AO is contrary to law, materially incorrect and unsustainable in law as well as on facts. All the finding and conclusion of the ld. AO are also contrary to the material, opposed to the fact, equity and law. 2. That on the facts and in the circumstances of the case and on law as well the ld. AO has erred and was not justified in invoking the provisions of section 153C of the Income tax Act and thereby in making the assessment on the basis of presumption and assumption and without any corroborative material. 3. That the ld. AO has erred and was not justified in rejecting the claim of deduction u/s. 80IB(10) of the I.T. Act at ₹ 29,76,373/-. He has further erred to interpret the provision of section 80IB (10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt at ₹ 20,00,000/- 11. That at any event, the ld. AO was not justified in not accepting the book results, deduction and prepaid taxes as claimed by the appellant. 12. The AO has erred and was not justified in levying penalty interest u/s. 234-B and further erred in initiating penalty proceeding u/s. 271(1)(c). That the appellant craves leave to add, alter, and amend or to modify any ground(s) on or before the date of hearing. ITA 679/Ind/ 2016 - Pradeep Sharma,A.Y. 2012-13 1. That on the facts and in the circumstances of the case, the impugned order passed by the ld. Lower authorities is contrary to law, materially incorrect and unsustainable in law as well as on facts. All the findings and conclusion of the ld. AO are also contrary to the material, opposed to the facts, equity and law. 2. That on the facts and in the circumstances of the case the ld. Lower authorities have erred and were not justified in invoking the provision of section 153C of the IT Act and thereby making the assessment in the hands of the appellant. The aforesaid action on the part of the ld. Lower authority are bad and visited in law. 3. That the ld. Lower authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to law, materially incorrect and unsustainable in law as well as on facts. All the findings and conclusion of the ld. AO are also contrary to the material, opposed to the facts, equity and law. 2. That on the facts and in the circumstances of the case the ld. Lower authorities have erred and were not justified in invoking the provision of section 148 and 153C of the IT Act and thereby making the assessment in the hands of the appellant. The aforesaid action on the part of the ld. lower authority are bad and visited in law. 3. That on the facts and in the circumstances of the case the Ld. Lower authority were not justified in not accepting the payment made by the appellant after receiving the cash from M/s AgrawalBuildcon. In facts the appellant worked as an agent and therefore has not given any undisclosed amount to the seller of land. 4. That the ld. Lower authorities has erred in making addition of ₹ 1,12,27,401/- in the total income the appellant. The appellant has paid cash part to seller Smt. RekhaBai, Lala Ram and Devi Singh after receiving cash from M/s. AgrawalBuildcon. In facts the appellant worked as an agent and therefore has not given any undisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.09.2013. PB 17. Document referred in satisfaction : PB 96-107 : LPS-3, pg. 62-75 of Panchanama dated 22.10.2011. Khasra, Form P-2, Sale deed between sellers Rekha Bai, Lala Ram, Devi Singh through POA- 1. Shri. Pankaj Makhija 2. Pradeep Sharma 3. ShriPradeek Kumar Hirani And ShriSanjeevAgrawal partner of Agrawal Buildcon (as Buyer) For ₹ 1,76,50,000/- for sale of 1.495 hectares of Land at Katara, PatwariHalka No. 43/ 24 Vikar Khand: Fanda Tehsil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document is found in the possession or control of any person in the course of a search it may be presumed that such document belongs to that person. It is similarly provided in section 292C(1)(i). In other words, whenever a document is found from a person who is being searched, the normal presumption is that the said document belongs to that person. It is for the AO to rebut that presumption and come to a conclusion or satisfaction that the document in fact belongs to somebody else. Section 292C has relevance where a search is conducted on a person. It is submitted that in present case, search was conducted on Sanjeev Agrawal of Agrawal Buildcon. No search was conducted on the assessee. This sale deed (PB 96-107) was found during the search from the possession of Sanjeev Agrawal. Thus, u/s. 292C, the presumption is that the document belongs to Sanjeev Agrawal. Subsequent amendment: - It is a trite law, that to understand the position of law existing prior to amendment, the subsequent amendment may be relevant. By the Finance Act, 2015 w.e.f. 01.06.2015, section 153C(1) was amended. This amendment is clearly applicable from 01.06.2015 and not applicable to the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds belong to in respect of a document as for instance when a given document seized from a person is a copy of the original document. Accordingly, section 153C has been amended so as to provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153 of the Income-tax Act, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing belongs to, or any books of account or documents seized or requisitioned pertain to, or any information contained therein, relates to, any person, other than the person referred to in section 153A of the Income-tax Act, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess income of such other person in accordance with the provisions of section 153A. 39.3 Applicability: This amendment has taken effect from the 1st day of June, 2015. Thus, the intention and the date of applicability of the amendment is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d filter. However, as already mentioned, in each case the extent of satisfaction of the above requirement will depend upon the nature of the documents. 14. Turning to the case at hand, the first document referred to in the satisfaction note of the AO of the searched person is an application made by the assessee for subscription to the shares of DEPL. Being an application for subscription of equity shares, it is a document filled up by the Assessee and submitted to DEPL. The said application having being found in the possession of the searched person should safely be presumed to belong to the searched person by virtue of Section 132(4A) read with section 292C of the Act. DEPL, there is also presumption that it in fact belongs to DEPL. This is a rebuttable presumption. But rebuttable at the instance of the searched person. 15. The presumption operates in favour of the Department by relieving it of the burden of having to demonstrate that the aforementioned document belongs to the DEPL. But here the Department seeks to be relieved of the burden of demonstrating that the said document in fact does not belong to DEPL but to the assessee. That is not possible on a collecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, it is not open to the Revenue to seek to point out that the document in question, pertains to or relates to the assessee. SLP against same was dismissed in SLP (C) Diary No. 27566 of 2018 (v) Pr. CIT vs Index Securities 304 CTR 67 (Del.): 157 DTR 20 (Del.) Search and Seizure Assessment under s. 153C Incriminating material belonging to the assessee Essential jurisdictional requirement for assumption of jurisdiction under s. 153C (as it stood prior to its amendment w.e.f. 1st June 2015) qua the other person (in this case the assessee) is that the seized documents forming the basis of the satisfaction note must not merely pertain to the other person but must belong to the other person . (vi) Anil kumar Gopikishan Agrawal (2020) 186 DTR 273 (Guj.) Discussing the provision prior to 2015 and subsequently, an interesting issue arose whether if the search is conducted before 01.06.2015 but the satisfaction is recorded subsequent to 01.06.2015, whether the old law will apply or new. It was held that the old law will apply as the document which is relevant, is that found during the search. Subsequent document found in assessment of person searched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounted for; therefore it cannot be said that any incriminating material was found during the course of search and seizure. 8. On the other hand, Ld. CIT(DR) supported the proceedings u/s. 153C and contended that during the course of search, a sale deed was found wherein the name of the assessee was mentioned as attorney holder for the seller Smt. Rekha Bai, Lala Ram and Devi Singh. The sale deed therefore clearly belonged to the assessee who acted as a seller in the transaction. He further referred to the Assessment order and contended that the during the course of assessment, assessee objected to the proceedings u/s. 153C vide letter dated 30.10.2013. Ld. AO after considering all the facts had already rejected the objections of the assessee vide his order dated 14.11.2013. Further, he relied on the order of Ld. CIT(A) who has also held the proceedings u/s. 153C to be valid. 9. We have considered the facts of the case, material on record, arguments of both the parties and the case laws relied on. The facts of the case are that during the course of search at the premises of Sagar Group , a sale deed was found marked as LPS-3 page no. 62 to 75. As per the sale deed, 1.495 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A. 11. On bare perusal of the aforesaid sections it is clear that prior to the amendment, jurisdiction u/s. 153C could be exercised if the AO was satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A. It was only w.e.f. 01.06.2015 that section 153C(1) was amended to provide that jurisdiction would be available where the AO is satisfied that (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A. Thus, the scope of section 153C(1) underwent a change w.e.f. 01.06.2015. Prior to that, the jurisdiction u/s. 153C was available only if the assets as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Discussing the provision prior to 2015 and subsequently, an interesting issue arose whether if the search is conducted before 01.06.2015 but the satisfaction is recorded subsequent to 01.06.2015, whether the old law will apply or new. It was held that the old law will apply as the document which is relevant, is that found during the search. Subsequent document found in assessment of person searched or found in post search inquiries would not be relevant. Since the old law will apply, department cannot claim that the document related to or pertained to the assessee; and they have to establish that the document belongs to the assessee. In Anil Kumar s case, the hard disk was found which contained information relating to the assessee. It was held that the hard disk was not belonging to the assessee, hence the essential jurisdiction requirement u/s. 153C did not exist. It was only on 1st June 2015 when the amended provisions came into force that the AO of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the assessee. 14. In these given facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011. In her statement, Smt. Rekha Bai stated that an agreement dated 27.11.2010 was entered into between Shri Lala Ram, Shri Devi Singh and Smt. Rekha Bai with Shri Laxmichand Hirani and Pradeep Sharma for sale of this 3.69 acres of land. As per this agreement, the consideration was ₹ 5,03,68,500/- whereby the payment was to be made as under:- 1) ₹ 10,00,000 was paid on date of agreement. 2) ₹ 40,00,000 was to be paid upto 10.12.2010. 3) ₹ 50,00,000 was to be paid upto₹ 10.04.2011. 4) ₹ 4,03,68,500 was to be paid upto 10.08.2011. Further, if the approval from Town and Country Planning could not be done, the seller shall be liable to refund the amount to the buyer. Seller shall be required to sign documents, as required, so that the approval of Town and Country Planning may be obtained by the buyers. 20. During her statement, Smt. Rekha Bai further stated that the following amount was received and used as under: Particular Devi Singh Rekha Bai Lalaram Total Amount Received (In Rs. Amount received by cheque against the sale of agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,50,000/- 13/08/2011 9,50,000/- 01/09/2011 Total 1,56,19,000/- 22. Another pertinent fact is that, during assessment, the assessee in a letter filed on 16/12/2013 accepted that the actual consideration for purchase of the land was ₹ 5,03,68,500/-. Assessee further contended that the land was in fact sold for ₹ 5,30,30,000/- to M/s. Agrawal Buildcon, against the consideration mentioned in the sale deed for ₹ 1,76,50,000. Assessee contended that assessee had only given ₹ 10,00,000/- to Smt. Rekhabai and others from own sources at the time of agreement on 27/11/2010 and balance was paid out of the amount received from M/s. Agrawal Buildcon. Further, assessee offered an amount of ₹ 26,61,500/- (₹ 5,30,30,000 ₹ 5,03,68,500) as income brokerage income from the transaction. Since the share of Pradeep Sharma in the land deal was 40%, he offered ₹ 10,52,600 as his income. Infact, later on statement on oath were recorded of Pradeep Sharma and Pradeep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , further establishes the nexus that only agreement was done on 27.11.2010 but the entire payment was made only in Aug. and Sept. 2011 after receiving the amount from M/s. Agrawal Buildcon. Ld. Counsel for the assessee submitted that the assessee had no intention to hold that land. No registry was done in the favour of the assessee. Land was not diverted by the assessee. The assessee is a builder, and had he intended to purchase the land by his own funds, he would have purchased the land, registered in his name, and developed it and earned substantially. But the same was not done, as the assessee intended to pocket immediately by getting involved in the land transaction. Ld. Counsel for the assessee submitted that the department could not establish by any evidence whatsoever that payment was made from any other income of the assessee. If the payment was not made out of the amount received from M/s. Agrawal Builders, then from where this money came. He also submitted that the Ld. A.O relied on the bank statements of Smt. Rekha Bai, Shri Devi Singh and Shri Lala Ram. Said bank statements were never confronted to the assessee. Copy of same were never supplied. He further referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly option to rely on the evidences on record. The agreement dated 27.11.2010 provides the details of date-wise consideration to be paid. Further, the bank account of the sellers are also important to find when the cash was deposited therein. Ld. Counsel for the assessee has submitted a chart at page 13 of his submissions: Amount payable as per agreement Amount deposited as per alleged Bank statement A.Y By 27.11.2010 ₹ 10,00,000 On 27.11.2010 ₹ 8,00,000 2011-12 By 10.12.2010 ₹ 40,00,000 On 10.12.2010 On 16.12.2010 ₹ 27,00,000 ₹ 10,00,000 2011-12 2011-12 By 10.04.2011 ₹ 50,00,000 On 31.03.2011 On 15- 18.04.2011 ₹ 29,99,000 ₹ 24,70,000 2011-12 2012-13 By 10.08.2011 ₹ 4,03,00,000 In Aug Sept 2011 In Aug Sept 2011 (Cheque portion) In Sept 2011 (used for purchase of land by Rekha Bai and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 1,02,39,401 (₹ 1,12,27,401 ₹ 9,88,000) is hereby deleted. 30. In the result Ground no. 4 of the assessee is partly allowed against the total addition of ₹ 1,02,39,401/- and addition of ₹ 9,88,000/- stands confirmed. 31. Now we take up Ground No. 5 of assessee s appeal relating to addition of ₹ 9,12,600/- on account of commission on sale of land. Ld. Counsel for the assessee fairly conceded that the assessee had already offered the additional commission income, this ground was not pressed. We therefore dismiss this ground as not pressed. 32. Ground No. 6 is general in nature and therefore no separate adjudication for same is called for. Ground No. 7 relates to initiation of interest and penalty. Same is dismissed as consequential. 33. Now we take up IT(SS)A 679/ Ind/ 2016 for A.Y. 2011-12 in the case of Pradeep Hirani. There is a delay of 3 days in filing the appeal. In the application for Condonation it has been submitted that the delay occurred as the connected appeals of Pradeep Sharma were heard together by the Ld. CIT(A). The said order of Ld. CIT(A) was received in the case of assessee on 18.04.2016, whereas the order in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) was not justified in sustaining the penalty order, which is bad in law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case liable to be annulled. 2. The Ld. CIT(A) did not provide proper opportunity of being heard, and therefore the order passed by the Ld. CIT(A) deserves to be set-aside. 3. The Ld. CIT(A) erred in confirming the penalty of ₹ 5,10,000/-, ₹ 13,50,000/-, ₹ 10,50,000/-, ₹ 19,10,000/-, ₹ 9,75,000/-, ₹ 14,75,000/-, ₹ 37,60,000/- u/s 271(1)(c) for Assessment Years 2006-07 to 2012-13 respectively. The appellant craves leave to add, amend or to modify any ground(s) of appeal. 39. During the course of hearing, Ld. Counsel for the assessee submitted that the penalty u/s. 271(1)(c) is not leviable. He submitted that the penalty is levied for following additions:- A.Y. Appeal No. ITA Basis of Penalty Penalty Amount Quantum Appeal Status PB 2006-07 645/IND/2017 Disallowance of deduction u/s. 80IB(10) 5,10,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement with the Ld. Counsel for the assessee that penalty cannot be levied in the present case merely for disallowance of deduction u/s. 80IB(10). Revenue authorities have failed to bring to our notice that the assessee had furnished inadequate particulars or concealed the particulars of income since the deduction u/s 80IB(10) of the Act was denied merely not receiving the completion certificate within the due time. In the similar set of facts we observe that Hon'ble jurisdictional High Court in the case of Pr. CIT V/s Surabhi Homes P Ltd (supra) held that :- The fact is that the assessee claimed deduction under section 80IB(10) for the reason that the a project approval certificate was filed and the possession delivered. May be the technical formality of obtaining completion certificate was not satisfied, but it will not mean that the assessee has claimed incorrect or false deduction. Mere non-satisfaction of a condition of deductions will not mean that the assessee has furnished incorrect return, which will make it liable for penalty. 42. We respectfully following the above judgment which is squarely applicable on the facts and issues of the case before us hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
