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TMI Blog2021 (12) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Panchnama dated 22.10.2011. After recording the reasons, the notice u/s 153C of the Act were duly served upon the assessee. In compliance thereto return of income for A.Ys. 2006-07 to 2011-12 were filed. The instant appeal relates to A.Y. 2010-11. Seized documents pertaining to assessee were confronted to which necessary submissions were made but they were not found satisfactory by Ld. AO are in addition for Long Term Capital Gain at Rs. 80,82,275/- made. During assessment proceedings Ld. AO also observed that the assessee has purchased 1.35 acre land from Shri Mangilal. Consideration shown in the registered sale deed was Rs. 40,00,000/-. However, in the statement given by Shri Mangilal, it was stated that 'on money' of Rs. 8,50,000/- was also received in cash. Though the assessee denied to have paid any such 'on money', Ld. AO made the addition of Rs. 8,50,000/-. After making the additions to the return income of Rs. 52,52,450/- shown in the return filed on 10.10.2013( same income disclosed in original return filed on 27.09.2010) income assessed at Rs. 1,41,84,725/-. 3. Aggrieved assessee preferred an appeal before the ld. CIT(A) and partly succeeded. As Ld. CIT(A) deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 153C speaks that notwithstanding anything contained in section 139, 147, 148, 149, 151 and 153, where the assessing officer is satisfied that any money jewellery or books of account or documents seized or requisitioned belongs to a person other than the person referred to in section 153A. *Thus, the power to the assessing officer u/s 153C of the Act for framing the assessment is subject to the condition that the assessing officer assessing the searched party, is satisfied that the jewellery or other valuables articles or things or books of accounts or documents or assets, seized or requisitioned pertain to some other person other, then the person referred to in Sec 153A. Than the books of accounts or the documents or assets seized or requisitioned, shall be handed over by the assessing officer of searched person to the assessing officer having jurisdiction over such other person and that the assessing officer shall proceed against each of such persons and issue such other person notice and assess or reassess income of such other person in accordance with the provision of section 153A of the Act. *Thus, the minimum requirement to justify the invocation of Sec 153C, is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertain' to other person but must belong to 'other person' - Held, yes Whether in order to justify assumption of jurisdiction under section 153C, documents seized must be incriminating and must relate to each of assessment years whose assessments are sought to be reopened - Held, yes - During course of assessment proceedings in case of a company, a number of documents were found and seized which contained trial balance and balance sheet of assessee company for period 1-4- 2010 to 13-9-2010 -- Though seized documents might pertain to assessee, same was not proved to belong to assessee - Further, said documents did not relate to relevant assessment years and secondly, they could not be said to be incriminating - Whether since, both essential requirements for assumption of jurisdiction under section 153C were not met, issuance of notice was unjustified - Held, yes [Paras 30 & 32] [In favour of assessee "'] 3.The Judgement of Hon'ble Supreme Court in the case of ACIT v. Pepsi Foods (P.) Ltd.- [2018J 89 taxmaan.com 10(SC)- The crux of which is reproduced below- "Section 153C of the income-tax Act, 1961 - Search and seizure - Assessment of in case of any other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al or evidence the provision of sec 292-C of Income Tax Act 1961 will prevail. The Provision of Sec 292-C are reproduced below- Presumption as to assets, books of account, etc.- "Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132, it may, in any proceeding under this Act, be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii ) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. fl. Hence, any proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s precedent) - Assessment years 2003-04, 2006-07 and 2007-08 - Authorised Officer conducted a search under section 132 upon assessee - No incriminating material was found during search - Thereafter assessee in response to notice issued under section 153A filed returns of income for three assessment years 2003-04. 2006-07 and 2007-08 - Assessments in relation to above assessment year had already been concluded - Assessing Officer made fresh assessments under section 153A for above assessment years and made additions in income of assessee on protective basis - Whether since no incriminating material was found during search operation under section 132, assessments made under section 153A were liable to be set aside - Held, yes [Para 9J [Infavour of assessee "J *Furthermore, if AO was of the view that appellant had escaped income than, the proceedings must have been initiated as per sec 148 of the income tax Act 1961 and not uls 153C of the Income Tax Act 1961. *In this case the proceeding uls 153C was initiated on the basis of certain documents and papers belonging to the person searched and not belonging to the appellant. Hence, the whole proceeding is illegal and not maintaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 23/03/2010, given the fact that the property sold by Shri Mangilal was registered in the name of appellant on 22/03/2010 * Further, in response to SCN dated 19/02/2014 issued by DCIT; where the DCIT inquired about the cash payment of Rs. 8, 50,000/- to Shri Mangilal, which is claimed to be paid by the appellant to him against purchase of land over and above Rs. 40, 00,000/- shown as amount of investment in land at Kh.148 admeasuring 1.35 acres located at Gram-Salaiya, Patwari Halka No. 39/30, Vikas khand-Fanda, The-Huzur, Dist. Bhopal; the appellant vide it's reply dated 21/02/2014, submitted that the appellant has not paid any sum in cash over and above the amount pertains to him and mentioned in the registry. * So far as deposition of cash by Shri Mangilal Patidar in his account in cash in two parts and consumption of Rs. 50,000 for his own expenses is concerned, it seems to be a presumption and after thought of the person making such statement, as there is no reason why he has made a registry for Rs. 40,00,000/- on 22/03/2010 and a sum of Rs. 20,00,000/- was paid to Shri Mangilal through Shri Gulshan Chandok, but he was not examined on oath by the A.O. and choose to presum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a total sale consideration of Rs. 40,00,000/- along with map. This letter is duly signed by Shri Sujit Sen and Shri N.C. Sen. The facts of complete ownership of the above land is also corroborated with the loose papers. 80 to 85 of LPS-5 seized during the search which shows that Shri N.C. Sen has already given to Power of attorney to Shri Sujit Sen for sale of land. Also there was Power of Attorney dated 24.02.2010 given by Shri Sujit Sen to Shri Sanjeev Agrawal for the above land which was signed in the present of witness namely Shri Neeraj Kumar and Shri Rupesh Gorkhe. 10. We find that in the incriminating material name of the assessee is appearing and he has a direct connection with the same and it cannot be said that these documents do not belong to the assessee. It is also revealed that assessee entered into a partnership on 04.06.2009 and contributed the said piece of land to the partnership firm and then he retired from partnership on 14.12.2009, leaving that piece of land as irrevocable property of partnership firm and copy of this deed was also found during the course of search. All these material are sufficient enough for the Ld. Assessing Officer to issue notice u/s 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purely based on the statement of Mr. Mangilal. Opportunity to cross examine was not provided. No other material was brought on record to establish that the assessee had paid 'on money'. The revenue has also not brought on record that whether any addition for unaccounted income was made in the hands of Shri Mangilal. The only authentic and genuine piece of evidence is a registered sale deed, where both buyer and seller have signed before registering authority for the consideration of Rs. 40,00,000/- passed by the buyer to seller. One cannot appreciate the act of making addition in the hands of on assessee merely on the basis of statement of a person who himself have not stated a correct purchase consideration in the registered sale deed signed by him. Revenue authorities having not given any opportunity of cross examination to the assessee, defies the principle of natural justice as held by Hon'ble Supreme Court in the case of Andman Timber Industries v. CCE (2015) 281 CIR 241 (SC), as the impugned addition is purely based on the statement of Mr. Mangilal who was not cross examined by the assessee. 16. It is also a well-established ratio laid down by Hon'ble Courts that written e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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