TMI Blog2022 (12) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... and development rights, treated by it its computation of income as income chargeable to tax under the Head capital gains but learned AO considered it as income from Business and Profession - HELD THAT:- Neither the AO, nor the ld. CIT (A) and ld. DR before us could not show above any incriminating material found during the course of search. In absence of incriminating material, we hold that orders of the ld. Lower Authorities are non-sustainable in view of the decision of honorable supreme court in case of Sinhgad Technical education society [ 2015 (4) TMI 190 - BOMBAY HIGH COURT] . Hence we allow ground no 4 and 5 of the Appeal. Addition of on money income on account of sale of car parking - taxation of on money on sale of flats - HELD THAT:- We find that both this issues were discussed by the coordinate bench in the case of the assessee for AY 2011 -12 [ 2022 (2) TMI 808 - ITAT MUMBAI] and held that there is no incriminating material available for making such addition in the hands of the assessee in case of a concluded assessment. Before us also same document andstatements are relied up on by the lower authorities as well as the ld. DR. Judicial Discipline demands that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxing Long Term Capital Gain of ₹ 10,89,14,692/- as business income and enhancing the same to Rs.11,11,62,469/-. 5. The learned CIT(A) has erred in law and on facts in upholding the action of the Assessing Officer in taxing Short Term Capital Gain of ₹ 2,05,75,672/- as business income. 6. The learned CIT(A) has erred in law and facts in upholding the action of the Assessing Officer in making addition of ₹ 10,84,00,000/- on account of alleged income from sell of car parking. 7. The learned CIT(A) has erred in law and on facts in upholding the action of Assessing Officer in taxing ₹ 16,78,31,377/- on account of alleged on money from sell of facts. 8. The order passed by the learned CIT(A) is in violation of the principles of natural justice. 03. Facts culled out shortly from orders of lower authorities shows that assessee is engaged in the business of builders and developers. It filed its return of income on 15.10.2010 declaring income of ₹ 9,95,07,964/-. Case of the assessee was not picked up for scrutiny. 04. Subsequently, search u/s. 132 was conducted in Lodha Group‟ cases on 10.01.2011. Assessee is also one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transacted rate as unaccounted sales as on money. 07. Accordingly, assessment order was passed on 28.03.2013 u/s. 153A r.w.s. 153C r.w.s. 143(3) of the Act determining the total income of the assessee at ₹37,94,31,080/-. 08. The assessee aggrieved with assessment order preferred appeal before the learned CIT(A) challenging the order on jurisdiction, approval and on the merits of the addition. i. On the issue of absence of incriminating material, the ld. CIT(A) held that there are enough indications of the evidence of incriminating material particularly unaccounted cash discovered during the course of search belonging to the appellant. ii. He further held that, the satisfaction recorded by the ld. AO is also correct as statement based on the discovery of unaccounted cash and incriminating material is enough to arrive at the satisfaction of the transaction found in the case of another person belonged to the assessee which has enabled the AO to issue a notice u/s. 153C of the Act. iii. On the issue of notice issued u/s. 143 (2) was not served on the assessee, the ld. CIT(A) following the decision of Hon‟ble Delhi High Court in case of Ashok Chadda 27.07.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not suggest any incriminating material with respect to the assessee specifically. It merely says that the documents are related to the group therefore, same cannot be used against the assessee. v. Appeal of the assessee for A.Y. 2010-11 in ITA No. 1574/MUM/2020 is decided on 09.02.2022 wherein the issue of receipt of on money on sale of car parking, sale of flats and on the issue of Notice u./s 153C qua incriminating material is decided in Para No. 16-30. He therefore submitted that, in absence of any incriminating material as well as in view of the decision of the co-ordinate bench in assessee own case for A.Y. 2011-12, addition deserves to be deleted. vi. He also extensively referred to 49 pages paper book submitted before us. He specifically referred to Page No. 19 which is a satisfaction note recorded for the issue of notice u/s. 153C of the Act. He submitted that in the whole of satisfaction note there is no single incriminating material mentioned by the ld. AO to give him jurisdiction u/s 153C of the Act. He submitted that the only reference was many incriminating documents related to the business activities of the group and also the statement recorded of different pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er concerns operated by other parties. iii. With respect to the receipt of on money on sale of flats, he referred Para No. 12.10 of the order ld. CIT(A), he referred to Para No. 13 of the appellate order also. Accordingly, he submitted that ld. Assessing Officer is correct in making the addition and the ld. CIT(A) is also correct in upholding the jurisdiction as well as the addition on merits of the case. He therefore, submitted that addition deserves to be upheld. 012. In rejoinder the ld. Authorized Representative extensively referred the submission made before ld. CIT (A) as well as order of the co-ordinate bench in assessee‟s own case for A.Y. 2011-12 and submitted that the issue is squarely covered on all accounts. He therefore submitted that order of the co-ordinate bench may be followed. 013. We have carefully considered the rival contentions and perused the orders of the lower authorities. We have carefully considered the order of the co-ordinate bench in assessee‟s own case for A.Y.2011-12 in ITA No. 1574/2020 dated 09.02.2022. In that appeal on identical facts and circumstances, the assessee challenged that provisions of Section 153C of the Act have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son is not a director of the assessee company. The assessee company has also mentioned that it has separate legal entity and the term Lodha group cannot be used against it without identifying the specific material belonging to it. The ld.CIT(A) has ignored this aspect despite reproducing the assessee submission before him in his appellate order. When the said person is not a director in the said company his statement by no stretch of imagination can be said to be applicable or binding upon the said company. In such eventuality, the said material cannot be said to be any material much less incriminating material found during search giving jurisdiction to the AO for assessment under section 153C on the touchstone of exposition of the Hon‟ble Supreme Court referred above. 21. Apart from the above, the ld.CIT(A) has referred to cash declared by Shri Abhinandan Lodha declared in his statement to be belonging to the assessee company. Firstly, as noted above except for the statement of Shri Abhinandan Lodha, there is no material whatsoever, that the cash seized at the premises which did not belong to the assessee belong to the assessee. In such circumstances, the said cash accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company can be an evidence against the assessee and which can be the basis of addition of undisclosed income. In this regard, it may also be relevant to refer to the material found in the search at other places and on the basis of which these statements have been obtained. The materials found in search mentioned is the retrieval of deleted file stored in computer system. In this connection, the law in this regard has been elaborately dealt with by the larger Bench Hon‟ble Supreme Court in the case of Arjun Panditrao Khotkar vs Kailash Kushanrao Gorantyal and ors in civil appeal No. 2407 of 2018, vide order dated 14.07.2020. The said larger Bench of Hon‟bel Apex Court noted the reference before to it in para 2 of the said order as under:- 2. These Civil Appeals have been referred to a Bench of three Honourable Judges of this Court by a Division Bench reference order dated 26.07.2019, dealing with the interpretation of Section 65B of the Indian Evidence Act, 1872 ( Evidence Act ) by two judgments of this Court. In the reference order, after quoting from Anvar P.V. v. P.K. Basheer Ors (2014) 10 SCC 473 (a three Judge Bench decision of this Court), it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Technology Act and data retention conditions are formulated for compliance by telecom and internet service providers. (d) Appropriate rules and directions should be framed in exercise of the Information Technology Act, by exercising powers such as in Section 67C, and also framing suitable rules for the retention of data involved in trial of offences, their segregation, rules of chain of custody, stamping and record maintenance, for the entire duration of trials and appeals, and also in regard to preservation of the meta data to avoid corruption. Likewise, appropriate rules for preservation, retrieval and production of electronic record, should be framed as indicated earlier, after considering the report of the Committee constituted by the Chief Justice s Conference in April, 2016. 28. In terms of above, we note that though ld.CIT(A) has elaborately dealt with evidences and evidences act, his order is conspicuously silent on the evidences of electronic data referred in this case and the compliance with the above exposition of law. We are conscious that this issue has not been raised, but then it is also settled that there is no estoppel as to law. 29. In the backg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income as income chargeable to tax under the Head capital gains‟ but learned AO considered it as income from Business and Profession. Neither the ld. AO, nor the ld. CIT (A) and ld. DR before us could not show above any incriminating material found during the course of search. In absence of incriminating material, we hold that orders of the ld. Lower Authorities are non-sustainable in view of the decision of honorable supreme court in case of Sinhgad Technical education society [2017] 397 ITR 344 (SC) . Hence we allow ground no 4 and 5 of the Appeal. 025. Ground no 6 is with respect to addition of on money income on account of sale of car parking and Ground no 7 is on account of taxation of on money on sale of flats. We find that both this issues were discussed by the coordinate bench in the case of the assessee for AY 2011 -12 In 1574/Mum/2020 AY 2011-12 dated 09-02-2022] and held that there is no incriminating material available for making such addition in the hands of the assessee in case of a concluded assessment. Before us also same document andstatements are relied up on by the lower authorities as well as the ld. DR. JudicialDiscipline demands that unless, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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