TMI Blog2023 (7) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Madan Mohan Gupta . The receipt of the money was also given by Shri Madan Mohan Gupta. Not only that, based on these incriminating documents Shri Madan Mohan Gupta accepted the transaction of on money and has offered the tax in his after search disclosure and return. Therefore, no reason of accepting the contention of the assessee that he has not paid any on money for purchase this property. As regards the opportunity for cross examination, the ld. A/R did not demonstrate before us any request made so far before the lower authorities and even the ld. CIT (A) has categorically dealt this aspect in his order and we do not find any infirmity in his finding also. Therefore, assessee is expressly shown as purchaser of the plot based on the Receipt, possession letter and incriminating documents based on which even the seller has disclosed the on money payment. There is no reason or any material based on which we accede to the request of the assessee that he has not paid any on money . Even the assessee has not filed any other document specifically controverting these finding of fact of the lower authorities and, therefore, no merit in the grounds taken by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ab-initio, the same kindly be quashed. Consequently, the impugned assessment framed u/s 143(3)/148 of the Act dated 24.12.2016 also kindly be quashed. 2. Rs. 4,66,660/-: The ld. CIT (A) erred in law as well as on the facts of the case in confirming addition made u/s 69B of the Act at Rs. 4,66,660/- as undisclosed investment in purchasing plot no. 83 in Revenue Residency colony from Shri Madan Mohan Gupta. The addition so made, being totally contrary to the provisions of law and facts of the case, kindly be deleted in full. 3. Rs. 61,333/-: The ld. CIT (A) erred in law as well as on the facts of the case in confirming the part rejection of claimed agricultural income upto Rs. 61,333/- (which is of 2/3rd of the declared agricultural income of Rs. 90,000/-) and in assessing the same as income from other sources. The addition so made, being totally contrary to the provisions of law and facts of the case, kindly be deleted in full. 4. The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234A, 234B 234C of the Act. The appellant totally denies its liability of charging and withdrawal of any such interest. The interest so charged/withdra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiation of proceeding u/s 148, which ought to have been first decided, before proceeding to decide the case on merits. 2. The ld. CIT (A) has erred in law and on facts in confirming the addition of Rs. 4,00,000/- u/s 69 made by AO ignoring all the evidence and argument put forth by simply relying on the statement of a third party. 3. The ld. CIT (A) has erred in law and on facts in upholding the additions made by the AO, by not passing a speaking order on any of the grounds of appeal filed before him. 4. The ld. AO erred in law as well as on the facts of the case in charging of interest u/s 234B, 234C 234D as consequential in nature. The appellant totally denies it liability of charging of any such interest. Hence the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 5. The appellant prays your honors indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing. ITA NO. 22/JP/2021 : 1. That on the facts and in law the impugned order as well as relevant assessment order are not maintainable and liable to be cancelled. 2. That the learned CIT (Appeals) failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in confirming the addition of Rs. 8,00,000/- without appreciating facts and various evidence available on record including lease deed, payment receipt, possession letter etc. The order passed appears to be predetermined order without considering the materials and evidences provided, which is not tenable in law and needs to be quashed. 4. The issue is already covered having been decided by the various Hon ble benches of the ITAT, Jaipur/Jodhpur (ITA No. 1273/JP/2018, ITA No. 1273/JP/2018, ITA No. 1310/JP/2018, ITA No. 1320/JP/2018, all decided by the Hon ble Jaipur bench by a consolidated order dated on 25.3.2019 and ITA No. 276/Jodh/2018, ITA No. 418/Jodh/2018, ITA No. 483/Jodh/2018, ITA No. 470/Jodh/2018 decided by the Hon ble Jodhpur Bench by consolidated order dated 9.05.2019 in favour of the appellants assessee and against the revenue. 5. The assessee craves to amend, alter and modify any of the grounds of appeal. ITA NO. 1279/JP/2019 : 2. The brief facts of the case are that the assessee filed his original return of income for assessment year 2009-10 declaring total income of Rs. 2,12,700/- under section 139(1) of the I.T. Act, 1961 on 30.07.2009. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per return uploaded from the AST System, the source of purchase of plot at `Revenue Residency` not verifiable. Hence, there was reason to believe that income amounting to Rs. 6,32,500/- had remained undisclosed and had escaped assessment. The AO noted that on the basis of information alleging escapement of income, notice u/s 148 was issued on 30.03.2016. Thereafter notices u/s 143(2) and notice u/s 142(1) issued on 23.06.2016, the counsel of the assessee attended the proceedings and filed copy of ITR, Computation, Bank Statement, Possession letter and other relevant papers of the plot purchased vide letter dated 01.09.2016 and also explained that the investment in the purchase of the plot was only of Rs. 2,32,500/- out of his past accumulated savings from the salary and the assessee has not paid over and above the amount mentioned in the Registered Deed. However, the AO rejecting the contention of the assessee stating that when Rs. 2,32,500/- is accepted to have been paid by the assessee then there is no reason as to why the payment of Rs. 4,00,000/- would not have been paid. He further alleged that the assessee has failed to explain the source of Rs. 2,32,500/- and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 1.3 S. 153C starts with a non obstante clause and therefore, is of overriding in nature. S. 153C overrides S. 139,147, 148, 149, 151 and 153 of the Act. Accordingly, notice u/s 153A shall be issued in the case of a person searched, whereas notice u/s 153C has to be issued in the case of 3rd person (other than the person searched) provided the seized material belonged to or seized papers or any information contained therein related to a 3rd person. Since S. 153C of the Act start with a non-obstinate clause, on the satisfaction of the above condition/s, there is no scope of invoking of S. 148 of the Act in such a case. Hence, the AO is left with no discretion or choice to invoke the provisions of S. 147/148 of the Act. If the case falls in the preview of specific provisions of S. 153C of the Act, the AO cannot resort to invoke the provisions of S. 147/148 of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Reason to believe and not reason to suspect: 2.1. It is submitted that even under the amended law the bedrock condition or words, which continue right since inception till date, are reason to believe and not reason to suspect . The word believe has to be understood in contradistinction of suspicion or opinion. Belief indicates something concrete or reliable. Kindly refer Gangasharan Sons Pvt. Ltd. v/s ITO Anr. (1981) 130 ITR 1 (SC) and ITO v/s Lakhmani Mewal Das (1976) 103 ITR 437 (SC). Further, the belief must be of an honest and reasonable person based upon reasonable grounds. The officer may act on direct or circumstantial evidence, but his/her belief must not be based on mere suspicion, gossip or rumor. The ld. AO would be acting without jurisdiction if the reason for his/her belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the provision of law. The Court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the Court Sheo Nath Singh v/s AAC (1971) 82 ITR 147 (SC). 2.2 Third party information not a good basis: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd misinterpreted. Supporting case laws: 2.5.1 Kindly refer S.P. Agarwalla Alias Sukhdeo Prasad Agarwalla v/s ITO (1983) 140 ITR 1010 (Kol HC) held that no direct nexus or live link between confessional statement of P and formation of the belief of the ITO that income of appellant has escaped assessment - In the absence of a direct nexus or live link, such confessional statement will not constitute a relevant material justifying the reopening of assessment. 2.5.2 In Kothari Metals v/s ITO (2015) 377 ITR 581/ 140 DTR 150 (Karn HC) held that the statement of some other person which was recorded was the basis of reassessment and the assessee was asked to explain it but the statement was itself not furnished to the assessee. 2.5.3. In CIT v/s Kamdhenu Steel Alloys Ltd. (2014) 68 DTR 38/361 ITR 220 (Delhi HC) held that notice issued after the expiry of four years from the end of the relevant assessment year by the AO merely acting mechanically on the information supplied by the Investigation wing about the accommodation entries provided by the assessee to certain entities without applying his own mind was led to be not justified. 2.5.4. Also kindly refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follow the Rajasthan High Court Decision. Moreover, even otherwise the said decisions are distinguishable being based on the peculiar facts available on those cases. 1.9 A similar view has been taken in CIT Vs Sunil Kumar Jain (2014) 42 Taxmann.com 376 (Chhattisgarh) in the context of S. 158BC v/s S. 148. 1.10 In any case, view favorable to assessee must be adopted as held in Vegetable Products 88 ITR 192 (SC). (To be read in relation to GOA 1- Proceeding u/s 147 invalid being without jurisdiction after para 2.5.4 of our earlier w.s. dt 31.08.2021 ) (To be read in relation GOA 2 - Addition of Rs. 6,32,500/- u/s 69 of the Act after para 4 of our earlier w.s. dt 31.08.2021 ) 3. Further submitted that it is wrong to say that the appellant made a purchase of plot from MMG whereas he was allotted the plot by Rajasthan Tehsildar Seva Parishad hence, he made no payment of On Money to MMG as wrongly alleged. Further the seized register nowhere shows that the assessee made payment of own money to MMG or even to the Parishad. In the statement of MMG recorded u/s 132(4) or u/s 131, he never admitted having received On Money from the appellant. Even mere confessional statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises of Sh Madan Mohan Gupta on 23-05-2013 who had been working as a deed-writer. During the course of search several incriminating papers/documents were found and seized from the various premises covered in search. On being confronted with the incriminating documents / papers so found and seized, Sh. Madan Mohan Gupta, admitted and surrendered undisclosed income. The seized documents reflect that, the assessee Sh. Kailash Chandra Gehlot had purchased one plot (Plot No. 134) measuring 200 Sq. Yard in the residential project Revenue Residency (NiziKhatedar Residential Scheme) at Village-Peepla Bharatsingh, (Jaisinghpura-Muhana Road), Bhankrota, Tehsil Sanganer, Jaipur developed by Sh. Madan Mohan Gupta in F.Y. 2008-09 (relevant to A.Y. 2009-10). The name of the assessee Sh. Kailash Chandra Gehlot is appearing at S.No. 134 in the seized register Annexure-AS (Unique ACCOUNT BOOK register) Exhibit-3 seized from the office premises of Shri Madan Mohan Gupta. Shri Madan Mohan Gupta has accepted and honoured on-money receipt on sale of plots in Revenue Residency scheme, which is Rs. 2000/- per Sq. Yd. as per seized paper. Meaning thereby, the assessee, Sh. Kailash Chandra Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and the seller of the plot Shri Madan Mohan Gupta, Revenue Residency Scheme. Even Shri Madan Mohan Gupta has surrendered the related on money income during the search and accordingly filed his after search Income Tax Return. Based on these facts, the AO has assumed payment of on money on the basis of notings in the Register seized from the residence of Shri Madan Mohan Gupta coupled with the disclosure made by Shri Madan Mohan Gupta. Further, in the statement of Shri Madan Mohan Gupta he has explained the nature of transactions recorded in the seized material regarding the purchase of plot of land by the assessee. The department then also conducted further inquiry by recording statements of the assessee and specifically asked the question regarding the consideration paid in respect of the land purchased by him. Thus the addition made by the AO is based on the material found from Shri Madan Mohan Gupta wherein he has also accepted the receipt of on money . Even the Receipt for cheque money and Allotment letter issued to the assessee is signed by Shri Madan Mohan Gupta. When the seized material found from Shri Madan Mohan Gupta as well as other material gathered during post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person. However, there is a distinction between the two provisions in as much as under s. 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under s. 158BD if the AO is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under s. 132 or whose books of account or other documents or assets were requisitioned under s. 132A, he shall proceed against such other person under s. 158BC. 13. Thus a condition precedent for issuing notice under s, 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the said requirement is not satisfied, resort cannot be had to the provisions of s. 153C of the Act. 14. Examining the facts of the present case in the light of the aforesaid statutory scheme. it is an admitted position as emerging from the record of the case, that the documents in question, namely the three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 2. 6. In respect of Ground No. 2, the ld. A/R of the assessee appearing before us has submitted as under :- The Id. Lower Authorities failed to appreciate the evidence of investment of Rs. 2,32,500/- despite of providing the evidences of the source through detailed submissions filed before CIT(A), which are strongly relied upon and being reproduced hereunder : Source of the declared purchase consideration fully explained and established: It is very surprising that the AO made this addition alleging lack of explaining source of payment to the declared purchase consideration. The facts are not denied that the assessee is a Sub Registrar / Tehsildar, who is an officer of the Gazetted Rank of the State Government and needless to say that he must be withdrawing a handsome amount of Salary and other perks. In addition to the various other facilities of free house, free medical and conveyance facilities etc. He has been in the service for last 36 years. He filed the ROI this year Le. in A.Y. 2009-10 at Rs. 2,12,700/- having substantial salary more than Rs. 3,00,000/-(ie. Rs. 3,12,696/-in A. Y. 2009-10, Rs. 2,11369/-in A. Y. 2008- 09 and Rs. 1,87,618/- in A. Y. 2007-08. Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior counsel appearing for the assessee, and Mr. K. Radhakrishnan, learned senior counsel who appeared for the Revenue. 6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as: amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT vs. Sunita Dhadda and SLP no. 9432/2018 of the revenue was rejected vide order dated 28.03.2018. In this case the Hon'ble Rajasthan High Court has considered several decisions on this aspect. 4. Covered Issue: On identical facts, the Hon'ble ITAT Jodhpur, has quashed the assessment made in the case of Shri Deva Ram Suthar Vs. ITO in ITA No. 342/Jodh/2018 vide order dated 27.12.2018 following the decisions of Andaman Timber Industries vs CIT (supra), Ashish International (Mum HC) in ITA No. 4299/Mum/2009 dated 22.02.2011 and H.R. Mehta Vs. ACIT (Mum HC) in ITA No. 58/Mum/2001 dated 30.06.2016. Hence the impugned addition deserves to be deleted in full. 7. The ld. D/R supported the findings given in the orders of authorities below and heavily relied upon those findings. 8. We have heard the rival submissions and perused the material available on record. As regards the facts found from the seized material, it is evidently clear that the receipt of the cheque money is accepted by Shri Madan Mohan Gupta. Even the possession of the land is given by Shri Madan Mohan Gupta bearing dated 22nd June, 2008. The receipt of the money was also given by Shri M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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