TMI Blog2022 (11) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... rna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Assessee by: Shri S.N. Soparkar, Sr. A.R. And Shri Parin Shah, A.R. Revenue by: Shri Alok Kumar, CIT-D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad in Appeal no. CIT(A)-11/529-A/CC-1(4)/2005-16 vide order dated 22/03/2017 passed for the assessment year 2011-12. 2. The Department has raised the following grounds of appeal 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in quashing the action of the AO u/s 153C of the Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs.5,17,00,000/- on account of undisclosed investment u/s 69 of the Act. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 4. It is, therefore, prayed that the order of the Ld. CIT (A) be set aside and that of the A.O. be restored to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 crores as the undisclosed investment under section 69C of the Act, with the following observations: 14. In light of the above, it is clearly established that the assessee had purchased land at FP No. 90 of S. No 316 at Tal. Jundal admeasuring 3485 sq yards (2914 sq meters) from M/s. Pushkar Corporation, which was purchased for a sum of Rs 1.80 crores and entered into vide document No. 22936/2010 dated 14.12.2010. This land was purchased for a total sum of Rs 6.97 crores @ Rs 20,000 per sq yard. The documented price was Rs 1.80 crores and the balance sum of Rs 5.17 crore is nothing but on money which was paid in cash. The incriminating material also records brokerage of Rs 3.50 lacs. It has been gathered from the market that the rate of brokerage is 0.5% for transaction over Rs 1.00 crore. Hence, for the total transaction value of Rs 6.97 crore, the assessee had paid brokerage of Rs 3.50 lacs @ 0.5%. Thus the incriminating material records even the minutest detail of brokerage paid also. The assessee's books records only Rs 1.80 crore and hence, the remaining sum of Rs 5,17,00,000/- is added to the total income as unexplained investment in purchase of land. The brokerag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation the assessee s contentions on challenge to jurisdiction, allowed assessee s appeal with the following observations: 9 After examining of the facts of the case, in the light of the provisions of section 153C position as emerging from the record of the case is that the documents in question namely, page No.242 of Annexure-A2 and page 42 of Annexure-A1 recovered during the search proceedings, do not belong to the appellant. It may be that there is a reference to the appellant in as much as the particulars like survey No, details of sale deed of the land etc., however, the AO has no basis to treat the said document, as belonging to the appellant. The AO emphasized on the fact that the particulars sale deed of the land purchased by the assessee were matching with the contents of the notings in the seized documents. It was observed from the assessment order that the A.O. could not being any evidence on record to show that in fact the assessee had paid 'on money' to the vendors and no document containing signature of the appellant or hand writing of the appellant was found during the course of search. There was no mention of either name or address or both of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not erred in facts and in law in allowing the assessee s appeal on the grounds of challenge to jurisdiction in making the aforesaid addition u/s 153C of the Act. 6. We have heard the rival contentions and perused the material on record. In the instant case we observe that the search was conducted at the premises of Soham group on 13-06-2013 and another search was carried out in the case of Sarkar group on 12-07-2013. Therefore, in view of the decision of jurisdictional High Court in the case of Anil Kumar Gopikishan Agrawal 418 ITR 25 (Gujarat High Court), since the search was conducted prior to date of amendment to section 153C of the Act, the amended provisions which came into effect from 1-6-2015 would not apply to search initiated on or before 1-6-2015 and thus, not applicable to the present case. It would be pertinent to reproduce the relevant extracts of the aforesaid ruling which are relevant to the issue under consideration before us: 19.4 Section 153C of the Act is a machinery provision which is inserted in the statute book for the purpose of carrying out assessments of a person other than the person searched under sections 132 and 132A of the Act. The moot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 153C of the Act as on the date of the search, are now sought to be brought within its fold on the ground that the satisfaction note and notice under section 153C of the Act have been issued after the amendment came into force. Therefore, this case does not relate to the interpretation of the provisions of any of the sections, but relates to the stage at which the amended section 153C of the Act can be made applicable, as to whether it relates to the date of search; or the date of recording of satisfaction by the Assessing Officer of the searched person; or the date of recording of satisfaction by the Assessing Officer of the other person; or the date of issuance of notice under section 153C of the Act. 19.9 In the facts of the present case, the search was conducted in all the cases on a date prior to 1st June, 2015. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to the effect that the seized material belongs or belong to the other person. In the present case, the hard-disc containing in the information relating to the petitioners admittedly did not belong to them, therefore, as on the date of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, since Assessing Officer of searched person failed to record a specific satisfaction as to how said hard disk belonged to assessee, impugned proceedings under section 153C were unjustified. 6.6 In light of the above rulings, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in holding that for the year under consideration, since the search was conducted prior to amendment in section 153C of the Act, it was an essential pre-requisite that the incriminating documents on the basis of which the assessment was framed must belong to the assessee. From the contents of the assessment order and the observations made by Ld. CIT(Appeals), even the assessing officer has not alleged that the documents belonged to the assessee and the AO has himself stated in the order that the documents pertain to the assessee. Therefore, in the instant set of facts, we find no infirmity in the order of the Ld. CIT(Appeals) wherein he has held that since the documents do not belong to the assessee, then in light of the various judicial precedents, including the jurisdictional Gujarat High Court decision on this subject, the additions are not liable to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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