Shri Manoj Dannala Naredi, Indore V. Shri I T O, Indore

CO 53/IND/2009

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 5986 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 02-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: MANOJ VAIDYA
• Keywords: Loose papers; Document seized; Documents seized
• Section: 153A; 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.65/IND/2009 A.Y.2004-05 INCOME TAX OFFICER 5(3), INDORE APPELLANT VS SHRI MANOJ DHANNALAL NAREDI INDORE PAN- AHXPA-0022A RESPONDENT C.O. NO.53/IND/09 (ARISING OUT OF ITA NO. 65/IND/2009) SHRI MANOJ DHANNALAL NAREDI INDORE OBJECTOR VS INCOME TAX OFFICER 5(3), INDORE RESPONDENT 2 DEPARTMENT BY : SHRI KESHAV SAXENA ASSESSEE BY : SHRI AJAY TULSIYAN AND SHRI MANOJ VAIDYA O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE HAS FILED THE APPEAL ON THE GROUND THA T THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NO T JUSTIFIED IN DELETING THE ADDITION OF RS. 1100000/- MADE BY THE ASSESSING OFFICER U/S 69A TREATING UNEXPLAINED MONE Y AND QUASHED THE ASSESSMENT ORDER PASSED U/S 153C READ W ITH SECTION 153A OF THE ACT, WHEREAS THE ASSESSEE HAS F ILED CROSS OBJECTION ON THE GROUND THAT THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN NOT DECID ING GROUND NOS. 2 AND 3 RELATING TO ADDITIONS OF RS. 8,86,900/ - AND RS. 2,13,100/- MADE BY THE ASSESSING OFFICER U/S 69A OF THE ACT. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SUPPORT OF THE ASSESSMENT ORDER WHEREAS THE LD. COUNSEL FOR THE AS SESSEE 3 DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT THE PROCEEDINGS U/S 153C ARE BASED ON BOOKS/DOCUMENTS S EIZED FROM THE PREMISES BELONGING TO HALKURAM SAHU AND DH ARAMPAL SAHU AND THE DEPARTMENT HAS NOT ESTABLISHED THE OWN ERSHIP OF SEIZED DOCUMENTS BY FURTHER SUBMITTING THAT THE ASS ESSING OFFICER HAS NOT SUPPLIED THE COPY OF PAPER NOS. 42 AND 43 AND THE APPRAISAL REPORT. THE BASIS OF INITIATION OF P ROCEEDINGS U/S 153C OF THE ACT WAS REFERENCE RECEIVED FROM DCIT-4( 1), INDORE, VIDE HIS LETTER DATED 23.11.2006. IT WAS CLAIMED T HAT IN THIS LETTER ITSELF IT HAS BEEN STATED THAT ASSESSMENT IN THE CASE OF MAIN SEARCHED PERSON I.E. HALKURAM AND DHARAMPAL S AHU WAS COMPLETED ON 31.3.2006 AND FURTHER THAT NOTICES U/S 153C WERE ISSUED BY THE THEN ASSESSING OFFICER TO SHRI MANOJ NAREDI I.E. THE ASSESSEE FOR THE ASSESSMENT YEAR 2000-01 TO 200 5-06 ON 13.4.2006, THEREFORE, IT WAS CONTENDED THAT THE PRO CEEDINGS U/S 153C OF THE ACT WERE INITIATED AFTER COMPLETION OF ASSESSMENT PROCEEDINGS OF HALKURAM SAHU AND THESE PROCEEDINGS SHOULD HAVE BEEN INITIATED BEFORE COMPLETION OF ASSESSMENT . EVEN THE NOTICES ISSUED ON 13.4.2006 BY DCIT 4(1), INDORE, W ERE ARGUED 4 TO BE NOT VALID BECAUSE SUCH NOTICES CAN BE ISSUED ONLY BY THE ASSESSING OFFICER HAVING SUCH JURISDICTION. IN SUCH A SITUATION THE BOOKS SO SEIZED SHOULD BELONG TO THE ASSESSEE. IT WAS EMPHATICALLY CLAIMED THAT THE ALLEGED SEIZED BOOKS DO NOT BELONG TO THE ASSESSEE BECAUSE THESE BOOKS/DOCUMENT S WERE SEIZED FROM THE PREMISES OF HALKURAM SAHU/SHRI DHAR AMPAL SAHU AND THE GENERAL PRESUMPTION WAS ARGUED TO BE T HAT THESE BELONG TO SAHUS ONLY. 3. WE HAVE PERUSED THE RECORD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE LEARNED RESPECTIVE COUNSE LS. BRIEF FACTS ARE THAT THE ASSESSEE IS A PROPERTY BROKER, D EALS IN PROPERTIES. THE RETURNED INCOME FOR ASSESSMENT YEA R 2004-05 WAS FILED ON 31.3.2005 FOR RS. 59,500/-. SEARCH OP ERATIONS WERE CONDUCTED AT THE PREMISES OF SHRI DHARAMPAL SA HU AND HALKURAM SAHU ON 8 TH TO 10 TH OCTOBER, 2003 WHEREIN CERTAIN LOOSE PAPERS WERE SEIZED FROM THEIR PREMISES AND ON THE BASIS OF THOSE LOOSE PAPERS, THE PROCEEDINGS U/S 153C OF THE ACT WERE INITIATED AGAINST THE ASSESSEE. THE ASSESSMENT S U/S 153A OF THE ACT READ WITH SECTION 153C WERE COMPLETED ON 31.3.2006 5 IN THE CASES OF SAHU GROUP. THE NOTICES U/S 153C O F THE ACT FOR THE ASSESSMENT YEARS 2000-01 TO 2005-06 DATED 13.4. 2006 WERE SERVED ON 16.5.2006 (PAGE 53 OF THE PAPER BOOK ). THE LEARNED DCIT 4(1) HANDED OVER COPIES OF DOCUMENTS T O ITO 5(3) VIDE LETTER DATED 23.11.2006 (PAGE 53 OF PAPER BOOK). AGAIN NOTICES U/S 153C DATED 29.11.2006 WERE ISSUED BY ITO 5(3), INDORE, FOR THE ASSESSMENT YEARS 1998-99 TO 2 005-06 (PAGE 4 OF THE PAPER BOOK). AS PER THE LD. COUNSEL FOR THE ASSESSEE, ONLY 6 LOOSE PAPERS WERE FOUND DURING THE COURSE OF SEARCH PROCEEDINGS FROM THE PREMISES OF SHRI HALKUR AM SAHU AND DHARAMPAL SAHU, NAMELY, B.S. 1/3 PAPER NO. 27, 28,30, 38, 42 AND 43 (PAGES 33 TO 37). IT WAS EMPHATICALL Y CLAIMED THAT COPIES OF DOCUMENT NO. 42 AND 43 WERE NEVER SU PPLIED TO THE ASSESSEE. THEREAFTER, THE LEARNED ASSESSING OFF ICER VIDE LETTER DATED 14.9.2007 ASKED THE ASSESSEE TO EXPLAI N AS TO WHY THE AMOUNTS OF RECEIPTS AND PAYMENTS, AS NOTED ON T HE DOCUMENTS, SEIZED FROM THE PREMISES OF SHRI HALKURA M SAHU AND DHARAMPAL SAHU, MAY NOT BE TREATED AS INCOME OF THE PRESENT ASSESSEE (PAGES 14 AND 15 OF THE PAPER BOOK ). IT IS 6 NOTICED THAT THE ASSESSING OFFICER HAS REFERRED TO BS 1/3, PAPER NOS. 27, 28, 30, 38, 42 AND 43, AS STATED ABOVE, WI THOUT ACTUALLY SUPPLYING THESE DOCUMENTS TO THE ASSESSEE. EVEN WHEN THE REQUEST WAS MADE FOR SUPPLY OF SUCH DOCUME NTS VIDE LETTER DATED 24.9.2007 (PAGE 16 TO 18 OF THE PAPER BOOK) AND AGAIN VIDE LETTER DATED 2.11.2007 (PAGE 31 OF THE P APER BOOK). THE CLAIM OF THE ASSESSEE IS THAT ON 5.121.2007 ONL Y THE COPIES OF PAPER NOS. 27, 28, 30 AND 38 WERE SUPPLIED AND P APER NOS. 42 AND 43 WERE NEVER SUPPLIED. IT IS FURTHER SEEN F ROM THE ORDER SHEET THAT THE DEPARTMENT HAD BEEN TAKING ADJOURNME NTS ON VARIOUS OCCASIONS TO FURNISH DETAILS AFTER OBTAININ G THE SAME FROM THE ASSESSING OFFICER BUT FINALLY ON 21.4.2011 THE LEARNED CIT DR SHOWED HIS INABILITY TO PRODUCE SUCH DOCUMEN TS BY SUBMITTING THAT SUCH DOCUMENTS WERE NOT AVAILABLE W ITH THE LEARNED CIT DR. IT WAS CLAIMED BY THE ASSESSEE THAT SINCE THESE DOCUMENTS WERE NEVER SUPPLIED TO THE ASSESSEE THEREFORE NO EXPLANATION COULD BE FURNISHED FOR THE ALLEGED PAPERS. IN SUCH A SITUATION ADMITTEDLY, THE PROCEED INGS U/S 153C OF THE ACT, INITIATED AGAINST THE ASSESSEE, WE RE ON THE 7 BASIS OF BOOKS/DOCUMENTS SEIZED FROM THE PREMISES F ROM SHRI HALKURAM SAHU AND DHARAMPAL SAHU DURING SEARCH OPER ATION. AS MENTIONED ABOVE, SINCE THESE DOCUMENTS WERE NOT EVEN MADE AVAILABLE TO THE LEARNED CIT DR IN SPITE OF VA RIOUS OPPORTUNITIES, THEREFORE, IT IS REASONABLY PRESUMED THAT EITHER THESE DOCUMENTS WERE NOT AVAILABLE WITH THE DEPARTM ENT AND WERE DELIBERATELY NOT SUPPLIED TO THE ASSESSEE, MEA NING THEREBY THE EXISTENCE OF SUCH DOCUMENTS IS DOUBTFUL . 4. SECTION 153C DEALS WITH ASSESSMENT OF INCOME OF ANY OTHER PERSON. AS PER THE PROVISIONS OF SECTION 153 C OF THE ACT, SATISFACTION OF THE ASSESSING OFFICER DEALING WITH THE MAIN SEARCHED PERSON IS THE PRIMARY REQUIREMENT. THE PR OVISIONS OF SECTION 153A ARE AKIN TO THE PROVISIONS OF SECTION 153BD AND THE PROVISIONS OF SEC. 153A ARE AKIN TO SECTION 153 BC. SECTION 153BD REFERS TO SATISFACTION ABOUT BELONGING OF UND ISCLOSED INCOME WHEREAS SECTION 153C REFERS TO SATISFACTION ABOUT BELONGING OF VALUABLE ARTICLES LIKE MONEY, BULLION, JEWELLERY, ETC. OR THINGS OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED. NO SUCH SATISFACTION HAS BEEN ARRIV ED AT BY THE 8 LEARNED DCIT 4(1), INDORE, BEFORE HANDING OVER OF C OPIES OF ALLEGED DOCUMENTS. IN THE ABSENCE OF SUCH SATISFAC TION THAT THE SEIZED DOCUMENTS BELONGING TO THE ASSESSEE, THE PRO CEEDINGS INITIATED U/S 153C, AGAINST THE ASSESSEE BY THE ITO 5(3), INDORE, THEREFORE, ARE WITHOUT JURISDICTION, ILLEGA L AND ARBITRARY. EVEN IN THE REMAND REPORT ASKED FROM THE ASSESSING OFFICER BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), T HE LEARNED ASSESSING OFFICER DID NOT REBUT THE CLAIM O F THE ASSESSEE (REMAND REPORT IS AVAILABLE AT PAGES 51 TO 59 OF THE PAPER BOOK), THEREFORE, THERE IS NO INFIRMITY IN TH E STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN QUA SHING THE ASSESSMENT AS IS EVIDENT FROM THE DISCUSSION MA DE IN PARA 2.14 (PAGE 11 OF THE IMPUGNED ORDER). AS PER THE PR OVISIONS OF SECTION 153C(1), WHERE THE ASSESSING OFFICER IS SA TISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE AR TICLES OR THINGS OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS TO A PERSON OTHER THAN THE PE RSON REFERRED TO IN SECTION 153A AND THE BOOKS OF ACCOUN TS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED, SHALL BE HANDED 9 OVER TO THE ASSESSING OFFICER HAVING JURISDICTION O VER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGA INST EACH SUCH OTHER PERSON AND ISSUE NOTICES AND ASSESS OR R EASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH PROV ISIONS OF SECTION 153A, MEANING THEREBY THE VALUABLE OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED SHOUL D BELONG TO SUCH OTHER PERSON. NO SUCH SATISFACTION HAS BEE N PRODUCED BEFORE US IN THE PRESENT APPEAL SINCE THE BOOKS SO SEIZED, DO NOT BELONG TO THE ASSESSEE AS IS EVIDENT FROM PAPER NOS. 27, 28, 30 AND 38 OF BS 1/3, THEREFORE, THE CONCLUSION DRAWN IN THE IMPUGNED ORDER IS JUSTIFIED. IT IS ALSO SEEN THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS DULY CONSI DERED THE APPRAISAL REPORT SUPPLIED BY THE DCIT 4(1) VID E LETTER DATED 23.11.2006 AND THE COUNTER REPLY OF THE ASSESSEE SU BMITTED ON 8.12.2008. FROM THE RECORD IT IS EVIDENT THAT FIRS TLY THE COPIES OF PAPER NO. 42 AND 43 WERE NOT PROVIDED TO THE ASSESS EE AND SECONDLY THE ASSESSING OFFICER HAS NOT PROVED THAT THE SEIZED PAPERS, CLAIMED TO BE RELATED TO THE ASSESSEE, ACTU ALLY PERTAINED TO HIM. EVEN THE SUBMISSIONS FILED BY TH E ASSESSEE 10 BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) WERE NOT REBUTTED BY THE ASSESSING OFFICER AND IT W AS NOT ESTABLISHED THAT THE ALLEGED PAPERS PERTAINED TO TH E PRESENT ASSESSEE, THEREFORE, WE ARE OF THE CONSIDERED OPINI ON THAT NO ACTION 153C IS WARRANTED IN THE CASE OF THE ASSESSE E, HENCE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WA S JUSTIFIED IN QUASHING THE ASSESSMENT. THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS AFFIRMED. 5. SO FAR AS CROSS OBJECTION OF THE ASSESSEE IS CON CERNED, WE FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT DECIDED GROUND NOS. 2 AND 3 TAKEN BY THE ASSESSEE BEFORE HIM RELATING TO ADDITIONS OF RS. 8, 86,900/- AND RS. 2,13,100/- MADE BY THE ASSESSING OFFICER U/S 69 A OF THE ACT. WE, THEREFORE, IN THE INTEREST OF JUSTICE, DI RECT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO DECIDE GROU ND NOS. 2 AND 3 TAKEN BEFORE HIM. IN THIS VIEW OF THE MATT ER, THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 11 FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED WH EREAS THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 30 APRIL, 2011. (R.C.SHARMA) (JOGIND ER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH APRIL, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE DN/-