ACIT, Nashik V. Shamsundat Laxman Jagtap, Nashik

ITA 1278/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1317 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers; Document seized; Block assessment; Documents seized; Reassessment proceedings
• Section: 153A; 148; 132; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , ! ' , #$ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1278/PN/2013 #% & '& / ASSESSMENT YEAR : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK ....... / APPELLANT (% / V/S. SHAMSUNDAR LAXMAN JAGTAP, G-16, SUYOJIT SANKUL, SHARANPUR ROAD, NASHIK PAN : ABLPJ4517H / RESPONDENT / ITA NO. 1333/PN/2013 #% & '& / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD 1(3), NASHIK ....... / APPELLANT (% / V/S. SMT. MOHINI SHAMSUNDAR JAGTAP, FLAT NO. 18, RISHAB APT., KALPANA NAGAR, COLLEGE ROAD, NASHIK-422005 PAN : AAYPJ1778N / RESPONDENT 2 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 / ITA NO. 1334/PN/2013 #% & '& / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD 1(3), NASHIK ....... / APPELLANT (% / V/S. SHRI SADASHIV LAXMAN JAGTAP, GAT NO. 201-C-PLOT NO. 111, SHRAMIK NAGAR, SATPUR, NASHIK-422007 PAN : AAUPJ7581P / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI RAJESH DAMOR / DATE OF HEARING : 23-06-2015 / DATE OF PRONOUNCEMENT : 21-08-2015 ) / ORDER PER VIKAS AWASTHY, JM : THESE THREE APPEALS HAVE BEEN FILED BY THE REVENUE AGA INST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK D ELETING THE PENALTY LEVIED U/S. 271(1)(C) IN ASSESSMENT YEAR 2006-07 IN THE CASE OF EACH ASSESSEE. ALL THE IMPUGNED ORDERS ARE DATED 18-03-2013. 2. THE ASSESSEES IN ALL THE APPEALS ARE CLOSELY RELATED A ND ARE ENGAGED IN THE BUSINESS OF BUILDING AND LAND DEVELOPMENT. T HE 3 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 ASSESSEES HAVE FILED THEIR RESPECTIVE RETURN OF INCOME AS INDIVIDUALS. THE ASSESSEES HAD JOINTLY PURCHASED TWO PARCELS OF LAND MEASURING 8000 SQ. MTRS. AND 3441 SQ. MTRS. FOR CONSIDERATION OF RS.2 .50 CRORES AS PER REGISTERED PURCHASE DEED FROM LUTHRA FAMILY. TH E ASSESSEES HAD PLAN TO SALE THE AFORESAID LAND AFTER PLOTTING. THE ASSESSE ES COLLECTED ADVANCES FROM THE PROSPECTIVE CUSTOMERS FOR SALE OF PLOTS IN THE AFORESTATED LAND. THE ASSESSEES PAID RS.2.80 CRORES IN CA SH TO LUTHRA FAMILY FOR THE PURCHASE OF LAND. THERE WAS ALLEGEDLY SOME DISPUTE BETWEEN THE ASSESSEES AND LUTHRA FAMILY, THEREFORE, THE DEAL COULD NOT BE FINALIZED. DUE TO SCRAPING OF THE LAND DEAL, LITIGATION AROSE BETWEEN THE ASSESSEES AND THE PROSPECTIVE BUYERS OF PLOTS. A SEARCH U/S. 132 WAS CONDUCTED AT THE PREMISES OF LUTHRA GROUP ON 28-0 9-2006. DURING SEARCH LOOSE PAPERS AND OTHER MATERIALS WITH RESP ECT TO LAND DEAL WERE FOUND. THE ASSESSING OFFICER ON THE BASIS OF MATE RIAL SEIZED HELD, THAT THE COST OF LAND PURCHASED BY THE ASSESSEES FROM LUTHRA FAMILY IS RS.5.21 CRORES AND CASH RS.2.80 CRORES WAS PAID A S ON-MONEY BY SHRI JAGTAP, SHRI MUSALE AND OTHERS. THE A SSESSING OFFICER ISSUED NOTICE U/S. 148 TO THE ASSESSEES ON 13-02- 2009. THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE ON-MONEY AMOU NT IN THE HANDS OF THE ASSESSEES, I.E. RS.46,66,666/- IN THE CASE OF EA CH ASSESSEE. THE ASSESSING OFFICER ALSO IMPOSED PENALTY U/S. 2 71(1)(C) ON THE ASSESSEES. THE AMOUNTS OF PENALTY IMPOSED BY THE A SSESSING OFFICER IN EACH CASE VIDE SEPARATE ORDERS OF EVEN DATE I.E. 28-03-201 2, IS AS UNDER: ITA NO. NAME OF THE ASSESSEE PENALTY 1278/PN/2013 SHAMSUNDAR LAXMAN JAGTAP RS.15,72,384/ - 1333/PN/2013 SMT. MOHINI SHAMSUNDAR JAGTAP RS.15,68,706/ - 1334/PN/2013 SHRI SADASHIV LAXMAN JAGTAP RS.15,71,827/ - 4 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 3. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEES FILED AP PEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDERS ACCEPTED THE APPEAL OF THE ASSESSEES AND DELETED THE PENALTY IN ALL THE APPEALS WITH THE FOLLOWING OBSERVATIONS: 7.5 THE APPELLANT HAS, FURTHER, CLAIMED THAT THE A MOUNT RECEIVED IN CASH AS ON-MONEY IN ADVANCE CANNOT BE TAXED IN THE YEAR OF RECEIPT AS OFFERED TO TAX AND TAXED BY THE A.O. THE SAID CASH ADVANCES ARE TO BE TAXED IN THE YEAR OF SALE OF PLOT AND, HENCE, THE ADVANCES R ECEIVED IN CASH HAVE BEEN TAXED IN INCORRECT YEAR. THIS CONTENTION OF TH E APPELLANT IS SUPPORTED BY THE DECISION OF HON'BLE BOMBAY HIGH CO URT IN THE CASE OF CIT, CENTRAL, NAGPUR VS. KARDA CONSTRUCTIONS PVT. L TD. (SUPRA) AND HON'BLE ITAT, PUNE IN THE CASES OF DHANVARSHA BUILD ERS AND DEVELOPERS (P) LTD. VS. DOT, 102 ITD 375 AND GOLANI BROTHERS V S. ACIT 75 ITD 1. THE CONTENTION OF THE APPELLANT THAT WHERE INCOME H AS BEEN TAXED IN THE INCORRECT YEAR, PENALTY U/S 271(L)(C) IS NOT LEVIAB LE IS SUPPORTED BY THE FOLLOWING DECISIONS I) CIT VS. MANILAL TARACHAND 254 ITR 630 (GUJ) II) CIT VS. KUSUM PRODUCTS LTD. 203 ITR 672 (CAL) III) NIRANJANLAL VS. ITO 14 ITD 439 THEREFORE, THE PENALTY U/S 271(L)(C) IS ALSO NOT JU STIFIED ON ABOVE COUNT. 7.6 IT HAS ALSO BEEN NOTICED THAT THE APPELLANT HAS NOT CONTESTED THE ADDITION MADE BY THE A.O. IN FURTHER IN ITAT OR HIG H COURT AND HAS PAID TAX AND INTEREST ON ASSESSMENT. AGAINST THESE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE HAS COME IN APPEAL. 4. SHRI RAJESH DAMOR, REPRESENTING THE DEPARTMENT SUBMIT TED THAT DURING SEARCH PROCEEDINGS IN THE CASE OF LUTHRA FAMILY CE RTAIN INCRIMINATING DOCUMENTS WERE SEIZED FROM WHICH IT WAS FOUND THAT THE ASSESSEES HAD PAID TOTAL CONSIDERATION OF RS.5.30 CRORES FO R PURCHASE 5 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 OF LAND. THE SALE PRICE AS PER THE REGISTED DOCUMENT WAS RS.2.50 CRORES. AN EXAMINATION OF SEIZED PAPERS/DOCUMENTS REVE ALED THAT THE ASSESSEES ALONG WITH MR. MUSALE HAD PAID RS.2.80 CRORES IN CASH AS ON-MONEY FOR PURCHASE OF LAND. ENTRIES REGARDING PAYMENT RECEIVED BY LUTHRA FAMILY IN RESPECT OF LAND TRANSACTIONS WERE RECORD ED IN DUMMY CASH BOOK. THE ASSESSEES HAVE NOT DISCLOSED THE CASH TRANSACTION WITH LUTHRA FAMILY IN RESPECT OF LAND IN THEIR RESPECTIVE RETURN OF INCOME. DURING ASSESSMENT PROCEEDINGS IN CASE OF LUTHRA GROUP, L UTHRA FAMILY ADMIT THE RECEIPT OF CASH PAYMENT TO THE TUNE OF RS.2.80 CRORES FROM THE ASSESSEES AND SHRI SHAILESH D. MUSALE. ACCORDINGLY, NO TICES U/S. 148 R.W.S. 147 WERE ISSUED TO THE ASSESSEES. THE ON-MO NEY COMPONENT WAS ADDED IN THE INCOME RETURNED BY THE ASSESSEES ON PROPORTIONATE BASIS. THE ASSESSEES FILED APPEAL AGAINST ASSESSMENT ORDE R BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). HOWEVER, THE SAME WAS WITHDRAWN. THUS, THE ADDITIONS MADE DURING THE ASSESSMEN T PROCEEDINGS WERE ACCEPTED BY THE ASSESSEES AND ATTAIN ED FINALITY. THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPE ALS) DURING PENALTY PROCEEDINGS ACCEPTED THE CONTENTIONS OF T HE ASSESSEE WITHOUT VERIFICATION OF THE FACTS. THERE IS NO TRANSACTION IN THE BOOKS OF ACCOUNT OF THE ASSESSEES WITH RESPECT TO ON-MONEY REC EIVED FROM THE PROSPECTIVE BUYERS OF PLOTS. THE COMMISSIONER OF INCOME T AX (APPEALS) ACCEPTED THE THEORY OF ON-MONEY WITHOUT ANY BASIS. TH E ASSESSEES HAVE NEITHER FILED ANY CONFIRMATIONS FROM THE PERSONS FROM W HOM THE ALLEGED ON-MONEY WAS ACCEPTED NOR THERE IS ANY RECORD OF TRANSACTIONS WITH RESPECT TO ADVANCE ON-MONEY IN THE BOOKS OF ACCOU NT. THUS, THE ASSESSEES HAVE NOT BEEN ABLE TO ESTABLISH THEIR BONAFIDE IN RESPECT OF CASH TRANSACTION AND THE SOURCE OF PAYMENTS. DURING AP PELLATE PROCEEDINGS IN PENALTY APPEALS, THE ASSESSEES RAISED THE QUESTION OF 6 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 VALIDITY OF PROCEEDINGS U/S. 148 AND YEAR OF TAXATION OF AM OUNT. THE CONTENTIONS OF THE ASSESSEES THAT ACTION SHOULD HAVE BE EN TAKEN AGAINST THE ASSESSEES U/S. 153C IS NOT TENABLE. THE BOO KS SEIZED DURING THE COURSE OF SEARCH BELONG TO LUTHRA FAMILY AND NOT OF THE ASSESSEES. THEREFORE, NO ACTION U/S. 153C IS MADE OUT A GAINST THE ASSESSEES. THE LD. DR VEHEMENTLY SUPPORTED THE PENALT Y ORDER AND PRAYED FOR SETTING ASIDE THE ORDERS PASSED BY THE COMM ISSIONER OF INCOME TAX (APPEALS). 5. ON THE OTHER HAND SHRI NIKHIL PATHAK APPEARING ON BEHA LF OF THE ASSESSEES STRONGLY DEFENDED THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS). THE LD. AR SUBMITTED THAT THE ALLEGED DOCUMENTS ON THE BASIS OF WHICH REASSESSMENT PROCEEDINGS WERE INITIATED, WER E FOUND DURING SEARCH PROCEEDINGS IN THE CASE OF LUTHRA GROUP. IF ANY INCRIMINATING MATERIAL IS FOUND AGAINST THE ASSESSEES, THE RI GHT COURSE OF ACTION WOULD HAVE BEEN TO INITIATE PROCEEDINGS U/S. 153C OF THE ACT AND NOT U/S. 148 OF THE ACT. THE PROVISIONS OF SECTION 1 53C OVER RIDE THE PROVISIONS OF SECTIONS 139, 147, 148, 149, 151 AND 153 OF THE ACT. THUS, THE REASSESSMENT PROCEEDINGS ARE IN ITSELF BAD IN LA W. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. ITO VS. ARUN KUMAR KAPOOR; 140 TTJ 249 (AMRITSAR BENCH). II. SRI MOTI PUNJABI-HUF VS. ACIT; ITA NO. 1474/PN/2011, A.Y. 2003-04, DECIDED ON 21-11-2012. III. ITO VS. SHRI SHAILENDRA B. AGRAWAL; ITA NOS. 1825 TO 1828/PN/2012, A.YS. 2004-05 TO 2007-08, DECIDED ON 09-12-2014. 7 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 5.1 THE LD. AR FURTHER SUBMITTED, THAT THE ASSESSEES AND THE OTHER CO-OWNER HAD RECEIVED ADVANCE PAYMENTS FROM PROSPECTIV E CUSTOMERS IN CASH AS ON-MONEY. THE ASSESSING OFFICER HAS TAXED TH E SAID MONEY IN THE YEAR OF RECEIPT. IT IS A WELL SETTLED LAW THAT THE A DVANCE RECEIVED IS NOT TO BE TAXED IN THE YEAR OF RECEIPT, BUT IS TO BE TAXED IN THE YEAR OF SALE OF PLOT IN RESPECT OF WHICH THE ON-MONEY HAS BEEN RE CEIVED AS ADVANCE. THE TOTAL SALE CONSIDERATION INCLUDES ON-MONEY. AFTER DEDUCTING THE COST OF PLOT AND EXPENDITURE THEREON, FROM TOTAL CONSIDERATION, THE NET AMOUNT IS TO BE TAXED. SINCE, THER E WAS DISPUTE BETWEEN THE ASSESSEES AND THE LUTHRA GROUP, THE LAND DEAL WENT UNDER LITIGATION AND HENCE, THE PLOTS COULD NOT BE SOLD. THE LD. AR FURTHER SUBMITTED THAT, THE ASSESSEES ACCEPTED THE ADDITION MAD E BY THE ASSESSING OFFICER IN QUANTUM PROCEEDINGS AND ACCORDINGLY, WITHDREW THE APPEALS FILED BEFORE THE COMMISSIONER OF INCOME TAX (APP EALS). THE WITHDRAWAL OF THE APPEALS BY THE ASSESSEES IN ASSESSMENT PROCEEDINGS HAVE NO BEARING IN PENALTY PROCEEDINGS, AS BOTH THE PROC EEDINGS ARE INDEPENDENT. THE LD. AR PRAYED FOR DISMISSING THE APPEALS O F THE REVENUE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DECISIONS ON WHICH THE LD. AR OF T HE ASSESSEES HAVE PLACED RELIANCE. DURING THE COURSE OF SEARCH ACTION U/S. 132 IN CASE OF LUTHRA GROUP, IT WAS FOUND THAT THE ASSESSEES H AVE MADE CASH PAYMENT OF RS.2.80 CRORES FOR PURCHASE OF LAND. REASSESSM ENT PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEES. THE L D. AR HAS ARGUED THAT SINCE, THE ALLEGED INCRIMINATING MATERIAL WAS FOUN D DURING SEARCH PROCEEDINGS THE RIGHT COURSE OF ACTION FOR THE R EVENUE IS TO 8 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 INITIATE PROCEEDINGS U/S. 153C AND NOT U/S. 148 R.W.S. 147 OF THE ACT. HERE IT WOULD BE ESSENTIAL TO REFER TO THE PROVISIONS OF S ECTION 153C OF THE ACT. THE RELEVANT EXTRACT OF SAME READS AS UNDER: 153C. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DO CUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. 7. THUS, A PERUSAL OF SUB-SECTION (1) OF SECTION 153C WOULD S HOW THAT WHERE ANY DOCUMENTS IS SEIZED DURING THE COURSE O F SEARCH BELONGING TO OTHER PERSON, THE SAME SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSO N. THE SECTION OVER RIDES THE PROVISIONS OF SECTIONS 147 AND 148 OF THE ACT . WE FIND FORCE IN THE SUBMISSIONS OF THE LD. AR. IN THE PRESENT CASE, REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF IN CRIMINATING DOCUMENT FOUND AGAINST THE ASSESSEE DURING SEARCH PROC EEDINGS IN THE CASE OF LUTHRA GROUP. THUS, THE RIGHT COURSE OF ACTION FO R THE REVENUE IS TO INITIATE PROCEEDINGS U/S. 153C AND NOT U/S. 148 OF T HE ACT. OUR VIEW IS SUPPORTED BY THE DECISION OF AMRITSAR BENCH OF TRIB UNAL IN THE CASE OF ITO VS. ARUN KUMAR KAPOOR (SUPRA), WHEREIN, UNDE R SIMILAR CIRCUMSTANCES THE TRIBUNAL HAS HELD THAT THE PROCEEDING S U/S. 148 ARE ILLEGAL AND VOID AB INITIO. THE RELEVANT EXTRACT OF THE ORDER IN THE CAS E OF ITO VS. ARUN KUMAR KAPOOR (SUPRA) IS AS UNDER: 7.2. THE UNDISPUTED FACTS ARE THAT A SEARCH WAS CO NDUCTED UNDER S. 132 OF THE ACT IN THE CASE OF M/S. TODAY HOMES & INFRAS TRUCTURE (P.) LTD. ON 28TH MARCH, 2006, DURING THE COURSE OF WHICH CERTAI N INCRIMINATING DOCUMENTS WERE ALLEGEDLY SEIZED. IT IS ALSO A MATTE R OF RECORD THAT THE DY. CIT, CENTRAL CIRCLE-22, NEW DELHI INTIMATED THE AO OF THE ASSESSEE ABOUT SEIZURE OF CERTAIN DOCUMENTS PERTAINING TO TH E ASSESSEE DURING 9 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 SEARCH AND ENCLOSED COPY OF THOSE DOCUMENTS REQUEST ING HIM TO TAKE APPROPRIATE ACTION UNDER S. 153C/148 OF THE ACT. IT IS AFTER THAT THAT DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE CIT(A) THE ASSESSEE TOOK AN ADDITIONAL GROUND OF APPEAL TO THE EFFECT T HAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE AO UNDER S. 148 ARE IL LEGAL AND VOID AB INITIO. IN THE INSTANT CASE, THE LEARNED CIT(A) HAS CORRECTLY OBSERVED THAT THE AO SHOULD HAVE ISSUED NOTICE UNDER S. 153C OF T HE ACT AND SHOULD HAVE FRAMED THE ASSESSMENT UNDER S. 153C R/W S. 153 A OF THE ACT. SEC. 153C OF THE ACT READS AS UNDER : '153C. NOTWITHSTANDING ANYTHING CONTAINED IN S. 139 , S. 147, S. 148, S. 149, S. 151 AND S. 153, WHERE THE AO IS SAT ISFIED THAT ANY MONEY, BULLION OR OTHER VALUABLE ARTICLE OR THING O R BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG S OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN S. 15 3A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR R EQUISITIONED SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT AO SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR RE ASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISI ONS OF S. 153A.' 8. ON A PERUSAL OF THE ABOVE PROVISIONS, IT WOULD B E CLEAR THAT THE PROVISIONS OF S. 153C OF THE ACT WERE APPLICABLE, W HICH SUPERSEDES THE APPLICABILITY OF PROVISIONS OF SS. 147 AND 148 OF T HE ACT. AS WE HAVE ALREADY NOTED HEREINABOVE THAT THE DOCUMENTS WERE S EIZED DURING THE SEARCH UNDER S. 132 OF THE ACT AND THE SAME WERE SE NT TO THE ASSESSEE'S AO AT AMRITSAR BY THE OFFICER AT DELHI IN OUR VIEW, THE LEARNED CIT(A) HAS CORRECTLY OBSERVED THAT ONLY THE PROVISION IN WHICH ANY ASSESSMENT COULD BE MADE AGAINST THE ASSESSEE IN THE IT ACT WAS S. 1 53C R/W S. 153A OF THE ACT. IT IS ALSO APPARENT FROM THE RECORD THAT T HE OFFICER AT DELHI HAS MENTIONED IN HIS LETTER THAT THE NECESSARY ACTION M AY BE TAKEN AS PER LAW UNDER S. 153C/148 OF THE ACT. HENCE, NOTICE ISS UED UNDER S. 148 OF THE ACT AND PROCEEDINGS UNDER S. 147 OF THE ACT BY THE AO ARE ILLEGAL AND VOID AB INITIO. IN VIEW OF THE PROVISIONS OF S. 153 C OF THE ACT, S. 147/148 STANDS OUSTED. IN THE INSTANT CASE, THE PROCEDURE L AID DOWN UNDER S. 153C HAS NOT BEEN FOLLOWED BY THE AO AND, THEREFORE , ASSESSMENT HAS BECOME INVALID. WE ALSO OBSERVE THAT THE CIT(A) WAS JUSTIFIED IN FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI V. ASSTT. CIT [2007] 289 ITR 341 / 159 TAXMAN 258 WHEREIN IT HAS BEEN HELD THAT IF THE PROCEDURE LAID DOWN IN S. 158BD IS NOT FOLLOWED, BLOCK ASSESSMENT PROCEEDINGS WOULD BE ILLEGAL. THE CIT(A) HAS CORRECTLY OBSERVED THAT THE PROVISIONS OF S. 15 3C ARE EXACTLY SIMILAR 10 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 TO THE PROVISIONS OF S. 158BD OF THE ACT IN BLOCK A SSESSMENT PROCEEDINGS. THUS, CONSIDERING THE ENTIRE FACTS AND THE CIRCUMST ANCES OF THE PRESENT CASE, WE HOLD THAT THE CIT(A) WAS FULLY JUSTIFIED I N QUASHING THE REASSESSMENT ORDER. WE ALSO DO NOT FIND ANY MERIT I N THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT DURING THE COURSE OF SEARCH, IT WAS FOUND AT PREMISES OF M/S. TODAY HOME S & INFRASTRUCTURE (P.) LTD. PERTAINING TO M/S. P.R. INFRASTRUCTURE LT D. AND NOT THE ASSESSEE. IN THIS REGARD, WE MAY POINT OUT THAT THE CONTENTIO N RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS FACTUALLY INCORRECT AND CONTRARY TO THE AVAILABLE RECORDS OF SEIZED DOCUMENTS SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER DT. 30TH DEC, 2008. IN VIEW OF THE ABOVE FACTUAL DISCUSSION, WE DO NOT FIND ANY MERIT AND SUBSTANCE IN THE CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUND NOS. 1 TO 4 OF THE APPEAL. SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SRI MOTI PUNJABI, HUF (SUPRA). SINCE, T HE SUBSTRATUM FOR MAKING ADDITION IS ITSELF BAD IN LAW, NO PENALT Y CAN BE LEVIED ON SUCH ADDITION. 8. AS FAR AS THE SUBMISSIONS OF LD. DR WITH RESPECT TO WITH DRAWAL OF QUANTUM APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (AP PEALS) IS CONCERNED, WE DO NOT FIND ANY MERIT IN THE SAME. IT IS A WELL SETTLED LAW THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS U/ S. 271(1)(C) ARE INDEPENDENT AND DISTINCT. THE FINDINGS GIVEN IN ASSESSMENT PROCEEDINGS CANNOT BE CONSIDERED AS CONCLUSIVE FOR THE P URPOSE OF LEVY OF PENALTY U/S. 271(1)(C). NO DOUBT, THE FINDINGS IN ASSESSME NT PROCEEDINGS MAY HAVE SOME SIGNIFICANCE IN THE PENALTY PROC EEDINGS BUT THEY ARE NOT DECISIVE OR DETERMINATIVE. THIS LAW HAS BEEN LAID DOWN BY THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS . KHODAY ESWARSA & SONS; 83 ITR 369 (SC) AND IS BEING CONSISTENTL Y FOLLOWED THEREAFTER. 11 ITA NOS. 1278, 1333 & 1334/PN/2013, A.Y. 2006-07 9. A PERUSAL OF THE IMPUGNED ORDERS SHOWS THAT THE COM MISSIONER OF INCOME TAX (APPEALS) HAS DELETED THE PENALTY ON THE GR OUND THAT THE AMOUNT OF ON-MONEY RECEIVED AS ADVANCE BY THE ASSESSE ES FROM THE PROSPECTIVE CUSTOMERS OF THE PLOTS IS TO BE TAXED IN THE YEAR OF SALE OF PLOTS. WE DO NOT FIND ANY ERROR IN THE FINDINGS OF THE COMM ISSIONER OF INCOME TAX (APPEALS). IN VIEW OF THE ABOVE, WE OBSERVE THAT THE AP PEALS OF THE REVENUE LACK MERIT. ACCORDINGLY, THE SAME ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 21 ST DAY OF AUGUST, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 21 ST AUGUST, 2015 RK )*+#,-!.!', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, NASHIK 4. ' / THE CIT-I, NASHIK 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- / ITAT, PUNE