ACIT, New Delhi V. Sh. Gulshan Kumar Sethi, Delhi

ITA 5220/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8042 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 20-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMITA M BISWAS
• Keywords: Document seized; Source of fund; Additional evidence; Assessment record; Documents seized; Set aside
• Section: 153A; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 5220/DEL/2015 A.Y. : 2012-13 ACIT, CIRCLE-59(1), NEW DELHI ROOM NO. 101, F-BLOCK, VIKAS BHAWAN, NEW DELHI VS. GULSHAN KUMAR SETHI, A-12, SWASTHYA VIHAR, DELHI-110 092 (PAN: AASPS1248Q) (ASSESSEE) (RESPONDENT) REVENUE BY : MS. PRAMITA M. BISWAS, CIT(DR) ASSESSEE BY : SH. C.S. ANAND, ADVOCATE ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMPUGN ED ORDER DATED 12.06.2015 OF THE LD. CIT(A)-19, NEW DELHI RELE VANT TO ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ A S UNDER:- 1. THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND NOT INCONSONANCE WITH THE FACTS OF THE CASE. 2 2. THE LD. CIT(A) FAILED TO APPRECIATE THE EFFORTS OF THE ASSESSING OFFICER OF THE SEARCHED PARTY BY HOLDING THE NOTICE U/S 153C OF THE ACT AS ILLEGAL UNDER THE CIRCUMSTANCES THAT THE ASSESSING OFFICER OF THE SEARCHED PARTY RECORDED HIS SATISFACTION ON THE BAS IS OF THE STATEMENT OF SRI SABBINENI SURENDERA. A MAIN PERSON OF THE M/S COASTAL PROJECTS GROUP, THAT THE SEIZED DOCUMENTS BELONG TO THE ASSESSEE, SH. GULSHAN KUMAR SETHI. 3. THE LD. CIT(A) ERRED IN HOLDING THE NOTICE U/S 153C AS INVALID MERELY ON THE SUBMISSIONS AND EVIDENCES FURNISHED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS MANY OF THEM BEING IN THE NATURE OF ADDITIONAL EVIDENCE/ARGUMENT AND NOT AFFORDING OPPORTUNITY TO THE ASSESSING OFFICER BY WAY OF SEEKING REMAND REPORT FROM HER. 4. THE LD. CIT(A) ERRED IN DECIDING THE APPEAL BY NOT STEPPING INTO THE SHOES OF THE ASSESSEE OFFICER BY NOT REQUISITIONING RECORDS OF THE SEARCHED PARTY FROM HYDERABAD. 3 5. THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS.6,45,00,000/- BY IGNORING THE FACT THAT THE PERS ON MAKING THE PAYMENT HAD ADMITTED FOR THE SAME AND ALSO OFFERED THE INCOME FOR TAXATION PURPOSE. 6. THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE A SSESSEE ON THE GROUND THAT THE ASSESSEE CEASED TO BE THE DIRECTOR OF THE COMPANY M/S HUMMING BIRDS SOLUTION PVT. LTD. W.E.F. 16.03.2007 WHEREAS HE WAS THE KEY PERSON AS PER SEIZED DOCUMENT TO NEGOTIATE THE DEAL FOR TRANSFER OF COMPANY AND ALSO THE NAME OF OTHER DIRECTOR WERE NOT DISCLOSED AT THE TIME OF NEGOTIATIONS. THE LD. CIT(A) SHOULD HAVE TAKEN COGNIZANCE OF SUBSTANTIVE OR BENEFICIAL OWNERSH IP, BEING THAT OF THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 13.03.201 3 AT A TOTAL INCOME OF RS. 20,72,270/-. AS PER THE ASSESSMENT ORDER, TH ERE WAS A SEARCH ON 25.11.2011 AT THE PREMISES OF M/S.COASTAL PROJECTS LTD. AND CERTAIN DOCUMENTS RELATING TO THE APPELLANT WERE SEIZED. BA SED ON THE ABOVE DOCUMENTS, DCIT, CENTRAL CIRCLE-4, HYDERABAD ON 07. 01.2014 RECORDED HIS SATISFACTION THAT SHEETS NUMBERED 18-19 IN ANNE XURE A/CPL/01 BELONGED TO THE ASSESSEE AND REQUESTED THE ASSESSI NG OFFICER OF THE 4 ASSESSEE TO ISSUE NOTICE UNDER SECTION 153C OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) TO THE ASSESSEE FROM ASSESSMENT YE AR 2006-07 TO ASSESSMENT YEAR 2012-13. ACCORDINGLY, THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER SECTION 153C OF THE ACT R.W.S. 15 3A OF THE ACT ON 14.03.2.014. THE ASSESSEE FILED ANOTHER RETURN FOR A.Y. 2012-13 IN COMPLIANCE OF THE ABOVE NOTICE ON 18.11.2004 SHOWIN G THE SAME INCOME OF RS. 20,72,270/-. SUBSEQUENTLY, THE FILE WAS TRAN SFERRED TO ACIT, CIRCLE- 59(1) AND THE ASSESSMENT WAS COMPLETED ON 31.03.201 5 UNDER SECTION 153C OF THE ACT READ WITH SECTION 153A OF THE ACT A FTER ADDING RS. 6,45,00,000/- U/S. 56 OF THE ACT AS ASSESSEES UNDISCLOSED INCOME ON THE BASIS OF LETTER DATED 17.3.2015 RECEIVED FROM T HE DCIT, CENTRAL CIRCLE-2(2), HYDERABAD INTIMATING THAT SH. SABBINEN I SURENDRA HAS ADMITTED THAT A PAYMENT OF RS. 6.45 CRORES WAS MADE TO SH. GULSHAN KUMAR AND COMPLETED THE ASSESSMENT AT RS. 6,65,72,2 70/- VIDE ORDER DATED 30.03.2015 U/S. 153C R.W.S. 153A OF THE ACT. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE FILED THE APPEAL BEFO RE THE LD. CIT(A) WHO VIDE HIS IMPUGNED ORDER DATED 26.11.2015 HAS ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITION O F RS. 6.45 CRORES. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A)-1 9, NEW DELHI THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. DR RELIED UPON THE ORDER OF THE AO. SHE STATED THAT ORDER OF THE LD. CIT(A) IS BAD IN LAW AND NOT INCONSONANC E WITH THE FACTS OF THE CASE, BECAUSE HE FAILED TO APPRECIATE THE EFFORTS O F THE ASSESSING OFFICER 5 OF THE SEARCHED PARTY BY HOLDING THE NOTICE U/S 153 C OF THE ACT AS ILLEGAL UNDER THE CIRCUMSTANCES THAT THE ASSESSING OFFICER OF THE SEARCHED PARTY RECORDED HIS SATISFACTION ON THE BASIS OF THE STATE MENT OF SRI SABBINENI SURENDERA, A MAIN PERSON OF THE M/S COASTAL PROJECT S GROUP, THAT THE SEIZED DOCUMENTS BELONG TO THE ASSESSEE, SH. GULSHA N KUMAR SETHI. SHE FURTHER STATED THAT LD. CIT(A) WRONGLY OBSERVED THA T THE NOTICE U/S 153C IS INVALID MERELY ON THE SUBMISSIONS AND EVIDENCES FURNISHED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS AND EVEN MANY OF THEM BEING IN THE NATURE OF ADDITIONAL EVIDENCE/ARG UMENT AND NOT AFFORDING OPPORTUNITY TO THE ASSESSING OFFICER BY W AY OF SEEKING REMAND REPORT FROM HER. IT WAS FURTHER SUBMITTED THAT LD . CIT(A) WRONGLY DELETED THE ADDITION OF RS.6,45,00,000/- BY IGNORIN G THE FACT THAT THE PERSON MAKING THE PAYMENT HAD ADMITTED FOR THE SAME AND ALSO OFFERED THE INCOME FOR TAXATION PURPOSE AND LD. CIT(A) ALSO ERRED IN ALLOWING RELIEF TO THE ASSESSEE ON THE GROUND THAT THE ASSES SEE CEASED TO BE THE DIRECTOR OF THE COMPANY M/S HUMMING BIRDS SOLUTION PVT. LTD. W.E.F. 16.03.2007 WHEREAS HE WAS THE KEY PERSON AS PER SEI ZED DOCUMENT TO NEGOTIATE THE DEAL FOR TRANSFER OF COMPANY AND ALSO THE NAME OF OTHER DIRECTOR WERE NOT DISCLOSED AT THE TIME OF NEGOTIAT IONS. HOWEVER, LD. CIT(A) SHOULD HAVE TAKEN COGNIZANCE OF SUBSTANTIVE OR BENEFICIAL OWNERSHIP, BEING THAT OF THE ASSESSEE, WHICH HE HAD NOT DONE. 5. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE H AS RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HA S PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFE RENCE. HOWEVER, 6 IN SUPPORT OF HIS CONTENTION, HE FILED A COPY OF S YNOPSIS WHICH IS REPRODUCED AS UNDER:- 1. THE DCIT, CENTRA! CIRCLE-4 HYDERABAD HAD ISSUED A LETTER DT. 07.01.2014 (EXHIBIT- 1) TO THE ITO, WARD-36(2) NEW DELHI, INTIMATING HIM THAT DURING THE COURSE OF SEARCH & SEIZURE OPERATION CARRIED OUT ON 25.11.2011 U/S 132 IN GROUP CASES OF M/S COASTAL PROJECTS LIMITED, THE DOCUMENTS VIDE ANNEXURE A / CPL/01 WAS SEIZED. THE DCIT, CENTRAL CIRCLE-4 HYDERABAD HAD MENTIONED THAT (I) AS PER THE SHEETS NUMBERED AS 18-19 OF THE ABOVE ANNEXURE, HE IS SATISFIED THAT THESE PAPERS BELONG TO SH. GULSHAN KUMAR; (II) HE HAS BEEN DIRECTED TO HANDOVER A COPY OF THE SAID SEIZED MATERIAL TO THE JURISDICTIONAL A.O. OF SH. GULSHAN KUMAR FOR ASSESSING OR REASSESSING THE INCOME OF SH. GULSHAN KUMAR IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A; AND (III) THE ASSESSEE OFFICE IS REQUESTED TO ISSUE NOTICES U/S 153C TO SH. 7 GULSHAN KUMAR FOR A.Y. 2006-07 TO A.Y. 2012- 13 AND COMPLETE THE ASSESSMENT. 2. A PERUSAL OF PAGE 18 (EXHIBIT-2) REVEALED THAT IT IS A NOTE PREPARED BY ONE- MR. DHARMENDRA(WHICH IS SIGNED BY SOMEONE ELSE FOR & ON BEHALF OF THE SAID MR. DHARMENDRA) ON 06.05.2011 REGARDING HIS DISCUSSIONS WITH THE OWNER OF PLOT NO. C-L, SECTOR-65, AND THE SAME WAS FORWARDED TO SOMEONE ELSE WITH THE CONCLUDING REMARK 'SUBMITTED FOR FURTHER ADVICE PLEASE'. [NOTE: THIS DOCUMENT DO NOT BEAR THE SIGNATURE OF SH. GULSHAN KUMAR SETHI]. 3. A PERUSAL OF PAGE 19 (EXHIBIT-3) REVEALED THAT THIS SHEET IS PREPARED BY SOMEONE REGARDING PROPOSED PURCHASE OF PLOT NO. C-L, SECTOR-65, AND THE SAME WAS FORWARDED TO SOMEONE ELSE WITH THE CONCLUDING REMARK 'FOR THE KIND INFORMATION OF MD'. [NOTE: THIS DOCUMENT DO NOT BEAR THE SIGNATURE OF SH. GULSHAN KUMAR SETHI]. 8 4. THE ITO, WARD- 36(2) NEW DELHI HAD MECHANICALLY RECORDED HIS SATISFACTION ON 10.10.2014 (EXHIBIT- 4), WHILE STATING THAT HE IS SATISFIED THAT PROCEEDINGS U/S 153C OF THE I.T. ACT 1961 ARE REQUIRED TO BE INITIATED. THEREAFTER, THE ITO, WARD- 36(2) NEW DELHI HAD ISSUED NOTICES U/S 153C FOR A.Y. 2006-07 TO A.Y. 2012- 13. 5. ULTIMATELY THE ACIT, CIRCIE-59(1) NEW DELHI HAD PASSED THE ASSESSMENT ORDER U/S 153C R.W.S153A OR. 31.03.2015, THEREBY MAKING ADDITION IN THE HANDS OF THE ASSESSEE AT RS. 6,45,00,000/- REPRESENTED THE VALUE OF PLOT NO. C-L. SECTOR-65, AS FOUND MENTIONED ON PAGE 19. 6. ON APPEAL BEFORE THE ID. CIT(A), THE ASSESSEE HAD CHALLENGED THE INITIATION OF PROCEEDINGS U/S 153C ON THE GROUND THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON HAS NOT RECORDED HIS SATISFACTION THAT THOSE DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON. FOR SUCH PROPOSITION, THE ASSESSEE HAD PLACED RELIANCE UPON THE DECISIONS 9 OF HON'BLE DELHI HIGH COURT IN THE CASES PEPSI FOODS PVT. LTD. VS. ACIT [367 ITR 112] AND PEPSICO INDIA HOLDINGS PVT. LTD. VS. ACIT [370 ITR 295]. 7. AFTER CAREFULLY EXAMINING THE FACTS OF THE CASE, THE CASE MADE OUT BY THE ACIT, CIRCLE-59(1) NEW DELHI VIDE ASSESSMENT ORDER IN THE LIGHT OF THE SEIZED DOCUMENTS FORWARDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE ASSESSEE'S SUBMISSIONS IN THE LIGHT OF THE DECISIONS RELIED UPON BY THE ASSESSEE, THE ID. CIT(A) HAD CATEGORICALLY RECORDED HIS FINDING THAT 'THE ASSESSING OFFICER OF THE SEARCH COMPANY NAMELY DCIT, CENTRAL CIRCLE-4 HYDERABAD, IN THE SATISFACTION NOTE HAD NOT STATED THAT THE SEIZED MATERIAL DO NOT BELONG TO THE SEARCHED PERSON'. 8. THE ASSESSEE HAD ALSO CHALLENGED THE ADDITION OF RS. 6,45,00,000/- ON FACTUAL GROUNDS, BY POINTING OUT THAT THE PLOT NO. C-L, SECTOR-65, NOIDA WAS NEVER OWNED BY HIM. ON SPECIFIC QUERY RAISED BY THE LD.CIT(A) REGARDING 10 OWNERSHIP OF THE SAID PLOT, THE ASSESSEE HAD INFORMED THAT THE SAID PLOT WAS-OWNED BY HUMMING BIRDS SOFTWARE PRIVATE LIMITED, WHOSE DIRECTORS WERE SANDEEP MALIK & VEENA MALIK. THE ASSESSEE HAD ALSO CLARIFIED THAT HE HAD CEASED TO BE THE DIRECTOR OF THIS COMPANY W.E.F 15.03.2007. ON SPECIFIC DIRECTIONS OF THE ID. CIT(A), THE ASSESSEE HAD MADE AVAILABLE CERTAIN DOCUMENTS WHICH WERE ALREADY AVAILABLE ON THE PUBLIC DOMAIN VIZ; ROC & IT DEPARTMENT. 9. AFTER CAREFULLY EXAMINING THE FACTS OF THE CASE, THE CASE MADE OUT BY THE ACIT, CIRCLE-59(1) NEW DELHI VIDE ASSESSMENT ORDER IN THE LIGHT OF THE SEIZED DOCUMENTS FORWARDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE ASSESSEE'S SUBMISSIONS, THE ID. CIT(A) HAD CATEGORICALLY RECORDED HIS FINDING THAT (I) THE ACIT, CIRCLE- 59(1) NEW DELHI HAD MADE ADDITION OF RS.6,45,00,000/- IN THE HANDS OF THE ASSESSEE MERELY ON THE PRESUMPTION THAT IT WAS THE ASSESSEE WHO HAD RECEIVED THE ENTIRE CONSIDERATION OF RS. 6,45,00,000/- WITHOUT 11 BRINGING ON RECORD ANY EVIDENCE TO SUPPORT HER SUCH PRESUMPTION; (II) THE ACIT, CIRCLE-59(1) NEW DELHI HAD NOT EVEN BOTHERED TO VERIFY AS TO WHO HAD BEEN PAID RS. 70,00,000/- THROUGH CHEQUE; AND (III) ON VERIFYING THE ASSESSMENT RECORDS MAINTAINED BY THE ACIT, CIRCLE-59(1) NEW DELHI, HE HAD NOTICED THAT THERE IS NO EVIDENCE WHATSOEVER INDICATING THAT GUISHAN KUMAR SETHI HAD RECEIVED RS. 6,45,00,000/-. [NOTE: THE ID. CIT(A) HAD CALLED FOR THE ASSESSMENT RECORD TO HIMSELF VERIFY THE DOCUMENTS LYTNG SN TR*E ASSESSMENT FOLDER AS TO WHETHER THERE IS ANY EVIDENCE SHOWING RECEIPT OF RS. 6,45,00,000/- BY GUISHAN KUMAR SETHI.] 5.1 IN SUPPORT OF AFORESAID CONTENTION MENTIONED IN TH E SYNOPSIS, LD. COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE F OLLOWING CASE LAWS, BY FILING THE COPIES THEREOF. A) HONBLE DELHI HIGH COURT DECISION IN THE CASE OF PEPSI FOODS P. LTD. VS. ACIT (2014) 367 ITR 112 (DEL.) 12 B) HONBLE DELHI HIGH COURT DECISION IN THE CASE OF PEPSICO INDIA HOLDINGS P. LTD. VS. ACIT AND ANOTHER (2015) 370 ITR 295 (DEL.) C) HONBLE DELHI HIGH COURT DECISION IN THE CASE OF CANYON FINANCIAL SERVICES LTD. VS. ITO (2017) 399 ITR 202 (DEL.) D) HONBLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. (1) RENU CONSTRUCTIONS PVT. LTD. (ITA NO. 499 OF 2011); (2) ANKIT GUPTA (ITA NOS. 32 AND 35 OF 2012); AND (3) ANKIT GUPTA, L/H MANOJ KUMAR (ITA NOS. 41 AND 125 OF 2017) VIDE ORDER DATED 6.9.2017 (2017) 399 ITR 262 (DEL.) 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), WRITT EN SYNOPSIS AND THE CASE LAWS FILED BY THE ASSESSEES COUNSEL. WE FIN D THAT LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUES IN DISPUTE I.E. LE GAL AS WELL AS ON MERITS VIDE PARA NO. 5 TO 11 AT PAGE NOS. 4 TO 11 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). FOR THE SAKE OF CLARITY, WE ARE REPRODUCING HEREUNDER THE SAID RELEVANT FINDINGS OF THE LD. CIT(A). 5. GROUND NOS. 1 & 2 ARE AGAINST THE INITIATION OF PROCEEDINGS UNDER SECTION 153C WHICH AS PER THE 13 APPELLANT IS NOT IN ACCORDANCE WITH LAW AND THEREFO RE, THE ASSESSMENT COMPLETED ON 31.03.2015 NEEDS TO BE SET ASIDE. DURING THE APPELLATE PROCEEDINGS, THE APPELLANTS AUTHORIZED REPRESENTATIVE CHALLENGED TH E ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER BEFORE ISSUING NOTICE UNDER SECTION 153C OF INCOME- TAX ACT. IN THIS REGARD, THE APPELLANTS AUTHORIZED REPRESENTATIVE RELIED ON THE JURISDICTIONAL HIGH CO URTS DECISION IN THE CASE OF M/S. PEPSICO INDIA HOLDINGS PVT. LTD. REPORTED IN 370 ITR 295, WHEREIN IT WAS HELD T HAT UNLESS IT WAS FIRST ESTABLISHED THAT THE SEIZED DOC UMENTS DO NOT BELONG TO THE PERSON IN RESPECT OF WHOM SEAR CH WAS CONDUCTED, THE PROVISIONS UNDER SECTION 153C ON ANY OTHER PERSON CANNOT BE VALIDLY INVOKED. AS PER THE APPELLANTS AUTHORIZED REPRESENTATIVE, THE ASSESSIN G OFFICER OF THE SEARCH COMPANY NAMELY DCIT, CENTRAL CIRCLE-4, HYDERABAD IN THE SATISFACTION NOTE HAD FA ILED TO STATE THAT THE SEIZED DOCUMENTS NAMELY, SHEETS NUMBERED 18 & 19 IN ANNEXURE A/CPL/01 DO NOT BELONGED TO HIS ASSESSEE M/S. COASTAL PROJECTS LTD. ON WHOM THE SEARCH WAS CONDUCTED ON 25.11.2011. IN SUPPORT OF THIS CONTENTION, THE APPELLANT FILED THE COPY OF THE SATISFACTION NOTE OF DCIT, CENTRAL CIRCLE-4, 14 HYDERABAD, DATED 07.01.2014. THE RELEVANT PORTION O F THE ABOVE SATISFACTION NOTE IS AS FOLLOWS:- TO THE INCOME TAX OFFICER, WARD 36(2), NEW DELHI. SUB: SEARCH & SEIZURE OPERATIONS IN THE GROUP CASES OF M/S. COASTAL PROJECTS LTD. - DOCUMENTS RELATING TO OTHER PERSONS U/S. 153 C - FORWARDING OF - REGARDING - SE ARCH OPERATIONS UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 WERE CONDUCTED IN THE GROUP CASES OF M/S. COAS TAL PROJECTS LTD. ON 25.11.2011. DURING THESE OPERATION S, THE DOCUMENTS VIDE ANNEXURE A/CPL/01 WERE SEIZED FROM THE BUSINESS PREMISES OF M/S. COASTAL PROJECTS PVT. LTD. AS PER PANCHANAMA DATED 25.11.2011. ON VERIFICATION OF THE SHEET NUMBERED AS 18-19 OF THE ABOVE ANNEXURE. I AM SATISFIED THAT THESE PAPERS BELONGS TO THE FOLLOWING PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153C OF THE INCOME TAX ACT, 1 961. NAME & ADDRESS PERMANENT ACCOUNT NUMBER SHRI GULSHAN KUMAR AASPS1248Q S/O. G. C. SETHI A-12, SWASTHYA VIHAR, 15 NEW DELHI - 92. 2. I HAVE BEEN DIRECTED TO HAND OVER A COPY OF ABOV E SEIZED MATERIAL TO THE JURISDICTIONAL ASSESSING OFF ICER AS ABOVE FOR ASSESSING OR RE-ASSESSING THE INCOME OF T HE ABOVE PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. HENCE THE SAME IS FORWARDED TO YOU. A COPY OF THE RELEVANT PORTION OF THE APPRAISAL REPOR T IS ALSO FORWARDED FOR NECESSARY ACTION AT YOUR END. 3. THE ASSESSING OFFICER IS REQUESTED TO ISSUE NOTI CES UNDER SECTION 153C IN THE ABOVE CASE FOR ASSESSMENT YEAR ASSESSMENT YEAR 2006-07 TO 2012-13 AND COMPLETE THE ASSESSMENT. IT IS FURTHER REQUESTED TO NOTE THAT THE TIME BARRING DATE FOR COMPLETION OF ASSESS MENT 131.03.2015. YOURS FAITHFULLY, SD/- (B. KURMINAIDU) DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-4, HYDERABAD. ENEL: AS ABOVE. 6. AS PER THE APPELLANTS AUTHORIZED REPRESENTATIVE , THE ASSESSING OFFICER OF THE SEARCHED COMPANY ONLY STATED THAT HE WAS SATISFIED THAT SHEET NUMBERED 18 -19 OF THE ANNEXURE A/CPL/01 BELONGED TO THE APPELLANT BUT FAILED TO MENTION THAT THESE PAPERS DO NOT BELONG T O THE 16 SEARCH COMPANY NAMELY M/S. COASTAL PROJECTS LTD. TH E APPELLANTS AUTHORIZED REPRESENTATIVE ALSO MENTION ED JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF PEPSI FOOD (P) LTD. REPORTED IN 367 ITR 112, WHEREIN IT W AS HELD THAT BEFORE A NOTICE UNDER SECTION 153C CAN BE ISSUED TWO STEPS ARE TO BE TAKEN. THE FIRST STEP IS THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE AT SATISFACTION THAT A DOCUMENT SEIZED FROM HIM DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON . IT IS ONLY IN THE SECOND STEP THAT THE DOCUMENT IS TO BE HANDED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM THE SEIZED DOCUMENT 'BELONGS'. IN THE ABOVE DECISION, THE HON'BLE JURISDICTIONAL HIGH COURT HAD STATED THAT THE NORMA! PRESUMPTION IS THAT THE DOCUMENT FOUND DURING THE SEARCH BELONGS TO THE PERSON ON WHOM THE SEARCH WAS CONDUCTED. THEREFORE, IT IS FOR THE ASSESSING OFFICER OF THE SEARCHED PER SON TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR 'SATISFACTION' THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. THUS, ACCORDING TO THE APPELLANTS AUTHORIZED REPRESENTATIVE, IN THE CASE OF THE APPEL LANT, THE ASSESSING OFFICER OF THE SEARCHED PERSON HAD NO T REBUTTED THE PRESUMPTION THAT THE SEIZED DOCUMENTS 18-19 BELONGED TO M/S. COASTAL PROJECTS LTD. THEREF ORE, 17 AS PER THE APPELLANTS AUTHORIZED REPRESENTATIVE, I N LIGHT OF THE ABOVE DECISION OF THE JURISDICTIONAL H IGH COURT, THE FIRST STEP ITSELF HAD NOT BEEN FULFILLED AND THUS, THE ISSUE OF NOTICE UNDER SECTION 153C ON THE APPELLANT IS ILLEGAL. ACCORDING TO THE APPELLANTS AUTHORIZED REPRESENTATIVE, IN THE SUBSEQUENT DECISI ON OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF PEPSICO INDIA HOLDINGS PVT. LTD. MENTIONED EARLIER, IT WAS CLEARLY HELD THAT UNLESS AND UNTIL IT IS ESTABL ISHED THAT DOCUMENTS SEIZED DO NOT BELONG TO SEARCHED PERSON, THE PROVISIONS OF SECTION 153C DO NOT GET ATTRACTED. THE RELEVANT PORTION OF THE ABOVE DECISI ON OF PEPSICO INDIA HOLDINGS PVT. LTD. REPORTED IN 367 IT R 112 IS AS FOLLOWS:- UNLESS AND UNTIL IT IS ESTABLISHE D THAT THE DOCUMENTS DO NOT BE IONS TO THE SEARCHED PERSON , THE PROVISIONS OF SECTION 153C OF THE SAID ACT DO N OT SET ATTRACTED BECAUSE THE VERY EXPRESSION USED IN SECTI ON 153C OF THE SAID ACT IS THAT 'WHERE THE ASSESSING O FFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A IN VIEW OF THIS PHRASE, IT IS NECESSARY THAT B EFORE THE PROVISIONS OF SECTION 153C OF THE SAID ACT CAN BE 18 INVOKED, THE ASSESSING OFFICER OF THE SEARCHED PERS ON MUST BE SATISFIED THAT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONGS TO THE PERSON REFERRED TO IN SECTION 153A (I.E., THE SEARCHED PER SON). 7. SINCE THE JURISDICTIONAL HIGH COURTS DECISION MENTIONED ABOVE IS IN FAVOUR OF THE APPELLANT, AS T HE ASSESSING OFFICER OF THE SEARCH COMPANY NAMELY DCIT , CENTRAL CIRCLE-4, HYDERABAD, IN THE SATISFACTION NO TE HAD NOT STATED THAT THE SEIZED MATERIAL DO NOT BELO NG TO THE SEARCHED PERSON. I AM CONSTRAINED TO DECIDE T HE ISSUE IN FAVOUR OF THE APPELLANT. BASED ON THE ABOV E DECISION OF THE JURISDICTIONAL HIGH COURT, THE ISSU E OF NOTICE UNDER SECTION 153C TO THE APPELLANT HAD TO B E CONSIDERED AS ILLEGAL AND AS A RESULT, GROUND NOS. 1 & 2 OF THE APPELLANT ARE ALLOWED. 8. GROUND NOS. 3 & 4 ARE AGAINST THE ADDITION OF RS . 6,45,00,000/- AS UNDISCLOSED INCOME. AS PER THE ASSESSMENT ORDER, THE APPELLANT HAD SOLD PROPERTY BEARING NO. C-L, SECTOR -65, NOIDA, TO M/S. COASTAL PROJECTS LTD. AS PER THE APPELLANT, HE NEVER OWNED THE ABOVE PROPERTY BUT THE PROPERTY BELONGED TO M/S. HUMMING BIRDS SOLUTION PVT. LTD. AND THE PROPERTY CONTINUES TO BELONG TO THE SAME COMPANY. THE APPELLANT HAD FILED A COPY OF THE E-FILED INCOME TA X 19 RETURN OF THE ABOVE COMPANY FOR ASSESSMENT YEAR 2010-11 AND AS PER THE SAME, THE COMPANYS PERMANENT ACCOUNT NUMBER IS AABCH8051J AND ASSESSED BY ITO, WARD 12(4), DELHI. COPY OF THE SEI ZED DOCUMENT NO. 18 MENTIONS THE NAME OF THE COMPANY DIFFERENTLY AS M/S. BIRDS SOFTWARE PVT. LTD. AND TH E RELEVANT PORTION IS AS FOLLOWS:- NAME OF THE COMPANY: BIRDS SOFTWARE PVT. LTD. - TH E SALE PROCEDURE SHALL BE THROUGH COMPANY TRANSFER IN THE NAME OF THE BUYER AS HAPPENED IN PREVIOUS TRANSACTION. 9. THEREFORE, IT APPEARS THAT IT WAS A TRANSFER OF COMPANY AND NOT THE TRANSFER OF THE PROPERTY AS STA TED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. T HE ASSESSMENT ORDER IS ALSO SILENT REGARDING THE DATE OF THE TRANSFER OR ABOUT ANY DOCUMENT INDICATING THE TRANS FER OF THE ABOVE PROPERTY. THE ASSESSMENT ORDER MENTION S THAT SALE CONSIDERATION WAS PAID BY CHEQUE AND ALSO BY CASH. BUT THERE IS NO MENTION ABOUT THE DATE OF THE CHEQUE OR ABOUT THE RECIPIENT OF CHEQUE FOR RS. 70,00,000/-. THE ASSESSING OFFICER HAD COMPLETED TH E ASSESSMENT ON THE PRESUMPTION THAT THE APPELLANT IS THE OWNER OF THE PROPERTY BASED ON THE SEIZED DOCUMENTS NO. 18, WHICH MENTIONS AS FOLLOWS:- OWNERS NAME I S 20 MR. GULSHAN. THE NAMES OF OTHER DIRECTORS OF THE SA ID COMPANY SHALL BE KNOWN LATER. 10. THEREFORE, IT APPEARS THAT THE APPELLANT SH. GULSHAN WAS ONE OF THE DIRECTORS AND THERE IS NO MENTION IN THE ASSESSMENT ORDER ABOUT THE OTHER DIRECTORS OF THE COMPANY WHICH PROPOSED TO SELL PROPERTY TO M/S COASTRAL PROJECT PVT. LTD. THE APPELLANTS AUTHORIZED REPRESENTATIVE DURING THE APPELLATE PROCEEDINGS STATED THAT THE APPELLANT CEA SED TO BE THE DIRECTOR OF THE ABOVE COMPANY M/S. HUMMIN G BIRDS SOLUTION PVT. LTD. W.E.F. 16.03.2007. THE APP ELLANT ALSO FILED A COPY OF FORM NO. 32 FILED BEFORE THE REGISTRAR OF COMPANIES INDICATING THAT HE HAD RESIG NED AS A DIRECTOR OF THE ABOVE COMPANY FROM 15.03.2007. THE AUDITED BALANCE SHEET OF THE ABOVE COMPANY M/S. HUMMING BIRDS SOLUTION PVT. LTD. FOR THE YEAR ENDIN G 31.03.2010 FILED BEFORE ME INDICATES THE NAMES OF T HE DIRECTORS AS SANDEEP MALIK AND VEENA MALIK, BUT THE ASSESSING OFFICER IS EITHER NOT AWARE OF THESE DIRE CTORS OR EVEN IF AWARE, HAD NOT CARRIED OUT ANY ENQUIRIES ON THEIR SOURCES OF INCOME. IT APPEARS THAT THE ASSESS ING OFFICER PRESUMED THAT THE APPELLANT HAD RECEIVED TH E ENTIRE CONSIDERATION OF RS. 6,45,00,000/-, THOUGH T HE SEIZED DOCUMENT ONLY INDICATES THAT THERE WAS SOME 21 NEGOTIATIONS FOR THE SALE OF PROPERTY BEARING NO. S ECTOR- 65, NOIDA AND THERE IS NO INDICATION IN IT OF ANY D EFINITE TRANSACTION. THERE IS NO MENTION IN THE ASSESSMENT ORDER ABOUT THE DATE OF SALE OR ANY DETAIL REGARDIN G THE SALE TRANSACTION. THE SEIZED DOCUMENT ALSO INDICATE S THE POSSIBILITY OF M/S. COASTAL PROJECTS LTD. ACQUIRING THE COMPANY M/S. HUMMING BIRDS SOLUTION PVT. LTD. WHICH HAD THE PROPERTY AT C-L, SECTOR-65, NOIDA. SINCE IT IS CLEARLY MENTIONED IN THE ASSESSMENT ORDER THAT RS. 70,00,000/- OF THE CONSIDERATION WAS PAID BY CHEQUE , THE ASSESSING OFFICER SHOULD HAVE AT LEAST TRACED T HIS CHEQUE PAYMENT. IF THERE WAS EVIDENCE THAT THE CHEQ UE OF RS. 70,00,000/- WAS RECEIVED BY THE APPELLANT SH . GULSHAN KUMAR SETHI, THEN THERE WAS SOME BASIS FOR CONSIDERING THAT THE APPELLANT HAD RECEIVED THE ENT IRE SALE CONSIDERATION OF RS. 6,45,00,000/- FOR TRANSFE RRING THE PROPERTY EITHER THROUGH A SALE DEED OR THROUGH THE OUTRIGHT TRANSFER OF THE SHARES OF THE COMPANY. IN THE ABSENCE OF ANY SUCH CONCRETE EVIDENCE, THE ADDITION OF RS. 6,45,00,000/- ON THE APPELLANT IS BASED ONLY ON ASSUMPTIONS AND THUS, NOT SUSTAINABLE. 11. AS PER THE ASSESSMENT ORDER, SH. SUBBINENI SURENDRA OF M/S. COASTAL PROJECTS LTD. HAD ADMITTED THE PAYMENT OF RS. 6,45,00,000/- TO SH. GULSHAN KUMAR A S 22 PER LETTER DATED 17.3.2015 OF DCIT, CENTRAL CIRCLE 2(2), HYDERABAD. I HAVE VERIFIED THE ASSESSMENT RECORDS A ND THERE IS NOTHING IN THE ABOVE LETTER DATED 17.3.201 5 TO INDICATE THAT THE APPELLANT HAD RECEIVED RS. 6,45,00,000/- FROM M/S. COASTAL PROJECTS LTD.. THE ASSESSING OFFICER HAD FAILED TO CARRY OUT ANY ENQUI RIES TO FIND OUT THE ACTUAL RECIPIENT / RECIPIENTS OF RS. 6,45,00,000/- FROM M/S. COASTAL PROJECTS LTD BEFORE ADDING THE ABOVE SUM AS APPELLANTS UNDISCLOSED INCOME. IN THE ABSENCE OF ANY CONCRETE EVIDENCE, TO INDICATE THAT THE APPELLANT HAD RECEIVED THE SUM OF RS. 6,45,00,000/- FROM M/S. COASTAL PROJECTS LTD., I AM CONSTRAINED TO DELETE THE ADDITION OF RS. 6,45,00,0 00/- MADE BY THE ASSESSING OFFICER ON MERE PRESUMPTION. THUS, GROUND NOS. 3 & 4 ARE ALLOWED. 6.1 AFTER PERUSING THE AFORESAID FINDINGS OF THE LD . CIT(A), WE FIND THAT ASSESSING OFFICER OF THE SEARCHED COMPANY ONLY STA TED THAT HE WAS SATISFIED THAT SHEET NUMBERED 18-19 OF THE ANNEXUR E A/CPL/01 BELONGED TO THE ASSESSEE BUT FAILED TO MENTION THAT THESE PA PERS DO NOT BELONG TO THE SEARCH COMPANY NAMELY M/S. COASTAL PROJECTS LTD . WE FURTHER FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF PEPSI FOOD (P) LTD. VS. ACIT REPORTED IN (2014) 367 ITR 1 12, HAS HELD THAT BEFORE A NOTICE UNDER SECTION 153C OF THE ACT CAN B E ISSUED TWO STEPS ARE TO BE TAKEN. THE FIRST STEP IS THAT THE ASSESSING O FFICER OF THE PERSON WHO 23 IS SEARCHED MUST ARRIVE AT SATISFACTION THAT A DOCU MENT SEIZED FROM HIM DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON. IT IS ONLY IN THE SECOND STEP THAT THE DOCUMENT IS TO BE HANDED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM THE SEIZED DOCUMENT 'BELONGS'. I N THE ABOVE DECISION, THE HON'BLE JURISDICTIONAL HIGH COURT HAD STATED TH AT THE NORMAL PRESUMPTION IS THAT THE DOCUMENT FOUND DURING THE S EARCH BELONGS TO THE PERSON ON WHOM THE SEARCH WAS CONDUCTED. THEREFORE, IT IS FOR THE ASSESSING OFFICER OF THE SEARCHED PERSON TO REBUT T HAT PRESUMPTION AND COME TO A CONCLUSION OR 'SATISFACTION' THAT THE DOC UMENT IN FACT BELONGS TO SOMEBODY ELSE. THUS, IN THE CASE OF THE ASSESSEE, T HE ASSESSING OFFICER OF THE SEARCHED PERSON HAD NOT REBUTTED THE PRESUMPTIO N THAT THE SEIZED DOCUMENTS 18-19 BELONGED TO M/S. COASTAL PROJECTS L TD. THEREFORE, IN LIGHT OF THE ABOVE DECISION OF THE JURISDICTIONAL H IGH COURT, THE FIRST STEP ITSELF HAD NOT BEEN FULFILLED AND THUS, THE ISSUE O F NOTICE UNDER SECTION 153C OF THE ACT ON THE ASSESSEE IS ILLEGAL. WE FURT HER NOTE THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PE PSICO INDIA HOLDINGS PVT. LTD. VS. ACIT & ANR. REPORTED IN 370 ITR 295, HAS H ELD THAT UNLESS AND UNTIL IT IS ESTABLISHED THAT DOCUMENTS SEIZED DO NO T BELONG TO SEARCHED PERSON, THE PROVISIONS OF SECTION 153C OF THE ACT D O NOT GET ATTRACTED. THE RELEVANT PORTION OF THE ABOVE DECISION OF PEPSICO I NDIA HOLDINGS PVT. LTD. (SUPRA) IS AS FOLLOWS:- UNLESS AND UNTIL IT IS ESTABLISHED THAT THE DOCUMENTS DO NOT BELONGS TO THE SEARCHED PERSON, TH E PROVISIONS OF SECTION 153C OF THE SAID ACT DO NOT SET ATTRACTED B ECAUSE THE VERY EXPRESSION USED IN SECTION 153C OF THE SAID ACT IS THAT 'WHERE THE 24 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 IN VIEW OF THIS PHRASE, IT IS NECESSARY THAT BEFORE THE PROVISIONS OF SECTION 153C OF THE SAID ACT CAN BE INVOKED, THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE SA TISFIED THAT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG S TO THE PERSON REFERRED TO IN SECTION 153A (I.E., THE SEARCHED PER SON). SINCE THE HONBLE JURISDICTIONAL HIGH COURT DECISIONS MENTIONED ABOVE IS IN FAVOUR OF THE ASSESSEE, THE ASSESSING OFFICER OF THE SEARCH COMPA NY NAMELY DCIT, CENTRAL CIRCLE-4, HYDERABAD, IN THE SATISFACTION NO TE HAD NOT STATED THAT THE SEIZED MATERIAL DO NOT BELONG TO THE SEARCHED P ERSON. THEREFORE, BASED ON THE ABOVE DECISIONS OF THE HONBLE JURISDI CTIONAL HIGH COURT, THE ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT TO TH E ASSESSEE HAD TO BE CONSIDERED AS ILLEGAL AND AS A RESULT, LD. CIT(A) H AS RIGHTLY ALLOWED THE LEGAL GROUNDS RAISED BY THE ASSESSEE, HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE LD. CIT(A), THEREFORE, WE UPH OLD THE ACTION OF THE LD. CIT(A) ON THE LEGAL ISSUES AND DISMISSED THE LE GAL GROUNDS RAISED BY THE REVENUE. 6.2 AS REGARDS MERITS OF THE CASE I.E. DELETION OF ADDITION OF RS. 6,45,00,000/- AS UNDISCLOSED INCOME IS CONCERNED, W E NOTE THAT AS PER THE ASSESSMENT ORDER, THE ASSESSEE HAD SOLD PROPERT Y BEARING NO. C-L, SECTOR -65, NOIDA, TO M/S. COASTAL PROJECTS LTD. TH E ASSESSEES COUNSEL SUBMITTED BEFORE THE LD. CIT(A) THAT ASSESSEE HAD N EVER OWNED THE 25 ABOVE PROPERTY BUT THE ABOVE PROPERTY CONTINUES TO BELONG TO THE SAME COMPANY. THE ASSESSEE HAD FILED A COPY OF THE E-FI LED INCOME TAX RETURN OF THE ABOVE COMPANY FOR ASSESSMENT YEAR 2010-11 AN D AS PER THE SAME, THE COMPANYS PERMANENT ACCOUNT NUMBER IS AAB CH8051J AND ASSESSED BY ITO, WARD 12(4), DELHI. COPY OF THE SEI ZED DOCUMENT NO. 18 MENTIONS THE NAME OF THE COMPANY DIFFERENTLY AS M/S . BIRDS SOFTWARE PVT. LTD. AND THE RELEVANT PORTION IS AS FOLLOWS:- NAME OF THE COMPANY: BIRDS SOFTWARE PVT. LTD. - TH E SALE PROCEDURE SHALL BE THROUGH COMPANY TRANSFER IN THE NAME OF THE BUYER AS HAPPENED IN PREVIOUS TRANSACTION. 6.3 AFTER PERUSING THE AFORESAID DETAILS, IT REVEA LS THAT IT WAS A TRANSFER OF COMPANY AND NOT THE TRANSFER OF THE PROPERTY AS STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ASSE SSMENT ORDER IS ALSO SILENT REGARDING THE DATE OF THE TRANSFER OR ABOUT ANY DOCUMENT INDICATING THE TRANSFER OF THE ABOVE PROPERTY. THE ASSESSMENT ORDER MENTIONS THAT SALE CONSIDERATION WAS PAID BY CHEQUE AND ALSO BY C ASH. BUT THERE IS NO MENTION ABOUT THE DATE OF THE CHEQUE OR ABOUT THE R ECIPIENT OF CHEQUE FOR RS. 70,00,000/-. THE ASSESSING OFFICER HAD COMPLETE D THE ASSESSMENT ON THE PRESUMPTION THAT THE ASSESSEE IS THE OWNER OF THE PROPERTY BASED ON THE SEIZED DOCUMENTS NO. 18, WHICH MENTIONS AS FOLL OWS:- OWNERS NAME IS MR. GULSHAN. THE NAMES OF OTHER DIRECTORS OF THE SAID COMPANY SHALL BE KNOWN LATER. 26 6.4 AFTER PERUSING THE AFORESAID DETAILS, IT IS OBS ERVED THAT THE ASSESSEE SH. GULSHAN WAS ONE OF THE DIRECTORS AND T HERE IS NO MENTION IN THE ASSESSMENT ORDER ABOUT THE OTHER DIRECTORS OF T HE COMPANY WHICH PROPOSED TO SELL PROPERTY TO M/S COASTRAL PROJECT P VT. LTD. HOWEVER, DURING THE APPELLATE PROCEEDINGS, THE AR OF THE ASS ESSEE STATED THAT THE ASSESSEE CEASED TO BE THE DIRECTOR OF THE ABOVE COM PANY M/S. HUMMING BIRDS SOLUTION PVT. LTD. W.E.F. 16.03.2007. THE ASS ESSEE ALSO FILED A COPY OF FORM NO. 32 FILED BEFORE THE REGISTRAR OF COMPAN IES INDICATING THAT HE HAD RESIGNED AS A DIRECTOR OF THE ABOVE COMPANY FRO M 15.03.2007. THE AUDITED BALANCE SHEET OF THE ABOVE COMPANY M/S. HUM MING BIRDS SOLUTION PVT. LTD. FOR THE YEAR ENDING 31.03.2010 F ILED BEFORE THE LD. CIT(A) WHICH INDICATES THE NAMES OF THE DIRECTORS A S SANDEEP MALIK AND VEENA MALIK, BUT THE ASSESSING OFFICER IS EITHER NO T AWARE OF THESE DIRECTORS OR EVEN IF AWARE, HAD NOT CARRIED OUT ANY ENQUIRIES ON THEIR SOURCES OF INCOME. IT APPEARS THAT THE ASSESSING OF FICER PRESUMED THAT THE ASSESSEE HAD RECEIVED THE ENTIRE CONSIDERATION OF RS. 6,45,00,000/-, THOUGH THE SEIZED DOCUMENT ONLY INDICATES THAT THER E WAS SOME NEGOTIATIONS FOR THE SALE OF PROPERTY BEARING NO. S ECTOR-65, NOIDA AND THERE IS NO INDICATION IN IT OF ANY DEFINITE TRANSA CTION. THERE IS NO MENTION IN THE ASSESSMENT ORDER ABOUT THE DATE OF SALE OR A NY DETAIL REGARDING THE SALE TRANSACTION. THE SEIZED DOCUMENT ALSO INDICATE S THE POSSIBILITY OF M/S. COASTAL PROJECTS LTD. ACQUIRING THE COMPANY M/S. HU MMING BIRDS SOLUTION PVT. LTD. WHICH HAD THE PROPERTY AT C-L, SECTOR-65, NOIDA. SINCE IT IS CLEARLY MENTIONED IN THE ASSESSMENT ORDER THAT RS. 70,00,000/- OF THE 27 CONSIDERATION WAS PAID BY CHEQUE, THE ASSESSING OFF ICER SHOULD HAVE AT LEAST TRACED THIS CHEQUE PAYMENT. IF THERE WAS EVID ENCE THAT THE CHEQUE OF RS. 70,00,000/- WAS RECEIVED BY THE ASSESSEE SH. GULSHAN KUMAR SETHI, THEN THERE WAS SOME BASIS FOR CONSIDERING TH AT THE ASSESSEE HAD RECEIVED THE ENTIRE SALE CONSIDERATION OF RS. 6,45, 00,000/- FOR TRANSFERRING THE PROPERTY EITHER THROUGH A SALE DEED OR THROUGH THE OUTRIGHT TRANSFER OF THE SHARES OF THE COMPANY. IN THE ABSENCE OF ANY SU CH CONCRETE EVIDENCE, THE ADDITION OF RS. 6,45,00,000/- ON THE ASSESSEE IS BASED ONLY ON ASSUMPTIONS AND THUS, NOT SUSTAINABLE. ALSO AS P ER THE ASSESSMENT ORDER, SH. SUBBINENI SURENDRA OF M/S. COASTAL PROJE CTS LTD. HAD ADMITTED THE PAYMENT OF RS. 6,45,00,000/- TO SH. GULSHAN KUM AR AS PER LETTER DATED 17.3.2015 OF DCIT, CENTRAL CIRCLE 2(2), HYDER ABAD, WHICH THE LD. CIT(A) HAS VERIFIED WITH THE ASSESSMENT RECORDS AND THERE IS NOTHING IN THE ABOVE LETTER DATED 17.3.2015 TO INDICATE THAT T HE ASSESSEE HAD RECEIVED RS. 6,45,00,000/- FROM M/S. COASTAL PROJEC TS LTD.. EVEN THE ASSESSING OFFICER HAD FAILED TO CARRY OUT ANY ENQUI RIES TO FIND OUT THE ACTUAL RECIPIENT / RECIPIENTS OF RS. 6,45,00,000/- FROM M/S. COASTAL PROJECTS LTD BEFORE ADDING THE ABOVE SUM AS ASSESSE ES UNDISCLOSED INCOME. IN THE ABSENCE OF ANY CONCRETE EVIDENCE, TO INDICATE THAT THE ASSESSEE HAD RECEIVED THE SUM OF RS. 6,45,00,000/- FROM M/S. COASTAL PROJECTS LTD., LD. CIT(A) HAS RIGHTLY DELETED THE A DDITION OF RS. 6,45,00,000/- MADE BY THE ASSESSING OFFICER, WH ICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE ORDER OF THE LD. 28 CIT(A) ON THIS ISSUE AND DISMISS THE GROUND RAISED ON THE MERITS OF THE CASE. 7. IN THE RESULT, THE REVENUES APPEAL STANDS DISMISSE D ORDER PRONOUNCED ON 18/04/2019. SD/- SD/- [T.S. KAPOOR] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 18/04/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES