ACIT CC 39, MUMBAI V. MAHAMAYA LAND P.LTD, NAVI MUMBAI

ITA 605/MUM/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0801 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGAR ZAINV P DR
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Loose papers; Document seized; Cost of acquisition; Corroborative evidences; Retraction; Documents seized
• Section: 69C; 143(3); 133A; 153A; 147; 131; 148; 132; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.598/MUM/2014 ASSESSMENT YEAR: 2008-09 ACIT, CENT. CIR.-6(4), R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI-400020 / VS. M/S NEEL LAND P. LTD. DN 215, SECOND FLOOR, PLOT NO.6, SECTOR 11, DRONAGIRI-400702 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AACCN5794F ITA NO.601/MUM/2014 ASSESSMENT YEAR: 2008-09 ACIT, CENT. CIR.-6(4), R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI-400020 / VS. M/S MANDAVI LAND P. LTD. DN 215, SECOND FLOOR, PLOT NO.6, SECTOR 11, DRONAGIRI-400702 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AAFCM2015D ITA NO.604/MUM/2014 ASSESSMENT YEAR: 2008-09 ACIT, CENT. CIR.-6(4), R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI-400020 / VS. M/S MATRUASHISH REALITY P. LTD. DN 215, SECOND FLOOR, PLOT NO.6, SECTOR 11, DRONAGIRI-400702 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AAECM9990L NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 2 ITA NO.605/MUM/2014 ASSESSMENT YEAR: 2008-09 ACIT, CENT. CIR.-6(4), R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI-400020 / VS. M/S MAHAMAYA LAND PVT. LTD. 101, SAGAR DARSHAN, CTS NO.1023/4 RAMNATH ROAD, ALIBAUG-400220 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AAFCM2016A ITA NO.610/MUM/2014 ASSESSMENT YEAR: 2008-09 ACIT, CENT. CIR.-6(4), R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI-400020 / VS. M/S BRAHMAND LAND INFRASTRUCTURE P. LTD. DN 416, SECOND FLOOR, PLOT NO.6, SECTOR 11, DRONAGIRI-400702 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO.AADCB0729R / REVENUE BY SHRI ASGAR ZAIN V.P.-DR !' # / ASSESSEE BY SHRI VIJAY MEHTA $ % & # ' / DATE OF HEARING : 06/07/2015 & # ' / DATE OF ORDER: 04/08/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS BUNCH OF FIVE APPEALS IS BY THE REVENUE DIREC TED AGAINST THE RESPECTIVE IMPUGNED ORDERS ALL DATED 30/10/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY COMMON GROUND RAISED IN ALL THE APPEALS IS WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APP EALS) NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 3 ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT, STATING THAT THE ADDITION U/S 69C DOES NOT SURVIVE, SINCE THE ISSUE OF ACTION U/S 153C AND THE QUANTUM ADDITI ON MADE U/S 69C OF THE ACT HAS BEEN DELETED BY THE TRI BUNAL. 2. DURING HEARING OF THESE APPEALS, THE LD. REPRESENTATIVES FROM BOTH SIDES CONTENDED THAT IDEN TICAL GROUNDS HAVE BEEN RAISED IN ALL THE APPEALS. AT TH E OUTSET, THE LD. COUNSEL FOR THE ASSESSEE, SHRI VIJAY MEHTA, ASSERTED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN ITA NO.8237/MUM/2011, ETC. ORDER DATED 22/03/2013. THIS FACTUAL MATRIX WAS NOT CONTROVERT ED BY SHRI ASGHAR ZAIN, V.P., LD. DR. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE CONSOLIDATE AFORESAID ORDER OF THE TRIBUNA L DATED 22/03/2013 FOR READY REFERENCE AND ANALYSIS:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A)-41, MUMBAI DT.27.10.2011 PERTAINING TO A.Y. 2008-09. THE LD. REPRESENTATIVES OF BOTH SIDES , I N UNISON , POINTED OUT THAT THERE ARE 67 APPEALS PERTAINING TO 52 DIFFERENT ASSESSEES, INCLUDING THE PRESENT ONE, WHI CH HAVE BEEN ASSESSED ON IDENTICAL FACTS AND THE ISSUES INVOLVED IN ALL THESE 67 APPEALS ARE THE SAME. ON THE STRENGTH OF THE ST ATEMENTS MADE BY THE LD. REPRESENTATIVES OF BOTH SIDES, WE H AVE DECIDED TO CLUB ALL THESE APPEALS TOGETHER FOR THE SAKE OF CONVENIENCE AND BREVITY. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 4 2. AS WE HAVE HEARD THE ARGUMENTS IN THE CASE OF M/ S. AVKASH LAND REALTY PVT. LTD. IN ITA NO. 8237/MUM/2 011, WE HAVE PROCEEDED TO DECIDE THIS APPEAL AND ON THE STR ENGTH OF THE STATEMENT OF THE LD. REPRESENTATIVES, ALL 67 AP PEALS PERTAINING TO 52 DIFFERENT ASSESSEES INCLUDING THE PRESENT ONE SHALL BE DISPOSED OF BY THIS COMMON ORDER. 2.1 WITH THIS APPEAL, THE ASSESSEE HAS RAISED FOLL OWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN REJECTING THE APPELLANT S CONTENTION THAT INITIATION OF PROCEEDINGS U/S.153C OF THE I.T. ACT, 1961 (THE ACT) ARE BAD-IN-LAW EVEN THOUGH NO ASSESSMEN T OR RE- ASSESSMENT PROCEEDINGS IN RELATION TO THIS YEAR WE RE PENDING AS ON THE DATE OF THE SEARCH U/S.132 OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN REJECTING THE APPELLANT S CONTENTION THAT INVOKING OF PROVISIONS OF SECTION 153C OF THE ACT WAS BAD- IN-LAW IN VIEW OF THE FACT THAT THERE WAS NO MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THINGS OR B OOKS OF ACCOUNT OR DOCUMENTS SEIZED WHICH ARE BELONGING OR BELONGED TO THE APPELLANT AND WHICH DISCLOSED THAT THE APPE LLANT HAD INCURRED UNACCOUNTED EXPENDITURE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE IN LANDS U/S.69C OF THE ACT, IGNORING THE EXPLANATION OF SEIZED MATERIAL AND APP ELLANTS RELIANCE ON VARIOUS DECISIONS. IT IS PRAYED THAT TH E ADDITION ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE OF RS.52 52000/- MAY BE DELETED. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 5 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN BRINGING NEW EVIDENCES OF PATHIK CONSTRUCTION AND SHRI SUNIL GULATI ON RECORD AND DI SCUSSING THE SAME IN THE APPELLATE ORDER EVEN THOUGH THE SAME HA S NO CONNECTION WITH THE FACTS OF THE APPELLANT. THE LEA RNED A.O. HAS ALSO MADE NO REFERENCE OF THESE EVIDENCES WHILE REA CHING ITS CONCLUSION IN THE ASSESSMENT ORDER. THESE EVIDENCES ARE, THEREFORE, IRRELEVANT AND OUT OF CONTEXT SO FAR AS THE APPELLANT IS CONCERNED. IT IS PRAYED THAT THESE EVIDENCES MAY KINDLY BE IGNORED. 5. ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE HONBLE CIT(A) ERRED IN RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF MALIK BROS (P) LTD VS. CI T (162 TAXMAN 43). IN THE APPELLANTS CASE, NONE OF THE LA ND OWNERS FROM WHOM LAND HAS BEEN PURCHASED BY THE APPELLANT CONFIRMED THE RECEIPT OF CASH PAYMENT. THESE REMARK S OF THE HONBLE CIT(A) IS ERRONEOUS REMARKS. IT IS THEREFOR E PRAYED THAT THESE ERRONEOUS REMARKS OF THE HONBLE CIT(A) MAY KINDLY BE DELETED. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE CHARGE O F INTEREST U/S.234B AND 234C OF THE ACT, HAVING REGARD TO THE FACT OF THE CASE. THE APPELLANT DENIES ITS LIABILITY FOR PAYMEN T OF INTEREST U/S.234B & 234C OF THE ACT. 3. WITH GROUND NO. 1 & 2, THE ASSESSEE HAS CHALLENG ED THE LEGALITY OF THE ASSESSMENT ORDER FRAMED U/S. 143(3) R.W.S 153C OF THE ACT. IT IS THE SAY OF THE ASSESSEE THAT NOTH ING HAS BEEN FOUND IN THE COURSE OF SEARCH AND SEIZURE PROCEEDIN GS WHICH COULD BE SAID TO BELONG TO THE ASSESSEE. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 6 4. FACTS AT THE STAGE OF ASSESSMENT SHOW THAT A SEA RCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CARRIED OUT ON 5.3.2009 IN THE CASE OF JAI CORP GROUP, ITS EMPLOYEES AND CL OSE ASSOCIATES WHO WERE CLOSELY INVOLVED IN THE PROCESS OF ACQUIRI NG LAND. JAI CORP GROUP IS LEAD BY A FLAGSHIP COMPANY OF JAI CO RP LTD. THIS GROUP IS PARTNER IN TWO MAJOR UPCOMING SPECIAL ECO NOMIC ZONES OF INDIA (SEZS) BEING DEVELOPED IN THE VICINI TY OF MUMBAI, NAMELY NAVI MUMBAI SPECIAL ECONOMIC ZONE (NMSEZ) AND MUMBAI SPECIAL ECONOMIC ZONE (MSEZ). IT IS THE SAY OF THE ASSESSING OFFICER THAT THIS GROUP HA S FLOATED A LARGE NUMBER OF COMPANIES HAVING COMMON ADDRESS. TH IS GROUPS REAL ESTATE OPERATIONS ARE BEING HANDLED MA INLY BY MR. VIRENDRA JAIN, MR. GAURAV JAIN AND MR. DILIP DHERAI , DURING THE COURSE OF THE SEARCH IT WAS FOUND THAT SHRI DIL IP DHERAI WAS MANAGING AND HANDLING THE ENTIRE LAND ACQUISITION O PERATIONS FOR MSEZ, AND OUTSIDE MSEZ (OMSEZ). IT IS THE SAY OF THE AO THAT LANDS IN OMSEZ HAVE BEEN PURCHASED IN VARIOUS PRIVATE LIMITED COMPANIES. THE ASSESSEE IS ONE OF SUCH LA ND COMPANIES IN WHICH LAND IN OMSEZ IS ACQUIRED. IT IS THE SAY OF THE AO THAT EMPLOYEES OF MSEZ AND NMSEZ ARE DIRECTORS IN THESE COMPANIES. THE ENTIRE FUNDING FOR ACQUISITION OF L AND IN THESE PVT. LTD. LAND COMPANIES HAS BEEN MADE FROM MSEZ LT D. AND OTHER GROUP COMPANIES. THE ENTIRE LAND ACQUISITION IS LOOKED AFTER BY CENTRAL LEADERSHIP TEAM (CLT) OF WHICH SHR I DILIP DHERAI, SHRI ANAND JAIN, SHRI SANJAY PUNKHIA AND MR . AJIT WARTHY ARE KEY MEMBERS. 4.1. CONSEQUENT TO THE SEARCH AND SEIZURE ACTION, T HE AO ISSUED AND SERVED NOTICE U/S. 153C OF THE ACT REQUI RING THE ASSESSEE TO FILE RETURN OF INCOME. THE ASSESSEE VI DE LETTER DT. 15.9.2010 SUBMITTED TO TREAT THE RETURN OF INCOME F ILED ON 7.8.2008 AS THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/S. 153C. THUS ASSESSMENT PROCEEDINGS WERE STARTE D, QUESTIONNAIRE WERE ISSUED AND SERVED ON THE ASSESSE E. THE ASSESSEE EXPLAINED ITS NATURE OF BUSINESS AND FILED NECESSARY DETAILS PERTAINING TO ITS BUSINESS INCLUDING STATEM ENT OF ACCOUNTS. THEREAFTER, THE AO WENT ON TO DISCUSS TH E STATEMENTS OF SHRI ANAND JAIN, SHRI SURENDRA VARMA AND SHRI PR AKASH CHANDRA SHUKLA RECORDED U/S. 131 OF THE ACT. THE A O SOUGHT NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 7 CLARIFICATION FROM THE ASSESSEE IN RESPECT OF CERTA IN CASH PAYMENTS MADE IN CONNECTION WITH THE LAND DEALS. T HIS QUERY WAS BASED ON CERTAIN SEIZED PAPERS FOUND FROM THE R ESIDENTIAL PREMISES OF SHRI DILIP DHERAI. THEREAFTER, THE AO WENT ON TO DISCUSS PAGE NOS. 22 AND 23 OF LOOSE PAPER FOLDER M ARKED AS ANNEXURE-A1 AS PER PANCHANAMA DT. 5.3.2009 AND 6.3. 2009 FROM THE RESIDENTIAL PREMISES OF SHRI DILIP DHERAI. THE AO WAS CONVINCED THAT THESE EXHIBITS CONTAIN THE DETAILS O F LAND ACQUIRED IN DIFFERENT VILLAGES WHEREIN SUBSTANTIAL CASH PAYMENTS HAVE BEEN MADE FOR ACQUISITION OF LAND IN THE VILLAGES WHOSE NAME ARE MENTIONED IN THESE EXHIBITS . THE AO WAS OF THE OPINION THAT AS PER THESE PAGES, THE TOT AL CASH PAYMENTS TO THE TUNE OF RS. 38.45 CRORES HAVE BEEN MADE FOR ACQUISITION OF LAND IN VARIOUS VILLAGES WHOSE NAME APPEARED IN THESE LOOSE PAPERS. WHEN CONFRONTED WITH THESE DOC UMENTS, SHRI DILIP DHERAI IN HIS SUBSEQUENT STATEMENT DT. 2 0.5.2009 STATED THAT THE FIGURES ARE ONLY PROJECTED FIGURES WHICH CAN AT THE MOST BE TAKEN AS THE BUDGETED AMOUNT FOR THE PU RCHASE OF LAND IN THE VILLAGES. THIS CONTENTION OF SHRI DILI P DHERAI WAS OUT-RIGHTLY REJECTED BY THE AO WHO WAS OF THE OPINI ON THAT IF THE FIGURES ARE PROJECTED, THEN THERE HAS TO BE SOM E PROJECTED AREA OF LAND WHICH IS ABSENT THEREFORE, THE FIGURES MENTIONED ARE NOT PROJECTED BUT ACTUAL AMOUNTS SPENT FOR THE ACQUISITION OF THE LANDS. 4.2. REFERRING TO THE INITIALS MK AND JT, THE AO SO UGHT EXPLANATION FROM SHRI DILIP DHERAI ASKING HIM TO EX PLAIN WHY AMOUNTS OF PROJECTED FUNDS HAVE BEEN BIFURCATED IN MK AND JT TO WHICH SHRI DILIP DHERAI SUBMITTED THAT MK AND JT ARE MERELY INDICATORS OF THE DISCUSSIONS TAKEN PLACE AT DIFFERENT SITES. THE AO FURTHER SOUGHT EXPLANATION IN RESPEC T OF ONE IOM DT. 18.1.2007 WHEREIN PAYMENT OF RS. 604.8 LAKHS IN CASH HAS BEEN MENTIONED TO WHICH SHRI DILIP DHERAI SUBMITTED THAT IT PERTAIN TO SOME DEAL WHICH COULD NOT BE IMPLEMENTED AS PROPOSED IN THE SAID IOM AND FURTHER STATED THAT IT HAS BEEN DECIDED TO MAKE A MOU WITH THE PARTY FOR AN AMOUNT OF RS. 604.8 LAKHS TO BE PAID LATER ON AS DEVELOPMENT CHAR GES THROUGH CHEQUE ONLY. THIS PLEA OF SHRI DILIP DHERA I WAS REJECTED BY THE AO WHO WAS OF THE OPINION THAT THE SAID IOM NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 8 CONTAINS PAYMENTS IN CASH AS WELL AS CHEQUE TOWARDS THE LAND CONSIDERATION ONLY. THERE IS NO MENTION OF DEVELOP MENT CHARGES OR AMOUNTS TO BE PAID FOR QUARRY OPERATIONS . ON THE BASIS OF THIS IOM, THE AO WAS CONVINCED THAT CASH P AYMENTS OF RS. 604.8 LAKHS WAS MADE FOR PURCHASE OF LAND. THE AO WENT ON TO RELATE THIS IOM WITH COLUMN NO. 6 & 7 OF PAGE NO. 22 AND 23 SEIZED FROM THE RESIDENCE OF SHRI DILIP DHERAI A ND CONCLUDED THAT THOSE COLUMNS SHOW THE PAYMENT IN CA SH ONLY. 4.3 THE AO FINALLY CONCLUDED AT PARA14 PG 58 OF HIS ORDER AS UNDER : HAVING REGARD TO THE ABOVE DISCUSSION, IT IS CLEAR THAT THE ASSESSEES SUBMISSIONS AND SUBMISSIONS MADE BY SHRI DILIP DHERAI ARE NOT TENABLE AND THUS THE SAME ARE REJECT ED. PLETHORA OF INCRIMINATING EVIDENCES GATHERED DURING THE SEARCH/SURVEY FROM VARIOUS PREMISES OF THE GROUP AN D THE PREPONDERANCE OF PROBABILITY ARE CLEARLY AGAINST TH E ASSESSEE. PLETHORA OF INCRIMINATING EVIDENCES GATHERED DURING THE SEARCH/SURVEY FROM VARIOUS PREMISES OF THE GROUP AN D THE PREPONDERANCE OF PROBABILITY CLEARLY ESTABLISH THAT UNACCOUNTED CASH PAYMENTS HAVE BEEN MADE IN THE ABO VE LAND DEALS. ACCORDINGLY, THE ABOVE MENTIONED TOTAL UNAC COUNTED CASH PAYMENTS OF CONSISTING OF RS. 38.4518 CRORES M ENTIONED ON PAGE NOS. 22 AND 23 + OTHER AMOUNTS (APPROX. RS. 4 CRORES ADDED FROM OTHER PAGES DISCUSSED ABOVE) ARE HELD AS UNEXPLAINED EXPENDITURE IN THE HANDS OF THE ABOVE M ENTIONED OSEZ LAND COMPANIES WHICH INCLUDE THE ASSESSEE ALSO , WITHIN THE MEANING OF PROVISIONS OF SEC. 69C OF THE ACT. THIS TOTAL AMOUNT OF UNEXPLAINED EXPENDITURE CONSIST OF RS. 38 .4518 CRORES AS NOTED ON PAGE NOS. 22 AND 23 SEIZED FROM RESIDENCE OF SHRI DILIP DHERAI, AND APPROXIMATELY ANOTHER RS. 5 CRORES AS FOUND RECORDED IN VARIOUS LOSSE PAPERS FOUND FROM T HE POSSESSION OF SHRI DILIP DHERAI IN FORM OF CASH REC EIPTS, ETC. AS DISCUSSED ABOVE WHICH ARE FOR THE PERIOD AFTER 28.1 1.2008 (I.E. THE DATE OF PAGE NOS. 22 & 23), THEREFORE ARE NOT I NCLUDED IN THE AMOUNTS MENTIONED ON PAGE NOS. 22 & 23. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 9 4.4 NOW THE QUESTION REMAIN WITH THE AO WAS THAT HO W TO APPORTION THE SUM OF RS. 38.45 CRORES AND 5 CRORES AMONGST OMSEZ COMPANIES I.E. 52 LAND COMPANIES. THE AO HAS DISCUSSED THE APPORTIONMENT FROM PARA 15.1.1 ONWARD S TILL PARA 15.1.5 OF HIS ORDER. THE BASIS OF THE APPORTI ONMENT OF EXPENSES HAS BEEN IN THE RATIO OF COST OF LAND PURC HASED IN OMSEZ LAND COMPANIES AND WHEREVER MORE THAN ONE ASSESSMENT YEAR IS FOUND TO BE INVOLVED THE AMOUNTS SO APPORTIONED TO THAT OMSEZ COMPANIES HAS BEEN FURTH ER APPORTIONED ASSESSMENT YEAR-WISE IN THE RATIO OF CO ST OF LAND PURCHASED IN EACH ASSESSMENT YEAR. SIMILAR TREATME NT WAS GIVEN TO THE AMOUNT OF RS. 5 CRORES. ACCORDING TO THE AO, THE SHARE OF THE APPELLANT COMPANY COMES TO RS. 52,50,0 00/- WHICH HE ADDED AS INCOME UNDER THE HEAD INCOME FROM OTHE R SOURCES U/S. 69C OF THE ACT AS UNEXPLAINED EXPENDITURE. 5. BEING STRONGLY AGGRIEVED BY THIS ASSESSMENT, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). 6. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS MADE BY THE ASSESSEE, THE LD. CIT(A) AT PARA 5.5 OF HIS ORD ER OBSERVED AS UNDER: IN TOTALITY OF FACTS AND CIRCUMSTANCES BASED ON TH E SEIZED PAPERS AND THE STATEMENTS RECORDED DURING THE COURS E OF SEARCH, IT IS ESTABLISHED THAT THE DOCUMENTS FOUND AND SEIZED ARE RELATING TO THE LAND PURCHASED OUTSIDE THE SEZ BY THESE COMPANIES AND THE ENTRIES ARE REFLECTED IN THE BOOK S OF ACCOUNT WHICH IS AN UNDISPUTED ISSUE. SINCE 5 COLUMNS OF T HE CHART ARE ENTERED IN THE BOOKS OF ACCOUNT, THEN IT CANNOT BE ACCEPTED THAT THE 6 TH & 7 TH COLUMNS DO NOT BELONG TO THE ASSESSEE COMPANY. ON THE BASIS OF SEIZED DOCUMENTS AND CORR OBORATED WITH OTHER DOCUMENTS WHERE IT IS CLEARLY MENTIONED CASH PAYMENTS WERE MADE TO ACQUIRE LAND OVER AND ABOVE T HE CHEQUE PAYMENTS WHICH IS FURTHER CONFIRMED BY SHRI DILIP DHERAI IN HIS STATEMENT RECORDED U/S. 132(4) ESTABL ISHES THIS FACT THAT CASH PAYMENTS HAVE BEEN MADE WHICH ARE NO T NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 10 REFLECTED IN THE BOOKS OF ACCOUNT. THE AFTERTHOUGH T STATEMENT OF THE APPELLANT AND SHRI DILIP DHERAI SEEMS TO BE MADE UNDER PRESSURE WHICH IS NOT CORROBORATED BY ANY INDEPENDE NT EVIDENCE TO DISPROVE THAT CASH PAYMENTS WERE NOT MA DE TO THE LAND OWNERS. 7. THE LD. CIT(A) FINALLY CONCLUDED THAT SINCE THE APPELLANT HAS FAILED TO SUBMIT ANY DOCUMENTARY EVIDENCE TO RE BUT THE ENTRIES OF SEIZED PAPERS AND STATEMENT RECORDED DUR ING THE COURSE OF SEARCH OF SHRI DILIP DHERAI, THE ADDITIO N MADE BY THE AO AT RS. 52,50,000/- U/S. 69C OF THE ACT IS UPHELD . 8. AGGRIEVED BY THIS FINDINGS OF THE LD. CIT(A), TH E ASSESSEE IS BEFORE US. 9. THE LD. SENIOR COUNSEL VEHEMENTLY QUESTIONED THE VALIDITY OF THE ORDER U/S. 153C OF THE ACT. THE LD . COUNSEL CHALLENGED THE VERY BASIS OF THE SATISFACTION NOTE. IT IS THE SAY OF THE LD. SR. COUNSEL THAT THE AO HAS RELIED UPON FOUR DOCUMENTS WHICH ARE EXHIBITED AT PAGES 17, 19, 20, 16, 42 & 43 OF THE PAPER BOOK , WHEN NONE OF THESE DOCUMENTS HA VE BEEN FOUND FROM THE POSSESSION OF THE ASSESSEE, THESE DO CUMENTS HAVE BEEN FOUND FROM THE POSSESSION OF EITHER SHRI DILIP DHERAI OR M/S. JAI CORP LTD. THESE DOCUMENTS ARE EITHER I N THE HANDWRITING OR ADDRESSED BY, OR ADDRESSED TO SHRI D ILIP DHERAI OR OTHER PERSON AND NOT BY ASSESSEE OR ANY OFFICE D IRECTOR. QUESTIONING THE SATISFACTION NOTE, THE LD. COUNSEL SUBMITTED THAT THERE IS NO EVIDENCE WHATSOEVER TO CONCLUDE TH AT ANY OF THESE DOCUMENTS BELONG TO THE ASSESSEE OR OTHER LAN D COMPANIES. MOREOVER, THESE SEIZED DOCUMENTS DO NOT EVEN MENTION THE NAME OF THE ASSESSEE OR ANY OTHER LAND COMPANY. THE LD. COUNSEL FURTHER POINTED OUT THAT THE ENTIRE ASSESSMENT REVOLVES AROUND THE SEARCH AND SEIZURE OPERATION CO NDUCTED IN THE RESIDENTIAL PREMISES OF SHRI DILIP DHERAI AND H IS STATEMENT RECORDED DURING THE COURSE OF SEARCH AND THEREAFTER . HOWEVER, THE SAID SHRI DILIP DHERAI HAS NO CONNECTION WHATSO EVER WITH THE ASSESSEE. INFACT, WHILE FRAMING THE ASSESSMENT , THE AO NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 11 HIMSELF HAS GIVEN A FINDING THAT THE SEIZED DOCUMEN TS BELONG TO SHRI DILIP DHERAI. IT IS THE SAY OF THE COUNSEL TH AT THE ONUS LIES ON THE AO TO ESTABLISH THAT THE SEIZED DOCUMENTS BE LONG TO THE ASSESSEE. THE AO HAS GROSSLY FAILED IN DISCHARGING THIS ONUS. 9.1. CONTINUING HIS ARGUMENT ON THIS POINT OF LAW, THE LD. SR. COUNSEL SUBMITTED THAT THE REQUIREMENT OF RECORDING SATISFACTION IS MANDATORY EVEN IF THE AO OF THE SEA RCHED PERSON AND THE PERSON WHOSE ASSESSMENT IS SOUGHT TO BE REO PENED U/S. 153C OF THE ACT IS THE SAME. THE LD. COUNSEL POINT ED OUT THAT NO SUCH SATISFACTION HAS BEEN RECORDED IN THE CASE OF SEARCHED PERSON SHRI DILIP DHERAI. ON THE CONTRARY, THE AO HAS RECORDED THE SO CALLED SATISFACTION IN THE CASE OF 52 LAND COMPANIES. CONCLUDING ON THIS SUBMISSION, THE QUESTION OF THE VALIDITY OF THE ORDER ON THE POINT OF LAW, THE LD. SR. COUNSEL CONCLUDED THAT CONSIDERING THE ENTIRE SEARCH AND SEIZURE PRO CEEDINGS IN THE LIGHT OF THE DOCUMENTS IMPOUNDED DURING THE COU RSE OF SEARCH, THERE IS NOT EVEN AN IOTA OF EVIDENCE BROU GHT ON RECORD TO SHOW THAT THE SEIZED DOCUMENTS BELONG TO THE AS SESSEE , NOT EVEN REMOTELY. 10. ARGUING ON THE MERITS OF THE CASE, THE LD. SR. COUNSEL SUBMITTED AS UNDER: 1. AN ADDITION OF RS.38.45 CRORE WAS COMPUTED BY THE A .O. ON THE BASIS OF SEIZED DOCUMENTS OF PG NOS. 22 & 23 OF ANNEXURE A1I. FURTHER, THE A.O. COMPUTED THE ADDITI ON OF RS.5.01 CRORE ON THE BASIS OF SEIZED DOCUMENTS OF P G.NOS.1-15, 54, 55, 56, 57, 58, 60-68, 69, 70 OF ANNEXURE A-1. THUS, THE TOTAL ALLEGED UNEXPLAINED EXPENDITURE HAS BEEN ESTIMATED BY THE A.O. AT RS.43.46 CRORE AND THE SAME HAS BEEN APPORT IONED IN 52 LAND COMPANIES WHERE 67 APPEALS HAVE BEEN FILED. 2. THE ADDITION OF RS.38.45 CRORE IS BASED ON PG NOS. 22 & 23 OF ANNEXURE A-1 AND RS.5.02 CRORE IS BASED ON OT HER SEIZED DOCUMENTS. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 12 3. WHILE ANALYZING THE CONTENTS OF PG. NO. 22 & 23, T HE A.O. HAS RELIED ON Q NO. 24 OF STATEMENT OF DILIP D HERAI RECORDED ON DATE OF SEARCH I.E. 05.03.2009. HOWEVER , THE SAME HAS BEEN RETRACTED THROUGH AN AFFIDAVIT DATED AND N OTARIZED ON 07.03.2009 I.E. IMMEDIATELY AFTER THE SEARCH. IT WAS SUBMITTED BEFORE THE INCOME TAX DEPT. ON 14.05.2009 AS MR. DILIP DHERAI WAS IN GREAT TENSION DUE TO THE MASSIV E SEARCH AND SEIZURE ACTION. THE CONTENTION OF THE LOWER AUT HORITIES THAT IT IS AFTER THOUGHT IS THUS WITHOUT ANY MERIT AS IT HAS BEEN NOTARIZED IMMEDIATELY AFTER SEARCH. 4. AS REGARDS PG NOS.22-23 OF ANNEXURE A SEIZED FROM T HE RESIDENCE OF SHRI DILIP DHERAI, AN EXPLANATION WAS OFFERED TO THE A.O. AS WELL AS TO THE LD.CIT(A) THAT THESE DOC UMENTS REFLECT TOTAL REGISTERED AREA, PAYMENT AMOUNTS AND FUTURE REQUIREMENTS FOR AMOUNT FOR PURCHASE OF LAND. THESE SHEETS HAVE BEEN PREPARED ON 28.11.2008. THESE SHEETS WERE IN CONNECTION WITH LAND ACQUIRED TILL 20.11.2008, AS I NDICATED IN COLUMN 3 OF PGS 22-23. THIS SHEET ALSO INCORPORATES BUDGETED REQUIREMENT FOR LAND WHICH HAS BEEN REFLECTED IN HI GHLIGHTED PORTION IN COLUMN 6 & 7 OF THESE DOCUMENTS. THESE E STIMATIONS WERE ARRIVED AT AFTER DISCUSSION WITH CENTRAL LEADE RSHIP TEAM OF JAI CORP GROUP. THE FIGURES MENTIONED IN COLUMN 6 & 7 REFLECT THE PROJECTED FUND REQUIREMENT FOR FUTURE A CQUISITION OF LAND. THIS STATEMENT WAS MADE FOR INDICATING FUND REQUIREMENT AT LATER DATE. MK & JT MENTIONED ON PGS 22-23 ARE MERELY INDICATORS OF THE DISCUSSION TOOK PLACE ON DIFFERENT SITES BEFORE THE SAID DATE. FOR MK & JT VILLAGES, A MAP SHOWING THE LAND TAKEN UPTO DATE AND LAND AVAILABLE FOR CON TIGUITY OF LAND ALONG WITH THE DETAILS OF SURVEY NO., AREA AND LAND OWNERS NAME FROM WHICH WE NEED TO ACQUIRE THE BALA NCE LAND FOR WHICH WE HAVE ISSUED THE CHEQUES IN FAVOUR OF B ROKERS! AGENTS TO SHOW THE LANDOWNERS FOR ACQUISITION OF TH EIR LANDS WERE ALSO SUBMITTED TO THE A.O. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 13 5. THE SEIZED DOCUMENTS OF PGS 22 & 23 DO NOT REVEA L ANYTHING WHICH PROVE THAT THE APPELLANT HAS INCURRE D ANY CASH EXPENDITURE AS ALLEGED BY THE A.O. FOR PURCHASE OF LAND. COLUMN 6 & 7 OF SEIZED MATERIAL AT PG NOS.22-23 ARE MERELY PROJECTED AND BUDGETED EXPENDITURE TO BE INCURRED IN CASE FUR THER LANDS ARE ACQUIRED. THIS WAS PURELY AN ESTIMATION. IN CAS E THIS EXPENDITURE WAS AN ACTUAL EXPENDITURE AS ALLEGED BY THE A.O. THEN VARIOUS DETAILS LIKE NAMES & ADDRESSES OF THE BROKERS, NAMES AND ADDRESS OF SELLERS! PERSONS TO WHOM THE A MOUNT IS PAID, DATE OF PAYMENT WOULD HAVE BEEN MAINTAINED BY THE APPELLANT. NO SUCH EVIDENCES HAVE BEEN FOUND DURING THE COURSE OF SEARCH AT THE RESIDENTIAL PREMISES OF SHR I DILIP DHERAI AS WELL AS OTHER PREMISES. THUS, THERE IS NO DOCUME NTARY EVIDENCE TO INDICATE THAT THE FIGURES MENTIONED IN COLUMN 6 & 7 ARE AN ACTUAL EXPENDITURE AS ALLEGED BY THE A.O. THE SEIZED DOCUMENTS, THEREFORE, NOWHERE REVEAL THE NAME AND A DDRESS OF THE RECIPIENTS. THE AMOUNT OF RS.38.46 CRORE IS THU S NOTHING, BUT A PROJECTED! BUDGETED EXPENDITURE WHICH IS FURT HER FORTIFIED BY THE FACT THAT CHEQUES AGGREGATING TO R S.38.46 CRORE WERE ISSUED BY VARIOUS LAND COMPANIES IN ADVANCE TO BROKERS ETC. WITH A VIEW TO FINALIZE A LAND DEAL THEN PAYME NT COULD HAVE BEEN MADE BY THE BROKERS. THESE CHEQUES WERE L YING UNENCASHED WITH AGENTS! BROKERS PROSPECTIVE SELLERS ON THE DATE OF SEARCH. 6. WITH REGARD TO THE ADDITION OF RS.5.O1 CRORE, I T IS SUBMITTED THAT THIS ALLEGED UNEXPLAINED EXPENDITURE HAS BEEN COMPUTED ON THE BASIS OF SEIZED MATERIAL, REFERRED TO ABOVE, AS PER ANNEXURE A-1. AGAIN THESE DOCUMENTS DO NOT INDI CATE THE NAMES & ADDRESS OF THE RECIPIENTS OF AMOUNTS. THE C ONTENTS OF THE SEIZED MATERIAL WERE DULY EXPLAINED DURING ASSE SSMENT PROCEEDINGS AS WELL AS BEFORE THE LD. CIT(A). THUS, EVEN THIS ADDITION IS ALSO NOT BASED ON THE FACT THAT THERE I S NO MENTION OF NAME & ADDRESS OF THE RECIPIENTS. THE APPELLANT AS WELL AS OTHER ASSOCIATE COMPANIES HAVE ENGAGED IN THE PURCH ASE OF LAND AND DURING SUCH ACTIVITIES, A NUMBER OF ROUGH NOTINGS NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 14 WERE MADE BY STAFF MEMBERS, BROKERS! AGENTS ETC. HO WEVER, AS ALREADY STATED, THE DOCUMENTS DO NOT REVEAL ANYTHIN G WHICH PROVE THAT THE APPELLANT HAS INCURRED ANY CASH EXPE NDITURE TO THE TUNE OF RS.5.O1 CRORE AS ALLEGED BY THE A.O. 7. THE APPELLANT PLACED RELIANCE ON THE FOLLOWING DECISIONS WHEREIN THE COURTS HAVE HELD THAT IN THE ABSENCE OF CORROBORATIVE EVIDENCES, ADDITIONS ON THE BASIS OF SLIPS, LOOSE SHEETS CANNOT BE UPHELD. (I) THE ITAT DELHI BENCH C IN THIRD MEMBERS DECI SION IN THE CASE OF AMARJIT SINGH BAKSHI (HUF) V. ACIT 263 ITR 75, 81 TTJ 169 WHILE DELIBERATING ON THE LOOSE SHEETS OF PAPER HELD THAT THERE IS NO DOCUMENTARY EVIDENCE TO SUPPORT THE PAS SING OF CASH. (II) IN THE CASE OF CIT V. ANIL BHALLA (2010) 38 DT R (DEL.) 113, 322 ITR 191, TRIBUNAL HELD THAT UNTIL THERE ARE IND EPENDENT EVIDENCES EXIST, THE ADDITION ON THE BASIS OF NOTIN GS, JOTTINGS CANNOT BE UPHELD. (III) THE RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS, WHEREIN IT HAS BEEN HELD THAT ADDITIONS MADE ON DUM B ENTRIES/ DOCUMENTS WITHOUT CORROBORATIVE EVIDENCES ARE NOT SUSTAINABLE. A) ATUL KUMAR JAM V. CIT (1999) 64 TTJ 786 (DELHI) B) RAKESH GOYAL V. ACIT (2004) 87 TTJ 151 (DELHI) C) RAKESH KUMAR LAIN V. DCIT (2004) 89 TTJ 203 (DEL HI) D) N.R.MALHAN V. DCIT (2004) 91 TTJ 908 (DELHI) E) AMARJIT SINGH BAXI V. ACIT (2004) 263 ITR (AT) 7 5 F) ACIT V. ASHOKKUMAR VIG (2008) 15 SOT 85 (RANCHI) G) MM FINANCIERS V. DCIT (2007) 17 SOT 5 (CHENNAL) NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 15 H) PANKAJ DAYABHAI PATEL HUF V. ACIT (1999) 63 TTJ 790 (AHD.) I) RADHE DEVELOPERS (2010) 329 ITR 1 (GUJ). J) SHRI KAPIDEV VS. JCIT (SPL. RANGE, DELHI) ITA NO.2259/DEL/2002/A.Y. 1997-98 DATED 22.03.2012. IT IS EVIDENT THAT THE ADDITION OF RS.38.45 CRORE A ND RS.5.01 CRORE IS BASED ONLY ON CONJECTURES AND SURMISES. TH ERE IS NO CORROBORATIVE EVIDENCE ON RECORD TO PROVE THAT THE APPELLANT HAS ACTUALLY INCURRED THE ALLEGED EXPENDITURE IN CA SH. THERE IS NOTHING ON RECORD TO ESTABLISH AS TO WHOM THE SAID AMOUNT HAS BEEN PAID. THERE IS ALSO NOTHING ON RECORD TO PROVE THE SOURCE OF THE ALLEGED CASH EXPENDITURE. 9.2. REPLYING TO THE QUESTION OF LEGALITY OF PROCEE DINGS U/S. 153C OF THE ACT, THE LD. DEPARTMENTAL REPRESENTATIV E, IN ADDITION TO HIS ORAL SUBMISSIONS, ALSO FILED WRITTE N SUBMISSIONS AS UNDER: 1. THE FIRST SUBMISSION OF REVENUE IS THAT WHEN THE A.O. OF THE PERSON SEARCHED U/S 153A OF I.T. ACT, 1961 IS THE SAME AS FOR THE OTHER PERSON COVERED U/S 153C OF I.T. ACT, 19 61 THEN AS HELD BY THE HONBLE KERALA HIGH COURT IN THE CASE O F CIT VS. PANCHAJANYAM MANAGEMENT AGENCIES 333 ITR 281 (KER.) THERE IS NO NEED TO RECORD THIS SATISFACTION U/S 153C OF I.T. ACT, 1961. HENCE WHATEVER SATISFACTION HAS BEEN RECORDED BY THE AO IS NOT REQUIRED IN/BY LAW SINCE A.O. IS THE SAME. LOGICALLY AND CONSEQUENTIALLY IT FOLLOWS - THAT IF THE RECORDING OF THIS - SATISFACTION IS NOT A SINE QUA NON AS AO IS THE SAME - THEN WHATEVER HAS BEEN RECORDED BY AC - CANNOT BE U SED ADVERSE TO REVENUE AS THE LAW DOES NOT REQUIRE IT. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 16 HENCE, THE SATISFACTION NOTE AS RECORDED BY AO IS OF NO LEGAL CONSEQUENCE VIS-A-VIS THE ISSUE OF NOTICE U/S 153C OF I.T.ACT AND IT CANNOT BE ASSAILED TO INVALIDATE THE PROCEEDINGS U/S 153C AS AC BEING THE SAME IT IS NOT REQUIRED. 2. THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN S.S .P. AVIATION 346 ITR 177 (DEL) ALSO MAKES IT VERY CLEAR THAT AT THE TIME OF RECORDING SATISFACTION ONLY PRIMA FADE GROUNDS HAVE TO BE MENTIONED AND NOT THAT THERE IS CONCLUSIVE EVIDENCE WITH AC AT THIS STAGE OF UNRECORDED INCOME ETC. - WHICH IS NOT REQUIRED AT ALL. 3. FURTHER, THE JUDGEMENT OF HONBLE KERALA HIGH CO URT IN THE CASE OF DR. K.M. MEHABOOB VS. DY.CIT, CIRCLE 2(1), KOZHIKODE (2012) 26 TAXMANN.COM 54(KER.) IS VERY CLEAR ON THI S AND IT STATES THAT U/S 153C -UNLIKE SECTION 158BD - THERE IS NO NEED WHETHER SEIZED EVIDENCE ETC. REPRESENTS OR PROVES U NDISCLOSED INCOME OF ANOTHER ASSESSEE - AND ALL THAT IS REQUIR ED TO BE CONSIDERED IS WHETHER SUCH MATERIALS OR EVIDENCE RE LATES TO ANOTHER ASSESSEE OR NOT - WHICH MAY OR MAY NOT LEAD TO AN ASSESSMENT AGAINST THAT OTHER PERSON. HERE TOO, THE HONBLE KERALA HIGH COURT HAS USED TH E WORD RELATES INTERCHANGEABLY WITH THE WORD BELONG - AND THIS SHOULD BE TAKEN NOTE OF BY THE HONBLE BENCH. HENCE, THE PLEA THAT THE REASONS FOR SATISFACTION A RE VAGUE AND EXTRANEOUS IS NOT LEGALLY ACCEPTABLE. II. THE NEXT ISSUE IS THAT THE MARGINAL NOTE TO SEC TION 153C VERY CLEARLY STATES - ASSESSMENT OF INCOME OF ANY OTHER PERSON - THAT IS - THIS SECTION IS CONCERNED WITH THE ASSES SMENT OF INCOME OF OTHER PERSON - AND AS HELD BY HONBLE SU PREME COURT IN THE CASE OF K.P. VARGHESE VS. CIT 131 ITR 597(SC) WHEREIN IT HAS CLEARLY BEEN HELD THAT THE MARGINAL NOTE OF THE NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 17 SECTION CAN BE REFERRED TO REMOVE ANY AMBIGUITY IF ANY - AS IT EXPLAINS THE DRIFT OF THE SECTION AND ITS PURPOSE AND INTENTION - IN THIS CASE THE PURPOSE AND INTENTION BEING TO A VOID MULTIPLICITY OF PROCEEDINGS U/S 153A AND 153C OF I. T. ACT - AND ALSO BY REMOVING THE EXPRESSION UNDISCLOSED INCOME FROM SECTION 158BA - MAKING IT SIMPLE FOR INITIATING ACT ION U/S 153C - ON THE BASIS OF SEIZED MATERIAL ONLY . HENCE, AS PER HEYDONS RULE - OR MISCHIEF RULE AL SO - ONLY THAT INTERPRETATION SHOULD BE GIVEN WHICH ENHANCES THE R EMEDY AND SUPPRESSES THE MISCHIEF AND DOES NOT ALLOW SUBTLE V ARIATIONS - AS IN THE PRESENT CASE OF TRYING TO IMPORT A HYPERT ECHNICAL MEANING TO THE WORD BELONG - OUT OF CONTEXT - AND THE SAME SHOULD BE CONSTRUED HARMONIOUSLY WITH THE CONTEXT - THE PURPOSE AND INTENTION - WHICH THE LAW SEEKS TO ACHI EVE. ALSO, BY REFERRING TO THE HISTORY OF THE LEGISLATIO N - IT BECOMES CLEAR THAT BY PUTTING A VERY NARROW AND RESTRICTED MEANING THE PURPOSE OF ENACTING SECTION 153C WILL BE DEFEATED - HENCE, COURTS SHOULD AVOID A HEADLONG CONFRONTATION BETWEE N TWO STATUTES - SO AS TO REDUCE IT TO A NULLITY - OR MAK E IT STILL BORN - RATHER THE SECTION SHOULD BE INTERPRETED TO BREATHE LIFE AND MEANING INTO IT. HENCE, EVEN BY HEYDONS RULE/MISCHIEF RULE/PURPOSIV E RULE - THE SECTION SHOULD BE SO CONSTRUED SO AS TO MAKE IT EFFECTIVE AND NOT STILL BORN. THE WORD BELONG AS USED IN THE SECTION MEANS - AN D CAN ONLY MEAN - RELATES TO OR PERTAINS TO AND AS HELD BY HONBLE SUPREME COURT IN THE CASE OF N.C. BUDDHIRAIA, 204 I TR 412 SC - YOU DO NOT INTERPRET A STATUTE WITH A DICTIONARY IN ONE HAND AND THE SECTION IN ANOTHER - YOU HAVE TO SEE THE C ONTEXT IN WHICH IT IS USED AND THE PURPOSE AND INTENTION IT SEEKS TO ACHIEVE ETC. - HENCE THE WORD BELONG CANNOT BE IN TERPRETED STRICTLY BY A DICTIONARY MEANING - BUT THE CONTEXT IN WHICH IT IS USED AND THE PURPOSE FOR WHICH IT IS USED AND THE I NTENTION OF NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 18 ACHIEVING THE ABOVE. ANY INTERPRETATION WHICH FAILS IN THE ABOVE SHOULD BE ESCHEWED AND THE INTERPRETATION THA T ACHIEVES IT SHOULD BE PREFERRED. ILL. THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI V. ACIT 333 ITR 436 RELIED UPON BY THE LD. COUNSEL FOR THE APPELLANT - CLEARLY STATES THAT HELD, ALLOWING THE PETITION, THAT ADMITTEDLY, THE THREE L OOSE PAPERS RECOVERED DURING THE SEARCH PROCEEDINGS DID NOT BEL ONG TO THE PETITIONER. IT WAS NOT THE CASE OF THE REVENUE THAT THE THREE DOCUMENTS WERE IN THE HANDWRITING OF THE PETITIONER IN THE CIRCUMSTANCES, WHEN THE CONDITION PRECEDENT FOR ISS UANCE OF NOTICE WAS NOT FULFILLED ACTION TAKEN U/S 153C OF T HE ACT STOOD VITIATED. THE ABOVE CASE STANDS DISTINGUISHED ON FACTS - BECA USE IN THE PRESENT CASE REVENUE HAS ALWAYS STATED - CONTENDED AND AFFIRMED THAT THE LOOSE PAPERS ARE SIGNED BY MR. DI LIP DHENIA AND ARE IN HIS HANDWRITING HENCE AS PER OBSERVATION S OF HONBLE SUPREME COURT IN THE CASE OF PADMA SUNDAR R AO 255 ITR 143 (SC) - EVEN A SMALL DIFFERENCE IN OUR FACT WILL MAKE A WORLD OF DIFFERENCE - TO THE CONCLUSION - HENCE THI S DIFFERENCE IN FACTS - SHOULD MAKE THE CONCLUSION DIFFERENT. IV. ALSO, THE DECISION OF HONBLE BANGALORE ITAT IN THE CASE OF P. SRINIVAS NAIK VS. ACIT, CC-1(2), BANGALORE (2009 ) 117 ITD 201 (BANG) - CLEARLY HOLDS THE FOLLOWING TEST FOR BELONG - THE TERM BELONGING IMPLIES SOMETHING MORE THAN THE ID EA OF A CASUAL ASSOCIATION. IT INVOLVES THE NOTION OF CONTI NUITY AND INDICATES ONE MORE OR LESS INTIMATE CONNECTION WITH THE PERSON OVER A PERIOD OF TIME. THE BOOKS OF ACCOUNT OR DOCU MENTS SEIZED DURING THE COURSE OF SEARCH HAD A CLOSE ASSO CIATION WITH THE GROUP CONCERN OF R. IT RECORDED THE TRANSACTI ON CARRIED OUT BY THAT GROUP. IT DID NOT RECORD THE TRANSACTIO N CARRIED OUT BY THE ASSESSEE. UNDER THE WEALTH TAX ACT, 1957 ASS ETS BELONGING TO THE ASSESSEE WERE TAXABLE. THE EXPRESS ION NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 19 BELONGING TO THE ASSESSEE - CONNOTES BOTH THE COM PLETE OWNERSHIP AND LIMITED OWNERSHIP OF INTEREST. OF COU RSE, BELONGING TO IS CAPABLE OF CONNOTING INTEREST WHICH IS LESS THAN AN ABSOLUTE PERFECT LEGAL TITLE. HOWEVER, THERE SHO ULD BE SOME LIMITED OWNERSHIP OF INTEREST, IF IT IS TO BE PERMI TTED THAT THE ASSETS BELONG TO THE ASSESSEE. HENCE, IN THE PRESENT CASE - THE CONNECTION IS NOT CASUAL BUT CAUSAL (THE CHART GIVEN DURING THE COURSE OF HEARIN G CLEARLY SHOWS THE LAND MENTIONED ON SEIZED DOCUMENT S AND APPELLANT COMPANIES DEALING IN IT) AND SINCE ALL THE DOCUMENTS ARE WRITTEN AND SIGNED BY MR. DILIP DHERI A WHO AS PER STATEMENT ON OATH OF MR. SHUKIA AND MR. KAPADIA THE DIRECTORS OF AVKASH LAND REALTY PVT. LTD. - HANDLED ALL THESE TRANSACTIONS - THE TEST AS LAID DOWN OF BELONG IN NAIKS CASE BY HONBLE BANGALORE ITAT(SUPRA) IS SATISFIED. FURTHER, WITHOUT PREJUDICE TO REVENUES STAND OF TH E DOCUMENTS BELONGING TO THE APPELLANT - IN CASE THE SUBMISSIONS OF REVENUE ARE NOT ACCEPTED BY HONBLE ITAT - THEN FOLLOWING THE ORDER OF HONBLE ITAT, BANGALORE THE HONBLE IT AT, MUMBAI MAY BE PLEASED TO GIVE NECESSARY DIRECTIONS/ FINDINGS THAT REVENUE IS FREE TO TAKE REMEDIAL MEASURES AS P ER LAW - AS OBSERVED IN PARA- 7 BY HONBLE BANGALORE ITAT, IN N AIKS CASE. V. FURTHER, THE DECISION OF HONBLE ITAT IN THE CAS E OF ITO VS. ARUN KUMAR KAPOOR (2012) 50 SOT 87 (ASR) - IS IN FA VOUR OF REVENUE WHEREIN ON SIMILAR FACTS HONBLE ITAT DID N OT PERMIT ACTION U/S 148 OF I.T. ACT - BUT DIRECTED REVENUE T O TAKE RECOURSE TO PROCEEDINGS U/S 153C OF I.T. ACT, 1961. HENCE, HONBLE ITAT, MUMBAI MAY KINDLY FOLLOW THIS DECISION. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 20 VI. THE DECISION OF HONBLE ANDHRA PRADESH HIGH COU RT IN THE CASE OF GOPAL LAL BHADRUKA VS. DCIT (2012) 346 ITR 106 (AP) ALSO HELPS THE REVENUE - AS IT CLEARLY STATES THAT U/S 153A AND 153C - AO CAN TAKE INTO CONSIDERATION MATERIAL OTHE R THAN WHAT WAS AVAILABLE DURING THE SEARCH AND SEIZURE OP ERATION FOR MAKING AN ASSESSMENT OF THE UNDISCLOSED INCOME OF THE ASSESSEE. IT SHOWS THAT THE SATISFACTION NOTE IS NOT THE END ALL AND AO CAN TAKE ACTION U/S. 153C BASED UPON OTHER MATERIALS ALSO AS CONNECTED WITH THE SEARCH PROCEEDINGS. ALSO, HONBLE DELHI HIGH COURT IN THE CASE OF CIT-V II VS. CHETAN DAS LACHMAN DAS (2012) 211 TAXMANN 61 (DEL) 254 CTR 392 (DEL) HAS ALSO CLEARLY HELD THAT SEIZED MATERIAL CAN ALSO BE RELIED UPON TO DRAW INFERENCE THAT THERE CAN BE SIM ILAR TRANSACTIONS THROUGHOUT THE PERIOD OF SIX YEARS COV ERED BY SECTION 153A. HENCE, THE ABOVE JUDGEMENT ALSO SUPPORTS REVENUES POSITION THAT THE ASSESSMENT NEED NOT BE BASED ONLY AND PURE LY ON SEIZED MATERIAL BUT ALSO ON OTHER RELEVANT AND ATT ENDANT EVIDENCES - HENCE THE WORD BELONGS TO MUST BE RE AD AND UNDERSTOOD ACCORDINGLY - PERMITTING THE ABOVE. HENC E, A HARMONIOUS INTERPRETATION IS NEEDED. VII. LASTLY, RELIANCE ON THE DECISION IN THE CASE O F PRITHVI PRAKASHAN BY LD. COUNSEL IS NOT RELEVANT SINCE IT R ELATES TO SECTION 158BD AND NOT SECTION 153BC - AS SECTION 15 3C IS MATERIALLY DIFFERENT FROM SECTION 1S8BD AS IT DOES NOT DEAL WITH UNDISCLOSED INCOME AS THE OLD SECTION 158BD DOES HENCE IS OF NO AVAIL. ALSO, RELIANCE PLACED BY LD. COUNSEL ON WEALTH TAX DECISIONS FOR UNDERSTANDING THE MEANING OF THE WORD BELONGS ARE OF NO RELEVANCE AS THEY ARE OUT OF CONTEXT - THE SENSE AN D PURPOSE IN NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 21 WEALTH TAX IS ENTIRELY DIFFERENT FROM THE SENSE AND PURPOSE OF SECTION 153C WHICH IS TO ASSESS INCOME BASED UPON S EIZED DOCUMENTS BELONGING TO ANOTHER PERSON AND NOT QUE STIONS OF OWNERSHIP ETC. - HENCE, THE WORD BELONGS AS USED IN SECTION 153C CAN ONLY MEAN RELATES OR PERTAINS TO THE O THER PERSON - AS EXPLAINED BY HONBLE SUPREME COURT IN THE CASE O F N.C. BUDDHIRAJA 204 ITR 412 (SC) AND NO OTHER MEANING CA N BE GIVEN TO IT. THUS, SINCE ALL THE SEIZED DOCUMENTS - BELONG TO - RELATE TO, PERTAIN TO THE APPELLANT - REVENUE HAS RIGHTLY IN ITIATED PROCEEDINGS U/S 153C OF I.T. ACT, WHICH MAY KINDLY BE SUSTAINED AND UPHELD. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE ORDERS OF THE LOWER AUTHORITIES AND THE DOCUMENTS R EFERRED TO AND RELIED UPON BY THE RIVAL PARTIES. WE FIND THAT THE ENTIRE ASSESSMENT REVOLVES AROUND THE DOCUMENTS SEIZED DUR ING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS AT THE RES IDENTIAL PREMISES OF ONE SHRI DHILIP DHERAI. THE MOST RELEV ANT DOCUMENTS HAVE BEEN MADE PART OF THE ASSESSMENT ORD ER. THE ENTIRE ASSESSMENT IS BASED UPON THE NOTINGS ON DOCU MENT NO. 22 & 23 OF ANNEXURE-A1 IMPOUNDED FROM THE RESIDENCE OF SHRI DHILIP DHERAI. WE ARE MAKING THESE TWO DOCUMENTS P ART OF OUR APPELLATE ORDER AT PAGE- 1 &2. 11. THE QUESTION WHICH IS TO BE DECIDED FIRST IS WH ETHER PROVISIONS OF SEC. 153C ARE APPLICABLE ON THE FACTS OF THE CASE IN THE LIGHT OF THE DOCUMENTS MARKED AS PAGE 1 & 2. SECTION 153C PROVIDES AS UNDER: NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 22 BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION ED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRE D TO IN SECTION 153A , THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH O THER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR RE ASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A :] [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO 97 [SUB-SECTION (1) OF SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACC OUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. ] [(2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREV IOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH O THER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE UN DER SUB- SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MA DE, NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 23 BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOM E OF SUCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECTION 153A .] 12. BEFORE PROCEEDING FURTHER LET US ALSO CONSIDER THE PROVISIONS OF SEC. 158BD AS PROVIDED UNDER CHAPTER XIVB WHICH HAS BECOME NON OPERATIVE QUA SEARCH ETC. MAD E AFTER 31.5.2003. 158BD-UNDISCLOSED INCOME OF ANY OTHER PERSON. WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THA N THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR AN Y ASSETS WERE REQUISITIONED UNDER SECTION 132A , THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQ UISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESS ING OFFICER SHALL PROCEED [UNDER SECTION 158BC ] AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCO RDINGLY. 13. A CLOSE PERUSAL OF THESE TWO SECTIONS SHOW THAT PRIOR TO 31.5.2003 IN CASE OF SEARCH AND SEIZURE PROCEEDINGS , UNDER ERSTWHILE SECTION 158BD, THE AO HAS TO SATISFY HIM SELF THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE U/S. 13 2 ETC. HOWEVER, UNDER THE PRESENT PROVISIONS OF SEC. 153C, THE AO HAS TO SATISFY THAT ANY MONEY, BULLION, JEWELLERY OR OT HER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONGED TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SEC. 153A. THE DISTINCTION IS CLEAR AND OBVIOUS. IN THE ERSTWHILE PROVISIONS OF SEC. 1 58BD THE EMPHASIS WAS ON UNDISCLOSED INCOME WHEREAS UNDER THE PRESENT PROVISION THE EMPHASIS IS ON MONEY, BULLION , NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 24 DOCUMENTS ETC. BELONGED TO A PERSON OTHER THAN THE PERSON SEARCHED. IN THE LIGHT OF THE AFORESAID DISTINCTIO N AND THE PROVISIONS OF SEC. 153C ALL THAT HAS TO BE SEEN IS WHETHER THE DOCUMENT SEIZED FROM THE POSSESSION OF SHRI DILIP DHERAI BELONG TO THE ASSESSEE AND WHETHER ON THE STRENGTH OF THESE DOCUMENTS HAS THE AO RECORDED THE SATISFACTION IN C ONSONANCE WITH THE LETTER AND SPIRIT OF THE PROVISIONS OF THE ACT. A CAREFUL PERUSAL OF THE DOCUMENTS MARKED AS PAGE 1 & 2 OF OU R ORDER SHOW THAT THERE IS NOT A SINGLE MENTION OF ANY COMP ANY. IT APPEARS THAT THE AO WAS IN POSSESSION WITH THE MYT HOLOGICAL POWER OF THE DIVYADRISHTI POSSESSED BY SARATH I SANJAY IN MAHABHARAT BY WHICH HE COULD FORESEE AND NARRATE TH E EXACT HAPPENINGS AT THE KURUSHETRA SITTING IN THE ROOM OF KING DRIDHARASHTRA. OUR REFERENCE TO THIS MYTHOLOGICAL CHARACTER IS NOT WITHOUT ANY BASIS BECAUSE JUST BY LOOKING AT TH E DOCUMENTS AT PAGE 1 & 2, THE AO COULD FORESEE THAT THESE LAND S BELONG TO 52 LAND COMPANIES WITHOUT EVEN KNOWING THEIR NAMES AT THE TIME OF RECORDING THE SATISFACTION. EVEN IN THE SA TISFACTION NOTE WHILE CONCLUDING HIS DISCUSSION AT PARA 1.6 THE AO CONCLUDED AS UNDER IN VIEW OF THE ABOVE, I AM SATISFIED THAT THE ABOV E MENTIONED SEIZED DOCUMENTS BELONG TO A PERSON I.E. THE ASSESS EE (WHICH IS INCLUDED IN THE ABOVE MENTIONED 52 COMPANIES) OTHER THAN THE PERSON REFERRED TO IN SEC. 153A WITHIN THE MEANING OF PROVISIONS OF SEC. 153C OF THE ACT. ACCORDINGLY, PR OCEEDINGS U/S. 153C OF THE ACT ARE INITIATED IN THE CASE OF T HE ASSESSEE. 14. AFTER CAREFULLY GOING THROUGH THIS SATISFACTION NOTE, A LOGICAL QUESTION IS FLASHING IN OUR MIND AND WHICH IS WHEN THE ASSESSMENT PROCEEDINGS ARE CONCLUDED AND ALL OTHER CONSEQUENTIAL PROCEEDINGS ARE COMPLETED, IT IS MAND ATORY TO RELEASE THE SEIZED MATERIAL TO THE ASSESSEE. THE QU ESTION IS - WHEN THESE SEIZED DOCUMENTS WOULD BE RELEASED , WHO WILL BE THE RECIPIENT? THE OBVIOUS ANSWER IS SHRI DILIP DH ERAI BECAUSE THE IMPUGNED DOCUMENTS WERE SEIZED FROM HIS PREMISE S. THEREFORE THE SEIZED DOCUMENTS CANNOT BELONG TO 52 COMPANIES BECAUSE ONE DOCUMENT CAN BELONG TO ONE PE RSON. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 25 EVEN IN THE SATISFACTION NOTE, A SAMPLE COPY OF ONE OF THESE 52 COMPANIES IS GIVEN TO US AND IT IS THE SAY OF THE L D DR THAT ALL SATISFACTION NOTES ARE EXACTLY WORDED WITH CHANGE I N THE NAME OF THE ASSESSEE, IT IS BEYOND ONES UNDERSTANDING H OW COULD THE AO COME TO KNOW THE NAMES AND PURCHASE COST OF LAND S IN THESE 52COMPANIES WITHOUT EVEN LOOKING INTO THEIR R ESPECTIVE BALANCE SHEETS. THEREFORE, IS THE SATISFACTION NOTE PREPARED ON THE DATE MENTIONED IN IT OR IS IT BACK DATED AFTER LOOKING INTO THE BALANCE SHEETS OF THESE 52 COMPANIES .IF THAT I S THE CASE, THAN ON THE DATE OF PREPARING THE SATISFACTION NOTE THE AO HAD NO OCCASION TO KNOW THAT THE ENTRIES IN SEIZED DOCU MENTS PERTAIN TO THESE 52 LAND COMPANIES. EVEN IF THE ENT RIES MAY PERTAIN TO THESE 52 LAND COMPANIES, BY ANY STRETCH OF IMAGINATION, IT CANNOT BE SAID THAT THE IMPUGNED DOCUMENT BELONG TO THESE 52 COMPANIES . OUR VIEW IS ALSO SUPPORTED BY THE PROVISIONS OF SEC. 292C, WHICH IS AS UNDER: 292C. [(1)] WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PER SON IN THE COURSE OF A SEARCH UNDER SECTION 132 [OR SURVEY UNDER SECTION 133A ], IT MAY, IN ANY PROCEEDING UNDER THIS ACT, BE PRE SUMED (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MO NEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG BELONG OR BELONGS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SU CH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY R EASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, ARE IN THAT PERSONS HAN DWRITING, AND IN THE CASE OF A DOCUMENT STAMPED, EXECUTED OR ATTE STED, THAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PE RSON BY WHOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTEST ED.] 26 [(2) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS HAVE BEEN DELIVERED TO THE REQUISITIONING OFFICER I N ACCORDANCE NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 26 WITH THE PROVISIONS OF SECTION 132A , THEN, THE PROVISIONS OF SUB- SECTION (1) SHALL APPLY AS IF SUCH BOOKS OF ACCOUNT , OTHER DOCUMENTS OR ASSETS WHICH HAD BEEN TAKEN INTO CUSTO DY FROM THE PERSON REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C), AS THE CASE MAY BE, OF SUB-SECTION (1) OF SECTION 132A , HAD BEEN FOUND IN THE POSSESSION OR CONTROL OF THAT PERSON I N THE COURSE OF A SEARCH UNDER SECTION 132 .] 15. IT IS THE SAY OF THE LD. DR THAT IN THE LIGHT OF THE DECISION OF KERALA HIGH COURT 333 ITR 281 WHEN THE AO OF TH E PERSON SEARCHED U/S. 153A IS THE SAME AS FOR THE OTHER PER SON COVERED U/S. 153C. THERE IS NO NEED TO RECORD THIS SATISFA CTION U/S. 153C OF THE ACT. THAT DECISION IS ONLY TO OVERRIDE THE PROCEDURAL PART BECAUSE THE SENDER AO AND THE RE CEIVER AO OF THE SEIZED DOCUMENTS BEING THE SAME. BUT IT CAN NOT BE SAID THAT NO SATISFACTION IS REQUIRED PRIOR TO PROCEEDIN G U/S. 153C OF THE ACT. HAD THIS BEING THE LEGISLATIVE INTENT, TH E LEGISLATURE COULD HAVE PROVIDED IN THE SECTION ITSELF THAT WHEN THE SEARCH CASES ARE CENTRALIZED, THERE IS NO NEED FOR RECORDI NG ANY SATISFACTION. THAT BEING NOT THE CASE, WE DO NOT A CCEPT THE SUBMISSION OF THE LD. DR ON THIS POINT. THE LD. DR HAS FURTHER RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT 346 ITR 177 ACCORDING TO WHICH AT THE TIME OF RECORDING SATISFACTION ONLY PRIMA FACIE GROUNDS HAVE TO BE ME NTIONED AND NOT THAT THERE ARE CONCLUSIVE EVIDENCES WITH AO AT THIS STAGE OF UNRECORDED INCOME ETC. INFACT, THIS DECI SION IS IN FAVOUR OF THE ASSESSEE BECAUSE ATLEAST THERE SHOULD BE SOME PRIMA FACIE GROUND, WHICH IS ABSENT IN THE PRESENT CASE. AS POINTED OUT EARLIER, THE SEIZED DOCUMENTS CONTAIN O NLY THE NAMES OF THE VILLAGES WHERE THE LANDS HAVE BEEN PUR CHASED. BY LOOKING AT THE NAMES OF THE VILLAGES, IT IS BEYOND OUR UNDERSTANDING HOW COULD ONE COME TO KNOW THAT 52 CO MPANIES HAVE PURCHASED LANDS IN THESE VILLAGES. THE THIRD DECISION RELIED UPON BY THE LD. DR ON THIS POINT IS THAT OF HONBLE KERALA HIGH COURT 26 TAXMANN.COM 54 BY WHICH THE LD . DR HAS EMPHASIZED THAT THERE IS NO NEED WHETHER SEIZED EVIDENCE ETC. REPRESENTS OR PROVE UNDISCLOSED INCOME OF ANOT HER ASSESSEE ALL THAT IS REQUIRED TO BE CONSIDERED IS W HETHER SUCH MATERIAL OR EVIDENCE RELATES TO ANOTHER ASSESSEE OR NOT. ONCE NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 27 AGAIN EVEN AT THE SAKE OF REPETITION WE HAVE TO SAY THAT THE EXHIBIT 1 & 2 RELIED UPON BY THE AO DO NOT CONTAIN THE NAMES OF ANY COMPANY THEREFORE AT THE STAGE OF RECORDING OF THE SATISFACTION HOW COULD THE AO SAY THAT THE ENTRIES PERTAIN TO 52 COMPANIES. THE LD. DR HAS FURTHER EMPHASIZED ON TH E WORD BELONG USED IN THE SECTION. IT IS THE SAY OF THE L D. DR THAT EVEN IF THERE IS A CAUSAL RELATIONSHIP, IT CAN BE SAID T HAT THE DOCUMENT BELONG TO OTHER PERSON. 16. ON THE CONTRARY, THE RELIANCE OF THE ASSESSEE O N THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF VIJAYBHAI CHANDRANI VS ACIT 333 ITR 436 IS WELL FOU NDED WHEREIN THE HONBLE GUJARAT HIGH COURT HAS HELD THA T ALLOWING THE PETITION, THAT ADMITTEDLY, THE 3 LOO SE PAPERS RECOVERED DURING THE SEARCH PROCEEDINGS DID NOT BEL ONG TO THE PETITIONER. IT WAS NOT THE CASE OF THE REVENUE THA T THE 3 DOCUMENTS WERE IN THE HANDWRITING OF THE PETITIONER S. IN THE CIRCUMSTANCES, WHEN THE CONDITION PRECEDENT FOR ISS UANCE OF NOTICE WAS NOT FULFILLED, ACTION TAKEN U/S. 153C OF THE ACT STOOD VITIATED. THE HONBLE HIGH COURT IN ITS ORDER CONSIDERING TH E USAGE OF A DOCUMENT HAS MADE THE FOLLOWING OBSERVATIONS: A PERUSAL OF THE SAID DOCUMENTS INDICATES THAT THE SAME CONTAIN DETAILS OF MEMBERS OF SAMUTKARSH CO-OPERATI VE HSG. SOC. THE SAID DOCUMENT UNDOUBTEDLY IS NOT A DOCUME NT WHICH BELONGS TO THE PETITIONER THOUGH THERE IS A REFEREN CE TO THE PETITIONER IN ONE OF THE LOOSE PAPERS UNDER THE HEA DING SAMUTKARSH MEMBERS. DETAIL INDICATING PLOT NUMBERS , NAMES OF MEMBERS AND OTHER DETAILS. 17. WE FIND THAT IN THIS DECISION OF THE HONBLE G UJARAT HIGH COURT, EVEN WHEN IMPUGNED DOCUMENTS HAD REFERENCE T O THE ASSESSEE, THE HONBLE HIGH COURT QUASHED THE PROCEE DINGS U/S. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 28 153C OF THE ACT. IN OUR CASE, THERE IS NOT EVEN A REFERENCE TO THE ASSESSEE EXCEPT THE NAME OF THE VILLAGE IN WHIC H THE ASSESSEE HAS PURCHASED THE LANDS. COMING BACK TO T HE PROVISIONS OF SEC. 153C VIS--VIS 158BD AS POINTED OUT EARLIER BOTH THE SECTIONS ARE SIMILARLY WORDED SECTION. WIT H A MARKED DISTINCTION SUCH AS THE MARGINAL HEADING OF 158 BD IS UNDISCLOSED INCOME OF ANY OTHER PERSON AND THAT OF 153C IS ASSESSMENT OF INCOME OF ANY OTHER PERSON. FURTHER U/S. 153C NOTICE CAN BE ISSUED ONLY WHERE THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACC OUNT SEIZED OR REQUISITIONED BELONG TO SUCH OTHER PERSON, WHERE AS ALL THAT IS REQUIRED U/S. 158BD IS THAT THE UNDISCLOSED INCO ME SHOULD BELONG TO ANY OTHER PERSON. 18. THUS IT IS CLEAR THAT BEFORE ISSUING NOTICE U/S . 153C, THE PRIMARY CONDITION HAS TO BE FULFILLED AND WHICH IS THAT THE MONEY, BULLION, DOCUMENTS ETC., SEIZED SHOULD BELON G TO SUCH OTHER PERSON. IF THIS CONDITION IS NOT SATISFIED, NO PROCEEDINGS COULD BE TAKEN U/S. 153C OF THE ACT. THE SEIZED DO CUMENTS MARKED AS PAGE 1 & 2 OF OUR ORDER DO NOT BELONG TO THE ASSESSEE BUT WERE SEIZED FROM THE RESIDENTIAL PREMI SES OF SHRI DILIP DHERAI. IT IS NOT THE CASE OF THE REVENUE TH AT THE IMPUGNED DOCUMENTS ARE IN THE HANDWRITING OF THE AS SESSEE. AT THIS STAGE, IT WOULD BE FAIR TO THE REVENUE THAT IT CANNOT BE IN THE HANDWRITING OF THE ASSESSEE SINCE THE ASSESS EE IS A LEGAL PERSON, SO TO EXTEND OUR OBSERVATION, THE SEIZED DO CUMENTS ARE NOT EVEN IN THE HANDWRITING OF ANY PERSON RELATED W ITH THE ASSESSEE BECAUSE SHRI DILIP DHERAI IS NEITHER A DIR ECTOR NOR A SHAREHOLDER/MEMBER NOR EVEN AN EMPLOYEE OF THE ASSE SSEE COMPANY. WE MAY MENTION AT THIS STAGE THAT THE PRO VISIONS OF THE INDIAN EVIDENCE ACT ARE NOT STRICTLY APPLICABLE TO THE PROCEEDINGS UNDER THE INCOME TAX ACT, BUT THE BROAD PRINCIPLES OF LAW OF EVIDENCE DO APPLY TO SUCH PROC EEDINGS. FURTHER AN ENTRY IN THE BOOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE OF BUSINESS IS RELEVANT FOR THE PURP OSE OF CONSIDERING THE NATURE AND IMPACT OF A TRANSACTION, BUT NOTING ON SLIP OF PAPERS OR LOOSE SHEET OF PAPERS ARE REQU IRED TO BE SUPPORTED/CORROBORATED BY OTHER EVIDENCE. THERE IS ALSO A DISTINCTION BETWEEN LOOSE PAPERS FOUND FROM THE POS SESSION OF NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 29 ASSESSEE AND SIMILAR DOCUMENTS FOUND FROM A THIRD P ERSON. IN THE PRESENT CASE, IMPUGNED DOCUMENTS WERE NOT FOUND FROM THE POSSESSION OF THE ASSESSEE BUT WAS FOUND FROM T HE POSSESSION OF A THIRD PERSON I.E. SHRI DILIP DHERA I. MERE MENTION OF THE NAMES OF THE VILLAGES WHERE THE COM PANIES MAY HAVE PURCHASED LANDS WOULD NOT GIVE ANY BASIS TO ASSUME/PRESUME/SURMISE THAT THE NAME OF THE COMPAN IES ARE MENTIONED IN THE IMPUGNED DOCUMENTS. THE VERY FOUN DATION OF SEC. 153C HAS BEEN SHAKEN BY NOT FULFILLING THE CON DITION PRECEDENT FOR THE ISSUE OF NOTICE. IT IS THE SAY OF THE LD DR THAT IN THE PRESENT CASE THERE IS NO NEED FOR RECORDING OF THE SATISFACTION .IF THIS PLEA OF THE DR IS ACCEPTED TH EN THE LEGISLATIVE INTENT OF INSERTING SEC.153C IN THE ACT WOULD GET DEFEATED BECAUSE THE AO WILL GET UNSTOPPABLE POWERS TO REOPEN ASSESSMENTS FOR 6 YEARS IN THE CASE OF THE OTHER PERSON WITHOUT RECORDING ANY BASIS [ SATISFACTION ] FOR H IS ACTION .THEREFORE THIS PLEA OF THE LD DR CANNOT BE ACCEPTE D . 19. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCE S IN THE LIGHT OF THE IMPUGNED SEIZED DOCUMENTS, WE HAVE NO HESITATION TO HOLD THAT ACTION TAKEN U/S. 153C OF THE ACT IS B AD IN LAW. 20. NOW COMING ON TO THE MERITS OF THE CASE, WHICH IS WITHOUT PREJUDICE TO OUR FINDINGS HEREINABOVE, THE SUBMISSIONS OF THE LD. SR. COUNSEL HAVE BEEN INCORPORATED HEREI NABOVE TO WHICH THE LD. DR IN ADDITION TO HIS ORAL ARGUMENTS FILED A WRITTEN SUBMISSION. THE LD. DR HAS MAINLY RELIED U PON THE FINDINGS OF THE AO. SO FAR AS PAYMENTS OUTSIDE THE REGULAR BOOKS OF ACCOUNTS ARE CONCERNED, IN HIS WRITTEN SUB MISSION, THE LD. DR HAS EXPLAINED THE MODUS OPERANDI OF THE ASSE SSEE RELYING UPON VARIOUS DOCUMENTS SEIZED FROM THE PREM ISES OF SHRI DILIP DHERAI AND M/S. JAI CORP GROUP. THE LD. DR STRONGLY CONTENDED THAT THE RETRACTION OF SHRI DILIP DHERAI IS ONLY SELF SERVING AND HAS TO BE REJECTED AS AN AFTERTHOUGHT. FOR THIS PREPOSITION THE LD DR RELIED UPON SEVERAL JUDGEMENT S . IT IS THE SAY OF THE LD. DR THAT THE STATEMENT OF SHRI DILIP DHERAI WAS RECORDED U/S. 132(4) OF THE ACT ON 5.3.2009 WHEREA S SHRI DILIP DHERAI HAS FILED AN AFFIDAVIT ON 14.5.2009 RETRACT ING FROM HIS NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 30 ADMISSION ON 5.3.2009. THE LD. DR POINTED OUT THAT AFTER 5.3.2009 SHRI DILIP DHERAI APPEARED BEFORE THE D DIT ON 6.4.2009, 8.4.2009, 20.4.2009, 22.4.2009 & 8.5.200 9 AND NONE OF THESE APPEARANCES SHRI DILIP DHERAI NEVER STATE D THAT HIS STATEMENT ON OATH RECORDED ON 5.3.2009 WAS DONE UND ER THREAT, FORCE, COERCION. THEREFORE, THE AFFIDAVIT FILED BY SHRI DILIP DHERAI IS ONLY AN AFTERTHOUGHT. IN HIS WRIT TEN SUBMISSION, THE LD. DR HAS POINTED OUT THAT SHRI DI LIP DHERAI IN ORDER TO ESCAPE THE CONSEQUENCES OF LAW , HAS F ILED THE AFFIDAVIT AS AN AFTERTHOUGHT WHICH DESERVES TO BE I GNORED ESPECIALLY WHEN THE AFFIDAVIT HAS BEEN CONTROVERTED AND REPELLED BY THE AUTHORISED OFFICER SHRI MANOJ KUMAR . THEREAFTER IN HIS WRITTEN SUBMISSION, THE LD. DR WE NT ON TO EXPLAIN HOW THE CASH TRANSACTIONS HAVE TAKEN PLACE AS MENTIONED IN THE SEIZED DOCUMENTS. IT IS THE SAY O F THE LD. DR THAT ON PERUSAL OF THESE SEIZED DOCUMENTS, THERE IS CLEAR MENTION OF CASH REQUIRED AT THE BOTTOM OF THESE PAG ES. FURTHER IN ALL THESE DOCUMENTS, TOTAL COST OF LAND HAS BEEN ARRIVED BY MULTIPLYING AREA OF LAND WITH RATE PER ACRE. REFER RING TO PAGE- 22 AND 23 OF ANNEXURE-A1, WHICH ARE AT PAGE 1 & 2 O F OUR ORDER, THE LD. DR SUBMITTED THAT SINCE 5 COLUMNS OF THE CHART ARE ENTERED INTO THE BOOKS OF ACCOUNT, THEN IT CANN OT BE ACCEPTED THAT THE 6 TH & 7 TH COLUMN DO NOT BELONG TO THE ASSESSEE COMPANY. THIS VIEW HAS BEEN ACCEPTED BY T HE LD. CIT(A). THE LD. DR FINALLY CONCLUDED THAT IN VIEW OF ALL THE SURROUNDING FACTS AND CIRCUMSTANCES, IT IS VERY CLE AR THAT CASH PAYMENTS HAVE BEEN MADE AND AN ADDITION HAS TO BE M ADE ON THIS ACCOUNT. TO SUBSTANTIATE HIS CLAIM, THE LD. D R HAS ALSO REFERRED TO SEIZED MATERIALS 101 TO 108. ACCORDING TO THE LD. DR, THESE SEIZED MATERIALS DESCRIBED THE MODUS OPER ANDI OF THE GROUP. THE LD. DR IN HIS WRITTEN SUBMISSION HAS TR IED TO EXPLAIN THE NATURE OF TRANSACTION RECORDED IN THE S EIZED DOCUMENTS 101 TO 108. 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON MER ITS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE E NTIRE ASSESSMENT REVOLVES AROUND THE STATEMENT OF SHRI DI LIP DHERAI RECORDED U/S. 132(4) OF THE ACT ON THE DATE OF SEAR CH I.E. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 31 5.3.2009. THE RELEVANT QUESTION WHICH HAS BEEN REL IED UPON BY THE AO AND THE LD. CIT(A) IS AS UNDER: Q. 24.PLEASE NOTE PAGE NO. 22 AND PAGE NO. 23 WHIC H IS KEPT BEFORE YOU. AS I UNDERSTAND THESE ARE THE STATEMEN T AS ON 28 TH NOVEMBER, 2008 FOR THE LAND PURCHASED HEREIN LIST O F ACCOUNTED PAYMENTS ARE PROVIDED AGAINST EACH VILLAG E. PLEASE CLARIFY THE SAME.? ANS. THESE DOCUMENTS REFLECT TOTAL AMOUNTS DISBURSE D FOR PURCHASE OF LAND. THE DETAILS OF AREA, VILLAGE, PAY MENTS MADE THROUGH CHEQUE ALONGWITH PAYMENTS MADE THROUGH CAS H IS SHOWN VERY CLEARLY IN THE CHART. THE HIGHLIGHTED P ORTION REFLECTS THE CASH PAYMENTS DISBURSED THROUGH JAICOR P OFFICE AT MAKER AND JAI TOWERS. THE SAME HAS BEEN MENTIONED SEPARATELY. THE CASH PAYMENT FROM MAKER ADDS UPTO RS. 28.01 CR AND CASH PAYMENT FROM JAI TOWERS ADDS UPTO RS. 1 0.43 CR. ALL THESE CASH WERE RECEIVED FOR THESE PROJECTS FRO M JAICORP LTD. AND THE TOTAL OF ALL THESE AMOUNTS WORKS OUT TO RS. 38.45 CR IN CASH. I WAS PROVIDED WITH THESE CASH AS AND WHEN R EQUIRED BY SHRI SANJAY PUNKHIA 22. HOWEVER, SUBSEQUENTLY SHRI DILIP DHERAI HAS RET RACTED FROM HIS STATEMENT WHICH HAS BEEN STRONGLY OBJECTED BY THE LD. DR IN HIS SUBMISSION. THE ENTIRE DISPUTE REVOLVES AROUND THE ALLEGED CASH PAYMENT AMOUNTING TO RS. 43 CRORES APP ROX. AND WHICH HAS BEEN ADDED U/S. 69C OF THE ACT. SEC. 69C OF THE ACT READS AS UNDER: WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATIO N, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO, SA TISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 32 23. A PERUSAL OF THE AFOREMENTIONED SECTION SHOWS T HAT THE REQUIREMENT OF THE SECTION IS THAT AN EXPENDITURE HAS BEEN FOUND TO HAVE BEEN INCURRED BY AN ASSESSEE IN ANY FINANCIAL YEAR. CONSEQUENTLY, THE ASSESSEE FAILS TO INDICATE SATISFACTORILY THE SOURCE OF SUCH EXPENDITURE OR AN Y PART THEREOF. THEN SECTION 69C IS ATTRACTED IN SUCH CIR CUMSTANCES. THE EMPHASIS IS ON THE FACT THAT AN ASSESSEE HAS INCURRED ANY EXPENDITURE. THIS ITSELF SHOW THAT THE ASSESSEE MUST HAVE BEEN FOUND TO HAVE INCURRED ANY EXPENDITURE TO INVOKE THE PROVISIONS OF SEC. 69C OF THE ACT. EVEN IF FOR THE SAKE OF ARGUMENTS, THE RETRACTION OF SHRI DILIP DHERAI IS IGNORED , IN HIS REPLY TO QUESTION NO. 24 ON THE DATE OF SEARCH, SHRI DILIP DHERAI HAS CATEGORICALLY MENTIONED THAT CASH PAYME NT FROM MAKERS IS AT RS. 28.01 CRORES AND CASH PAYMENT FR OM JAI TOWERS IS AT RS. 10.43 CRORES, TOTAL OF THESE AMOUN TS WORKS OUT AT RS. 38.45 CRORES WHICH WAS PROVIDED TO SHRI DI LIP DHERAI BY ONE SHRI SANJAY PUNKHIA CEO OF SEZ PROJECT. SHRI D ILIP DHERAI IS NOT EVEN REMOTELY RELATED TO THE ASSESSEE COMPAN Y .IT IS ALSO NOT THE CASE OF THE REVENUE THAT DILIP DHERAI WAS A CTING AS AGENT OF THE ASSESSEE COMPANY. MERELY ON THE STRENG TH OF THIS ADMISSION, IT CANNOT BE SAID THAT THE ASSESSEE HAS INCURRED CERTAIN EXPENDITURE OVER AND ABOVE WHAT HAS BEEN RE CORDED IN ITS BOOKS OF ACCOUNT. WE FIND THAT THE ULTIMATE CO NCLUSIONS DRAWN BY THE AO AND THE LD. CIT(A) HAVE BEEN REACHE D MERELY ON THE ENTRIES FOUND ON LOOSE SHEET OF PAPERS FOR WHICH SHRI DILIP DHERAI HAS STATED THAT THEY ARE ONLY ESTIMAT S / BUDGETARY FIGURES. HOWEVER, THE ALLEGATIONS MADE B Y THE LOWER AUTHORITIES ARE NOT SUPPORTED BY ACTUAL CASH PASSIN G HANDS. THE ENTIRE ADDITIONS ARE BASED ON THE SEIZED DOCUME NTS AND NO OTHER MATERIAL HAS BEEN ADVERTED TO AND WHICH COULD CONCLUSIVELY SHOW THAT THE HUGE AMOUNT OF THE MAGNI TUDE MENTIONED IN THE SEIZED DOCUMENTS TRAVELLED FROM, O NE SIDE TO THE OTHER. THE REVENUE AUTHORITIES HAVE NOT BROUGH T A SINGLE STATEMENT ON RECORD OF THE VENDORS OF LAND IN DIFFE RENT VILLAGES. NONE OF THE SELLER HAS BEEN EXAMINED TO SUBSTANTIAT E THE CLAIM OF THE REVENUE THAT EXTRA CASH HAS ACTUALLY CHANGED HANDS. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 33 24. OUR VIEW IS FORTIFIED BY THE DECISION OF THE D ELHI HIGH COURT IN THE CASE OF MALIK BROTHERS PVT. LTD. VS CI T 162 TAXMANN 43 WHICH IS RELIED UPON BY THE LD. DR. I N THAT CASE, THE ASSESSEE PURCHASED THE PROPERTY ALLEGEDLY FOR RS. 6 LAKHS. THE VENDOR IN HER STATEMENT CONFIRMED THAT THE SALE CONSIDERATION OF SAID PROPERTY WAS RS. 45 LAKHS AND PAID TAX THEREON. IN VIEW OF VENDORS STATEMENT, THE AO MAD E AN ADDITION OF RS. 39 LAKHS TO THE INCOME OF THE ASSES SEE TOWARDS UNEXPLAINED INVESTMENT. THE ACTION OF THE AO WAS J USTIFIED AND THE ADDITIONS WERE CONFIRMED. THUS IN VIEW OF THE AFORESAID DECISION, IN THE PRESENT CASE, NONE OF THE SELLERS HAVE BEEN EXAMINED BY THE AO TO STRENGTHEN HIS VIEWS THAT CA SH HAS BEEN PAID OVER AND ABOVE THE REGISTERED AMOUNT. THERE I S NOT EVEN A SINGLE DOCUMENT/EVIDENCE OF PARTIES INVOLVED IN T HE SALE OF LAND AT DIFFERENT VILLAGES BROUGHT ON RECORD TO SHO W THAT AN AMOUNT OTHER THAN THE PAYMENT OF CONSIDERATION HAS EXCHANGED HANDS. NO CONFESSION FROM THE SELLERS HAV E BEEN BROUGHT ON RECORD. THE ENTIRE ADDITIONS HAVE BEEN MADE MERELY ON THE STRENGTH OF LOOSE PAPERS FOUND DURING THE COURSE OF THE SEARCH NOT SUPPORTED BY ANY INDEPENDENT AUTH ORITY. CONSIDERING THE ENTIRE ADDITION, IN THE LIGHT OF TH E PROVISIONS OF SEC. 69C, AS PER A.OS OWN INTERPRETATION, INVESTME NTS IN PURCHASE OF LAND HAVE BEEN FULLY FINANCED BY SOME O THER PERSONS, THEREFORE, THE ADDITION IN THE HANDS OF TH E ASSESSEE CANNOT BE JUSTIFIED AS THE ASSESSEE HAS NOT INCURRE D ANY EXPENDITURE. THERE MAY BE ONE MORE POSSIBILITY THA T THE PERSONS WHO WERE DOING LAND PURCHASE MIGHT HAVE INF LATED THE SALE PRICE IN THESE LOOSE SHEETS JUST TO EXTRACT MO NIES FROM THEIR HIGHER AUTHORITIES IN THE GUISE OF ON-MONEY TO BE P AID TO THE VENDORS. MAY BE BECAUSE OF HIS POSSIBILITY NO DOCUM ENTS WERE FOUND TO SHOW THAT THE MONEY ACTUALLY CHANGED HANDS . 25. A PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE SHOW THAT THE AUTHORIZED, ISSUED AND SUBSCRIBED PAID UP CAPIT AL IS AT RS. ONE LAKH AND THE ASSESSEE HAD NOT DONE ANY BUSINESS DURING THE YEAR UNDER CONSIDERATION. WITH SUCH A SMALL CO RPUS AND NO BUSINESS ACTIVITY, NOR ANY HAS BEEN BROUGHT ON RECO RD BY THE REVENUE, IT IS NOT ACCEPTABLE THAT THE COMPANY MAY HAVE INCURRED SUCH HUGE EXPENDITURE OUTSIDE ITS BOOKS OF ACCOUNT. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 34 FURTHER IN HIS ENTIRE ASSESSMENT ORDER, THE AO HIMS ELF HAS POINTED OUT TIME AND AGAIN DIFFERENT PERSONS, WHO A RE ALLEGED, TO HAVE MADE CASH PAYMENTS. EVEN ON THAT COUNT, TH E ADDITIONS CANNOT BE SUSTAINED IN THE HANDS OF THE A SSESSEE. IN OUR CONSIDERATE VIEW, THERE BEING NO EVIDENCE TO SU PPORT THE REVENUES CASE THAT A HUGE FIGURE, WHATEVER BE ITS QUANTUM , OVER AND ABOVE THE FIGURE BOOKED IN THE RECORDS AND ACCOUNTS CHANGED HANDS BETWEEN THE PARTIES, NO ADDITION COUL D THEREFORE BE MADE U/S. 69C OF THE ACT TO THE INCOME OF THE ASSESSEE. CONSIDERING THE ENTIRE FACTS BROUGHT ON RECORD, WE HAVE NO HESITATION TO HOLD THAT EVEN ON MERITS, NO ADDITION COULD BE SUSTAINED. 26. SINCE WE HAVE ALLOWED THE ISSUE IN THE CASE OF THE PRESENT ASSESSEE ON BOTH COUNTS I.E. ON LEGAL ISSUE AND ON MERIT AND THE ISSUES INVOLVED IN ALL OTHER APPEALS OF OTH ER ASSESSEES ARE SIMILAR AND IDENTICAL, THOUGH QUANTUM MAY DIFFE R, FOR SIMILAR REASONS, WE QUASH THE ASSESSMENTS AND DELET E THE ADDITIONS ON MERIT AS WELL AS ON POINT OF LAW IN AL L OTHER CASES ALSO. 27. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE ES ARE ALLOWED. 2.1. IF THE OBSERVATION MADE IN THE ASSESSMENT OR DER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, THE AFORESAID ORDER OF THE TRIBUNAL DATED 22/03/201 3 AND ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT IN THE CA SE OF M/S MATRUASHISH REALTY PVT. LTD. (ITA NO.8223 AND 8225/MUM/2011) (A.YS. 2008-09 AND 2009-10), THE TRIBUNAL HAS MADE DISCUSSION AND FOR M/S NEEL LAND PVT. LTD. VS DCIT (ITA NO.8173 & 8163/MUM/2011) (A.YS. 2 008- NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 35 09 AND 2009-10), IN THE CASE OF M/S MANDAVI LAND PV T. LTD. VS DCIT(ITA NO.8244 & 8169/MUM/2011)(A.YS. 2008-09 AND 2009-10), IN THE CASE OF M/S MAHAMAYA LAND PVT. LTD. VS DCIT (ITA NO.8181/MUM/2011)(A.Y. 2008-09) AND M/ S BRHMAND LAND INFRASTRUCTURE PVT. LTD. (ITA NO.8236/MUM/2011)(A.Y. 2008-09) IN THE GROUP CASE O F VARIOUS ASSESSEES INCLUDING THE PRESENT ASSESSEES B EFORE US, THE TRIBUNAL HAS DELIBERATED UPON THE ISSUE IN DETA IL AND THEN REACHED TO A PARTICULAR CONCLUSION. THE TRIBU NAL PLACE RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMENT INCLUD ING THE PROVISIONS OF THE ACT FOUND THAT THERE WAS NO EVIDE NCE TO SUPPORT THE CASE OF THE REVENUE THAT A HUGE FIGURE WHATEVER BE ITS QUANTUM, OR AN ABOVE THE FIGURE BOOKED IN TH E RECORD AND ACCOUNTS CHANGE HANDS BETWEEN THE PARTIES, THUS , NO ADDITION COULD BE MADE U/S 69C OF THE RESPECTIVE AS SESSEE AS THEIR INCOME AND FINALLY CONCLUDED THAT ADDITION CANNOT BE SUSTAINED. SINCE, THE ADDITION WAS DELETED NO P ENALTY CAN SURVIVE. 2.2. THERE IS NO DISPUTE THAT QUANTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL, THEREFORE, IN OUR HUMBLE O PINION, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS JUS TIFIED IN REACHING TO A PARTICULAR CONCLUSION. OUR VIEW FURT HER FINDS SUPPORT FROM THE DECISION AND THE RATIO LAID DOWN I N CIT VS S.P VIZ CONSTRUCTION COMPANY 176 ITR 47 (PATNA) AND K.C. BUILDERS VS ACIT 265 ITR 562 (SUPREME COURT). WE AR E OF THE VIEW WHERE THE PENALTY FOR CONCEALMENT OR FURNI SHING INACCURATE PARTICULARS WAS LEVIED AND AFTER DELETIN G THE NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 36 QUANTUM ADDITION, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY. ORDINARILY, PENALTY CANNOT STAND IN I TSELF IF THE ADDITION MADE IN THE ASSESSMENT ITSELF IS SET ASIDE OR CANCELLED BY THE SUPERIOR AUTHORITY/COURT. THE PEN ALTY CANNOT STAND BY ITSELF BECAUSE FALSE RESULT MAY BE PRODUCED BY THE FALSITY OF ONE OR MORE OF THE CONSTITUENT IT EMS IN THE RETURN. THE WORD INACCURATE PARTICULARS WOULD CO VER FALSITY IN THE FINAL FIGURE AND ALSO THE CONSTITUENT ELEMEN TS OR ITEMS. THEY SIMPLY WOULD MEAN INACCURATE IN SOME S PECIFIC OR DEFINITE RESPECT WHETHER IN THE CONSTITUENT OR S UBORDINATE ITEMS OF INCOME OR THE END RESULT. CONCEALMENT OR FURNISHING INACCURATE PARTICULARS IMPLIES SOME DELI BERATE ACT ON THE PART OF THE ASSESSEE IN WITHHOLDING THE TRUE FACTS FROM THE AUTHORITIES. SINCE, THE BASIS OF LEVYING PENALTY REMAINS NO MORE IN EXISTENCE, AFTER DELETION OF QUA NTUM ADDITION, THEREFORE, FROM THIS ANGLE THE STAND OF T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED . FINALLY, ALL THE APPEALS OF THE REVENUE ARE DISMISS ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 06/07/2015. SD/ - (RAJENDRA) SD/ - (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; ( DATED : 04/08/2015 F{X~{T? P.S/. .. NEEL LAND PVT. LTD. & ORS. ITA NO.598/MUM/2014 & ORS. CASES 37 !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1# / CIT(A)- , MUMBAI 5. 34.# , 0 *+'* 5 , / DR, ITAT, MUMBAI 6. 6!7 / GUARD FILE. ! / BY ORDER, /3+#.# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI