SHRI PRADEEP sHARMA, Bhopal V. ACIT Central ( Circle)-2, Bhopal

ITA 647/Ind/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4655 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-01-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 09-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N D PATWA A RS
• Keywords: Search and seizure; Loose papers; Document seized; Opportunity of being heard; Reasonable cause; Validity of assessment; Documents seized
• Section: 271(1)(c); 92C; 143(3); 153A; 80IB; 143(2); 43; 73; 13; 153; 22; 153C; 148; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER IT(SS) A NO.111/IND/2016 (ASSESSMENT YEAR 2011-12) & ITA NOS.645 TO 651/IND/2017 & 679/IND/2016 ASSESSMENT YEARS: 2006-07 TO 2012-13 IT(SS)A NOS.108 /IND/2016 ASSESSMENT YEAR 2011-12 ITA NO. 675 IND/2016 ASSESSMENT YEAR 2012-13 & ITA NOS.227 & 228/IND/2018 ASSESSMENT YEARS: 2011-12& 2012-13 APPELLANT BY SHRI ASHISHGOYAL & N.D. PAT W A, ARS RESPONDENT BY SHRI LAL CHAND, CIT - DR PRADEEP SHARMA , S-4, RAMESH TOWER, 10 NO. STOP,ARERA COLONY, BHOPAL VS. ACIT(CENTRAL) - 2 BHOPAL (APPELLANT) (REVENUE ) PAN: ACWPS6402S PRADEEP HIRANI, E-3, 3/2 NUPURKUNJ, ARERA COLONY BHOPAL VS. ACIT(CENTRAL) - II BHOPAL (APPELLANT) (REVENUE ) PAN :ABOPH8456N PRADEEP SHARMA & PRADEEP HIRANI 2 DATE OF HEARING: 1 2 . 0 1 .20 2 1 DATE OF PRONOUNCEMENT: 1 1 .02.2021 / O R D E R PER BENCH: BY WAY OF THE ABOVE CAPTIONED APPEALS BY THE ASSES SEE(S) PRADEEP SHARMA AND PRADEEP HIRANI, QUANTUM APPEALS RELATING TO A.Y. 2011-12 AND A.Y. 2012-13 ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) -3, BHOPAL DATED 18.03.2016 ARISING OUT OF T HE ORDER U/S. 153C RWST. SECTION 143(3) OF THE INCOME TAX ACT (HE REINAFTER REFERRED TO AS THE ACT) FOR A.Y. 2011-12 AND U/S. 143(3) OF THE ACT FOR A.Y. 2012-13 OF DCIT (CENTRAL), BHOPAL DATED 03 .03.2014. FURTHER, IN APPEAL NOS. ITA 645 TO 651/ IND/ 2017, IN THE CASE OF PRADEEP SHARMA FOR THE A.Y. 2006-07 TO 2012-13 IS D IRECTED AGAINST THE ORDER OF LD. CIT(A)-3, BHOPAL DATED 11.09.2017 WHICH IS ARISING OUT OF THE PENALTY ORDER U/S. 271(1)(C) OF THE ACT FRAMED BY THE LD. ACIT (CENTRAL)II, BHOPAL ON 27.09.2016. FURTHER, I N APPEAL NOS. ITA 227-228/ IND/ 2018, IN THE CASE OF PRADEEP HIRA NI FOR THE A.Y. 2011-12 AND 2012-13 IS DIRECTED AGAINST THE ORDER O F LD. CIT(A)-3, BHOPAL DATED 23.02.2018 WHICH IS ARISING OUT OF THE PENALTY ORDER PRADEEP SHARMA & PRADEEP HIRANI 3 U/S. 271(1)(C) LEVIED BY THE LD. ACIT (CENTRAL)II, BHOPAL VIDE HIS ORDER DATED 27.09.2016. 2. SINCE COMMON ISSUES AND ALMOST IDENTICAL FACTS A RE INVOLVED AND AS REQUESTED BY BOTH THE PARTIES IT IS DECIDED TO ADJUDICATE THE ISSUES RAISED IN THESE APPEALS BY FRAMING COMMON OR DER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. IN RESPECT OF THE QUANTUM APPEAL, THE ASSESSEES HAVE RAISED FOLLOWING GROUNDS OF APPEAL:- IT(SS)A 111/IND/ 2016 - PRADEEP SHARMA,A.Y. 2011-12 1. THAT ON THE FATS AND IN THE CIRCUMSTANCES OF THE CA SE, THE IMPUGNED ORDER PASSED BY THE LD. AO IS CONTRARY TO LAW, MATE RIALLY INCORRECT AND UNSUSTAINABLE IN LAW AS WELL AS ON FACTS. ALL THE F INDING AND CONCLUSION OF THE LD. AO ARE ALSO CONTRARY TO THE MATERIAL, OPPOS ED TO THE FACT, EQUITY AND LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND ON LAW AS WELL THE LD. AO HAS ERRED AND WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 153C OF THE INCOME TAX ACT AND THEREBY I N MAKING THE ASSESSMENT ON THE BASIS OF PRESUMPTION AND ASSUMPTI ON AND WITHOUT ANY CORROBORATIVE MATERIAL. 3. THAT THE LD. AO HAS ERRED AND WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE I.T. ACT AT RS. 2 9,76,373/-. HE HAS FURTHER ERRED TO INTERPRET THE PROVISION OF SECTION 80IB (10) AND THEREBY DISALLOWING THE LAWFUL, VALID AND LEGAL CLAIM WHICH IS FULLY SUPPORTED BY EVIDENCES. HENCE THE DEDUCTION U/S 80IB(10) BE KIND LY ALLOWED. PRADEEP SHARMA & PRADEEP HIRANI 4 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN THE LAW AS WELL, THE REASON ADVANCE BY THE LD. AO FOR D ISALLOWING THE CLAIM MADE U/S 80IB(10) OF THE I.T. ACT IS NEITHER JUSTIF IED NOR SUSTAINABLE IN LAW. THE SO-CALLED REASONS ARE OPPOSED TO FACTS AND LAW AND BASED UPON PRESUMPTION AND ASSUMPTION. THEREFORE, THE SAID SO- CALLED REASONS BE HELD AS WRONG AND UNSUSTAINABLE OF LAW. 5. THAT THE LD. AO GRIEVOUSLY ERRED AND WAS NOT JUSTIF IED IN HOLDING THAT THE APPELLANT IS NOT AN UNDERTAKING FOR DEVELO PING AND BUILDING HOUSING PROJECT, THE LD. AO HAS FURTHER ERRED IN HO LDING THAT THE APPELLANT IS A CONTRACTOR AND IS NOT ENTITLED FOR CLAIMING DI CTION U/S. 80IB(10). THE SO- CALLED FINDINGS AND CONCLUSION IS GROSSLY ARBITRARY AND ERRONEOUS. THE SAME MAY KINDLY BE HELD AS BAD AND WRONG. 6. THAT THE LD. AO HAS ERRED AND NOT JUSTIFIED IN HOLD ING THAT THE APPELLANT HAS NOT FURNISHED COMPLETION CERTIFICATE ISSUED BY THE MUNICIPAL CORPORATION. THE APPELLANT FILED COMPLETION CERTIFI CATE DULY SIGNED BY REGISTERED ARCHITECT WITH MUNICIPAL CORPORATION, BH OPAL. THEREFORE THE SAME SHOULD HAVE BEEN TREATED AS VALID AND LEGAL EV IDENCE. 7. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND ON LAW AS WELL THE LD. AO WAS NOT JUSTIFIED IN NOT ALLOWING P ROPER AND REASONABLE OPPORTUNITY TO THE APPELLANT FOR SEEKING THE DETAIL ED OBJECTION IN RESPECT OF MEASUREMENT OF THE RESIDENTIAL UNITS. THEREFORE THE ORDER IS ILLEGAL INVALID AND MAY BE QUASHED. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. AO HAS ERRED AND WAS NOT JUSTIFIED IN NOT ACCEPTING THE ME ASUREMENT OF THE RESIDENTIAL UNIT AS APPROVED BY THE MUNICIPAL CORPO RATION. THE DVO TAKING THE MEASUREMENT AND APPLYING THE SAME AS TAKEN BY H IM IS NEITHER JUSTIFY NOR SUSTAINABLE IN LAW. THEREFORE THE BUILT-UP AREA OF CONSTRUCTED UNIT MAY PLEASE BY ACCEPTED. PRADEEP SHARMA & PRADEEP HIRANI 5 9. THAT THE LD. AO HAS ERRED IN NOT CONSIDERING THE SU BMISSION AND THE DECISION QUOTED BY THE APPELLANT JUDICIOUSLY. HE FU RTHER ERRED WITHOUT POINTING OUT ANY SPECIFIC, LEGAL AND LAWFUL AND SUP PORTING PROVISIONS OF THE LAW IN DISBELIEVING THE CLAIM OF THE APPELLANT. 10. THAT THE LD AO HAS ERRED IN MAKING ADDITION ON ADDI TION ON ACCOUNT OF UNDISCLOSED ON MONEY PAYMENT AT RS. 20,00,000/- 11. THAT AT ANY EVENT, THE LD. AO WAS NOT JUSTIFIED IN NOT ACCEPTING THE BOOK RESULTS, DEDUCTION AND PREPAID TAXES AS CLAIME D BY THE APPELLANT. 12. THE AO HAS ERRED AND WAS NOT JUSTIFIED IN LEVYING P ENALTY INTEREST U/S. 234-B AND FURTHER ERRED IN INITIATING PENALTY PROCEEDING U/S. 271(1)(C). THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AND AMEND OR TO MODIFY ANY GROUND(S) ON OR BEFORE THE DATE OF HEARING. ITA 679/IND/ 2016 - PRADEEP SHARMA,A.Y. 2012-13 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE IMPUGNED ORDER PASSED BY THE LD. LOWER AUTHORITIES IS CONTRA RY TO LAW, MATERIALLY INCORRECT AND UNSUSTAINABLE IN LAW AS WE LL AS ON FACTS. ALL THE FINDINGS AND CONCLUSION OF THE LD. AO ARE ALSO CONTRARY TO THE MATERIAL, OPPOSED TO THE FACTS, EQUITY AND LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN IN VOKING THE PROVISION OF SECTION 153C OF THE IT ACT AND THEREBY MAKING THE ASSESSMENT IN THE HANDS OF THE APPELLANT. THE AFORE SAID ACTION ON THE PART OF THE LD. LOWER AUTHORITY ARE BAD AND VIS ITED IN LAW. 3. THAT THE LD. LOWER AUTHORITIES HAS ERRED IN NOT CON SIDERING THE SUBMISSION AND THE DECISIONS QUOTED BY THE APPELLAN T JUDICIOUSLY. 4. THAT THE LD. LOWER AUTHORITIES HAS ERRED IN MAKING ADDITION ON ACCOUNT OF UNDISCLOSED ON MONEY PAYMENT AT RS. 1,12 ,27,401/-. 5. THAT THE LD. LOWER AUTHORITIES HAS ERRED IN MAKING ADDITION OF RS. 9,12,600/- ON ACCOUNT OF COMMISSION ON SALE OF LAND . PRADEEP SHARMA & PRADEEP HIRANI 6 6. THAT AT ANY EVENT, THE LD. LOWER AUTHORITIES WERE N OT JUSTIFIED IN NOT ACCEPTING THE RESULTS AND DEDUCTION AS CLAIMED IN T HE RETURN. 7. THE LOWER AUTHORITIES HAS ERRED AND WAS NOT JUSTIFI ED IN LEVYING PENAL INTEREST U/S. 234-B AND FURTHER ERRED IN INIT IATING PENALTY PROCEEDING U/S 271(1)(C). THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AND AMEND OR TO MODIFY ANY GROUND(S) ON OR BEFORE THE DATE OF HEARING. IT(SS)A 108/IND/ 2016 - PRADEEP HIRANI.A.Y. 2011-12 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE IMPUGNED ORDER PASSED BY THE LD. LOWER AUTHORITIES IS CONTRA RY TO LAW, MATERIALLY INCORRECT AND UNSUSTAINABLE IN LAW AS WELL AS ON FA CTS. ALL THE FINDING AND CONCLUSION OF THE LD. AO ARE ALSO CONTRARY TO T HE MATERIAL, OPPOSED TO THE FACTS, EQUITY AND LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN IN VOKING THE PROVISION OF SECTION 148 AND 153C OF IT ACT AND THEREBY MAKIN G THE ASSESSMENT AND REASSESSMENT IN THE HANDS OF THE APPELLANT. THE AFORESAID ACTION ON THE PART OF THE LD. LOWER AUTHORITY ARE BAD AND VISITED IN LAW. 3. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD. LOWER AUTHORITY WERE NOT JUSTIFIED IN NOT ACCEPTING THE P AYMENT MADE BY THE APPELLANT AFTER RECEIVING THE CASH FROM M/S AGRAWAL BUILDCON. IN THE FACTS THE APPELLANT WORKED AS AN AGENT AND THEREFOR E HAS NOT GIVEN ANY UNDISCLOSED AMOUNT TO THE SELLER OF LAND. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE ADDITION MADE BY THE LD. LOWER AUTHORITIES OF RS. 20,00,00/- ON ACCOUNT OF UNDISCLOSED MONEY IS TOTALLY ARBITRARY AND ILLEGAL. THIS ADDITION MAY PLEASE BY QUASHED. PRADEEP SHARMA & PRADEEP HIRANI 7 THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AND AMEND OR TO MODIFY ANY GROUND(S) ON OR BEFORE THE DATE OF HEARING. ITA 675/IND/ 2016 - PRADEEP HIRANI A.Y. 2012-13 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE IMPUGNED ORDER PASSED BY THE LD. LOWER AUTHORITIES IS CONTRA RY TO LAW, MATERIALLY INCORRECT AND UNSUSTAINABLE IN LAW AS WELL AS ON FA CTS. ALL THE FINDINGS AND CONCLUSION OF THE LD. AO ARE ALSO CONTRARY TO THE M ATERIAL, OPPOSED TO THE FACTS, EQUITY AND LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN IN VOKING THE PROVISION OF SECTION 148 AND 153C OF THE IT ACT AND THEREBY MAKI NG THE ASSESSMENT IN THE HANDS OF THE APPELLANT. THE AFORESAID ACTION ON THE PART OF THE LD. LOWER AUTHORITY ARE BAD AND VISITED IN LAW. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. LOWER AUTHORITY WERE NOT JUSTIFIED IN NOT ACCEPTING THE P AYMENT MADE BY THE APPELLANT AFTER RECEIVING THE CASH FROM M/S AGRAWAL BUILDCON. IN FACTS THE APPELLANT WORKED AS AN AGENT AND THEREFORE HAS NOT GIVEN ANY UNDISCLOSED AMOUNT TO THE SELLER OF LAND. 4. THAT THE LD. LOWER AUTHORITIES HAS ERRED IN MAKING ADDITION OF RS. 1,12,27,401/- IN THE TOTAL INCOME THE APPELLANT. TH E APPELLANT HAS PAID CASH PART TO SELLER SMT. REKHABAI, LALA RAM AND DEV I SINGH AFTER RECEIVING CASH FROM M/S. AGRAWALBUILDCON. IN FACTS THE APPELL ANT WORKED AS AN AGENT AND THEREFORE HAS NOT GIVEN ANY UNDISCLOSED A MOUNT TO THE SELLER OF LAND. 5. THAT IN VIEW OF THE MATTER, THE ADDITION MADE BY TH E LD. LOWER AUTHORITIES OF RS. 1,12,27,401/- ON ACCOUNT OF UNDI SCLOSED ON MONEY PAYMENT TO THE SELLER IS TOTALLY ARBITRARY, ILLEGAL AND VISITED IN LAW. THE SAME MAY PLEASE BY QUASHED. PRADEEP SHARMA & PRADEEP HIRANI 8 THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AND AMEND OR TO MODIFY ANY GROUND(S) ON OR BEFORE THE DATE OF HEARING. 4. FIRST WE TAKE UP IT(SS)A 111/ IND/ 2016 FOR A.Y. 2011-12 IN THE CASE OF PRADEEP SHARMA. GROUND NO. 1 AND 2 RELA TE TO THE COMMON GROUND CHALLENGING THE VALIDITY OF THE PROCE EDINGS U/S. 153C R/W SECTION 143(3). 5. THE FACTS RELATING TO THIS GROUND OF APPEAL ARE A SEARCH AND SEIZURE ACTION U/S. 132 OF THE INCOME-TAX ACT, 1961 WAS UNDERTAKEN ON 21.10.2011 AND 22.10.2011 AT THE BUSI NESS PREMISES OF 250, SAGAR PLAZA, M.P. NAGAR, ZONE-II, BHOPAL IN THE SAGAR GROUP. DURING THE COURSE OF SEARCH AND SEIZ URE, VARIOUS DOCUMENTS WERE FOUND AND SEIZED. AFTER THE SEARCH A ND SEIZURE ACTION, SATISFACTION U/S. 153C WAS RECORDED BY ACIT (CENTRAL) ON 11.09.2013. IN THE SATISFACTION, IT WAS MENTIONED T HAT THE FOLLOWING BOOKS OF ACCOUNTS/ DOCUMENTS BELONGING TO THE ASSES SEE PRADEEP SHARMA WERE FOUND AND SEIZED: PAGE N O D ETAILS 62 TO 75 OF LPS-3 MAP, KAHSRA FORM P - 2, PHOTOS, SALES DEED HELD BETWEEN PANKAJ MAKHIJA, PRADEEP SHARMA, PRADEEP KUMAR HIRAN I (SELLER) AND SANJIVAGRAWAL OF RS. 1,76,50,000/- REG ARDING LAND SITUATED AT GRAM: KATARA, PATWARIHALKA NO. 43/ 25 VIKASKHAND: FANDA TEHSIL: HUZURZILA: BHOPAL PRADEEP SHARMA & PRADEEP HIRANI 9 LD. ACIT (CENTRAL), BHOPAL THEREAFTER BEING SATISFI ED THAT BOOKS OF ACCOUNTS/DOCUMENTS SEIZED ABOVE BELONG TO PRADEEP SHARMA, INITIATED ACTION U/S. 153C. 6. LD. COUNSEL FOR THE ASSESSEE, CHALLENGING THE AS SUMPTION OF JURISDICTION U/S. 153C MADE THE FOLLOWING SUBMISSIO NS: GROUND NO. 1-2 - VALIDITY U/S. 153C AO PG. 2 (SATISFACTION AND ORDER) CIT(A) GR. 1-2 PG. 2. SEARCH : 20.10.2011 TO 21.10.2011 AT BUSINESS PREMISES OF SAGAR GROUP AT 250, SAGAR PLAZA, ZONE-II, M.P. NAGAR, BHOPAL. SATISFACTION U/S. 153C : 11.09.2013. PB 17. DOCUMENT REFERRED IN SATISFACTION: PB 96-107 : LPS-3, PG. 62-75 OF PANCHANAMA DATED 22.10.2011. KHASRA, FORM P-2, SALE DEED BETWEEN SELLERS REKHA BAI, LALA RAM, DEVI SINGH THROUGH POA- 1. SHRI. PANKAJ MAKHIJA 2. PRADEEP SHARMA 3. SHRIPRADEEK KUMAR HIRANI AND SHRISANJEEVAGRAWAL PARTNER OF AGRAWAL BUILDCON (AS BUYER) FOR RS. 1,76,50,000/- FOR SALE OF 1.495 HECTARES OF LAND AT KATARA, PATWARIHALKA NO. 43/ 24 VIKAR KHAND: FANDA TEHSIL HUZUR, ZILA BHOPAL NOTICE U/S. 153C : 11.09.2013. RETURN : 15.10.2013. (AO PG. 1-2) PB 18-19. NOTICE U/S. 143(2) : 29.10.2013. PB 20. BUSINESS OF ASSESSEE : REAL ESTATE TRADER AND BUILD ER. PRADEEP SHARMA & PRADEEP HIRANI 10 FACTS THE DOCUMENT, WHICH IS THE BASIS OF INITIATING PROC EEDINGS U/S. 153C, AS MENTIONED ABOVE, IS A SALE DEED EXECUTED BETWEEN RE KHA BAI, LALA RAM AND OTHERS THROUGH POWER OF ATTORNEY HOLDERS BEING PANKAJ MAKHIJA, PRADEEP SHARMA AND PRADEEP HIRANI; AND SANJEEV AGRA WAL FOR AGRAWAL BUILDCON AS THE BUYER. THE SALE CONSIDERATION MENTI ONED THEREIN IS RS. 1,76,50,000 WAS PAID BY CHEQUE. IN THE SATISFACTION, THERE WAS NO MENTION OF ANY IN CRIMINATING DOCUMENT. THE VERY BASIS OF THE SATISFACTION IS THE SALE DEED OF RS. 1,76,50,000. THIS WOULD BE CLEAR FROM THE SATISFACTION NOTE AT P B 17. THIS SALE DEED, OF COURSE MENTIONED THE NAME OF THE ASSESSEE, BUT DID NOT BELONG TO THE ASSESSEE. RELEVANT PROVISION BEFORE, ITS AMENDMENT BY FINANCE ACT, 2015 W.E.F. 0 1.06.2015, THE RELEVANT SECTION 153C(1) READ 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, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENT SEIZED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DO CUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. [EMPHA SIS APPLIED] SUBMISSIONS: THE JURISDICTION U/S. 153C IS OBTAINED ONLY WHEN AN Y MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENT IS SEIZED, THAT BELONGS OR BELONG TO A ANY THIRD PERSON (I.E. PERSON NOT COVERED IN THE WARRANT OF AUTHORISATION) . THUS THE SATISFACTION HAS TO BE: PRADEEP SHARMA & PRADEEP HIRANI 11 A. MONEY, BULLION, JEWELLERY ........BOOKS OF ACCO UNT OR DOCUMENT IS SEIZED. B. IT BELONGS TO A PERSON OTHER THAN PERSON SEAR CHED. PRESUMPTION U/S. 292C: - SECTION 292C WOULD ALSO BE RELEVANT HERE. AS PER THIS SECTION, WHERE ANY DOCUMENT IS FOUND IN TH E POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONGS TO THAT PERSON. IT IS SIMIL ARLY PROVIDED IN SECTION 292C(1)(I). IN OTHER WORDS, WHENEVER A DOCU MENT IS FOUND FROM A PERSON WHO IS BEING SEARCHED, THE NORMAL PRESUMPTIO N IS THAT THE SAID DOCUMENT BELONGS TO THAT PERSON. IT IS FOR THE AO T O REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR SATISFACTI ON THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. SECTION 292C HAS RELEVANCE WHERE A SEARCH IS CONDUCTED ON A PERSON. IT IS SUBMITTED THAT IN PRESENT CASE, SEARCH WAS CO NDUCTED ON SANJEEV AGRAWAL OF AGRAWAL BUILDCON. NO SEARCH WAS CONDUCTE D ON THE ASSESSEE. THIS SALE DEED (PB 96-107) WAS FOUND DURING THE SEA RCH FROM THE POSSESSION OF SANJEEV AGRAWAL. THUS, U/S. 292C, THE PRESUMPTION IS THAT THE DOCUMENT BELONGS TO SANJEEV AGRAWAL. SUBSEQUENT AMENDMENT: - IT IS A TRITE LAW, THAT TO UNDERSTAND THE POSITION OF LAW EXISTING PRIOR TO AMENDMENT, THE SU BSEQUENT AMENDMENT MAY BE RELEVANT. BY THE FINANCE ACT, 2015 W.E.F. 01 .06.2015, SECTION 153C(1) WAS AMENDED. THIS AMENDMENT IS CLEARLY APPL ICABLE FROM 01.06.2015 AND NOT APPLICABLE TO THE PRESENT CASE; BUT WOULD SERVE IN INTERPRETING THE EARLIER LAW. THE NEW SECTION 153C(1) (AS AMENDED) READS AS UNDER : PRADEEP SHARMA & PRADEEP HIRANI 12 NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, WHERE THE ASSESSING OFFICER IS SATISFIED THAT, - (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR RE QUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINE D THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN S ECTION 153A............. THUS, AFTER 2015, IN RESPECT OF ASSETS, THE WORDS BELONG WAS USED AND IN RESPECT OF DOCUMENTS, THE WORDS PERTAINS/ RELATES WERE USED. THE POSITION BEFORE THIS AMENDMENT, IS THUS MADE MO RE CLEAR, THAT PRIOR TO THE AMENDMENT, THE LEGISLATURE ONLY USED THE WOR DS BELONG. SECTION 153C(1) GRANTS JURISDICTION AND THEREFORE A STRICT INTERPRETATION IS REQUIRED FOR SAME. EVEN THE CBDT CIRCULAR NO. 19/ 2015 DATED 27 TH NOV. 2015, WHICH EXPLAINED THE AMENDMENT READ AS UNDER: 39. ASSESSMENT OF INCOME OF A PERSON OTHER THAN TH E PERSON IN WHOSE CASE SEARCH HAS BEEN INITIATED OR BOOKS OF AC COUNT, OTHER DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED. 39.1 SECTION 153C OF THE INCOME-TAX ACT RELATES TO ASSESSMENT OF INCOME OF ANY PERSON OTHER THAN THE PERSON IN WHOSE CASE SEARCH HAS BEEN CONDUCTED OR REQUISITION HAS BEEN MADE. TH E PROVISIONS CONTAINED IN SUB-SECTION (1) OF THE SECTION 153C, B EFORE AMENDMENT MADE BY THE ACT, PROVIDED THAT NOTWITHSTANDING ANYT HING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 1 49, SECTION 151 AND SECTION 153 OF THE INCOME-TAX ACT, WHERE THE AS SESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED OR PRADEEP SHARMA & PRADEEP HIRANI 13 REQUISITIONED BELONG TO ANY PERSON, OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE INCOME-TAX ACT, THEN THE BOO KS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL B E HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH S UCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS INCOME OF S UCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. 39.2 DISPUTES HAVE ARISEN AS TO THE INTERPRETATION OF THE WORDS BELONG TO IN RESPECT OF A DOCUMENT AS FOR INSTANC E WHEN A GIVEN DOCUMENT SEIZED FROM A PERSON IS A COPY OF THE ORIG INAL DOCUMENT. ACCORDINGLY, SECTION 153C HAS BEEN AMENDED SO AS TO PROVIDE THAT NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53 OF THE INCOME- TAX ACT, WHERE THE ASSESSING OFFICER IS SATISFIED T HAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG BELONGS TO, OR ANY BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION ED PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELATES TO, ANY PERSON, OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE INCOM E-TAX ACT, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR R EQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER S HALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. 39.3 APPLICABILITY: THIS AMENDMENT HAS TAKEN EFFECT FROM THE 1ST DAY OF JUNE, 2015. PRADEEP SHARMA & PRADEEP HIRANI 14 THUS, THE INTENTION AND THE DATE OF APPLICABILITY O F THE AMENDMENT IS MADE CLEAR FROM THE ABOVE CIRCULAR. MEANING OF THE WORD BELONGS: - THE WORD BELONGS IS NOT DEFINED IN THE INCOME-TAX ACT, 1961. WHILE INTERPRETING SEC TION 153C, THE WORD BELONG HAS BEEN INTERPRETED BY THE HONBLE COURTS AS UNDER: (I) PEPSICO INDIA HOLDINGS P LTD. VSASST CIT (2015) 370 ITR 295 (DEL.) PARA 16, WHICH IS SQUARELY APPLICABLE TO THE PRESEN T CASE, READS AS UNDER: 16. THIRDLY, WE WOULD ALSO LIKE TO MAKE IT CLEAR T HAT THE ASSESSING OFFICERS SHOULD NOT CONFUSE THE EXPRESSION BELONGS TO WITH THE EXPRESSIONS RELATES TO OR REFERS TO. A REGISTER ED SALE DEED, FOR EXAMPLE, BELONGS TO THE PURCHASER OF THE PROPERTY ALTHOUGH IT OBVIOUSLY RELATES TO OR REFERS TO THE VENDOR. I N THIS EXAMPLE IF THE PURCHASERS PREMISES ARE SEARCHED AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT BE SAID THAT IT BELONGS TO THE VENDOR JUST BECAUSE HIS NAME IS MENTIONED IN THE DOCUMENT..... FURTHER, PARA 14 AND 15 WOULD BE RELEVANT. IN THE P RESENT CASE, NOTHING IS MENTIONED IN THE SATISFACTION THAT SANJE EV AGRAWAL DISOWNED THE SALE DEED. SLP AGAINST THE JUDGMENT WAS DISMISSED; REPORTED AT 252 TAXMAN372 (SC) COPY AT PB 222/ II (CASE LAWS BOOK ). (II) CANYON FINANCIAL SERVICES LTD. 399 ITR 202 (DE L.) PRADEEP SHARMA & PRADEEP HIRANI 15 IN THIS CASE, REFERRING TO SECTION 153C WITH SECTIO N 292C, IT WAS HELD AS UNDER: 13. IN THE FIRST PLACE, THE SATISFACTION NOTE OF T HE AO OF THE SEARCHED PERSON HAS TO RECORD THAT THE DOCUMENT SEIZED BELO NGS OR BELONG TO THE PERSON OTHER THAN THE PERSON REFERRED TO IN SEC TION 153A OF THE ACT. IT WAS EXPLAINED IN PEPSICO INDIA HOLDINGS (P. ) LTD. (SUPRA) AND REITERATED IN PEPSI FOODS (P) LTD. (SUPRA) THAT, GI VEN THE NATURE OF A PARTICULAR SEIZED DOCUMENT, IN THE PROCESS OF RECOR DING HIS SATISFACTION, THE AO OF THE SEARCHED PERSON MAY HAV E TO NOTE THE REASONS FOR HIS CONCLUSION THAT THE SAID DOCUMENT D OES NOT BELONG TO THE SEARCHED PERSON BUT TO THE OTHER PERSON. IT IS ONT NECESSARY THAT THIS SHOULD BE DONE IN EACH AND EVERY CASE. IF, AS IN THE PRESENT CASE, THE AO OF THE OTHER PERSON IS NOT THE AO A LSO OF THE SEARCHED PERSON, THEN THE AO OF THE OTHER PERSON HAS AN OBLI GATION TO ALSO EXAMINE IF INDEED ANY OF THE DOCUMENTS HANDED OVER TO HIM BY THE AO OF THE SEARCHED PERSON IN FACT BELONG TO THE ASS ESSEE AND FURTHER IF THEY CONSTITUTE INCRIMINATING MATERIAL JUSTIFYIN G THE REOPENING OF THE ASSESSMENTS OF THE ASSESSEE. THIS IS THEN THE S ECOND FILTER. HOWEVER, AS ALREADY MENTIONED, IN EACH CASE THE EXT ENT OF SATISFACTION OF THE ABOVE REQUIREMENT WILL DEPEND U PON THE NATURE OF THE DOCUMENTS. 14. TURNING TO THE CASE AT HAND, THE FIRST DOCUMENT REFERRED TO IN THE SATISFACTION NOTE OF THE AO OF THE SEARCHED PERSON IS AN APPLICATION MADE BY THE ASSESSEE FOR SUBSCRIPTION TO THE SHARES OF DEPL. BEING AN APPLICATION FOR SUBSCRIPTION OF EQUITY SHARES, I T IS A DOCUMENT FILLED UP BY THE ASSESSEE AND SUBMITTED TO DEPL. TH E SAID APPLICATION HAVING BEING FOUND IN THE POSSESSION OF THE SEARCHED PRADEEP SHARMA & PRADEEP HIRANI 16 PERSON SHOULD SAFELY BE PRESUMED TO BELONG TO THE S EARCHED PERSON BY VIRTUE OF SECTION 132(4A) READ WITH SECTION 292C OF THE ACT. DEPL, THERE IS ALSO PRESUMPTION THAT IT IN FACT BELONGS T O DEPL. THIS IS A REBUTTABLE PRESUMPTION. BUT REBUTTABLE AT THE INSTA NCE OF THE SEARCHED PERSON. 15. THE PRESUMPTION OPERATES IN FAVOUR OF THE DEPAR TMENT BY RELIEVING IT OF THE BURDEN OF HAVING TO DEMONSTRATE THAT THE AFOREMENTIONED DOCUMENT BELONGS TO THE DEPL. BUT HE RE THE DEPARTMENT SEEKS TO BE RELIEVED OF THE BURDEN OF DE MONSTRATING THAT THE SAID DOCUMENT IN FACT DOES NOT BELONG TO DEPL B UT TO THE ASSESSEE. THAT IS NOT POSSIBLE ON A COLLECTIVE READ ING OF SECTION 132(4A) AND SECTION 292C OF THE ACT. THESE PROVISIO NS DO NOT DILUTE THE OBLIGATION ON THE DEPARTMENT AND IN PARTICULAR THE AO OF THE SEARCHED PERSON, UNDER SECTION 153C(1) OF THE ACT A S IT STOOD PRIOR TO 1 ST APRIL 2015 OF SHOWING THAT THE SEIZED DOCUMENT BEL ONGS TO THE OTHER PERSON (HERE, THE ASSESSEE) AND NOT THE SEARC HED PERSON FROM WHOM IT WAS SEIZED. 16. THE APPLICATION SUBMITTED BY THE ASSESSEE FOR S UBSCRIPTION OF SHARES OF DEPL CAN CERTAINLY BE SAID TO BE PERTAIN ING TO TO THE ASSESSEE. HOWEVER, ONCE IT WAS SUBMITTED BY THE ASS ESSEE TO DEPL, AND WAS FOUND IN POSSESSION OF DEPL, IT CANNOT BE S AID TO BELONG TO THE ASSESSEE. IF IT HAS BEEN RECOVERED FROM THE PREMISES OF ASSESSEE THEN THE POSITION MAY HAVE BEEN DIFFERENT. BASED ON THE PRESUMPTION U/S. 132(4A) READ WITH SECTION 292C OF THE ACT, IT MAY HAVE BEEN POSSIBLE TO PROCEED AGAINST THE ASSESSEE UNDER SECTION 153A OF THE ACT, SUBJECT OF COURSE TO THE DOCUMENT CONSTITUTING INCRIMINATING MATERIAL. HOWEVER, IN THE PRESENT CAS E THAT IS NOT THE PRADEEP SHARMA & PRADEEP HIRANI 17 POSITION. THE JURISDICTIONAL REQUIREMENT UNDER SECT ION 153C (1) OF THE ACT OF THE DEPARTMENT HAVING TO SHOW THAT THE APPLI CATION MADE BY THE ASSESSEE FOR EQUITY SHARES OF DEPL BELONGS TO T HE ASSESSEE IS NOT SATISFIED. SLP AGAINST THIS JUDGMENT WAS DISMISSED. PB 232-233 / II (CASE LAWS BOOK). (III) VIJAYBHAI N. CHANDRANI 231 CTR 474 (GUJ.): 33 3 ITR 436 (GUJ.) SEARCH AND SEIZURE ASSESSMENT UNDER S. 153C SCO PE CONDITION PRECEDENT FOR ISSUING NOTICE UNDER S. 153C AND ASSE SSING OR REASSESSING INCOME OF SUCH OTHER PERSON, IS THAT TH E MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH PERSON THREE LOOSE PAPERS FOUND AT THE TIME OF THE SEARCH OF ONE HOUSING SOCIETY DID NOT BELONG TO THE PETITIONER IT MAY B E THAT THERE IS A REFERENCE TO THE PETITIONER AND CERTAIN DETAILS ARE GIVEN UNDER DIFFERENT COLUMNS AGAINST THE NAME OF PETITIONER AL ONG WITH OTHER MEMBERS NOTICE ISSUED UNDER S. 153C IS THEREFORE QUASHED AND SET-ASIDE. (IV) PR. CIT VS VINITA CHAURASIA 394 ITR 758 (DEL.) : 154 DTR 145 (DEL.) SEARCH AND SEIZURE ASSESSMENT UNDER S. 153C REC ORDING OF SATISFACTION VIS-A-VIS DOCUMENT BELONGING TO ASSES SEE SEARCH IN THE PRESENT CASE TOOK PLACE ON 19 TH JUNE 2009 I.E. PRIOR TO THE AMENDMENT IN S. 153C(1) W.E.F. 1 ST JUNE 2015 THEREFORE, IT IS NOT PRADEEP SHARMA & PRADEEP HIRANI 18 OPEN TO THE REVENUE TO SEEK TO POINT OUT THAT THE DOCUMENT IN QUESTION, PERTAINS TO OR RELATES TO THE ASSESS EE. SLP AGAINST SAME WAS DISMISSED IN SLP (C) DIARY NO. 27566 OF 2018 (V) PR. CIT VS INDEX SECURITIES 304 CTR 67 (DEL.): 157 DTR 20 (DEL.) SEARCH AND SEIZURE ASSESSMENT UNDER S. 153C INC RIMINATING MATERIAL BELONGING TO THE ASSESSEE ESSENTIAL JURI SDICTIONAL REQUIREMENT FOR ASSUMPTION OF JURISDICTION UNDER S. 153C (AS IT STOOD PRIOR TO ITS AMENDMENT W.E.F. 1 ST JUNE 2015) QUA THE OTHER PERSON (IN THIS CASE THE ASSESSEE) IS THAT THE SEIZED DOCU MENTS FORMING THE BASIS OF THE SATISFACTION NOTE MUST NOT MERELY PER TAIN TO THE OTHER PERSON BUT MUST BELONG TO THE OTHER PERSON. (VI) ANIL KUMAR GOPIKISHAN AGRAWAL (2020) 186 DTR 2 73 (GUJ.) DISCUSSING THE PROVISION PRIOR TO 2015 AND SUBSEQUE NTLY, AN INTERESTING ISSUE AROSE WHETHER IF THE SEARCH IS CO NDUCTED BEFORE 01.06.2015 BUT THE SATISFACTION IS RECORDED SUBSEQU ENT TO 01.06.2015, WHETHER THE OLD LAW WILL APPLY OR NEW. IT WAS HELD THAT THE OLD LAW WILL APPLY AS THE DOCUMENT WHICH IS REL EVANT, IS THAT FOUND DURING THE SEARCH. SUBSEQUENT DOCUMENT FOUND IN ASSESSMENT OF PERSON SEARCHED OR FOUND IN POST SEARCH INQUIRIE S WOULD NOT BE RELEVANT. SINCE THE OLD LAW WILL APPLY, DEPARTMENT CANNOT CLAIM THAT THE DOCUMENT RELATED TO OR PERTAINED TO THE ASS ESSEE; AND THEY HAVE TO ESTABLISH THAT THE DOCUMENT BELONGS TO TH E ASSESSEE. IN ANIL KUMARS CASE, THE HARDDISK WAS FOUND WHICH CON TAINED INFORMATION RELATING TO THE ASSESSEE. IT WAS HELD T HAT THE HARDDISK WAS NOT BELONGING TO THE ASSESSEE, HENCE THE ESSENT IAL JURISDICTION PRADEEP SHARMA & PRADEEP HIRANI 19 REQUIREMENT U/S. 153C DID NOT EXIST. IT WAS ONLY ON 1 ST JUNE 2015 WHEN THE AMENDED PROVISIONS CAME INTO FORCE THAT TH E AO OF THE SEARCHED PERSON COULD HAVE FORMED THE REQUISITE BEL IEF THAT THE BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION ED PERTAIN TO OR THE INFORMATION CONTAINED THEREIN RELATES TO THE AS SESSEE. THE PRESENT CASE, IS MUCH BETTER ON FACTS FAVOURING THE ASSESSEE AS THE SEARCH WAS CONDUCTED ON 20.10.2011 AND THE SATISFAC TION WAS RECORDED ON 11.09.2013. THUS BOTH WERE PRIOR TO 1 ST JUNE 2015. THE LAW PRIOR TO 1 ST JUNE 2015 IS APPLICABLE AND THE PRESUMPTION U/S. 2 92C IS NOT REBUTTED. THE REGISTERED SALE DEED WAS SEIZED FROM SANJEEV AG RAWAL; INFACT, IT BELONGED TO HIM AND WAS FOUND FROM HIS POSSESSION, ALTHOUGH THE TRANSACTION MENTIONED THEREIN MAY ALSO PERTAIN TO OR RELATE TO THE APPELLANT. IT IS FURTHER PERTINENT THAT THIS SALE D EED WAS NOT INCRIMINATING AS THE TRANSACTION MENTIONED THEREIN WAS ACCOUNTED FOR. NO JURISDICTION U/S. 153C COULD HAVE BEEN ASSUMED THEREFORE. IT IS THEREFORE PRAYED THAT THE ASSESSMENT U/S. 153C IS BAD-IN-LAW. TWO SATISFACTIONS: EARLIER, THE APPELLANT WAS CLAIMING THAT TWO SATISF ACTIONS SHALL BE RECORDED; I.E. IN THE CASE OF THE PERSON SEARCHED, AND IN THE CASE OF THE APPELLANT. THIS CONTENTION WAS BASED ON THE JUDGMEN T OF HONBLE M.P. HIGH COURT CIT VS MECHMAN 60 TAXMANN.COM 484 (MP). BUT IN THE LIGHT OF THE LATEST JUDGMENT IN SPER MALLS P LTD. (SC) [P LACED AT PB 210-221/ II (CASE LAWS BOOK)]; THE APPELLANT IS NOT PRESSING TH IS ISSUE. THE APPELLANT PRAYS THAT THE JURISDICTION U/S. 153C IS BAD IN LAW. PRADEEP SHARMA & PRADEEP HIRANI 20 7. THE LD. COUNSEL FOR THE ASSESSEE, FURTHER SUBMIT TED THAT THE PROCEEDINGS U/S. 153C ARE BAD IN LAW, AS NO MATERIA L BELONGING TO THE ASSESSEE WAS FOUND. THE REGISTRY FOUND MIGHT BE RELATED TO OR CONTAINED TRANSACTION PERTAINING TO THE ASSESSEE. FURTHER, THE REGISTRY CONTAINED THE TRANSACTION AT RS. 1,76,50,0 00/- WHICH WAS BY BANKING CHANNELS AND WAS ACCOUNTED FOR; THEREFOR E IT CANNOT BE SAID THAT ANY INCRIMINATING MATERIAL WAS FOUND DURI NG THE COURSE OF SEARCH AND SEIZURE. 8. ON THE OTHER HAND, LD. CIT(DR) SUPPORTED THE PRO CEEDINGS U/S. 153C AND CONTENDED THAT DURING THE COURSE OF S EARCH, A SALE DEED WAS FOUND WHEREIN THE NAME OF THE ASSESSEE WAS MENTIONED AS ATTORNEY HOLDER FOR THE SELLER SMT. REKHA BAI, L ALA RAM AND DEVI SINGH. THE SALE DEED THEREFORE CLEARLY BELONGED TO THE ASSESSEE WHO ACTED AS A SELLER IN THE TRANSACTION. HE FURTHER RE FERRED TO THE ASSESSMENT ORDER AND CONTENDED THAT THE DURING THE COURSE OF ASSESSMENT, ASSESSEE OBJECTED TO THE PROCEEDINGS U/ S. 153C VIDE LETTER DATED 30.10.2013. LD. AO AFTER CONSIDERING A LL THE FACTS HAD ALREADY REJECTED THE OBJECTIONS OF THE ASSESSEE VID E HIS ORDER DATED PRADEEP SHARMA & PRADEEP HIRANI 21 14.11.2013. FURTHER, HE RELIED ON THE ORDER OF LD. CIT(A) WHO HAS ALSO HELD THE PROCEEDINGS U/S. 153C TO BE VALID. 9. WE HAVE CONSIDERED THE FACTS OF THE CASE, MATERI AL ON RECORD, ARGUMENTS OF BOTH THE PARTIES AND THE CASE LAWS REL IED ON. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH AT THE PREMISES OF SAGAR GROUP, A SALE DEED WAS FOUND MARKED AS LPS- 3 PAGE NO. 62 TO 75. AS PER THE SALE DEED, 1.495 HECTARE (3.69 AC RES) LAND WAS TRANSFERRED BY SMT. REKHA BAI, SHRI LALARAM AND SHR I DEVI SINGH, THROUGH POWER OF ATTORNEY HOLDERS SHRI PANKAJ MAKHI JA, PRADEEP SHARMA AND PRADEEP HIRANI TO M/S. AGRAWAL BUILDCON THROUGH SHRI SANJEEV AGRAWAL, PARTNER. THE SALE DEED MENTIONED T HAT THE SALE OF THE LAND IS FOR RS. 1,76,50,000. NOW, THE ISSUE BEF ORE US IS WHETHER THIS DOCUMENT I.E. THE SALE DEED, WHICH MENTIONS TH E ASSESSEE AS ATTORNEY HOLDERS OF SELLERS; CAN BE SAID TO BELONG TO THE ASSESSEE. 10. BEFORE GOING FURTHER, WE MAY REFER THAT SECTION 153C(1) OF THE ACT PRIOR TO ITS AMENDMENT BY FINANCE ACT, 2015 REA D AS UNDER (RELEVANT PORTION): (1) 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, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENT SEIZED BELONGS OR PRADEEP SHARMA & PRADEEP HIRANI 22 BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A , THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURI SDICTION OVER SUCH OTHER PERSONAND THAT ASSESSING OFFICER SHALL PROCEED AGAI NST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSES S OR REASSESS INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 153A LATER ON, AFTER AMENDMENT BY FINANCE ACT, 2015 W.E. F. 01.06.2015, SECTION 153C(1) READ AS UNDER (RELEVANT PORTION): (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT, - (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR RE QUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINE D THEREIN, RELATES TO , A PERSON OTHER THAN THE PERSON REFERRED TO IN SEC TION 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER S HALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFI CER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL I NCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR Y EARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A. 11. ON BARE PERUSAL OF THE AFORESAID SECTIONS IT IS CLEAR THAT PRIOR TO THE AMENDMENT, JURISDICTION U/S. 153C COULD BE E XERCISED IF THE AO WAS SATISFIED THAT ANY MONEY, BULLION, 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. IT WAS ONLY W.E.F. 01. 06.2015 THAT PRADEEP SHARMA & PRADEEP HIRANI 23 SECTION 153C(1) WAS AMENDED TO PROVIDE THAT JURISDI CTION WOULD BE AVAILABLE WHERE THE AO IS SATISFIED THAT (A) ANY MO NEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZE D OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENT S, SEIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFOR MATION CONTAINED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. THUS, THE SCOPE OF SECTION 153C(1) UN DERWENT A CHANGE W.E.F. 01.06.2015. PRIOR TO THAT, THE JURISD ICTION U/S. 153C WAS AVAILABLE ONLY IF THE ASSETS AS WELL AS DOCUMEN TS BELONGS OR BELONG TO THIRD PERSON. 12. WE WOULD LIKE TO REFER TO THE JUDGMENT OF HON'B LE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS P LTD. VS ASST CIT (2015) 370 ITR 295 (DEL.) , WHERE, PARA 16, READ AS UNDER: 16. THIRDLY, WE WOULD ALSO LIKE TO MAKE IT CLEAR T HAT THE ASSESSING OFFICERS SHOULD NOT CONFUSE THE EXPRESSION BELONGS TO WITH THE EXPRESSIONS RELATES TO OR REFERS TO. A REGISTER ED SALE DEED, FOR EXAMPLE, BELONGS TO THE PURCHASER OF THE PROPERTY ALTHOUGH IT OBVIOUSLY RELATES TO OR REFERS TO THE VENDOR. IN THIS EXAMPLE IF THE P URCHASERS PREMISES ARE SEARCHED AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT BE SAID THAT IT BELONGS TO THE VENDOR JUST BECAUSE HIS NAME IS ME NTIONED IN THE DOCUMENT..... PRADEEP SHARMA & PRADEEP HIRANI 24 13. IT HAS ALSO BEEN BROUGHT TO OUR NOTICE BY THE L EARNED COUNSEL FOR THE ASSESSEE THAT SLP AGAINST THE AFORESAID JUD GMENT HAS BEEN DISMISSED WHICH IS REPORTED AT 252 TAXMAN372 (SC). (1) CANYON FINANCIAL SERVICES LTD. 399 ITR 202 (DEL.) IN THIS CASE, REFERRING TO SECTION 153C WITH SECTIO N 292C, IT WAS HELD AS UNDER: 13. IN THE FIRST PLACE, THE SATISFACTION NOTE OF T HE AO OF THE SEARCHED PERSON HAS TO RECORD THAT THE DOCUMENT SEIZED BELO NGS OR BELONG TO THE PERSON OTHER THAN THE PERSON REFERRED TO IN SEC TION 153A OF THE ACT. IT WAS EXPLAINED IN PEPSICO INDIA HOLDINGS (P. ) LTD. (SUPRA) AND REITERATED IN PEPSI FOODS (P) LTD. (SUPRA) THAT, GI VEN THE NATURE OF A PARTICULAR SEIZED DOCUMENT, IN THE PROCESS OF RECOR DING HIS SATISFACTION, THE AO OF THE SEARCHED PERSON MAY HAV E TO NOTE THE REASONS FOR HIS CONCLUSION THAT THE SAID DOCUMENT D OES NOT BELONG TO THE SEARCHED PERSON BUT TO THE OTHER PERSON. IT IS ONT NECESSARY THAT THIS SHOULD BE DONE IN EACH AND EVERY CASE. IF, AS IN THE PRESENT CASE, THE AO OF THE OTHER PERSON IS NOT THE AO A LSO OF THE SEARCHED PERSON, THEN THE AO OF THE OTHER PERSON HAS AN OBLI GATION TO ALSO EXAMINE IF INDEED ANY OF THE DOCUMENTS HANDED OVER TO HIM BY THE AO OF THE SEARCHED PERSON IN FACT BELONG TO THE ASS ESSEE AND FURTHER IF THEY CONSTITUTE INCRIMINATING MATERIAL JUSTIFYIN G THE REOPENING OF THE ASSESSMENTS OF THE ASSESSEE. THIS IS THEN THE S ECOND FILTER. HOWEVER, AS ALREADY MENTIONED, IN EACH CASE THE EXT ENT OF SATISFACTION OF THE ABOVE REQUIREMENT WILL DEPEND U PON THE NATURE OF THE DOCUMENTS. (2) ANIL KUMAR GOPIKISHAN AGRAWAL (2020) 186 DTR 273 ( GUJ.) DISCUSSING THE PROVISION PRIOR TO 2015 AND SUBSEQUE NTLY, AN INTERESTING ISSUE AROSE WHETHER IF THE SEARCH IS CO NDUCTED BEFORE 01.06.2015 BUT THE SATISFACTION IS RECORDED SUBSEQU ENT TO 01.06.2015, WHETHER THE OLD LAW WILL APPLY OR NEW. IT WAS HELD THAT THE OLD LAW WILL APPLY AS THE DOCUMENT WHICH IS REL EVANT, IS THAT FOUND DURING THE SEARCH. SUBSEQUENT DOCUMENT FOUND IN ASSESSMENT OF PERSON SEARCHED OR FOUND IN POST SEARCH INQUIRIE S WOULD NOT BE RELEVANT. SINCE THE OLD LAW WILL APPLY, DEPARTMENT CANNOT CLAIM THAT THE DOCUMENT RELATED TO OR PERTAINED TO THE ASS ESSEE; AND THEY HAVE TO ESTABLISH THAT THE DOCUMENT BELONGS TO TH E ASSESSEE. IN PRADEEP SHARMA & PRADEEP HIRANI 25 ANIL KUMARS CASE, THE HARD DISK WAS FOUND WHICH CO NTAINED INFORMATION RELATING TO THE ASSESSEE. IT WAS HELD T HAT THE HARD DISK WAS NOT BELONGING TO THE ASSESSEE, HENCE THE ESSENT IAL JURISDICTION REQUIREMENT U/S. 153C DID NOT EXIST. IT WAS ONLY ON 1 ST JUNE 2015 WHEN THE AMENDED PROVISIONS CAME INTO FORCE THAT TH E AO OF THE SEARCHED PERSON COULD HAVE FORMED THE REQUISITE BEL IEF THAT THE BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION ED PERTAIN TO OR THE INFORMATION CONTAINED THEREIN RELATES TO THE AS SESSEE. 14. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE P RESENT CASE THE AFORESAID JUDGMENT OF PEPSICO INDIA HOLDINGS P LTD. VS ASST CIT (2015) 370 ITR 295 (DEL.) IS SQUARELY APPLICABLE. IN THE INSTANT CASE, ASSESSEE WAS THE ATTORNEY HOLDER OF THE SELLER. THE SALE DEED WAS FOUND DURING THE COURSE OF SEARCH AT THE PREMISES O F THE BUYER. THE SALE DEED, AT BEST CAN BE SAID TO RELATE TO OR R EFER TO THE ASSESSEE, BUT IT CANNOT BE SAID TO BELONG TO THE SELLER OR TO THE ATTORNEY HOLDER. BEFORE US LD. CIT(DR) COULD NOT PLACE ANY J UDGMENT IN ITS FAVOUR AGAINST THIS JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS P LTD. VS ASST CIT (2015) 37 0 ITR 295 (DEL.) . RESPECTFULLY FOLLOWING THIS JUDGMENT, WE THEREFOR E HOLD THAT THE PROCEEDINGS U/S. 153C ARE BAD IN LAW AND THEREF ORE THE ASSESSMENTS SO MADE DESERVES TO BE QUASHED. THIS GR OUND OF THE ASSESSEES APPEAL IS ALLOWED. PRADEEP SHARMA & PRADEEP HIRANI 26 15. SINCE WE HAVE HELD THAT THE ASSUMPTION OF JURIS DICTION BY THE ASSESSING OFFICER U/S 153C OF THE ACT FOR FRAMING A SSESSMENT IS NOT IN ACCORDANCE WITH LAW AND HAVE QUASHED THE ASSESSM ENT ORDERS ON THIS LEGAL GROUND ITSELF, THE OTHER GROUNDS ON MERI T HAVE BECOME INFRUCTUOUS AND MERELY ACADEMIC IN NATURE AND THUS WE ARE NOT ADJUDICATING THE SAME. 16. NOW WE TAKE UP ITA 679/ IND/ 2016 FOR A.Y. 2012 -13 IN THE CASE OF PRADEEP SHARMA. 17. GROUND NO. 1 TO 3 DEAL WITH THE VALIDITY OF THE ASSESSMENT. SAME WERE NOT PRESSED DURING THE COURSE OF HEARING. SAME ARE BEING DISMISSED AS NOT PRESSED. 18. GROUND NO. 4 RELATES TO THE ADDITION ON ACCOUNT OF UNDISCLOSED ON MONEY PAYMENT AT RS. 1,12,27,401/-. 19. THE FACTS RELATING TO THIS GROUND OF APPEAL ARE THAT A SEARCH AND SEIZURE ACTION U/S. 132 OF THE INCOME-TAX ACT, 1961 WAS UNDERTAKEN ON 21.10.2011 AND 22.10.2011 AT THE BUSI NESS PREMISES OF 250, SAGAR PLAZA, M.P. NAGAR, ZONE-II, BHOPAL IN THE SAGAR GROUP. DURING THE COURSE OF SEARCH AND SEIZ URE, ONE DOCUMENT LPS-3 PAGE NO. 62 -75 WAS SEIZED. THIS DOC UMENT WAS A PRADEEP SHARMA & PRADEEP HIRANI 27 SALE DEED FOR SALE OF 3.69 ACRES OF AGRICULTURAL LA ND BETWEEN SMT. REKHA BAI, SHRI LALA RAM AND SHRI DEVI SINGH, AS SE LLERS THROUGH ATTORNEY HOLDERS (1) SHRI PANKAJ MAKHIJA; (2) PRADE EP SHARMA; AND (3) SHRI PRADEEP KUMAR HIRANI; AND THE LAND WAS PUR CHASED BY SHRI SANJEEV AGRAWAL PARTNER OF M/S. AGRAWAL BUILDCON. T HE LAND WAS SOLD FOR RS. 1,76,50,000/-. IN THE POST SEARCH INQU IRIES, STATEMENT OF SMT. REKHA BAI WAS RECORDED ON 30.10.2011. IN HE R STATEMENT, SMT. REKHA BAI STATED THAT AN AGREEMENT DATED 27.11 .2010 WAS ENTERED INTO BETWEEN SHRI LALA RAM, SHRI DEVI SINGH AND SMT. REKHA BAI WITH SHRI LAXMICHAND HIRANI AND PRADEEP S HARMA FOR SALE OF THIS 3.69 ACRES OF LAND. AS PER THIS AGREEM ENT, THE CONSIDERATION WAS RS. 5,03,68,500/- WHEREBY THE PAY MENT WAS TO BE MADE AS UNDER:- 1) RS. 10,00,000 WAS PAID ON DATE OF AGREEMENT. 2) RS. 40,00,000 WAS TO BE PAID UPTO 10.12.2010. 3) RS. 50,00,000 WAS TO BE PAID UPTORS. 10.04.2011. 4) RS. 4,03,68,500 WAS TO BE PAID UPTO 10.08.2011. FURTHER, IF THE APPROVAL FROM TOWN AND COUNTRY PLANNING COULD NOT B E DONE, THE SELLER SHALL BE LIABLE TO REFUND THE AMOUNT TO THE BUYER. SELLER SHALL PRADEEP SHARMA & PRADEEP HIRANI 28 BE REQUIRED TO SIGN DOCUMENTS, AS REQUIRED, SO THAT THE APPROVAL OF TOWN AND COUNTRY PLANNING MAY BE OBTAINED BY THE BU YERS. 20. DURING HER STATEMENT, SMT. REKHA BAI FURTHER ST ATED THAT THE FOLLOWING AMOUNT WAS RECEIVED AND USED AS UNDER: PARTICULAR DEVI S INGH REKHA BAI LALARAM TOTAL AMOUNT RECEIVED (IN RS. AMOUNT RECEIVED BY CHEQUE AGAINST THE SALE OF AGRICULTURE LAND SITUATED AT GRAM KATARA DEPOSIT IN THE BANK ACCOUNTS. 54,39,595/ - 54,39,595/ - 64,20,808/ - 1,72,99,998/ - AMOUNT RECEIVED IN CASH AGAINST THE SALE OF AGRICULTURE LAND SITUATED AT GRAM KATARA DEPOSIT IN THE BANK ACCOUNTS. 1,03,20,000/ - 33,99,500/ - 19,00,500/ - 1,56,20,000/ - AMOUNT RECEIVED BY CASH AGAINST THE SALE OF AGRICULTURE LAND AND USED FOR THE PURCHASE OF ANOTHER AGRICULTURAL LAND, NOT DEPOSITED IN THE BANK ACCOUNT. 1,74,48,502/ - 1,74,48,502/ - TOTAL 5,03,68,500/ - PRADEEP SHARMA & PRADEEP HIRANI 29 21. LD. AO STATED IN THE ASSESSMENT ORDER THAT THE FACT MENTIONED IN HER STATEMENT WERE FURTHER RECONFIRMED IN THE AF FIDAVIT DATED 18.12.2013. LD. AO NOTICED THAT THE DATE WISE CASH DEPOSITS IN THE BANK ACCOUNT OF THE SELLERS ARE AS UNDER: NAME OF THE PERSON BANK ACCOUNT AMOUNT DEPOSIT BY CASH (IN RS.) DATE OF DEPOSIT 1.SHRI DEVI SINGH 3372101000100 CANARA BANK 8,00,000/ - 29/11/2010 27,00,000/ - 10/12/2010 10,00,000/ - 16/12/2010 15,00,000/ - 31/03/2011 23,00,000/ - 15/04/2011 1,70,000/ - 18/04/2011 9,00,000/ - 13/08/2011 9,50,000/ - 01/09/2011 2.SHRI LALARAM 3372101000731 CANARA BANK 9,50,000/ - 13/08/2011 9,50,000/ - 01/09/2011 3.SMT. REKHA BAI 3372101000424 CANARA BANK 14,99,000/ - 31/03/2011 9,50,000/ - 13/08/2011 9,50,000/ - 01/09/2011 TOTAL 1,56,19,000/ - 22. ANOTHER PERTINENT FACT IS THAT, DURING ASSESSME NT, THE ASSESSEE IN A LETTER FILED ON 16/12/2013 ACCEPTED T HAT THE ACTUAL CONSIDERATION FOR PURCHASE OF THE LAND WAS RS. 5,03 ,68,500/-. ASSESSEE FURTHER CONTENDED THAT THE LAND WAS IN FAC T SOLD FOR RS. 5,30,30,000/- TO M/S. AGRAWAL BUILDCON, AGAINST TH E CONSIDERATION MENTIONED IN THE SALE DEED FOR RS. 1,76,50,000. ASS ESSEE CONTENDED THAT ASSESSEE HAD ONLY GIVEN RS. 10,00,000/- TO SMT . REKHABAI AND PRADEEP SHARMA & PRADEEP HIRANI 30 OTHERS FROM OWN SOURCES AT THE TIME OF AGREEMENT ON 27/11/2010 AND BALANCE WAS PAID OUT OF THE AMOUNT RECEIVED FRO M M/S. AGRAWAL BUILDCON. FURTHER, ASSESSEE OFFERED AN AMOU NT OF RS. 26,61,500/- (RS. 5,30,30,000 RS. 5,03,68,500) AS INCOME BROKERAGE INCOME FROM THE TRANSACTION. SINCE THE SH ARE OF PRADEEP SHARMA IN THE LAND DEAL WAS 40%, HE OFFERED RS. 10, 52,600 AS HIS INCOME. INFACT, LATER ON STATEMENT ON OATH WERE REC ORDED OF PRADEEP SHARMA AND PRADEEP HIRANI. BOTH OF THEM IN THEIR ST ATEMENT DATED 18.12.2011 ACCEPTED THAT THE LAND WAS PURCHASED FOR RS. 5,03,68,500/- AND SOLD FOR RS. 5,30,30,000/- IN A S HORT SPAN OF TIME. THE ASSESSEES ACTED AS BROKERS IN THE TRANSA CTION AND OFFERED INCOME OF RS. 26,31,500/- BEING RS. 10,52,600 (EACH ) AS HAVING 40% SHARE. FURTHER, THEY STATED THAT THE AMOUNT OF ON-MONEY PAID FOR PURCHASE OF LAND WAS PAID ONLY OUT OF THE CASH RECEIVED FROM M/S. AGRAWAL BUILDCON. 23. LD. AO CONCLUDED THAT, IT IS CLEAR THAT THE AB OVE LAND WAS PURCHASED BY PRADEEP SHARMA, PRADEEP HIRANI, AND SH RI PANKAJ MAKHIJA FROM SHRI LALA RAM, SHRI DEVI SINGH, AND SM T. REKHA BAI AS PER AGREEMENT DATED 27.11.2010 FOR A TOTAL CONSI DERATION OF RS. PRADEEP SHARMA & PRADEEP HIRANI 31 5,03,68,500/-. FOR THIS PURCHASE OF LAND, THEY HAVE PAID TOTAL ON- MONEY TO THE SELLERS OF RS. 3,30,68,502/-. FURTHER, THE SAME LAND WAS TRANSFERRED TO M/S. AGRAWAL BUILDCON (THROUGH P ARTNER SHRI SANJEEV AGRAWAL) ON 30.08.2011 FOR TOTAL CONSIDERAT ION OF RS. 5,30,30,000/-. LD. AO THEREFORE ASSESSED ON-MONEY, INTER-ALIA OF RS. 2,80,68,502 IN A.Y. 2012-13. LD. AO ADDED RS. 1 ,12,27,401/- EACH IN THE HANDS OF PRADEEP SHARMA AND PRADEEP HIR ANI BEING BOTH 40% HOLDERS IN THE LAND DEAL. 24. AGAINST THIS ADDITION, THE ASSESSEE FILED APPEA L BEFORE THE LD. CIT(A) WHO CONSIDERING THE FACTS OF THE CASE, CONFI RMED THE ADDITION. 25. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 26. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS UNCONTROVERTED FACT AS SEEN FROM THE ASSESSMENT ORD ER THAT THE LAND WAS PURCHASED FOR RS. 5,03,68,500/- AND THE SA ME WAS SOLD FOR RS. 5,30,30,000/-. THE APPELLANT ACTED ONLY AS BROKER IN THE TRANSACTION. HE HAD NOT GOT SUFFICIENT FUNDS FOR TH E PURCHASE OF LAND. HE, ALONGWITH OTHER PARTIES ENTERED INTO AN A GREEMENT FOR PURCHASE OF THE LAND ON 27.11.2010 AND THEREAFTER P AID RS. 10,00,000/- ONLY OUT OF OWN SOURCES ON THAT DATE. L ATER ON, NO PRADEEP SHARMA & PRADEEP HIRANI 32 PAYMENT WAS MADE TO THE SELLERS SMT. REKHABAI AND O THERS. IT WAS ONLY WHEN THE LAND WAS AGREED TO BE TRANSFERRED TO M/S. AGRAWAL BUILDCON, THE PAYMENT WAS MADE AFTER RECEIVING THE AMOUNT FROM M/S. AGRAWAL BUILDCON. HE THUS ARGUED THAT ALTHOUGH ON-MONEY WAS PAID, BUT HE SOURCE OF SAME WAS ESTABLISHED. HE CONTENDED THAT EVEN THE CHEQUE PAYMENTS WERE MADE IN THE MONT H OF AUGUST AND SEPT 2011 WHEN THE REGISTRY WAS DONE IN THE FAV OUR OF M/S. AGRAWAL BUILDCON. THIS, FURTHER ESTABLISHES THE NEX US THAT ONLY AGREEMENT WAS DONE ON 27.11.2010 BUT THE ENTIRE PAY MENT WAS MADE ONLY IN AUG. AND SEPT. 2011 AFTER RECEIVING TH E AMOUNT FROM M/S. AGRAWAL BUILDCON. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD NO INTENTION TO HOLD THAT LAND. NO REGISTRY WAS DONE IN THE FAVOUR OF THE ASSESSEE. LAND WAS NOT DI VERTED BY THE ASSESSEE. THE ASSESSEE IS A BUILDER, AND HAD HE INT ENDED TO PURCHASE THE LAND BY HIS OWN FUNDS, HE WOULD HAVE P URCHASED THE LAND, REGISTERED IN HIS NAME, AND DEVELOPED IT AND EARNED SUBSTANTIALLY. BUT THE SAME WAS NOT DONE, AS THE AS SESSEE INTENDED TO POCKET IMMEDIATELY BY GETTING INVOLVED IN THE LA ND TRANSACTION. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEP ARTMENT COULD PRADEEP SHARMA & PRADEEP HIRANI 33 NOT ESTABLISH BY ANY EVIDENCE WHATSOEVER THAT PAYME NT WAS MADE FROM ANY OTHER INCOME OF THE ASSESSEE. IF THE PAYME NT WAS NOT MADE OUT OF THE AMOUNT RECEIVED FROM M/S. AGRAWAL B UILDERS, THEN FROM WHERE THIS MONEY CAME. HE ALSO SUBMITTED THAT THE LD. A.O RELIED ON THE BANK STATEMENTS OF SMT. REKHA BAI, SH RI DEVI SINGH AND SHRI LALA RAM. SAID BANK STATEMENTS WERE NEVER CONFRONTED TO THE ASSESSEE. COPY OF SAME WERE NEVER SUPPLIED. HE FURTHER REFERRED TO THE AGREEMENT DATED 27.11.2010 AND CONTENDED THA T AS PER THE AGREEMENT, LAND WAS TO BE DIVERTED AND APPROVAL OF TOWN AND COUNTRY PLANNING WAS TO BE OBTAINED. HOWEVER, THE S AME WAS NOT DONE, AND THEREFORE NO FURTHER PAYMENT WAS MADE AFT ER 27.11.2010. THE LAND WAS SOLD ON 30.08.2011 AS AN AGRICULTURAL LAND ONLY. HE THEREFORE CONTENDED THAT THE ON-MONEY PAYMENT WAS ONLY OUT OF CASH RECEIVED FROM THE SALE OF LAND TO M/S. AGRAWAL BUILDCON. 27. ON THE OTHER HAND, LD. COUNSEL FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE LD. LOWER AUTHORITIES. HE CONT ENDED THAT DURING THE POST SEARCH INQUIRIES, IT WAS CLEARLY ES TABLISHED THAT THE ASSESSEE MADE A PAYMENT OF ON-MONEY FOR THE PURCHAS E OF LAND. FURTHER THE AGREEMENT DATED 27.11.2010 WAS ALSO ON RECORD TO PRADEEP SHARMA & PRADEEP HIRANI 34 PROVE THAT THE LAND WAS PURCHASED FOR RS. 5,03,68,5 00/-. THE BANK STATEMENTS OF THE SELLERS ALSO PROVED THE DATE WISE PAYMENTS MADE BY ASSESSEE. ALSO, THE ASSESSEE HIMSELF HAS ACCEPTE D TO HAVE PAID ON-MONEY. NO EVIDENCE WAS BROUGHT ON RECORD TO PROV E THAT PAYMENT WAS MADE OUT OF THE MONEY RECEIVED FROM M/S . AGRAWAL BUILDCON. HE THEREFORE PRAYED THAT THE ADDITION MAD E BY THE LD. AO BE CONFIRMED. 28. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, ORDER OF THE LD. LOWER AUTHORITIES AND EVIDENCE ON RECORDED. AT FIRS T WE MAY MENTION THAT THE SALE CONSIDERATION MENTIONED IN TH E REGISTRY DATED 30.08.2011 IS RS. 1,76,50,000/- BUT THE ASSESSEE HI MSELF HAS ACCEPTED THAT THE LAND WAS SOLD FOR RS. 5,30,30,000 /-. THUS, THIS FACT IS UNCONTROVERTED BEFORE US. INFACT, LD. AO HI MSELF ACCEPTED THE DIFFERENCE INCOME OFFERED BY THE ASSESSEE AT RS. 26 ,61,500/- (RS. 5,30,30,000 RS. 5,03,68,500). LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PAYMENT WAS MADE OUT OF AMOUNT R ECEIVED FROM M/S. AGRAWAL BUILDCON. HOWEVER, THIS FACT CANNOT BE VERIFIED BASED ON EVIDENCES ON RECORD, AND CANNOT BE ACCEPTED IN T OTO. ON THE OTHER HAND, LD. COUNSEL FOR THE REVENUE HAS SUBMITT ED THAT PRADEEP SHARMA & PRADEEP HIRANI 35 PAYMENT WAS MADE FROM OTHER SOURCES. HOWEVER, THIS FACT IS ALSO UNSUBSTANTIATED AS MAJORITY OF THE PAYMENT BY THE A SSESSEE TO SMT. REKHA BAI AND OTHERS WAS MADE IN AUG- SEPT 2011, WH EN THE REGISTRY WAS DONE IN THE FAVOUR OF M/S. AGRAWAL BUI LDCON. FURTHER, THE DEPARTMENT COULD NOT SUPPORT THEIR CASE WITH AN Y POSITIVE EVIDENCE TO PROVE THAT THE CONTENTION OF THE ASSESS EE IS WRONG. THUS, IN THESE CIRCUMSTANCES, WE ARE LEFT WITH ONLY OPTION TO RELY ON THE EVIDENCES ON RECORD. THE AGREEMENT DATED 27.11. 2010 PROVIDES THE DETAILS OF DATE-WISE CONSIDERATION TO BE PAID. FURTHER, THE BANK ACCOUNT OF THE SELLERS ARE ALSO IMPORTANT TO FIND W HEN THE CASH WAS DEPOSITED THEREIN. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED A CHART AT PAGE 13 OF HIS SUBMISSIONS: AMOUNT PAYABLE AS PER AGREEMENT AMOUNT DEPOSITED AS PER ALLEGED BANK STATEMENT A. Y BY 27.11.2010 RS. 10,00,000 ON 27.11.2010 RS.8,00,000 2011 - 12 BY 10.12.2010 RS.40,00,000 ON 10.12.2010 ON 16.12.2010 RS.27,00,000 RS.10,00,000 2011 - 12 2011-12 BY 10.04.2011 RS.50,00,000 ON 31.03.2011 ON 15- 18.04.2011 RS.29,99,000 RS.24,70,000 2011 - 12 2012-13 BY 10.08.2011 RS. 4,03,00,000 IN AUG SEPT 2011 RS.56,50,000 PRADEEP SHARMA & PRADEEP HIRANI 36 IN AUG SEPT 2011 (CHEQUE PORTION) IN SEPT 2011 (USED FOR PURCHASE OF LAND BY REKHA BAI AND OTHERS RS.1,72,99,998 STATEMENT THAT BALANCE AMOUNT USED (RS.173.50 LAKHS 2012 - 13 29. THIS CHART CLEARLY ESTABLISHES THE NEXUS BETWEE N THE DATES AS PER THE AGREEMENT AND THE DEPOSITS MADE IN THE BANK ACCOUNT OF SMT. REKHA BAI AND OTHERS. IT CAN BE SEEN THAT ON 2 7.11.2010 AN AMOUNT OF RS. 10,00,000 WAS PAID AS PER THE AGREEME NT, AND AN AMOUNT OF RS. 8,00,000 WAS DEPOSITED IN THE BANK AC COUNT OF THE SELLERS. SIMILARLY, UPTO 10.12.2010, RS. 40,00,000 WAS TO BE PAID AND RS. 37,00,000 WAS DEPOSITED NEARING TO THAT DAT E. FURTHER, UPTO 10.04.2011 RS. 50,00,000 WAS TO BE PAID AS PER THE AGREEMENT; AND RS. 29,99,000 WAS DEPOSITED ON 31.03 .2011 AND RS. 24,70,000 WAS DEPOSITED BETWEEN 15 TO 18 APRIL 2011. SIMILARLY, UPTO 10.08.2011 RS. 4,03,00,000 WAS TO B E PAID; AND BETWEEN AUG. AND SEPT. 2011, ALL PAYMENTS WERE DONE AND SALE DEED WAS ALSO REGISTERED IN THE FAVOUR OF M/S. AGRA WAL BUILDCON. PRADEEP SHARMA & PRADEEP HIRANI 37 CONSIDERING THE ENTIRETY OF THE FACTS, SO FAR AS TH E PAYMENTS MADE, THE NEXUS BETWEEN AMOUNT RECEIVED FROM M/S. AGRAWAL BUILDCON AND PAYMENT TO SMT. REKHA BAI AND OTHERS CAN BE EST ABLISHED. SINCE IT IS PROVED THAT THE CONSIDERATION OF RS.4,0 3,00,000/- WHICH INCLUDED BOTH THE ACCOUNTED AND UNACCOUNTED CONSIDE RATION HAS BEEN PAID BY M/S AGRAWAL BUILDCON FOR THE PURCHASE OF LAND IN QUESTION FROM THE SELLERS NAMELY SMT. REKHA BAI AND OTHERS, REVENUE AUTHORITIES ARE FREE TO CARRY OUT NECESSARY EXERCISE/ VERIFICATION IN THE CASE OF M/S AGRAWAL BUILDCON WI TH REGARD TO THE BALANCE PURCHASE CONSIDERATION AT RS..4,03,00,000/- . HOWEVER, SO FAR AS THE CASH DEPOSITS IN THE ACCOUNT OF SMT. REK HA BAI AND OTHERS IN APRIL 2011, TO THE TUNE OF RS. 24,70,000 NO NEXUS CAN BE ESTABLISHED IN RESPECT TO AMOUNT RECEIVED FROM M/S. AGRAWAL BUILDCON. SINCE THERE IN NO DIRECT EVIDENCE AS TO W HEN THE AMOUNT WAS ACTUALLY PAID, CONSIDERING THE SURROUNDING CIRC UMSTANCES BASED ON AGREEMENT AND BANK ACCOUNTS OF THE SELLERS , WE HOLD THAT DURING THE CURRENT A.Y. 2012-13 THE SOURCE OF PAYME NT OF RS. 24,70,000 TO SMT. REKHA BAI AND OTHERS COULD NOT BE ESTABLISHED AND THEREFORE OUGHT TO BE CONFIRMED. SINCE THE SHAR E OF THE PRADEEP SHARMA & PRADEEP HIRANI 38 ASSESSEE PRADEEP SHARMA WAS 40% IN THE LAND DEAL, A N AMOUNT OF RS. 9,88,000 IS TO BE CONFIRMED IN THE HANDS OF PRA DEEP SHARMA FOR A.Y. 2012-13. BALANCE ADDITION OF RS. 1,02,39,401 ( RS. 1,12,27,401 RS. 9,88,000) IS HEREBY DELETED. 30. IN THE RESULT GROUND NO. 4 OF THE ASSESSEE IS PARTLY ALLOWED AGAINST THE TOTAL ADDITION OF RS. 1,02,39,401/- AND ADDITION OF RS. 9,88,000/- STANDS CONFIRMED. 31. NOW WE TAKE UP GROUND NO. 5 OF ASSESSEES APPEA L RELATING TO ADDITION OF RS. 9,12,600/- ON ACCOUNT OF COMMISSION ON SALE OF LAND. LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT THE ASSESSEE HAD ALREADY OFFERED THE ADDITIONAL COMMISSION INCOM E, THIS GROUND WAS NOT PRESSED. WE THEREFORE DISMISS THIS GROUND A S NOT PRESSED. 32. GROUND NO. 6 IS GENERAL IN NATURE AND THEREFORE NO SEPARATE ADJUDICATION FOR SAME IS CALLED FOR. GROUND NO. 7 R ELATES TO INITIATION OF INTEREST AND PENALTY. SAME IS DISMISSED AS CONSE QUENTIAL. 33. NOW WE TAKE UP IT(SS)A 679/ IND/ 2016 FOR A.Y. 2011-12 IN THE CASE OF PRADEEP HIRANI. THERE IS A DELAY OF 3 D AYS IN FILING THE APPEAL. IN THE APPLICATION FOR CONDONATION IT HAS B EEN SUBMITTED THAT THE DELAY OCCURRED AS THE CONNECTED APPEALS OF PRADEEP PRADEEP SHARMA & PRADEEP HIRANI 39 SHARMA WERE HEARD TOGETHER BY THE LD. CIT(A). THE S AID ORDER OF LD. CIT(A) WAS RECEIVED IN THE CASE OF ASSESSEE ON 18.0 4.2016, WHEREAS THE ORDER IN THE CASE OF ANOTHER ASSESSEE NAMELY PR ADEEP SHARMA WAS RECEIVED ON 24.04.2016. THE LD. COUNSEL WHO PRE PARED BOTH THE APPEALS TOGETHER, UNDER THIS CONFUSION, COULD N OT FILE THE APPEAL WITHIN TIME. FURTHER 18 TH AND 19 TH JUNE 2016 WERE SATURDAY AND SUNDAY, THUS EFFECTIVELY THERE WAS A DELAY OF ONLY 1 DAY. WE HAVE CONSIDERED THE REASONS FOR DELAY, AND LOOKING TO TH E REASONABLE CAUSE THE DELAY IS HEREBY CONDONED. 34. THE ASSESSEE IN GROUND NO. 1 AND 2 HAVE CHALLEN GED THE VALIDITY OF PROCEEDINGS U/S. 153C OF THE INCOME-TAX ACT, 1961. 35. THE ISSUE OF VALIDITY OF ASSESSMENT PROCEEDINGS CARRIED OUT U/S 153C R.W.S 143(3) OF THE ACT ALREADY STANDS ADJ UDICATED BY US IN THE CASE OF PRADEEP SHARMA IN IT(SS)A 111/ IND/ 2016 IN THE PRECEDING PARAS WHEREIN WE AFTER OBSERVING THAT THE FACTS OF THE INSTANT CASE AND THE ISSUES RAISED BEFORE US ARE SQ UARELY COVERED BY THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CAS E OF PEPSICO INDIA HOLDINGS P LTD V/S ACIT (SUPRA) AND PLACING RELIANCE ON THE SAME WE HAVE HELD THE ASSESSMENT PROCEEDINGS U/S 15 3C R.W.S. PRADEEP SHARMA & PRADEEP HIRANI 40 143(3) OF THE ACT AS VOID AND BAD IN LAW AND PROCEE DINGS WERE QUASHED ACCORDINGLY. FOLLOWING THE SAME VIEW WE HO LD THAT THE ASSUMPTION OF JURISDICTION IN THE PRESENT CASE OF S HRI PRADEEP HIRANI FOR ASSESSMENT YEAR 2011-12 IS VOID. THE ASS ESSMENT IS HEREBY QUASHED AND THIS GROUND OF THE ASSESSEE IS A LLOWED. SINCE THE ASSESSMENT ITSELF IS QUASHED, THE ADDITION IN C HALLENGE BEFORE US FOR THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 STANDS DELETED. ALL OTHER GROUNDS FOR THIS YEAR BECOME ACADEMIC. 36. NOW WE TAKE UP ITA 675/ IND/ 2016 RELATING TO A .Y. 2012-13 IN THE CASE OF PRADEEP HIRANI. GROUND NO. 1 AND 2 RELATE TO VALIDITY OF ASSESSMENT. THE SAME WERE NOT PRESSED HENCE DISM ISSED AS NOT PRESSED. 37. GROUND NO. 3 TO 5 RELATE TO ADDITION ON ACCOUNT OF ON-MONEY PAYMENT TO SMT. REKHABAI, LALA RAM AND DEVI SINGH F OR PURCHASE OF LAND. THIS ISSUE IS COVERED BY OUR FINDINGS IN T HE AFORESAID PARAS IN THE CASE OF PRADEEP SHARMA IN ITA 679/ IND/ 2016 . FOLLOWING THE SAME WE CONFIRM THE ADDITION TO RS. 9,88,000 AN D DELETE THE ADDITION OF RS. 1,02,39,401/-. THUS GROUNDS OF THE ASSESSEE ARE PARTLY ALLOWED. PRADEEP SHARMA & PRADEEP HIRANI 41 38. NOW WE TAKE UP THE PENALTY APPEALS. APPEAL NOS. ITA 645 TO 651/ IND/ 2017 ARE THE PENALTY APPEAL U/S. 271(1)(C ) IN THE CASE OF PRADEEP SHARMA FOR THE A.Y. 2006-07 TO 2012-13. COMMON GROUNDS OF APPEAL; 1. THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE PENALTY ORDER, WHICH IS BAD IN LAW, VOID AB INITIO, BARRED BY LIMI TATION, ILLEGAL, CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE LIABLE TO B E ANNULLED. 2. THE LD. CIT(A) DID NOT PROVIDE PROPER OPPORTUNITY O F BEING HEARD, AND THEREFORE THE ORDER PASSED BY THE LD. CIT(A) DE SERVES TO BE SET-ASIDE. 3. THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF R S.5,10,000/-, RS.13,50,000/-, RS.10,50,000/-, RS.19,10,000/-, RS. 9,75,000/-, RS.14,75,000/-, & RS.37,60,000/- U/S 271(1)(C) FOR ASSESSMENT YEARS 2006-07 TO 2012-13 RESPECTIVELY. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR TO MODI FY ANY GROUND(S) OF APPEAL . 39. DURING THE COURSE OF HEARING, LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE PENALTY U/S. 271(1)(C) IS NOT LE VIABLE. HE SUBMITTED THAT THE PENALTY IS LEVIED FOR FOLLOWING ADDITIONS:- A.Y. APPEAL NO. ITA BASIS OF PENALTY PENALTY AMOUNT QUANTUM APPEAL STATUS PB 2006 - 07 645/ IND/ 2017 DISALLOWANCE OF DEDUCTION U/S. 80IB(10) 5,10,000 CIT(A) CONFIRMED THE DISALLOWANCE. - 2007 - 08 646/ IND/ 2017 ---- SAME ---- 13,50,000 PENDING BEFORE HONBLE HIGH COURT. PB 1 - 2 2008 - 09 647/ IND/ ---- SAME ---- 10,50,000 ----- SAME - ----- PB 3 - 4 PRADEEP SHARMA & PRADEEP HIRANI 42 2017 2009 - 10 648/ IND/ 2017 ---- SAME ---- 19,10,000 ----- SAME - ----- PB 5 - 6 2010 - 11 649/ IND/ 2017 ---- SAME ---- 9,75,000 CIT(A) CONFIRMED THE DISALLOWANCE. - 2011 - 12 650/ IND/ 2017 (1) ---- SAME ---- RS. 28,76,373 (2) ON-MONEY PAYMENT RS. 20,00,000 14,75,000 PENDING BEFORE YOUR HONOURS. BUNCHED TOGETHER WITH PRESENT APPEALS. - 2012 - 13 651/ IND/ 2017 (1) ON - MONEY PAYMENT (2) ADDITIONAL COMMISSION INCOME 37,60,000 ---- DO ---- - 40. IN RESPECT OF PENALTY FOR DISALLOWANCE U/S. 80I B(10) IN A.Y. 2006-07 TO 2010-11, LD. COUNSEL FOR THE APPELLANT S UBMITTED THAT THE DISALLOWANCE U/S. 80IB(10) IN THE ABOVE CASES, HAD BEEN CONFIRMED AS THE COMPLETION CERTIFICATE WAS NOT BEE N ISSUED IN TIME. THE APPELLANT HAD COMPLETED THE PROJECT AND APPLIED FOR COMPLETION CERTIFICATE. HOWEVER, SINCE THE SAME COULD NOT BE I SSUED IN TIME, THE DISALLOWANCE U/S. 80IB(10) WAS CONFIRMED. LD. COUNS EL FOR THE ASSESSEE RELIED ON THE JUDGMENT OF HONBLE M.P. HIG H COURT IN THE PR. CIT VS SURABHI HOMES P LTD. (ITA 69 OF 2016) AND PLACED A COPY OF THE SAME AT PAPER BOOK PAGE 9-10. HE FURTHER REL IED ON THE PRADEEP SHARMA & PRADEEP HIRANI 43 JUDGMENT OF CIT VS RELIANCE PETRO PRODUCTS LTD. 230 CTR 320 (SC ) TO CONTEND THAT MERELY FOR THE REASON THAT THE DEDUCTI ON CLAIMED BY THE ASSESSEE IS NOT ALLOWABLE, PENALTY CANNOT BE LE VIED U/S. 271(1)(C) AS THERE IS A DELIBERATE ACT OF CONCEALME NT OR FURNISHING OF INACCURATE PARTICULARS. LD. COUNSEL FOR THE DEPARTM ENT ON THE OTHER HAND, RELIED ON THE PENALTY ORDERS AND CONTENDED TH AT THE PENALTY MAY BE CONFIRMED. 41. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE AR E FULLY IN AGREEMENT WITH THE LD. COUNSEL FOR THE ASSESSEE THA T PENALTY CANNOT BE LEVIED IN THE PRESENT CASE MERELY FOR DIS ALLOWANCE OF DEDUCTION U/S. 80IB(10). REVENUE AUTHORITIES HAVE FAILED TO BRING TO OUR NOTICE THAT THE ASSESSEE HAD FURNISHED INADE QUATE PARTICULARS OR CONCEALED THE PARTICULARS OF INCOME SINCE THE DEDUCTION U/S 80IB(10) OF THE ACT WAS DENIED MERELY NOT RECEIVING THE COMPLETION CERTIFICATE WITHIN THE DUE TIME. IN THE SIMILAR SET OF FACTS WE OBSERVE THAT HON'BLE JURISDICTIONAL HIGH C OURT IN THE CASE OF PR. CIT V/S SURABHI HOMES P LTD (SUPRA) HELD THA T :- THE FACT IS THAT THE ASSESSEE CLAIMED DEDUCTION U NDER SECTION 80IB(10) FOR THE REASON THAT THE A PROJECT APPROVAL CERTIFIC ATE WAS FILED AND THE POSSESSION DELIVERED. MAY BE THE TECHNICAL FORMALIT Y OF OBTAINING PRADEEP SHARMA & PRADEEP HIRANI 44 COMPLETION CERTIFICATE WAS NOT SATISFIED, BUT IT WI LL NOT MEAN THAT THE ASSESSEE HAS CLAIMED INCORRECT OR FALSE DEDUCTION. MERE NON-SATISFACTION OF A CONDITION OF DEDUCTIONS WILL NOT MEAN THAT THE AS SESSEE HAS FURNISHED INCORRECT RETURN, WHICH WILL MAKE IT LIABLE FOR PEN ALTY. 42. WE RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT WH ICH IS SQUARELY APPLICABLE ON THE FACTS AND ISSUES OF THE CASE BEFORE US HOLD THAT THE PENALTY U/S. 271(1)(C) IS LIABLE TO B E DELETED IN THE PRESENT CASE FOR THE A.Y. 2006-07 TO A.Y. 2010-11. THE APPEAL OF THE ASSESSEE FOR A.Y. 2006-07 TO A.Y. 2010-11 IS HEREBY ALLOWED. 43. IN RESPECT OF PENALTY FOR A.Y. 2011-12, COVERED IN APPEAL NO. ITA 650/ IND/ 2017, SINCE WE HAVE ALREADY QUASHED T HE ASSESSMENT U/S. 153C R/W SECTION 143(3), THE PENALTY ORDER IS ALSO NOT SUSTAINABLE AND THE SAME IS HEREBY QUASHED. 44. IN RESPECT OF PENALTY FOR A.Y. 2012-13 IN ITA N O. 651/ IND/ 2017, LD. COUNSEL FOR THE ASSESSEE RELIED ON HIS SU BMISSIONS AS MADE IN THE QUANTUM PROCEEDINGS. LD. COUNSEL FOR TH E REVENUE CONTENDED THAT THE PENALTY MAY KINDLY BE CONFIRMED. 45. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND TH E IMPUGNED PENALTY LEVIED ON THE ADDITION OF RS. 1,12,27,401/- . WHILE DEALING WITH THE QUANTUM ADDITION WE HAVE SUSTAINED THE ADD ITION OF RS. PRADEEP SHARMA & PRADEEP HIRANI 45 9,88,000/-. ASSESSEE WAS UNABLE TO SHOW THE SOURCE OF INVESTMENT MADE BY HIM. IN THESE CIRCUMSTANCES WE DIRECT THE REVENUE AUTHORITIES TO LEVY THE PENALTY U/S 271(1)(C) OF TH E ACT ONLY ON THE ADDITIONS SUSTAINED BY US AT RS.9,88,000/-. ACCORD INGLY GROUND RAISED FOR THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 2012-13 IS PARTLY ALLOWED. 46. NOW WE TAKE UP THE LEVY OF PENALTY U/S. 271(1)( C) IN ITA 227/ IND/ 2018 AND ITA 228/ IND/ 2018 FOR A.Y. 2011-12 A ND A.Y. 2012- 13 RESPECTIVELY, IN THE CASE OF PRADEEP HIRANI. COMMON GROUNDS OF APPEAL; 1. THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE PENALTY ORDER, WHICH IS, VOID AB INITIO, INVALID, UNJUSTIFIED, BAR RED BY LIMITATION AND THEREFORE LIABLE TO BE QUASHED. 2. THE LD. CIT(A) DID NOT PROVIDE PROPER AND MEANINGFU L OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 3. THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF R S.5,60,000/- AND RS.37,60,000/- U/S 271(1)(C) FOR ASSESSMENT YEARS 2 011-12 & 2012-13 RESPECTIVELY. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR TO MOD IFY ANY GROUND(S) OF APPEAL. 47. IN RESPECT OF PENALTY FOR A.Y. 2011-12, COVERED IN APPEAL NO. ITA 227/ IND/ 2018, SINCE WE HAVE ALREADY QUASHED THE A SSESSMENT U/S. PRADEEP SHARMA & PRADEEP HIRANI 46 153C R/W SECTION 143(3), THE PENALTY ORDER IS ALSO NOT SUSTAINABLE AND THE SAME IS HEREBY QUASHED. 48. IN RESPECT OF PENALTY FOR A.Y. 2012-13 (ITA 228/ IND/ 2018) LD. CIT(A) CONFIRMED THE LEVY OF PENALTY ON THE ADDITIO N OF RS.1,12,27,401/-. WE HAVE SUSTAINED THIS ADDITION ONLY TO RS.9,88,000 /-. SINCE THE PENALTY IS LINKED TO THE ADDITION MADE IN THE HANDS OF THE ASSESSEE THE SAME NEEDS TO BE SUSTAINED ONLY TO THE EXTENT OF ADDITIO N OF RS.9,88,000/- SUSTAINED BY US. THE APPEAL OF THE ASSESSEE IS THU S PARTLY ALLOWED. 49. IN THE RESULT QUANTUM APPEALS IN RESPECT OF BOT H THE ASSESSEE(S) FOR ASSESSMENT YEAR 2011-12 ARE ALLOWED AND THAT OF ASS ESSMENT YEAR 2012-13 ARE PARTLY ALLOWED. PENALTY APPEALS IN CASE OF SHRI PRADEEP SHARMA FOR ASSESSMENT YEAR 2006-07 TO 2011-12 ARE A LLOWED AND FOR ASSESSMENT YEAR 2012-13 IS PARTLY ALLOWED. PENALTY IN THE CASE OF SHRI PRADEEP HIRANI ARE ALLOWED FOR ASSESSMENT YEAR 2011 -12 AND PARTLY ALLOWED FOR ASSESSMENT YEAR 2012-13. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.02.2 021. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 11 FEBRUARY, 2021 /DEV PRADEEP SHARMA & PRADEEP HIRANI 47 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE