REGENCY MAHAVIR PROPERTIES, PUNE V. ACIT CEN CIR 1, THANE

ITA 682/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1048 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AWUNGSHI GIMSON
• Assessee Lawyers: SUNIL U PATH AK; GEETAA GUWALANII
• Keywords: Invalid notice; Search and seizure; Loose papers; Retrospective amendment; Reason to believe
• Section: 143(3); 142(1); 133A; 153A; 131; 37; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT & SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NOS. 682 & 683/MUM/2016 ASSESSMENT YEARS : 2007-08 & 2010-11 REGENCY MAHAVIR PROPERTIES 2418 EAST STREET, THAKKAR HOUSE, 1 ST WING, 2 ND FLOOR, CAMP, PUNE 411 001 PAN AAJFR6383G VS. ACIT CEN CIR. 1 THANE (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUNIL U PATHAK & SMT GEETAA GUWALANII RESPONDENT BY: SHRI AWUNGSHI GIMSON DATE OF HEARING : 29. 11 .2017 DATE OF PRONOUNCEMENT : 04 . 0 1 .201 8 O R D E R PER P K BANSAL, VICE-PRESIDENT: BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE COMMON ORDER, DATED 3012.2015, OF THE CIT(A), PUNE, FOR ASSESSMENT YEARS 2007-08 AND 2010-11. 2. THE ASSESSEE HAS TAKEN FOLLOWING EFFECTIVE GROUN DS OF APPEAL FOR A.Y. 2007-08: 1] THE LEARNED CIT(A) ERRED IN HOLDING THAT T HE SEARCH ACTION U/S. 132 WAS CONDUCTED ON THE ASSESSEE FIRM AND HEN CE, THE LEARNED A.O. WAS JUSTIFIED IN ASSUMING JURISDICTION U/S. 153A AND COMPLETING THE ASST. ACCORDINGLY. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 2 1.1] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT THE PROCEEDINGS U/S 153A ARE WRONGLY INITIATED IN THE C ASE OF THE ASSESSEE AS THERE WAS NO SEARCH CONDUCTED ON THE AS SESSEE FIRM AND THE PROVISION U/S 153A WERE NOT APPLICABLE AND HENCE, THE ASST. COMPLETED U/S. 153A WAS NULL AND VOID. 1.2] THE LEARNED CIT(A) ERRED IN HOLDING THAT TH E NAME OF THE ASSESSEE WAS INCLUDED IN THE WARRANT ISSUED TO SEAR CH THE PREMISES AT 111/112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGEN CY MARRIAGE HALL, ULHASNAGAR- 2 AND THEREFORE, THE LEARNED A.O. WAS JUSTIFIED IN COMPLETING THE ASST. U/S. 153A ON THE BASIS OF THE SAID AUTHORIZATION. 1.3] THE LEARNED CIT(A) FAILED TO APPRECIATE THA T - A. THE WARRANT ISSUED TO SEARCH THE PREMISES AT 111 /112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR - 2 DID NOT BELONG TO THE ASSESSEE FIRM NOR THE ASSES SEE CONDUCTED IT'S BUSINESS FROM THE SAID ADDRESS AND THEREFORE, THERE WAS NO SEARCH ON THE ASSESSEE FIRM AND THE ASSESSMENT INIT IATED AND COMPLETED U/S. 153A WAS BAD IN LAW. B. CONDUCTING A SEARCH ON THE PREMISES OF THE PARTN ER DOES NOT AMOUNT TO CONDUCTING A SEARCH ON THE FIRM AND THUS, IN THIS CASE, IT CANNOT BE HELD THAT THE APPELLANT FIRM WAS SEARCHED . C. THE ADDITIONAL GROUNDS RAISED BY THE APPELLANT O UGHT TO HAVE BEEN ADMITTED AND ALLOWED AS IT WAS SHOWN BY THE AP PELLANT THAT THE BUSINESS PREMISES OF THE FIRM WERE NOT SEARCHED AND THE ASST. U/S 153A IS WAND VOID. . 2] THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADDIT ION OF RS. 2,60,00,000/- IN THE HANDS OF THE APPELLANT FIRM ON THE BASIS OF THE LOOSE PAPER SEIZED FROM THIRD PARTY. 2.1] THE LEARNED CIT(A) ERRED IN HOLDING THA T - A. THE APPELLANT FIRM HAD PAID TOTAL ON MONEY OF RS . 7,60,00,000/- TO ASHRAY PREMISES PVT. LTD. FOR PURC HASE OF THE PROPERTY NAMED DECCAN PAPER MILL PROPERTY AND PART OF THE ON MONEY OF RS. 2,60,00,000/- WAS PAID BY THE APPELLAN T FIRM IN THIS YEAR AND THEREFORE, THE LEARNED A.O. WAS JUSTIFIED IN MAKING THE SAID ADDITION IN THIS YEAR. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 3 B. THE LEARNED A.O. WAS JUSTIFIED IN MAKING THE ADD ITION IN THE HANDS OF THE APPELLANT FIRM ON THE BASIS OF THE LOO SE PAPERS FOUND DURING THE COURSE OF SEARCH ON PANCHSHEEL GROUP. C. THE AMOUNT OF RS. 7,60,00,000/- HAS BEEN TAXED IN THE HANDS OF THE SELLER OF THE SAID PROPERTY AND THEREFORE, THE SAID AMOUNT SHOULD BE TAXED IN THE HANDS OF THE APPELLANT FIRM WHO IS THE BUYER OF THE SAID PROPERTY. 2.2] THE LEARNED CIT(A) ERRED IN NOT APPRECIATIN G THAT THE APPELLANT FIRM HAD NOT PAID ANY ON MONEY FOR PURCHA SE OF DECCAN PAPER MILL PROPERTY FROM M/S. ASHRAY PREMISES PVT. LTD. AND THEREFORE, THE ADDITION MADE OF RS. 2,60,00,000/- I N THIS YEAR WAS NOT JUSTIFIED AT ALL. 2.3] THE LEARNED CIT(A) FAILED TO APPRECIATE THA T A. NO ADDITION COULD BE MADE IN THE HANDS OF THE AP PELLANT FIRM ON THE BASIS OF THE DOCUMENT FOUND WITH THIRD PARTY. B. THERE IS NO CORROBORATIVE EVIDENCE WITH THE LEAR NED A.O. TO INDICATE THAT THE APPELLANT FIRM HAD PAID ON MONEY OF RS. 7,60,00,000/- FOR PURCHASE OF THE SAID PROPERTY FRO M ASHRAY PREMISES PVT. LTD AND HENCE, IN THE ABSENCE OF ANY CONCRETE EVIDENCE, NO ADDITION WAS JUSTIFIED IN THE HANDS OF THE APPELLANT FIRM. C. THE IMPUGNED DOCUMENT WAS NEITHER FOUND WITH ATU L CHORDIYA NOR HE WAS THE AUTHOR OF SAME. HENCE HIS STATEMENT COULD NOT BE MADE BASIS OF ADDITION. D. THERE WERE INCONSISTENCIES IN THE STATEMENT OF S HRI ATUL CHORDIA AND THEREFORE, THE RELIANCE PLACED ON HIS STATEMENT FOR MAKING ADDITION IN THE HANDS OF THE APPELLANT FIRM WAS NOT JUSTIFIED AT ALL. E. THE APPELLANT FIRM WAS NOT GRANTED PROPER OPPORT UNITY TO CROSS EXAMINE SHRI ATUI CHORDIA AND THEREFORE, THE RELIAN CE PLACED ON HIS STATEMENT FOR MAKING ADDITION IN THE HANDS OF THE A PPELLANT FIRM WAS NOT VALID AT ALL. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 4 SUBSEQUENTLY, THE ASSESSEE FILED ABRIDGED GROUNDS O F APPEAL WHICH READ AS UNDER: ON THE FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE SEA RCH ACTION U/S. 132 WAS CONDUCTED ON THE ASSESSEE FIRM AND THUS, TH E ASST. ORDER PASSED U/S 153A IS VALID IN LAW. 1.1] THE LEARNED CIT(A) ERRED IN HOLDING THAT TH E NAME OF THE ASSESSEE WAS INCLUDED IN THE WARRANT TO SEARCH THE PREMISES AT 111 / 112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MA RRIAGE HALL, ULHASNAGAR 2 AND THEREFORE, THE ASSESSEE WAS SEARCH ED AND THE ASST. U/S 153A WAS VALID. 2] THE LEARNED CIT (A) FAILED TO APPRECIATE TH AT THE ASSESSMENT FOR A.Y.2007-08 WAS A NON ABATED ASSESSMENT AND SIN CE NO INCRIMINATING EVIDENCE WAS FOUND RELATING TO THE IMPUGNED ADDITION OF RS. 2,60,00,000/- DURING THE COURSE OF ALLEGED SEARCH ON THE APPELLANT FIRM, NO ADDITION COULD BE MADE IN 153A ASSESSMENT. THE ENTIRE ADDITION OF RS. 2,60,00,000/ - MAY KINDLY BE DELETED. 3] BASED ON THE LOOSE PAPERS FOUND IN THE SEAR CH ON ATUL CHORDIA GROUP AND THE STATEMENT OF SHRI ATUL CHORDI A, THE LEARNED CIT(A) ERRED IN HOLDING THAT IN TOTAL, THE APPELLAN T HAD PAID ON MONEY OF RS.7,60,00,000/- TO M/S. ASHRAY PREMISES P VT. LTD. FOR PURCHASE OF THE PROPERTY NAMED DECCAN PAPER MILL PR OPERTY. 4] THE LEARNED CIT(A) ERRED IN CONFIRMING AN AD DITION OF RS.2,60,00,000/- IN THE HANDS OF THE APPELLANT FIRM FOR THIS YEAR ON THE BASIS OF THE EVIDENCE SEIZED DURING THE SEARCH ON ATUL CHORDIA GROUP (THIRD PARTY) THE ASSESSEE HAS TAKEN FOLLOWING EFFECTIVE GROUNDS OF APPEAL FOR A.Y. 2010-11: ON FACTS AND IN LAW, ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 5 1] THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADDITION OF RS. 5,00,00,000/- IN THE HANDS OF THE APPELLANT FIRM ON THE BASIS OF THE LOOSE PAPER SEIZED FROM THIRD PARTY. 1.1] THE LEARNED CIT(A) ERRED IN HOLDING THAT - A.THE APPELLANT FIRM HAD PAID TOTAL ON MONEY OF RS. 7,60,00,000/- TO M/S. ASHRAY PREMISES PVT. LTD. FOR PURCHASE OF T HE PROPERTY NAMED DECCAN PAPER MILL PROPERTY AND PART OF THE ON MONEY OF RS. 5,00,00,000/- WAS PAID BY THE APPELLANT FIRM IN THI S YEAR AND THEREFORE, THE LEARNED A.O. WAS JUSTIFIED IN MAKING THE SAID ADDITION IN THIS YEAR. B. THE LEARNED A.O. WAS JUSTIFIED IN MAKING THE ADD ITION IN THE HANDS OF THE APPELLANT FIRM ON THE BASIS OF THE LOO SE PAPERS FOUND DURING THE COURSE OF SEARCH ON PANCHSHEEL GROUP. C. THE AMOUNT OF RS. 7,60,00,0007- HAS BEEN TAXED I N THE HANDS OF THE SELLER OF THE SAID PROPERTY AND THEREFORE, THE SAID AMOUNT SHOULD BE TAXED IN THE HANDS OF THE APPELLANT FIRM WHO IS THE BUYER OF THE SAID PROPERTY. 1.2] THE LEARNED CIT(A) ERRED IN NOT APPRECIATIN G THAT THE APPELLANT FIRM HAD .NOT PAID ANY ON MONEY FOR PURCH ASE OF DECCAN PAPER MILL PROPERTY FROM M/S. ASHRAY PREMISES PVT. LTD. AND THEREFORE, THE ADDITION MADE OF RS. 5,00,00,000/- I N THIS YEAR WAS NOT JUSTIFIED AT ALL. 1.3] THE LEARNED CIT(A) FAILED TO APPRECIATE THA T - A. NO ADDITION COULD BE MADE IN THE HANDS OF THE AP PELLANT FIRM ON THE BASIS OF THE DOCUMENT FOUND WITH THIRD PARTY. B. THERE IS NO CORROBORATIVE EVIDENCE WITH THE LEAR NED A.O. TO INDICATE THAT THE APPELLANT FIRM HAD PAID ON MONEY OF RS. 7,60,00,000/- FOR PURCHASE OF THE SAID PROPERTY FRO M ASHRAY PREMISES PVT. LTD AND HENCE, IN THE ABSENCE OF ANY CONCRETE EVIDENCE, NO ADDITION WAS JUSTIFIED IN THE HANDS OF THE APPELLANT FIRM. C. THE IMPUGNED DOCUMENT WAS NEITHER FOUND WITH ATU L CHORDIYA NOR HE WAS THE AUTHOR OF SAME. HENCE HIS STATEMENT COULD NOT BE MADE BASIS OF ADDITION. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 6 D. THERE WERE INCONSISTENCIES IN THE STATEMENT OF S HRI ATUL CHORDIA AND THEREFORE, THE RELIANCE PLACED ON HIS STATEMENT FOR MAKING ADDITION IN THE HANDS OF THE APPELLANT FIRM WAS NOT JUSTIFIED AT ALL. E. THE APPELLANT FIRM WAS NOT GRANTED PROPER OPPORT UNITY TO CROSS EXAMINE SHRI ATUL CHORDIA AND THEREFORE, THE RELIAN CE PLACED ON HIS STATEMENT FOR MAKING ADDITION IN THE HANDS OF THE A PPELLANT FIRM WAS NOT VALID AT ALL. F. THERE WAS NO CONCRETE EVIDENCE THAT THE APPELL ANT FIRM HAD PAID RS. 5,00,00,000/- AS ON MONEY FOR PURCHASE OF THE SAID PROPERTY IN THIS YEAR AND HENCE, THE ADDITION MADE OF RS. 5,00,00,000/- IN THIS YEAR WAS NOT JUSTIFIED AT ALL . SUBSEQUENTLY, ASSESSEE FILED ABRIDGED GROUNDS OF AP PEAL FOR A.Y. 2010-11, AS UNDER:- THE FOLLOWING GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER ON THE FACTS AND IN LAW, 1] BASED ON THE LOOSE PAPERS FOUND IN THE SEAR CH ON ATUL CHORDIA GROUP AND THE STATEMENT OF SHRI ATUL CHORDI A, THE LEARNED CIT(A) ERRED IN HOLDING THAT IN TOTAL, THE APPELLAN T HAD PAID ON MONEY OF RS. 7,60,00,0007- TO M/S. ASHRAY PREMISES PVT. LTD. FOR PURCHASE OF THE PROPERTY NAMED DECCAN PAPER MILL PR OPERTY. 2] THE LEARNED CIT(A) ERRED IN CONFIRMING AN A DDITION OF RS.5,00,00,000/- IN THE HANDS OF THE APPELLANT FIRM FOR THIS YEAR ON THE BASIS OF THE EVIDENCE SEIZED DURING THE SEARCH ON ATUL CHORDIA GROUP (THIRD PARTY). 3] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. BOTH THE PARTIES AGREED THAT FIRST APPEAL FOR TH E A.Y. 2007-08 BE DECIDED. WE THEREFORE, DECIDED TO DISPOSE OF THE A PPEAL FOR A.Y. 2007-08. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 7 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM CONSTITUTED ON 26.08.2005. THE DETAILS OF PRINCIPA L PLACE OF BUSINESS AS PER THE PARTNERSHIP DEEDS ARE AS UNDER: SR NO PARTNERSHIP DEED DATE PLACE OF BUSINESS AS PER PARTNERSHIP DEED 1 26.08.2005 2418, EAST STREET, THAKKAR HOUSE, 1 ST WING CAMP, PUNE 2 30.05.2006 3 02.11.2006 5 TH AVENUE, DHOLE PATIL ROAD, PUNE THE PRINCIPAL PLACE OF BUSINESS AS STATED IN THE LA ST PARTNERSHIP DEED DATED 2.11.2006 IS AS THAT APPEARING IN I.T. DATABA SE I.E. PAN/TAN RECORDS. THERE HAS BEEN SEARCH U/S. 132 OF THE INCOME TAX AC T ON THE ASSESSEE FIRM ALONG WITH THOSE OF ITS PARTNERS AT 111/112, ANIL C OMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2 ON 18.02.2 010, ALTHOUGH THERE HAD BEEN SURVEY U/S. 133A CARRIED OUT AT 2418, EAST STR EET, THAKKAR HOUSE, 1 ST WING, 2 ND FLOOR, CAMP PUNE ON THE SAME DATE. THE ASSESSEE C ONTENDED THAT THE SAID PREMISES DID NOT BELONG TO THE ASSESSEE AN D BELONGED TO THE KHAIRARI GROUP AND WAS OCCUPIED BY VARIOUS CONCERNS CONTROLL ED BY THEM. THE AUTHORIZED WARRANT FOR SEARCH ACTION CONDUCTED IN T HE PREMISES MIGHT BE IN RESPECT OF THESE CONCERNS CARRYING ON THEIR ACTIVIT IES. THE ASSESSEE DOES NOT HAVE ANY CONNECTION WITH THESE CONCERNS AND THE ADD RESS OF THE ASSESSEES FIRM, VIDE PARTNERSHIP DEED DATED 2.11.2016, WAS 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. DURING THE COURSE OF THE SEARCH CARRIE D OUT AT M/S. ASHRAY PREMISES PVT LTD., LOOSE PAPERS I.E. COMPUTERIZED P ROFIT & LOSS ACCOUNT OF ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 8 ASHRAY PREMISES PVT LTD FROM 01.04.2006 TO 3.8.2009 WAS FOUND AND SEIZED AND THE COPY OF COMPUTERIZED LEDGER ACCOUNT OF KLL IN BOOKS OF ASHRAY PREMISES PVT LTD. FOR THE PERIOD FROM 01.04.2006 TO 3.08.2009. THE ASSESSING OFFICER ON THE BASIS OF THESE DOCUMENTS T OOK THE VIEW THAT THE ASSESSEE HAS PAID A SUM OF ` 7,60,00,000/- IN CASH TO ASHRAY PREMISES PRIVATE LTD., OUT OF WHICH ` 2.60 CRORES WAS PAID IN A.Y. 2007-08 AND BALANCE AMOUNT OF ` 5 CRORES WAS PAID IN A.Y. 2010-11. THE ASSESSING OFFICER ACCORDINGLY, MADE THE ADDITION IN EACH OF THE ASSES SMENT YEARS. WHEN THE MATTER WENT BEFORE THE CIT(A), THE ASSESSEE HAD CHA LLENGED BOTH THE ADDITIONS ON LEGALITY AS WELL AS ON MERIT. HOWEVE R, THE CIT(A) DISMISSED THE GROUND OF THE ASSESSEE AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. THE LEARNED AR VEHEMENTLY CONTENDED THAT NO SEAR CH ACTION WAS CARRIED OUT IN EITHER OF THE PREMISES OF THE ASSESS EE FIRM SITUATED IN PUNE I.E. 2418, EAST STREET, THAKKAR HOUSE, 1 ST WING, 2 ND FLOOR, CAMP PUNE. THERE HAD BEEN A SEARCH U/S. 132 AT 111/112, ANIL COMPLEX , NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR- 421 002 AND FOR THIS OUR ATTENTION WAS DRAWN TOWARDS 1 ST PARA AT PAGE 2 OF THE ASSESSMENT ORDER. THE PLACE WHERE SEARCH HAD TAKEN PLACE BELONGS TO KHAIRARI GROUP AN D WAS OCCUPIED BY VARIOUS CONCERNS CONTROLLED BY THEM. THESE PLACES WERE THE PRINCIPAL PLACE OF BUSINESS OF VARIOUS OTHER CONCERNS. THE ASSESSE E HAD NOTHING TO DO WITH THIS PREMISES EXCEPT THAT IT IS THE OFFICE ADDRESS OF ONE OF THE COMPANY IN ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 9 WHICH ONE OF ITS PARTNER IS INTERESTED I.E. KONARK PROJECT LTD. THE ASSESSEE DOES NOT HAVE ANY CONNECTION WHATEVER WITH THIS PRE MISES I.E. 111/112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR- 421 002. THE ASSESSEE IS FILING ITS RETURN WITH ITO WARD 2(2 ), PUNE AND AFTER THE SEARCH ACTION THE CASE OF THE ASSESSEE WAS CENTRALI ZED AND TRANSFERRED TO CENTRAL CIRCLE THANE. THE PRINCIPAL PLACE OF BUSIN ESS OF THE ASSESSEE MENTIONED IN THE PARTNERSHIP DEED DATED 5.11.2006 I S 5 TH AVENUE, DHOLE PATIL ROAD, PUNE, WHICH IS THE ADDRESS AS PER INCOME TAX DATABASE. THE PREMISES COVERED BY THE SEARCH DID NOT BELONG TO THE ASSESSE E. ALTHOUGH THE PREMISES 2418, EAST STREET, THAKKAR HOUSE, 1 ST WING, 2 ND FLOOR, CAMP PUNE, WAS COVERED UNDER SURVEY ACTION CARRIED OUT U/S. 133A, NO SEARCH HAD TAKEN PLACED IN THE CASE OF THE ASSESSEE. THE ASSESSEE N EVER CONDUCTED ANY ACTIVITY OF WHATSOEVER NATURE FROM THE PREMISES WHE RE THE SEARCH HAS BEEN CARRIED OUT. THE ASSESSMENT U/S. 153A IS TO BE MAD E WHEN VALID SEARCH ACTION IS INITIATED U/S. 132 OF THE I T ACT. UNTIL AND UNLESS THERE IS A VALID SEARCH U/S. 132, THE PROCEEDINGS U/S. 153A CANNOT B E INITIATED. IN THIS REGARD OUR ATTENTION WAS DRAWN TOWARDS THE PROVISIONS OF S ECTION 153A AND ON THAT BASIS IT WAS SUBMITTED THAT SECTION 153A MANDATES T O ASSESS OR RE-ASSESS THAT TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE. THE PHRASE SEARC H IS CONDUCTED WOULD MEAN THE INCIDENCE OF ACTUAL CONDUCT OF SEARCH. WH ERE THERE IS NO ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 10 PANCHNAMA DRAWN IN THE NAME OF THE PERSON SEARCHED, HEAVY BURDEN WOULD LIE ON THE REVENUE TO PROVE BY EVIDENCE OR BY LEADI NG ANY OTHER EVIDENCE THAT IN FACT, SEARCH WITH RESPECT TO SUCH PERSON, W AS ACTUALLY CONDUCTED BY THEM. MERELY SHOWING SEARCH WARRANT CANNOT BE TREA TED AS IF SEARCH WAS CONDUCTED. THE PROVISIONS OF SECTION 153B PROVIDE THE TIME-LIMIT FOR COMPLETION OF ASSESSMENT OR REASSESSMENT UNDER SECT ION 153A. REFERRING TO SECTION 153B(1)(A) IT WAS CONTENDED THAT THE ASSESS ING OFFICER SHALL MAKE AN ORDER OF ASSESSMENT OR REASSESSMENT IN RESPECT OF E ACH ASSESSMENT YEARS FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B) OF SECTION 153A, WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE FI NANCIAL YEAR IN WHICH THE LAST OF THE AUTHORIZATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A IS EXECUTED. ON THIS BASIS, IT WAS CO NTENDED THAT FOR MAKING ASSESSMENT UNDER SECTION 153A, IT IS NECESSARY THAT A SEARCH SHOULD HAVE BEEN VALIDLY INITIATED U/S. 132 AFTER 31.05.2003. I T SHOULD BE CONDUCTED IN A PARTICULAR FINANCIAL YEAR SO AS TO DETERMINE THE SI X ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO FINANCIAL IN WHICH SEARCH IS CONDUCTED SO AS TO ASSESS OR REASSESS THE TOTAL INCOME OF SUCH SIX ASSESSMENT YEARS. THE PROVISIONS TO SECTION 153A(1 )(B) WILL BE REDUNDANT IF A SEARCH IS ONLY INITIATED BUT NOT CONDUCTED AGAINS T A PERSON, AS THE INITIATION OF SEARCH AND CONDUCT THEREOF ARE TWO DISTINCT ACTI ONS OF TWO DIFFERENT INCOME TAX AUTHORITIES UNDER THE ACT. A PANCHNAMA NEEDS TO BE DRAWN IN THE NAME OF THE PERSON AGAINST WHOM THE PROVISIONS OF SECTION 153A ARE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 11 SOUGHT TO BE INVOKED AND THE ABSENCE OF SUCH PANCHN AMA SHALL FIRSTLY NEGATE THE FACTS AND CIRCUMSTANCES LEADING TO THE INITIATI ON OF THE SEARCH, SECONDLY, DISPROVE THE FACT OF THE CONDUCT AND CONCLUSION OF THE SEARCH AND, THIRDLY, ALSO RESULT IN DEFEATING THE PROVISIONS OF SECTION 153A(1)(B). 153B(1)(A)& 153B(2) AS THE DETERMINATION OF THE FINANCIAL YEAR IN WHICH THE SEARCH WAS CONDUCTED WILL BE IMPOSSIBLE RESULTING INTO PROVISI ONS OF SECTION 153A(1)(B) BEING NON-STARTER. FURTHER THE TIME LIMIT FOR COMPL ETION OF ASSESSMENT U/S 153B WILL ALSO NOT BE WORKABLE IN ABSENCE A LAST PA NCHNAMA WITNESSING THE EXECUTION OF THE LAST OF THE AUTHORIZATIONS. THUS, IT WAS STRESSED THAT THE EXECUTION OF THE LAST OF THE AUTHORIZATIONS FOR SEA RCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A IS IMPORTANT TO DECI DE THE TIME LIMIT TO COMPLETE THE ASSESSMENTS OR REASSESSMENTS FOR THE F AST PREVIOUS SIX YEARS. THE DATE ON WHICH THE LAST OF THE AUTHORIZATION IS EXECUTED CLEARLY REFERS TO THE ACTUAL EXECUTION OF THE WARRANT OF AUTHORIZATIO N, WHICH IN TURN REFERS TO THE CONDUCT OF PHYSICAL SEARCH OF THE PREMISES OR T HE PERSON. THUS, IT WAS VEHEMENTLY CONTENDED THAT BOTH EVENTS I.E. INITIATI ON OF SEARCH AS WELL AS CONCLUSION OF SEARCH ARE IMPORTANT. THEREFORE, IN CASE THE PHYSICAL SEARCH IS NOT CONDUCTED EVEN AFTER THE ISSUE OF WARRANT OF AU THORIZATION, THE CONDITIONS AS SPECIFIED IN SECTION 132 OR 132A WOULD NOT GET S ATISFIED AND THE ASSESSMENT MADE IN CONSEQUENCE THEREOF WILL NOT BE VALID AS THE ASSESSING OFFICER WILL NOT HAVE A VALID JURISDICTION TO FRAME ASSESSMENT U/S. 153A. THUS, IT WAS CONTENDED THAT THE FACTS INVOLVED CLEA RLY PROVED THAT NO ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 12 PANCHNAMA WAS EVER DRAWN PROVING THE CONDUCT AND CO NCLUSION OF THE SEARCH AT THE PREMISES OF THE ASSESSEE FIRM ON THE DATE OF SEARCH ON 18.02.2010, ALTHOUGH NAME OF THE ASSESSEE FIRM MIGHT HAVE BEEN INCLUDED IN ONE OF THE WARRANT OF AUTHORIZATION. MERE INITIATION OF SEARC H BY MENTIONING THE NAME OF AN ASSESSEE ON ANY PREMISES, IS NOT ENOUGH TO SUBJE CT AN ASSESSEE TO ASSESSMENT OR REASSESSMENT U/S. 153A/153A(1)(B) ON THE BASIS OF INCLUSION OF A PERSON/CONCERN IN THE WARRANT OF AUTHORIZATION . IT WAS FURTHER CONTENDED THAT IF IT IS ASSUMED FOR THE SAKE OF THE ARGUMENTS THAT THE NAME OF THE ASSESSEE HAS BEEN INCLUDED IN ONE OF THE WAR RANT OF AUTHORIZATION ISSUED AND THIS WARRANT OF AUTHORIZATION WAS EXECUT ED ON 18.02.2010 AT THE BUSINESS PREMISES OF PARTNERS, THE FACT REMAINS THA T NO SEARCH WAS CONDUCTED IN ASSESSEES PREMISES AT 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. THE CONDUCT OF THE SEARCH AND DRAWING OF THE PANCHNAMA ARE THE PRE CONDITIONS FOR ISSUE OF NOTICE U/S. 153A AND 153A(1)(B). IN THIS REGARD RE LIANCE WAS PLACED ON THE DECISION OF J M TRADING CORPORATION VS. ACIT 20 SOT 489 (MUM); DR. MANSUKH KANJIBHAI SHAH V. ACIT 36(II) ITCL 62 (AHME DABAD D BENCH OF THE TRIBUNAL); CIT VS. WIPRO FINANCE LTD. 323 ITR 467 ( KAR) AND CIT VS. KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA 82 ITR 821 (SC). TH US, ON THE BASIS OF THESE DECISIONS, IT WAS SUBMITTED THAT SINCE THE ASSESSME NT U/S 153A IS BASED ON A INVALID NOTICE ISSUED U/S. 153A THE SAME MUST THERE FORE BE QUASHED. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 13 6. THE LEARNED AR BEFORE US SUBMITTED THAT THE ASSE SSEE HAS TAKEN THIS GROUND BEFORE THE CIT(A) BUT THE CIT(A) DISMISSED T HE GROUND MENTIONING THAT THIS GROUND DOES NOT EMANATE FROM THE ORDER OF THE ASSESSING OFFICER AS THE ASSESSEE HAS NOT TAKEN THIS ISSUE BEFORE THE AS SESSING OFFICER. IT WAS CONTENDED THAT THIS GROUND IS A LEGAL GROUND AND HA S TO BE ADMITTED. THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THERE HAS BEEN SEARCH CARRIED OUT IN ASSESSEES CASE AT 111/112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR- 2, WHICH IS THE ADDRESS AND THE BUSINES S PLACE OF PARTNER OF THE ASSESSEE FIRM. THE LAW NOWHERE MENTIONS THAT IN CA SE OF A PARTNERSHIP FIRM SEARCH CAN BE CARRIED OUT ONLY AT THE ADDRESS MENTI ONED IN THE PARTNERSHIP DEED AND IN THIS REGARD OUR ATTENTION WAS DRAWN TOW ARDS THE ASSESSMENT ORDER WHERE THE ADDRESS OF THE ASSESSEE IS MENTIONE D AS 111/112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR- 2, WHICH WAS COVERED BY THE SEARCH CONDUCTED U/S. 132(1). T HE ASSESSEE HAD NEVER OBJECTED WITH REGARD TO THE ADDRESS MENTIONED BY TH E ASSESSING OFFICER IN THE ASSESSMENT ORDER. IN THE APPEAL MEMO, THE ADDRESS MENTIONED IS 2418 EAST STREET, THAKKAR HOUSE, 1 ST WING, 2 ND FLOOR, CAMP, PUNE 411 001 AND THE SAME IS MENTIONED IN THE POWER OF ATTORNEY GIVEN IN FAVOUR OF THE COUNSEL. THE APPEAL FEES OF ` 1000 HAS ALSO BEEN PAID FROM THE BANK ACCOUNT AT ULHASNAGAR. THE NOTICE U/S. 143(2) SENT TO ULHASNA GAR ADDRESS WAS DULY ACKNOWLEDGED BY THE ASSESSEE. THE ASSESSEE ITSELF IS NOT USING THE ADDRESS ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 14 5 TH AVENUE, DHOLE PATIL ROAD, PUNE FOR MANY PURPOSES. THIS ADDRESS HAS BEEN USED FOR THE FIRST TIME IN THE APPELLATE PROCE EDINGS IN THE LETTER FILED ON 10.02.2014. WHATEVER MAY BE THE ASSESSEES REGISTE RED ADDRESS OR CORRESPONDENCE ADDRESS OR ADDRESS FOR ANY OTHER PUR POSE, THE FACT IS ADMITTED THAT THE ASSESSEES NAME WAS INCLUDED IN T HE WARRANT ISSUED TO SEARCH THE PREMISES AT 111/112, ANIL COMPLEX, NEW L INK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2. BESIDES THE ASSESSEE, OTHER PERSONS TO BE SEARCHED AS PER THIS WARRANT OF AUTHORIZATION WERE M/S. KONARK PROJECT LTD., M/S KONARK INFRASTRUCTURE PVT. LTD., M/S. REGENCY I NVESTMENT, M/S. REGENCY REALITIES, M/S. REGENCY PROPERTIES, M/S. REGENCY NI RMAN PVT. LTD. AND M/S. REGENCY ISPAT PVT. LTD. REFERRING TO SECTION 292CC OF I.T ACT INSERTED IN THE STATUTE BY THE FINANCE ACT 2012 WITH RETROSPECTIVE EFFECT FROM 01.04.1976, IT WAS SUBMITTED THAT WHERE THE AUTHORIZATION IS ISSUE D IN THE NAME OF MORE THAN ONE PERSON, THE ASSESSMENT OR REASSESSMENT SHA LL BE MADE SEPARATELY IN THE NAME OF EACH OF PERSONS MENTIONED IN SUCH AU THORIZATION. REFERRING TO THE CASE LAW RELIED ON BY THE ASSESSEE, RELIANCE WA S PLACED ON THE DECISION OF THE CIT(A) IN WHICH THE CIT(A) HAS DULY DISTINGUISH ED THESE CASE LAWS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE CAR EFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE AUTHORITIES BELOW . THE QUESTION BEFORE US IN GROUND NO.1 TAKEN BY THE ASSESSEE IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE ABSENCE OF SEARCH BEING CONDUCTED AT THE PLACE OF THE BUSINESS OF THE ASSESSEE, ANY ASSESSME NT CAN BE MADE BY ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 15 ISSUING NOTICE U/S. 153A OF THE ACT. IT IS NOT DEN IED THAT THE SEARCH WARRANT ON THE BASIS OF WHICH THE SEARCH HAS BEEN CONDUCTED AT THE PREMISES 111/112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2, CONTAINED THE NAME OF THE ASSESSEE BU T THIS PREMISES WHERE THE SEARCH HAS BEEN CONDUCTED DOES NOT BELONG TO TH E ASSESSEE FIRM NOR THE ASSESSEE FIRM WAS CARRYING ON ANY BUSINESS FROM THE SAID PLACE. THE PREMISES WHERE THE SEARCH WAS CONDUCTED RELATE TO K ONARK PROJECT LTD., IN WHICH ONE OF THE ASSESSEES PARTNER IS INTERESTED. BUT THIS IS NOT THE ADDRESS OF THE ASSESSEE FIRM. THE ASSESSEES FIRM IS CONS TITUTED ON 26.08.2005 VIDE PARTNERSHIP DEED DATED 26.08.2005 AND SUBSEQUENTLY AMENDED VIDE DEED DATED 30.06.2006 AND 3.11.2006. THE ADDRESS IN THE PARTNERSHIP DEED DATED 26.08.2005 AND 30.06.2006 IS 2418, EAST STREET, THA KKAR HOUSE, 1 ST WING CAMP, PUNE AND IN THE DEED DATED 3.11.2006, THE ADD RESS IS 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. THESE ARE THE ADDRESS OF P RINCIPAL PLACE OF BUSINESS OF THE ASSESSEE IS CONSTITUTED. IT IS ALSO NOT DEN IED THAT IN INCOME TAX DATABASE I.E. PAN/TIN RECORD THE ADDRESS OF THE ASS ESSEE FROM 2.11.2006 IS APPEARING AS 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. IN THE NOTICE ISS UED ON 5.12.2011 THE ADDRESS OF THE ASSESSEE IS SHOWN AS 2 418, EAST STREET, THAKKAR HOUSE, 1 ST WING CAMP, PUNE. IN THE REPLY TO THE SHOW CAUSE N OTICE DATED 5.12.2011 THE ADDRESS OF THE ASSESSEE IS THE SAME. WE ALSO NOTED THAT IN THE ITR-5, FILED BY THE ASSESSEE ON 02.08.2007, THE ADDRESS OF THE ASSESSEE IS APPEARING AS 5 TH FLOOR, 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. THE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 16 ASSESSING OFFICER EVEN THOUGH ISSUED NOTICE U/S. 15 3A TO THE ASSESSEE AT THE ADDRESS 111/112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2, ON 29.10.2010, THE ASSESSEE IN REPLY THERETO MENTIONED ADDRESS AS 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. IN THE RETURN FIL ED FOR A.Y. 2010-11 ALSO THE ASSESSEE HAS BEEN GIVEN AS 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. IN THE NOTICE ISSUED U/S. 143(2) ALTHOUGH TH E ASSESSING OFFICER HAS GIVEN THE ADDRESS AS 111/112, ANIL COMPLEX, NEW LIN K ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2. IN THE NOTICE DATED 0 4.10.2011 ISSUED BY THE ASSESSING OFFICER, WE NOTED THAT THE ADDRESS OF THE ASSESSEE HAS BEEN MENTIONED BY HAND AS A3, 5 TH AVENUE, DHOLE PATIL ROAD, PUNE WHILE IN THE NOTICE DATED 14.11.2010 ISSUED U/S. 142(1) FOR A.Y. 2010-11 THE ADDRESS OF THE ASSESSEE HAS BEEN GIVEN THAKKAR HOUSE, 1 ST WING CAMP, 2 ND FLOOR, EAST STREET, PUNE. IN THE NOTICE ISSUED ON 5.12.2011 AG AIN THE ASSESSING OFFICER HAS ADDRESSED THE ASSESSEE AT THAKKAR HOUSE, 1 ST WING CAMP, 2 ND FLOOR, EAST STREET, PUNE. WE NOTED THAT IN THE NOTICES DATED 9. 12.2011, 11,12,2011 AND 21.12.2011, ISSUED BY THE ASSESSING OFFICER, THE AD DRESS HAS BEEN MENTIONED THAKKAR HOUSE, 1 ST WING, CAMP, 2 ND FLOOR, EAST STREET, PUNE. THE SAME ADDRESS WAS MENTIONED IN THE NOTICE DATED 15.2.2012 ISSUED U/S. 220(6). IN THE RECOVERY NOTICE DATED 27.11.2012 AND IN THE ORD ER FOR ATTACHMENT THE ADDRESS HAS BEEN MENTIONED 5 TH FLOOR, 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. NOT ONLY THIS, WE NOTED THAT ALTHOUGH IN THE ASSESS MENT ORDER THE ASSESSING OFFICER HAS MENTIONED THE ADDRESS OF THE ASSESSEE T O BE AT 111/112, ANIL ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 17 COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2, BUT IN THE NOTICE OF DEMAND ISSUED U/S. 156 THE ADDRESS HA S BEEN GENERATED ON LINE AND MENTIONED AS 5 TH FLOOR, A3, 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. ALL THESE DOCUMENTS PROVE THAT THE ADDRESS OF THE ASSESSEE IS NOT 111/112, ANIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2. WE ALSO NOTED THAT THE PANCHNAMA HAS BEEN DRAWN SHOWIN G THE SEARCH BEING CONDUCTED AT THE PREMISES OF THE ASSESSEE. IN OUR VIEW, THE ASSESSING OFFICER ASSUMED THE JURISDICTION TO ISSUE NOTICE U/ S. 153A AND MADE ASSESSMENT IN CONSEQUENCE OF SEARCH ACTION BEING TA KEN U/S. 132 OF THE INCOME TAX ACT. BEFORE DECIDING WHETHER THE ASSESS ING OFFICER HAS VALIDLY ASSUMED THE JURISDICTION U/S. 153A, IT IS NECESSARY TO ANALYZE THE PROVISIONS OF SECTION 132(1) AS WELL AS 153A. THE PROVISIONS OF SECTION 153A, 153B AND 132(1) ARE REPRODUCED AS UNDER: '153A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SE CTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION-15-1 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASS ETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOM E IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS [AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS] REFERRED CO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN R EQUIRED TO BE FURNISHED UNDER SECTION 139; ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 18 (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE. 153B. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SEC TION 153, THE ASSESSING OFFICER SHALL MAKE ART ORDER OF ASSESSMEN T OR REASSESSMENT, (A) IN RESPECT OF EACH ASSESSMENT YEAR FATTING WITH IN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B) OF SUB-SECTION (1) OF SECTION 153A, WITHIN A PERIOD OF TWENTY-ONE MONTHS FROM THE END O F THE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORISATIONS FOR SE ARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECU TED; (B) IN RESPECT OF THE ASSESSMENT YEAR RELEVANT TO T HE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR R EQUISITION IS MADE UNDER SECTION 132A, WITHIN A PERIOD OF TWENTY- ONE MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAS T OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED : (2) THE AUTHORISATION REFERRED TO IN CLAUSE (A) AND CLAUSE (B) OF SUB-SECTION (1) SHALL BE DEEMED TO HAVE BEEN EXECUT ED, (A) IN THE CASE OF SEARCH, ON THE CONCLUSION OF SEA RCH AS RECORDED IN THE LAST PANCHNAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORISATION HAS BEEN ISSUED; OR (B) IN THE CASE OF REQUISITION UNDER SECTION 132A, ON THE ACTUAL RECEIPT OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS BY THE AUTHORISED OFFICER. SECTION 132(1) 132. (1) WHERE THE PRINCIPAL DIRECTOR GENERAL OR DI RECTOR GENERAL OR PRINCIPAL DIRECTOR OR DIRECTOR OR THE PRINCIPAL CHI EF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COM MISSIONER OR ADDITIONAL DIRECTOR OR ADDITIONAL COMMISSIONER OR J OINT DIRECTOR OR JOINT COMMISSIONER IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS REASON TO BELIEVE THAT (A) ANY PERSON TO WHOM A SUMMONS UNDER SUB-SECTION (1) OF SECTION 37 OF THE INDIAN INCOME-TAX ACT, 1922 (11 O F 1922), OR ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 19 UNDER SUB-SECTION (1) OF SECTION 131 OF THIS ACT, O R A NOTICE UNDER SUB-SECTION (4) OF SECTION 22 OF THE INDIAN INCOME- TAX ACT, 1922, OR UNDER SUB-SECTION (1) OF SECTION 142 OF THIS ACT WA S ISSUED TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY BOOKS OF ACCO UNT OR OTHER DOCUMENTS HAS OMITTED OR FAILED TO PRODUCE, OR CAUS E TO BE PRODUCED, SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS AS REQUIRED BY SUCH SUMMONS OR NOTICE, OR (B) ANY PERSON TO WHOM A SUMMONS OR NOTICE AS AFORE SAID HAS BEEN OR MIGHT BE ISSUED WILL NOT, OR WOULD NOT, PRO DUCE OR CAUSE TO BE PRODUCED, ANY BOOKS OF ACCOUNT OR OTHER DOCUMENT S WHICH WILL BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR UNDER THIS AC T, OR (C) ANY PERSON IS IN POSSESSION OF ANY MONEY, BULLI ON, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SUCH MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING REPRESENTS EITHER W HOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN, OR WOULD NOT BE, DISCLOSED FOR THE PURPOSES OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR THIS ACT (HEREINAFTER IN THIS SECTION REFERRED T O AS THE UNDISCLOSED INCOME OR PROPERTY), FROM THE READING OF THESE PROVISIONS, IT IS CLEAR T HAT SECTION 153A(A) OF THE INCOME TAX ACT AUTHORIZED THE ASSESSING OFFICER TO ISSUE NOTICE IN A CASE WHERE SEARCH HAS BEEN INITIATED AND THUS, IT IS ONL Y MACHINERY SECTION. SECTION 153A(B) OF THE ACT ALSO AUTHORIZES THE ASSE SSING OFFICER TO ASSESSEE OR REASSESS THE INCOME OF SIX ASSESSMENT YEARS IMME DIATELY PRECEDING ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEAR IN W HICH THE SEARCH HAS BEEN CONDUCTED OR REQUISITION IS MADE. THE SAID SUBSECTI ON USING THE TERM 'SEARCH IS CONDUCTED' HAD ALSO SPECIFIED ASSESSMENT YEAR FO R WHICH THE RE- ASSESSMENT PROCEEDINGS ARE TRIGGERED AFTER SEARCH. IT IS CLEAR FROM THE ABOVE THAT THE PROVISIONS OF SECTION 153A OF THE ACT COME INTO PLAY ONLY AFTER SEARCH ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 20 HAS BEEN CONDUCTED. THE PROVISIONS OF SECTION 153B OF THE ACT PROVIDES THAT AUTHORIZATION OF WARRANT SHALL BE DEEMED TO BE EXEC UTED UPON THE CONCLUSION OF SEARCH AS RECORDED IN THE LAST PANCHNAMA DRAWN I N RELATION TO THE PERSONS IN WHOSE CASE THE WARRANT OR AUTHORIZATION HAS BEEN ISSUED. SO, IN ALL THE SECTIONS THE TERM USED IS IMPORTANT THAT FRESH PANC HNAMA DRAWN IN RELATION TO ANY PERSON. THUS, IN ORDER TO COMPLETE THE SEARC H THERE IS A INITIATION OF PROCEEDINGS U/S 132(1) OF THE ACT, CONDUCTION OF SE ARCH IN TERMS OF SEARCH WARRANT ISSUED WHICH INCLUDES SEARCH IN THE PREMISE S OF THE ASSESSEE AND OTHER PLACES AND ALSO THE LAST STAGE PANCHNAMA WHIC H IS CONCLUSIVE PROOF OF CONCLUSION OF SEARCH FROM WHICH THE PERIOD OF LIMIT ATION WILL BE CALCULATED AS PROVIDED U/S 153B OF THE ACT. THE PROVISIONS OF ACT VERY CLEARLY AND UNAMBIGUOUSLY PROVIDE FOR INITIATION OF SEARCH, CON DUCT OF SEARCH AND CONCLUSION OF SEARCH AND ONLY THEN THE ASSESSING OF FICER CAN ASSUME JURISDICTION U/S 153A OF THE ACT. IN THE PRESENT CA SE BEFORE US, WE NOTED THAT THE SEARCH HAS BEEN INITIATED IN THE NAME OF THE AS SESSEE ALONG WITH OTHER ASSESSEES APPEARING ON THE WARRANT OF AUTHORIZATION ISSUED U/S 132(1) BUT DID NOT MENTION THE ADDRESS OF THE PREMISES FROM WH ERE THE ASSESSEE CONDUCTS BUSINESS. NO INCRIMINATING MATERIAL RELAT ING TO THE ASSESSEE WAS FOUND IN THE PREMISES WHERE THE SEARCH WAS CARRIED OUT. THE SEARCH WAS CONCLUDED BUT NO PANCHNAMA WAS DRAWN IN THE NAME OF THE ASSESSEE. THEREFORE, THE CONDITIONS AS STIPULATED FOR ASSUMIN G THE JURISDICTION U/S. 153A, IN OUR VIEW, HAVE NOT BEEN SATISFIED. WE, DO NOT AGREE WITH THE CIT(A) ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 21 THAT MERELY MENTIONING THE ADDRESS OF THE PREMISES WHERE THE SEARCH HAS BEEN CONDUCTION IN THE ASSESSMENT ORDER WILL VALIDA TE THE ACTION OF THE ASSESSING OFFICER THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS FROM THE SAME PREMISES. THE ADDRESS MENTIONED IN THE NOTICE ISSUED U/S. 143(2) AND THE DEMAND NOTICE GENERATED ON LINE AS WELL AS THE PAN/TIN, COPIES OF WHICH WERE FILED BEFORE US, CLEARLY PROVE THAT 111/112, A NIL COMPLEX, NEW LINK ROAD, NEAR REGENCY MARRIAGE HALL, ULHASNAGAR-2. , W HERE THE SEARCH WAS CONDUCTED IS NOT THE BUSINESS ADDRESS OF THE ASSESS EE. IN VIEW OF THESE FACTS, WE ARE OF THE OPINION THAT THE CONDITIONS ST IPULATED U/S. 153A, FOR THE ISSUE OF NOTICE, ARE NOT SATISFIED. UNTIL AND UNLE SS THE ASSESSING OFFICER ASSUMES THE VALID JURISDICTION U/S. 153A THE ASSESS MENT MADE IN CONSEQUENCE OF THE NOTICE ISSUED U/S. 153A, IN OUR VIEW IS INVALID AND VOID AB INITIO. WE ACCORDINGLY QUASH THE ASSESSMENT MADE B Y THE ASSESSING OFFICER. 8. BEFORE CONCLUDING, WE WOULD LIKE TO DISCUSS THE CASE LAW AS HAS BEEN RELIED ON BEFORE US: J.M TRADING CORPORATION VS. ACIT20SOT489 (MUM) IN THIS CASE, PREMISES OWNED BY ASSESSES WERE SEARCHED BUT THESE PREMISES WERE NOT OCCUPIED BY ASSESSES BUT TENANTED TO SOMEO NE ELSE. IT IS HELD THAT SEARCH ACTION WAS INVALID AND ILLEGAL, IT IS HELD (IN PARA 24) THAT 'MERE MENTIONING OF NAME IN THE PANCHNAMA DOES NOT LEAD TO THE CONCLUSION THAT A VALID SEARCH HAS BEEN CONDUCT ED AGAINST THE ASSESSEE'. THE CONCLUSION PART IS REPRODUCED BELOW: - 'CONCLUSFQN SEARCH OF ASSESSEE'S TENANTED PREMISES WHERE ASSESS EE WAS NOT PRESENT COULD NOT BE SAID TO BE VALID SEARCH AGAINS T THE ASSESSEE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 22 EVEN THOUGH HIS NAME WAS MENTIONED IN THE PANCHNAMA , HENCE ASSESSMENT OF ASSESSEE U/S. 143(3) RWS 153A IN PURS UANCE OF SUCH INVALID SEARCH HAD TO BE DECLARED AS NULL AND VOID DR. MANSUKH KANLIBHAI SHAH V, AOT&OIOI 36 (HIITCL 6 2 (AHET D- TRIB) HEREIN ALSO THE ISSUE WAS REGARDING VALIDITY OF ASS ESSMENT U/S 153 A WHEN NO SEARCH ACTION WAS CONDUCTED IN ASSESSEE'S PREMISES. IT IS HELD AS UNDER ;- 'THE MERE ISSUE OF WARRANT OF AUTHORIZATION, WITHOU T THERE BEING SEARCH OF THE PREMISES MENTIONED IN THE WARRANT OF AUTHORIZATION WOULD BE MEANINGLESS AND WOULD NOT SERVE THE PURPOS E OF SECTION 132 OF THE ACT. IT MAY ALSO BE ADDED THAT IN SECTIO N 153A(B) IT IS SPECIFICALLY PROVIDED THAT THE ASSESSING OFFICER SH ALL ASSESS OR REASSESS THE TOTAL INCOME OF SIX YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEAR IN W HICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. IT WOUL D, THEREFORE, CLARIFY THAT NOT ONLY THE WARRANT OF AUTHORIZATION IS TO BE ISSUED IN THE NAME OF THE ASSESSEE BUT SEARCH SHALL HAVE TO B ENECESSARILY CONDUCTED OR IN CASE OF REQUISITION UNDER SECTION 1 32A, THE REQUISITION IS TO BE MADE ACTUALLY. IT IS UNDISPUTED FACT THAT THOUGH WARRANT OF AUTHOR IZATION WAS ISSUED IN THE NAME OF ASSESSEE BEING MANAGING TRUST EE OF THE TRUST, HOWEVER IT WAS AN ADMITTED FACT THAT NO SEAR CH OPERATION WAS CONDUCTED IN THE PREMISES OF ASSESSEE. EVEN IN THE WARRANT OF AUTHORIZATION, THE ADDRESS OF THE PLACE TO BE SEARC HED WAS NOT THE ADDRESS OF ASSESSEE INDIVIDUAL. ADMITTEDLY, NO PANC HNAMA WAS ALSO DRAWN IN PURSUANCE WITH THE WARRANT OF AUTHORIZATIO N IN THE CASE OF ASSESSEE. NO DOCUMENTS WERE SEIZED OR IMPOUNDED AS SUCH DURING THE COURSE OF SEARCH FROM ASSESSEE. THE WARRANT OF AUTHORIZATION IN THE NAME OF THE TRUST AND ASSESSEE STANDS UNEXECUTE D IN THE CASE OF ASSESSEE-INDIVIDUAL. SINCE IN THIS CASE ONLY SUR VEY OPERATION UNDER SECTION 133A WAS CONDUCTED IN THE PREMISES OF ASSESSEES TRUST, IT WOULD NOT SATISFY THE REQUIREMENTS OF SEC TION 153A. AS SUCH, AO WAS NOT JUSTIFIED IN INITIATING PROCEEDING OR ASSUMING VALID JURISDICTION UNDER SECTION 153A AGAINST ASSESSEE. / ACTUAL SEARCH SHALL HAVE TO BE EARNED OUT NECESSARILY BEFORE PROC EEDINGS UNDER SECTION.' ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 23 CIT V/S WIORO FINANCE LTD 323 ITR 467 (KAR) HEREIN IT WAS HELD THAT THE SEARCH IS INITIATED NOT ON DATE OF SIGNING THE WARRANT OF AUTHORITIES BUT ON THE DATE INITIAL SEARCH WAS CONDUCTED. PANCHNAMA IS A DOCUMENT PREPARED AT THE CONCLUSION OF SEARCH OPERATION. IT IS A WRITTEN RECORD OF WHAT HAS BEEN WITNESSED BY PANCHAS AND IT PROVES CONDUCT OF SEARCH.} CIT VS. KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA 82 IT R 821 WHEREIN HON'BLE SUPREME COURT HAS HELD AS BELOW: IT IS WELL SETTLED THAT THE ITO'S JURISDICTION TO R EOPEN AN ASSESSMENT UNDER S. 34 DEPENDS UPON THE ISSUANCE OF A VALID NO TICE. IF THE NOTICE ISSUED BY HIM IS INVALID FOR ANY REASON THE ENTIRE PROCEEDINGS TAKEN BY HIM WOULD BECOME VOID FOR WANT OF JURISDIC TION. IN THE NOTICE ISSUED UNDER S. 34 THE ITO SOUGHT TO REOPEN THE ASSESSMENT OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1948-49 BUT IN FACT HE REOPENED THE ASSESSMENT OF THE YEAR 1949-50. HENCE, IN OUR OPINION, THE HIGH COURT WAS RIGHT IN HOLDING THAT T HE NOTICE IN QUESTION WAS INVALID AND AS SUCH THE ITO HAD NO JUR ISDICTION TO REVISE THE ASSESSMENT OF THE ASSESSEE FOR THE YEAR 1949-50. THESE DECISIONS SUPPORT THE VIEW TAKEN BY US IN THE PRECEDING PARAGRAPHS. ACCORDINGLY, WE QUASH THE ASSESSMENT ORDER PASSED U /S. 153A R.W.S. 143(3) OF THE ACT. 9. GROUND NO.2 TAKEN BY THE ASSESSEE RELATES TO THE ADDITION OF ` 2,60,00,000/-. IN THIS REGARD, THE LEANED AR BEFOR E US VEHEMENTLY CONTENDED THAT EVEN IF IT IS ASSUMED THAT THERE WAS A VALID SEARCH IN THE CASE OF THE ASSESSEE, SINCE NO INCRIMINATING MATERIAL RE LATING THE ASSESSEE WAS FOUND DURING THE COURSE OF THE SEARCH, NO ADDITION U/S. 153A CAN BE MADE AS THE ASSESSMENT FOR THE A.Y. 2007-08 HAS NOT BEEN AB ETTED. THE RETURN FOR ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 24 THE SAID ASSESSMENT YEAR HAS BEEN FILED ON 02.08.20 07 DECLARING A TOTAL LOSS OF ` 4687/-. RELIANCE IN THIS REGARD WAS MADE ON THE D ECISION OF SPECIAL BENCH OF TRIBUNAL, MUMBAI BENCHES, IN THE CASE OF A LL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 137 ITD 287 (SB). IT WAS POINTED OUT THAT THE SAID DECISION HAS BEEN CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD . [2015] 58 TAXMANN.COM 78. THE ADDITION IN THE CASE OF THE AS SESSEE HAS BEEN MADE BY THE ASSESSING OFFICER WHOLLY ON THE BASIS OF THE MA TERIAL FOUND DURING THE COURSE OF THE SEARCH ON 11.09.2009 ON PANCHSHEEL GR OUP I.E. ASHRAY PREMISES PVT LTD. THE LEARNED DR, ON THE OTHER HAN D, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE AUTHORITIES BELOW . WE NOTED THAT ON THE ISSUE WHETHER ANY ADDITION CAN BE MADE IN THE ASSES SMENT MADE U/S. 153A WHEN NO INCRIMINATING DOCUMENTS ARE FOUND DURING TH E COURSE OF THE SEARCH, THE SPECIAL BENCH OF THE TRIBUNAL, MUMBAI BENCHES, IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 137 ITD 287 (SB) HAS HELD AS UNDER: IN PARA 58 OF ITS ORDER 58. THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS U NDER: A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY; ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 25 B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON T HE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF REL EVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCU MENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COU RSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. IT IS A FACT THAT THE ASSESSMENT FOR THE IMPUGNED A SSESSMENT YEAR HAS NOT BEEN ABETTED AND NO INCRIMINATING MATERIAL REGARDIN G THE ADDITION MADE BY THE ASSESSING OFFICER WAS FOUND DURING THE COURSE O F THE SEARCH IN THE CASE OF THE ASSESSEE. THE SAID DECISION HAS BEEN CONFIR MED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CONTINENTA L WAREHOUSING CORPORATION (NHAVA SHEVA) LTD . (SUPRA). RESPECTFULLY FOLLOWING THE SAID DECISION, WE DELETE THE ADDITION OF ` 2,60,00,000/- AND ALLOW GROUND NO. 2 TAKEN BY THE ASSESSEE. 11. GROUND NOS.3 & 4 FOR A.Y. 2007-08 AND GROUND NO S. 1 & 2 FOR A.Y. 2010-11 RELATE TO THE SUSTENANCE OF ADDITION OF ` 2,60,00,000/- AND ` 5,00,00,000/- FOR A.YS. 2007-08 AND 2010-11 RESPECT IVELY. BOTH THE PARTIES AGREED THAT SINCE THE FACTS INVOLVED RELATING TO TH ESE ADDITIONS ARE COMMON THE ISSUE MAY BE DECIDED ON MERIT ON THE BASIS OF T HE FACTS FOR A.Y. 2007-08. THE FACTS RELATING TO THESE ADDITIONS ARE THAT THER E HAD BEEN A SEARCH IN THE CASE ON 11.09.2009 ON PANCHSHEEL GROUP I.E. ASHRAY PREMISES PVT LTD. DURING THE COURSE OF THE SEARCH, TWO DOCUMENTS VIZ. PAGE NO.23 (P23) AND PAGE NO.26(P26) WERE FOUND. P23 IS THE PROFIT & LOS S ACCOUNT FROM ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 26 01.04.2006 TO 3.08.2009 OF ASHRAY PREMISES PVT. LTD ., WHILE P26 CONTAINS THE LEDGER ACCOUNT OF K.L.L. FOR THE PERIOD 01.04.2006 TO 3.08.2009. THE P & L A/C. IN P23 SHOWS THAT A SUM OF ` 7,60,00,000 HAS BEEN CREDITED ON ACCOUNT OF SALE OF DECCAN PAPER MILL WHILE P26 IS A COMPUTE RIZED LEDGER ACCOUNT OF K.L.L IN THE BOOKS OF ASHRAY PREMISES PVT. LTD., FO R THE AFOREMENTIONED PERIOD, REFLECTING THE FOLLOWING DEBIT ENTRIES, TOT ALING TO ` 2,10,00,000/-, ON THREE DIFFERENT DATES: DATE PARTICULARS VCH TYPE VCH NO DEBIT 26.07.2006 CR M.C.M.G. PAYMENT 8 5,000,000 BEING AMOUNT RECEIVED FROM DILIP JAIN 1.00 TO MR. K.L.L-: 50 DEBITED THU MCMG : ICD A/C REFUND. . 23.09.2006 CR M.C.M.G PAYMENT 11 10,000,000 BEING AMOUNT RECEIVED FROM MR. DILIP JAIN ON DECCAN PAPER RETAINED BY MR. K.LL AS PER INST. FROM KLL : A/C FO R . 22.10.2006 CR. MUKESH AGARWAL/DILIP JAIN (6.25) J OURNAL 11 6,000,000 BEING ACCOUNT CLOSED BY MR LUNKAD AND LAST PAYMENT RECEIVED BY MR LUNKAD. THE ASSESSING OFFICER HAS TAKEN IT INCORRECTLY TO ` 2,60,00,000/-. ON THE BASIS OF THESE TWO DOCUMENTS, THE ASSESSING OFFICER CONCLUDED THAT SINCE THE ASSESSEE HAS BOUGHT DEVELOPMENT RIGHTS OF THE LAND FROM ASHRAY PREMISES ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 27 PVT LTD. THEREFORE, IT HAD PAD A SUM OF ` 7,60,00,000 TO THE DIRECTOR, ASHRAY PREMISES PVT LTD., K.L.L. WHICH STANDS FOR KANTIL AL L LUNKAD, BY THE PARTNER OF THE ASSESSEE SHRI DILIP JAIN/MUKESH AGARWAL AND SINCE THE SUM OF ` 2,60,00,000/- (CORRECT FIGURE ` 2,10,00,000) WERE PAID DURING THE A.Y. 2007- 08, THE BALANCE SUM OF ` 5 CRORES WOULD HAVE BEEN PAID IN THE ASSESSMENT YEAR 2010-11. THE ASSESSING OFFICER THEREFORE, ADD ED THE SUM OF ` 2,60,00,000/- IN A.Y. 2007-08 AND ` 5 CRORES IN A.Y. 2010-11. SUBSEQUENTLY, THERE HAD BEEN A SEARCH IN THE CASE OF KONARK GROUP AND ITS ASSOCIATE CONCERNS ON 18.02.2010. THE RESIDENTIAL PREMISES O F MAHESH KHAIRARI AND DILIP OSWAL WERE ALSO COVERED IN THE SEARCH. A SUR VEY ACTION U/. 133A WAS CARRIED OUT AT THE OFFICE PREMISES OF THE ASSESSEE AT A3, 5 TH AVENUE, DHOLE PATIL ROAD, PUNE. THE ASSESSEE SUBMITTED THE RETUR N FOR A.Y. 2007-08 ON 02.08.2007 DECLARING A TOTAL LOSS OF ` 4,687/- WHILE NO RETURN HAD BEEN FILED FOR A.Y. 2010-11. DURING THE COURSE OF SEARCH AT K ONARK GROUP, NO INCRIMINATING MATERIAL RELATING TO THE ASSESSEE WAS FOUND. THE ASSESSEE VIDE AGREEMENT, DATED 20.05.2006, DULY REGISTERED WITH A SHRAY PREMISES PVT. LTD., TRANSFERRED THE DEVELOPMENT RIGHTS IN RESPECT OF PL OT NO.96B, 96C AND 96D AT VILLAGE MUNDHWA, ADMEASURING 3,51,541 SQ. FT. AT PU NE, FOR A CONSIDERATION OF ` 9,12,60,000/- THE CONSIDERATION THEREOF WAS PAID I N THE FOLLOWING MANNER: ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 28 (A) MONETARY CONSIDERATION OF RS.3,11,00,0007- TO BE PAID AS UNDER: (I) RS.75,00,000/- VIDE CHEQUE DTD 01-09-2005 OF RS .55 LAKHS & DTD 10-09- 2005 OF RS.20 LAKHS (II)RS.15 LAKHS- AFTER REGISTERED CONFIRMATION OF D EED WITH A CONSENTING PARTY LATEST BY 15-06-2006. (III) RS.2,21,00,0007- TO BE PAID WITHIN TWO MONTH AFTER FULFILLMENT OF CONDITION (II) MENTIONED ABOVE. (B) 60,100 SQ.FT BUILT-UP AREA (COST EVALUATED AT R S. 1,000/- PER SQ.FT)ALONG WITH ADDITIONAL PRO-RATA 30 OPEN & 30 C OVERED CAR PARKING. THE BACKGROUND OF THIS PROPERTY IS THAT THE PROPERT Y ORIGINALLY BELONGED TO M/S DECCAN PAPER MILLS CO. LTD., WHO ENTERED INTO A N AGREEMENT DATED 27.04.2002 ON A STAMP PAPER OF ` 100/- WITH ASHRAY PREMISES PVT. LTD. FOR ITS DEVELOPMENT IN CONSIDERATION OF HANDING OVER SALEAB LE BUILT-UP AREA OF 63,600 SQ. FT CONSISTING OF ROW HOUSES/BUNGALOW/OFF ICES/SHOPS ALONG WITH ADDITIONAL PRORATE OPEN/COVERED CAR PARKING. SUBSE QUENTLY, A FRESH AGREEMENT DATED 22.04.2004 WAS EXECUTED AND REGISTE RED BETWEEN DECCAN PAPER MILLS CO. LTD. AND ASHRAY PREMISES PVT. LTD. IN WHICH THERE WAS A MONETARY CONSIDERATION TO BE PAID OF ` 1,67,75,001/- AS WELL AS BUILT-UP AREA OF 65,000 SQ. FT. ALONG WITH ADDITIONAL PRO-RATA OP EN/COVERED CAR PARKING. THESE WERE TO PAID AND PROVIDED BY ASHRAY PREMISES PVT. LTD. TO DECCAN PAPER MILLS CO. LTD. SUBSEQUENTLY, VIDE AGREEMENT DATED 20.05.2006, ASHRAY PREMISES PVT. LTD. TRANSFERRED ITS RIGHTS TO THE AS SESSEE FOR A CONSIDERATION OF ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 29 ` 9,12,60,000/- AND THE CONSENTING PARTY TO THE SAID AGREEMENT WAS DECCAN PAPER MILLS CO. LTD. FURTHER AS PER CONDITION NO.( II) OF THE SAID AGREEMENT DEED OF CONFIRMATION WAS DULY EXECUTED ON 17.07.200 6 BETWEEN ASHRAY PREMISES PVT. LTD BEING TRANSFEROR, THE ASSESSEE BE ING THE DEVELOPER AND DECCAN PAPER MILLS CO. LTD., BEING THE CONSENTING P ARTIES TO ARTICLE OF AGREEMENT DATED 20.05.2006. THE ASSESSING OFFICER NOTED FROM SEIZED DOCUMENT P23 (PROFIT & LOSS ACCOUNT) THAT THE ASSES SEE HAD DEBITED IN THE PURCHASE ACCOUNT UNDER THE NAME DECCAN PAPER MILL : PURCHASE ` 1,91,93,350 WHILE IT HAS CREDITED DECCAN PAPER MI LL : SALE ` 7,60,00,000/- WHILE THE PURCHASE VALUE AS PER THE AGREEMENT DATED 22.4.2004 WAS OF ` 1,67,75,001/-. THE SEARCH PARTY ON 12.09.2009 RE CORDED THE STATEMENT OF ATUL CHORDIA, WHO ADMITTED THE UNDISCLOSED INCOME O F ` 8.04 CRORES. THE RELEVANT PORTION OF THE STATEMENT OF SHRI ATUL CHOR DIA DATED 12.09.2009, IS REPRODUCED AS UNDER: Q.NO.6: I AM SHOWING YOU PAGES NO. 12 TO 19, 22 TO 27 OF BUNDLE NO.6 OF ANNEXURE A OF PANCHNAMA DATED 12-09-2009. P LEASE GO THROUGH THESE PAGES AND EXPLAIN THE CONTENT ON IT AND ALSO CONFIRM WHETHER THESE ARE ACCOUNTED IN THE REGULAR BOOKS OF MR KIL AND MR KLL ACCOUNTS ALONG WITH THE DOCUMENTARY EVIDENCES. ANS: THE PAGES REFERRED ABOVE PERTAIN TO THE COMPAN Y NAMED 'M/S ASHRAY PREMISES PVT LTD., OF WHICH I AM ONE OF THE SHAREHOLDER AND A DIRECTOR. THESE TRANSACTIONS ARE NOT RECORDED EIT HER, IN THE BOOKS OF THE SAID COMPANY OR KLL OR MY BOOKS OF ACCOUNTS. PAGE A/O.23 IS A PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDING 3 D AUGUST 2009 AND THE GROSS PROFIT IS RS.11,04,44,650/-. PAGE 15 TO 19 AND PAGE NO.22 HAVE NOTINGS REGARDING THE EXPENDITURE INCURR ED FOR EARNING THE SAID AMOUNT OF RS.11,04,44,650/-. THE TOTAL EXP ENDITURE INCURRED IS ABOUT RS.3 CRORES, THEREFORE, THE INCOM E EARNED BY THE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 30 SAID COMPANY IN THE CAPACITY IS RS.8.04 CRORES WHIC H IS PERTAINING TO F.Y. 2009-10 IN THE HANDS OF M/S.ASHRAY PREMISES PVT LTD OVER AND ABOVE THE REGULAR INCOME. ON THE BASIS OF THE STATEMENT OF SHRI ATUL CHORDIA, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS PAID AN AMOUNT OF ` 7,60,00,000/- IN CASH TOWARDS PURCHASE OF THE SAID LAND. IN VIEW OF THE COPY OF LEDGER ACCOUNT OF K.L.L. IN THE BOOKS OF ASHRAY PREMISES PVT. LTD, TH E ASSESSING OFFICER WAS OF THE VIEW THAT DURING A.Y. 2007-08, THE PARTNER OF T HE ASSESSEE FIRM PAID A SUM OF ` 2,60,00,000/- TO THE ASSESSEE WHILE THE SEIZED PAP ER SHOWS A DEBIT OF ` 2,10,00,000/-. DURING THE COURSE OF THE SEARCH AT THE PREMISES OF ONE OF THE PARTNERS SHRI DILIP OSWAL, WHEN THE SAID TRANSA CTION WAS ASKED TO BE EXPLAINED, HE ANSWERED AS UNDER: THIS TRANSACTION WAS ENTERED IN THE YEAR 2005-06, W ITH DECCAN PAPER MILL AND M/S. ASHRAY PREMISES PVT LTD. FOR PL OT OF LAND ADMEASURING 3,52,000 SQ. FT. APPROX AT MUNDHAWA FOR WHICH WE HAD OBTAINED DEVELOPMENT RIGHTS. AS PER THE DEVELOP MENT AGREEMENT CONSIDERATION OF RS.3,11,00,000/- WAS TO BE PAID TO M/S. ASHRAY PREMISES PVT LTD AND 61,000 SQ.FT. OF BUILT- UP AREA WAS TO BE HANDED OVER TO DECCAN PAPER MILL. FOR THIS WE HA D PAID DEPOSIT RS.90 LAKHS(RS. 5 LAKHS PER MONTH FOR 18 MONTHS) TO DECCAN PAPER MILL. WHEN SHRI DILIP OSWAL WAS SHOWN THE SEIZED DOCUMENT S FROM THE PREMISES OF ASHRAYA PREMISES PVT. LTD. I.E. P23 AND P26, HE REP LIED AS UNDER: Q3.PL.EXPLAIN THE TRANSACTION OF DECCAN PAPER MILL LAND, PUNE AND YOUR ROLE IN THE SAME. ANS. M/S.ASHRAY PREMISES PVT IM HAD PURCHASED THE L AND FROM DECCAN PAPER MILLS LTD ON 22/072004 ON A DEVELOPMEN T AGREEMENT. I WAS'ONE OF THE SHAREHOLDER IN M/S. ASHRAY PREMISE S PVT LTD. THE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 31 LAND IN QUESTION WAS SUBSEQUENTLY SOLD TO M/S. REGE NCY MAHAVIR PROPERTIES ON 20/05/2006. M/S.ASHRAY PREMISES PVT L TD RECEIVED THE AMOUNT OF RS.3.11 CRORES. Q.4. DURING THE COURSE OF SEARCH AND SEIZURE ACTION U/S. 132 IN PANCHSHEEL GROUP OF CASES ON 11/09/2009, LOOSE PAPE RS BEARING NOS.23 & 26 OF BUNDLE NO.6 OF PARTY NO.P-1 WERE SEI ZED. PI. GO THROUGH IT AND CONFIRM IT. ANS. I CONFIRM THAT THE PAGES WERE FOUND DURING THE SEARCH AND THE ENTRY ON PAGE NO.23, 25& 26 SHOWS AN ENTRY OF 2.10 CRORES RECEIVED BY SHRI KANTILAL LUNKAD FROM SHRI DILIP JA IN WHEREIN IN ONE ENTRY IT IS MENTIONED ON ACCOUNT OL DECCAN PAPER MI LL. Q.5 DURING THE COURSE OF SEARCH YOUR STATEMENT WAS RECORDED U/S. 132(4) ON 12/09/2009, THE RELEVANT PORTION OF THE S TATEMENT AND YOUR SUBMISSION IS REPRODUCED AS UNDER: Q.NO.6:1 AM SHOWING YOU PAGES NO.12 TO 19, 22 TO 27 OF BUNDLE NO.6 OF ANNEXURE A OF PANCHNAMA DATED 12-09- 2009. PLEASE GO THROUGH THESE PAGES AND EXPLAIN THE CONTENT ON IT AND ALSO CONFIRM WHETHER THESE ARE AC COUNTED IN THE REGULAR BOOKS OF MR KIL AND MR KLL ACCOUNTS ALONG WITH THE DOCUMENTARY EVIDENCES. ANS: THE PAGES REFERRED ABOVE PERTAIN TO THE COMPAN Y NAMED M/S.,ASHRAY PREMISES PVT LTD., OF WHICH I AM ONE OF THE SHAREHOLDER AND A DIRECTOR. THESE TRANSACTIONS ARE NOT RECORDED EITHER IN THE BOOKS OF THE SAID COMPANY OR KLL OR MY BOOKS OF ACCOUNTS. PAGE NO.23 IS A PROFIT AND LO SS ACCOUNT FOR THE PERIOD ENDING 3 RD AUGUST 2009 AND THE GROSS PROFIT IS RS.11,04,44,650/-. PAGE 15 TO 19 AND PAGE NO.22 HAVE NOTINGS REGARDING THE EXPENDITURE INCURRED FOR EARNING THE SAID AMOUNT OF RS.11,04,44,650/-. THE TOTAL EXP ENDITURE INCURRED IS ABOUT RS.3 CRORES. THEREFORE,, THE INCO ME EARNED BY THE SAID COMPANY IN THE CAPACITY IS RS.8. 04 CRORES WHICH IS PERTAINING TO F.Y.2009-10 IN THE HA NDS OF M/V.ASHRAY PREMISES PVT LTD OVER AND ABOVE THE REGU LAR INCOME. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 32 EVEN SHRI MAHESH KHAIRARI, PARTNER OF THE ASSESSEE FIRM WHEN CONFRONTED, ALSO DENIED THE INVOLVEMENT OF CASH COMPONENT IN TH E TRANSACTION. THE ASSESSING OFFICER SUBSEQUENTLY GAVE OPPORTUNITY TO THE ASSESSEE TO CROSS- EXAMINE SHRI ATUL CHORDIA ON 19.12.2011 BUT ON THAT DATE SHRI ATUL CHORDIA DID NOT ATTEND. HE ATTENDED OFFICE OF THE AO ONLY ON 20.12.2011 AND HIS STATEMENT WAS RECORDED. HE CONFIRMED THAT A SUM OF ` 2,10,00,000/- WAS RECEIVED FROM KANTILAL L LUNKAD & DILIP JAIN BUT NO QUESTION IN RESPECT OF THE SUM OF ` 5 CRORE WAS ASKED. ULTIMATELY, THE ASSESSING OFFI CER NOTED THAT INCOME WAS DECLARED UNDER THE NAME AND STYLE OF ASH RAY PREMISES (AOP) CONSISTING OF ATUL CHORDIA & KANTILAL LUNKAD IN THE FOLLOWING MANNER: AY 2005-06 RS. 01,68,75,000 AY 2006-07 RS.03,18,28,400 AY 2007-08 RS.00,65,00,000 AY 2009-10 RS.00,42,00,000 AY 2010-11 RS.16,35,00,000 THE INCOME RELATING TO THESE TRANSACTIONS HAS NOT B EEN DISCLOSED BY ASHRAY PREMISES PVT LTD. AND IN THE DISCLOSURE SHRI ATUL C HORDIA MADE THE FOLLOWING COMMENT; DURING THE SEARCH, TO BUY PEACE WITH THE DEPARTMEN T WE ADMITTED 55 CRORES AS UNDISCLOSED INCOME. OUT OF THIS 22 CRO RES WAS ADMITTED BY ASHRAY (AOP) BETWEEN MYSELF AND MR.KANT ILAL LUNKAND AS TWO PARTNERS. THE SAID AMOUNT OFRS.2.10 CRORES G IVEN BY DILIP JAIN TO KANTILAL LUNKAD WAS PART OF THE DISCLOSURE IN THE HANDS OF AHSRAY (AOP) AS UNDISCLOSED INCOME AND THEREAFTER W E HAVE FILED THE RETURN AND PAID THE TAXES THEREON. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 33 THE ASSESSING OFFICER ON THE THIS BASIS MADE THE AD DITION OF ` 2,60,00,000 IN THE A.Y. 2007-08 AND ` 5 CRORES IN THE A.Y. 2010-11, WHICH WAS CONFIRMED BY THE CIT(A). 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE FOLLOWING DECISIONS AS RELIED ON BEFORE US: CTT VS. TIRUPATI OIL CORPORATION 248 ITR 194 UNIQUE STAR DEVELOPERS VS. DCIT 50 CCH 25 MUM ACIT VS. MAB FINLEASE LTD. 37 CCH 597 DEL J.M.TRADING COPRN. VS. ACIT 20 SOT 489 DR. MANSUKH SHAH VS. ACLT 18 ITR 80 ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 137 ITD 28 7 PRADEEP RUNWAL VS. TRO, RANGE-3, PUNE IN ITA NO. 33 4/PN/2013 PRATHNA CONSTRUCTION (P) LTD VS. DCIT 70 TTJ 122 T S VENKATESAN VS ACIT 74 ITD 298 KETAN SHAH VS. ACIT, CENTRAL CIRCLE - 11, MUMBAI IN ITA NOS. 2321 & 2322/MUM/2013 PAVITRA REAL(W(P) LTD VS. ACIT, CEN CIR-32, NEW DEL HI/87 TAXMANN.COM 142 (DELHI TRIB) ADDL. COMM. OF INCOME TAX: VS. LATA MANGESHKAR 97 I TR 696 WE HAVE ALSO GONE THROUGH THE SEIZED PAPER FOUND DU RING THE COURSE OF THE SEARCH IN THE CASE OF ASHRAY PREMISES PVT. LTD., CO PIES OF WHICH ARE AVAILABLE AT PAGES 196 AND 197A OF THE PAPER-BOOK. AT PAGE 1 96 IS THE PROFIT & LOSS ACCOUNT OF ASHRAY PREMISES PVT. LTD. FOR THE PERIOD 01.04.2006 TO 3.08.2009. WE NOTED THAT A SUM OF ` 7,60,00,000/- HAS BEEN CREDITED ON ACCOUNT OF SALE OF DECCAN PAPER MILL WHILE IT HAS DEBITED A SUM OF ` 1,91,93,350/- AS PURCHASE OF DECCAN PAPER MILL. THIS PAPER IS A COM PUTERIZED SHEET. SINCE THE DIRECTOR OF ASHRAY PREMISES PVT. LTD ACCEPTED T HAT THIS PAPER BELONGED TO ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 34 THEM THEREFORE, THE NATURAL INFERENCE WILL BE THAT THE AMOUNT MENTIONED IN THE PAPER REPRESENTS THE SALES AND PURCHASE OF ASHR AY PREMISES PVT. LTD. FROM THE FACTS INVOLVED IN THIS CASE, WE NOTED THAT THE ASSESSEE HAD ENTERED INTO DULY REGISTERED AGREEMENT, DATED 20.05.2006, W ITH ASHRAY PREMISES PVT. LTD., AND TRANSFERRED THE DEVELOPMENT RIGHTS IN RES PECT OF PLOT NO.96B, 96C AND 96D AT VILLAGE MUNDHWA, ADMEASURING 3,51,541 SQ . FT. AT PUNE, FOR A CONSIDERATION OF ` 9,12,60,000/-. M/S. ASHRAY PREMISES PVT. LTD. GOT THE DEVELOPMENT RIGHTS IN THE SAID PROPERTY BY VIRTUE O F AN UNREGISTERED AGREEMENT, DATED 27.04.2002, ENTERED INTO ON A STAM P PAPER OF ` 100 WITH DECCAN PAPER MILLS CO. LTD. BY WHICH IT AGREED TO DEVELOP THE SAID PROPERTY BY HANDING OVER SALEABLE BUILT-UP AREA OF 63,600 SQ . FT CONSISTING OF ROW HOUSES/BUNGALOW/OFFICES/SHOPS ALONG WITH ADDITIONAL PRORATE OPEN/COVERED CAR PARKING. SUBSEQUENTLY, A FRESH AGREEMENT DATED 22.04.2004 WAS EXECUTED AND REGISTERED BETWEEN DECCAN PAPER MILLS CO. LTD. AND ASHRAY PREMISES PVT. LTD. IN WHICH THERE WAS A MONETARY CO NSIDERATION TO BE PAID OF ` 1,67,75,001/- AS WELL AS BUILT-UP AREA OF 65,000 S Q. FT. ALONG WITH ADDITIONAL PRO-RATA OPEN/COVERED CAR PARKING. SUBSEQUENTLY, A DEED OF CONFIRMATION WAS DULY EXECUTED ON 13.07.2006 BETWEEN ASHRAY PREM ISES PVT. LTD BEING THE TRANSFEROR), THE ASSESSEE BEING THE DEVELOPER A ND DECCAN PAPER MILLS PVT LTD BEING THE CONSENTING PARTY TO THE AGREEMENT DAT ED 20.05.2006. DURING THE COURSE OF THE SEARCH AT ASHRAY PROPERTIES PVT . LTD. TWO DOCUMENTS WERE SEIZED (P23 AND P26), ON THE BASIS OF WHICH THE AS SESSING OFFICER MADE THE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 35 ADDITION IN THE CASE OF THE ASSESSEE AMOUNTING TO ` 2,60,00,000 IN A.Y. 2007- 8 AND ` 5 CRORES IN A.Y. 2010-11. WE NOTED THAT THE STATE MENT OF ONE OF THE DIRECTORS OF ASHRAY PREMISES PVT LTD. WAS RECORDED AND SUBSEQUENTLY QUESTIONS WERE RAISED WITH REGARD TO THESE PAPERS A ND IN REPLY THERETO IS REPRODUCED AS UNDER: STATEMENT OF SHRI ATUL CHORDIA Q.NO.6: I AM SHOWING YOU PAGES NO. 12 TO 19, 22 TO 27 OF BUNDLE NO.6 OF ANNEXURE A OF PANCHNAMA DATED 12-09-2009. P LEASE GO THROUGH THESE PAGES AND EXPLAIN THE CONTENT ON IT AND ALSO CONFIRM WHETHER THESE ARE ACCOUNTED IN THE REGULAR BOOKS OF MR KIL AND MR KLL ACCOUNTS ALONG WITH THE DOCUMENTARY EVIDENCES. ANS: THE PAGES REFERRED ABOVE PERTAIN TO THE COMPAN Y NAMED 'M/S ASHRAY PREMISES PVT LTD., OF WHICH I AM ONE OF THE SHAREHOLDER AND A DIRECTOR. THESE TRANSACTIONS ARE NOT RECORDED EIT HER, IN THE BOOKS OF THE SAID COMPANY OR KLL OR MY BOOKS OF ACCOUNTS. PAGE A/O.23 IS A PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDING 3 D AUGUST 2009 AND THE GROSS PROFIT IS RS.11,04,44,650/-. PAGE 15 TO 19 AND PAGE NO.22 HAVE NOTINGS REGARDING THE EXPENDITURE INCURR ED FOR EARNING THE SAID AMOUNT OF RS.11,04,44,650/-. THE TOTAL EXP ENDITURE INCURRED IS ABOUT RS.3 CRORES, THEREFORE, THE INCOM E EARNED BY THE SAID COMPANY IN THE CAPACITY IS RS.8.04 CRORES WHIC H IS PERTAINING TO F.Y. 2009-10 IN THE HANDS OF M/S.ASHRAY PREMISES PVT LTD OVER AND ABOVE THE REGULAR INCOME. STATEMENT OF SHRI DILIP OSWAL THIS TRANSACTION WAS ENTERED IN THE YEAR 2005-06, W ITH DECCAN PAPER MILL AND M/S. ASHRAY PREMISES PVT LTD. FOR PL OT OF LAND ADMEASURING 3,52,000 SQ. FT. APPROX AT MUNDHAWA FOR WHICH WE HAD OBTAINED DEVELOPMENT RIGHTS. AS PER THE DEVELOP MENT AGREEMENT CONSIDERATION OF RS.3,11,00,000/- WAS TO BE PAID TO M/S. ASHRAY PREMISES PVT LTD AND 61,000 SQ.FT. OF BUILT- UP AREA WAS TO BE HANDED OVER TO DECCAN PAPER MILL. FOR THIS WE HA D PAID DEPOSIT RS.90 LAKHS(RS. 5 LAKHS PER MONTH FOR 18 MONTHS) TO DECCAN PAPER MILL. ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 36 IN THE SAID REPLY, THE DIRECTOR HAS STATED THAT THE TRANSACTIONS IN THESE PAGES ARE NOT RECORDED IN THE BOOKS OF ASHRAY PREMISES PV T. LTD. BUT NOWHERE HE HAD STATED THAT THE COMPANY ASHRAY PREMISES PVT. LT D. RECEIVED A SUM OF ` 7,60,00,000 IN CASH FROM THE ASSESSEE. THE ASSESSI NG OFFICER CALCULATED THIS BY INTERPRETING THE ENTRY APPEARING AT PAGE P26 [PG 197 OF THE PAPER-BOOK]. IN THIS PAGE WE NOTED THAT ON 26.07.2006 A SUM OF ` 50 LACS HAS BEEN CREDITED TO M.C.M.G. BEING AMOUNT RECEIVED FROM DILIP JAIN 1.00 TO MR. K.L.L-: 50 DEBITED THU MCMG : ICD A/C REFUND . SIMILARLY ON 23.09.2006 AGAINST THE ENTRY OF 10,000,000/- THE DESCRIPTION IS M.C.M.G BEING AMOUNT RECEIVED FROM MR. DILIP JAIN ON DECCAN PAPER RETAINED BY MR. K.LL AS PER INST. FROM KLL : A/C FOR AND AGAINST THE SUM OF ` 60,00,000/- CREDITED ON 22.10.2006, IT HAS BEEN MENTIONED MUKESH AGARWAL/DILIP JAIN (6.25) BEING ACCOUNT CLO SED BY MR LUNKAD AND LAST PAYMENT RECEIVED BY MR LUNKAD. FROM THESE DESCRIPTIONS IN THIS ACCOUNT, IT IS NOT CLEAR THAT THE PAYMENT H AS BEEN MADE BY THE ASSESSEE IN CASH FOR GETTING THE DEVELOPMENT RIGHTS IN RESPECT OF PLOT NO.96B, 96C AND 96D AT VILLAGE MUNDHWA, ADMEASURING 3,51,54 1 SQ. FT. AT PUNE. WE NOTED THAT THE DEVELOPMENT AGREEMENT HAS BEEN REGIS TERED ON 20.05.2006 AND THE CONFIRMATION DEED FOR THE SAME WAS EXECUTED ON 13.07.2006. IF THE ASSESSEE FIRM WOULD HAVE PAID IN CASH NATURALLY THE SELLER WOULD HAVE RECEIVED THE PAYMENT IN CASH BEFORE SIGNING AND REG ISTERING THE SAID AGREEMENT. WE ALSO NOTED THAT DURING THE COURSE OF THE SEARCH AT THE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 37 PREMISES OF SHRI DILIP OSWAL & SHRI MAHESH KHAIRARI , THE SEARCH PARTY HAD SPECIFICALLY ASKED FOR THE QUESTION RELATING TO THE SUM OF ` 7,60,00,000 PAID BY THE ASSESSEE TO ASHRAY PREMISES PVT LTD. AND, IN REPLY THERETO, EACH OF THEM HAS CATEGORICALLY DENIED ANY CASH PAYMENT BY T HE ASSESSEE TO ASHRAY PREMISES PVT LTD. FURTHER WE ALSO NOTED THAT THERE WAS SEARCH IN THE CASE OF ASHRAY PREMISES P LTD, THE LEDGER ACCOUNT REFLECTS A DEBIT OF ` 2,10,00,000/- BUT A SUM OF ` 7,60,00,000. THE PAYMENT OF ` 5 CRORES HAVE BEEN PRESUMED BY THE ASSESSING OFFICER AS PAYMENT MADE BY THE ASS ESSEE ON THE BASIS OF THE PROFIT & LOSS ACCOUNT OF ASHRAY PREMISES P LTD. WE ALSO NOTED FROM THE PROFIT & LOSS ACCOUNT THAT A SUM OF ` 1,91,93,350/- HAS ALSO BEEN SHOWN AS PURCHASE OF DECCAN PAPER MILLS BUT NO QUESTION REGA RDING THIS AMOUNT HAS BEEN EVER ASKED BY THE ASSESSING OFFICER. EVEN FRO M THE STATEMENT OF THE DIRECTORS OF ASHRAY PREMISES PVT. LTD RECORDED ON 2 0.12.2011, THE QUESTION RELATING TO THE SUM OF ` 2,10,00,000/- WAS ASKED WHILE NO QUESTION WITH REGARD TO THE SUM OF ` 5 CRORES WAS EVER ASKED. THIS FACT IS APPARENT FR OM THE QUESTION AND ANSWER PRODUCED BY THE ASSESSING O FFICER AT PAGE 8 OF THE ASSESSMENT ORDER. WE ALSO NOTED THAT THE ASSESSING OFFICER HAS NOT TREATED THE INCOME SHOWN IN THE PROFIT & LOSS ACCOUNT AS IN COME OF ASHRAY PREMISES PVT. LTD., BUT ACCEPTED THE SURRENDER MADE BY THE D IRECTOR OF ASHRAY PREMISES PVT. LTD. IN THE HANDS OF AOP. IF THE AMO UNT HAS BEEN PAID TO ASHRAY PREMISES PVT. LTD. IN RESPECT OF PROCURING T HE DEVELOPMENT RIGHTS OF THE PLOT NO.96B, 96C AND 96D AT VILLAGE MUNDHWA, TH EN THE SAID AMOUNT ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 38 SHOULD HAVE BEEN TREATED AS INCOME OF ASHRAY PREMIS ES PVT. LTD. ACCEPTING THE SURRENDER BEING MADE BY ONE OF ITS DIRECTORS AS UNDISCLOSED INCOME OF ASHRAY PREMISES (AOP). IT SHALL PROVE THAT THE ASS ESSING OFFICER IS ALSO NOT SURE ON THE BASIS OF THE EVIDENCE FOUND DURING THE COURSE OF THE SEARCH THAT THE ASSESSEE HAS PAID A SUM OF ` 7,60,00,000 I.E. ` 2,60,00,000/- IN A.Y. 2007-08 AND ` 5 CRORES IN A.Y. 2010-11. THERE HAD BEEN SEARCH I N THE CASE OF THE ASSESSEE BUT NO COGENT MATERIAL OR EVIDENCE HAVE BEEN FOUND AND BROUGHT TO OUR NOTICE WHICH MAY PROVE THAT THE ASSE SSEE HAD PAID OF ` 7,60,00,000/- TO ASHRAY PREMISES PVT. LTD. EVEN TH E PAYMENT OF ` 2,10,00,000 HAS BEEN ASSUMED BY THE ASSESSING OFFIC ER APPEARING AT PAGE 26 RELATING TO THE SAID TRANSACTION HAS BEEN DEBITED O NLY AFTER THE EXECUTION AND REGISTRATION OF THE AGREEMENT BETWEEN THE ASSESSEE AND ASHRAY PREMISES PVT LTD. NO SELLER WILL TRANSFER HIS RIGHTS IN FAVOUR OF THE BUYER UNTIL AND UNLESS HE HAS RECEIVED THE CASH CONSIDERATION, IF ANY EMBE DDED THERE IN. NO ADDITION CAN BE SUSTAINED ON THE BASIS OF ASSUMPTIO N AND PRESUMPTIONS, HOWEVER, STRONG IT MAY BE. THERE IS NO MATERIAL BE ING BROUGHT ON RECORD FOR THE A.Y. 2010-11 BEING FOUND DURING THE COURSE OF T HE SEARCH EVEN IN THE CASE OF ASHRAY PREMISES PVT. LTD. WE, THEREFORE, S ET ASIDE THE ORDER OF THE CIT(A) IN EACH OF THE ASSESSMENT YEAR AND DELETE TH E ADDITION OF ` 2,60,00,000/- IN A.Y. 2007-08 AND ` 5 CRORES RELATING TO A.Y. 2010-11. 13. FROM THE PROFIT & LOSS ACCOUNT SEIZED FROM ASHR AY PREMISES PVT. LTD., WE NOTED THAT NEITHER THERE IS ANY DATE NOR THE NAM E OF THE ASSESSEE ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 39 MENTIONED, WHICH MAY PROVE THAT THE ASSESSEE HAS PA ID A SUM OF ` 7,60,00,000/- IN CASH TO M/S. ASHRAY PREMISES PVT L TD. WE ALSO NOTED FROM THE SAID PROFIT & LOSS ACCOUNT THAT NOWHERE IN THES E DOCUMENTS IT IS MENTIONED THAT M./S ASHRAY PREMISES PVT LTD. RECEIV ED A SUM OF ` 7,60,00,000/- IN CASH. THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF THE STATEMENT OF ONE OF THE DIRECTOR OF ASHRAY PREM ISES PVT LTD. WHEN THE ASSESSEES PARTNERS WERE CROSS-EXAMINED IN THIS REG ARD, THEY CATEGORICALLY DENIED THAT THEY HAVE PAID ANY CASH. IN OUR OPINIO N, IN VIEW OF THE DECISION OF HONBLE HIGH COURT IN THE CASE OF CONTINENTAL WA REHOUSING CORPORATION (NHAVA SHEVA) LTD . (SUPRA), NO ADDITION CAN BE MADE IN THE CASE OF TH E ASSESSEE ON THE BASIS OF DOCUMENTS BEING FOUND FROM THE PREMISES OF THE THIRD PARTY WHERE NEITHER THE NAME OF THE ASSESSEE NOR THE FACT THAT THE ASSESSEE HAS PAID ANY CASH OF ` 7,60,00,000/-. EVEN OTHERWISE ALSO IT IS AN UNDISPUTED FACT THAT THE SAID DOCUMENTS P23 AND P26 ON THE BASIS OF WHICH THE ASSESSING OFFICER HAS MADE THE ADDITION IN THE CASE OF THE ASSESSEE WERE FOUND DURING THE COURSE OF THE SEARCH CONDUCTED AT THE PREMISES OF ASHRAY PREMISES PVT. LTD. SINCE THESE DOCUMENTS HAVE BEEN FOUND DURING THE COURSE OF SEARCH CONDUCTED IN THE CASE OF ASHRAY PR EMISES PVT. LTD., IF THE ASSESSING OFFICER WANTED TO MAKE ADDITION, THE ASSE SSMENT SHOULD HAVE BEEN COMPLETED IN THE CASE OF THE ASSESSEE ONLY U/S. 153 C R.W.S. 143(3). NO ASSESSMENT HAS BEEN COMPLETED U/S. 153 R.W.S. 143(3 ) NEITHER ANY SATISFACTION THAT THESE DOCUMENTS BELONG TO THE ASS ESSEE WAS BROUGHT ON ITA NO.682 & 683/MUM/2016 REGENCY MAHAVIR PROPERTIES 40 RECORD BY THE ASSESSING OFFICER OF ASHRAY PREMISES PVT. LTD. THEREFORE, ON THIS BASIS ALSO THE ADDITION MADE IN THE CASE OF TH E ASSESSEE CANNOT BE SUSTAINED. 14. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DAY OF JANUARY 2018 SD/- SD/- (RAVISH SOOD) (P K BANSAL) JUDICIAL MEMBER VICE-PRESIDENT MUMBAI; DATED: 4 TH JANUARY 2018 SA COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, D BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI