ACIT, Central Circle- 16, New Delhi V. Vinita Chaurasia, New Delhi

ITA 7382/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4575 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 08-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA SENIOR
• Keywords: Search and seizure; Set aside
• Section: 153A; 153; 22; 153C; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.7382/DEL./2017 (ASSESSMENT YEAR : 2009-10) ACIT, CENTRAL CIRCLE 16, VS. SMT. VINITA CHAURASIA , NEW DELHI. 575, DOUBLE STOREY FLATS, NEW RAJENDRA NAGAR, NEW DELHI 110 060. (PAN : AAFPC4589D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, CA REVENUE BY : SHRI F.R. MEENA, SENIOR DR DATE OF HEARING : 15.10.2020 DATE OF ORDER : 22.10.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, ACIT, CENTRAL CIRCLE 16, NEW DELHI (HERE INAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 26.09.2017 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXVI, NEW DELH I QUA THE ASSESSMENT YEAR 2009-10 ON THE GROUNDS INTER ALIA T HAT :- ITA NO.7382/DEL./2017 2 WHETHER THE LD. CIT(A) IS JUSTIFIED IN DELETION TH E ADDITION OF RS.4,00,00,000/- ON THE BASIS THAT HONBLE HIGH COU RT OF DELHI AS WELL AS HONBLE ITAT IN ASSESSEE'S OWN CASE FOR A.Y.2010-11 HAS HELD THAT INITIATION OF ASSESSMENT PROCEEDINGS U/S 153C WAS INVALID, IGNORING THE FACT THAT AFTER THE AMENDMENT IN SECTION 153C, WHICH IS C1ARIFICATORY AND CURATIVE AND THUS RETROSPECTIVE IN NATURE, THE REQUIREMENT, IS THAT THE DOCUMENTS M UST PERTAIN TO THE ASSESSEE AND MUST HAVE A BEARING ON THE INCOME OF THE ASSESSEE. ALSO, DEPARTMENT IS IN PROCESS OF FILING OF SLP AGAINST THE ORDER OF DELHI HIGH COURT IN ITA NO. 1004/2015 & 1005/2015, IN ASSESSEE'S CASE FOR AY 2010-11. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : SUBSEQUENT TO THE SEARCH AND SEIZURE OPERATION CARRIED OUT ON CHAURASIA GROUP ON 29.04.2 008, ASSESSEE FILED RETURN FOR VARIOUS YEARS U/S 153A OF THE INCO ME-TAX ACT, 1961 (FOR SHORT THE ACT) AND REGULAR ASSESSMENT WAS FR AMED AT THE INCOME OF RS.1,61,49,687/- U/S 153C/143(3) OF THE A CT. SUBSEQUENT THERETO, SEARCH AND SEIZURE OPERATION AT THE PREMISES OF LALIT MODI, A THIRD PARTY, WAS CARRIED OUT ON 19.06 .2009 AND A DOCUMENT NO. ANNEXURE A-1, PAGE 5, WAS FOUND AND S EIZED ON THE BASIS OF WHICH PROCEEDINGS U/S 153C WERE INITIATED AND ACCORDINGLY ASSESSMENT WAS FRAMED U/S 153C/143 (3) OF THE ACT A T THE INCOME OF RS.161,49,687/-. 3. ON THE BASIS OF SEIZED DOCUMENT, ANNEXURE A-1, P AGE 5, FROM THE PREMISES OF LALIT MODI, AN ADDITION OF RS. 19,02,68,289/- WAS MADE FOR AY 2010-11 WHICH WAS CONFIRMED BY THE LD. CIT (A), HOWEVER HE HAS ALSO ENHANCED THE ASSESSED INCO ME BY ITA NO.7382/DEL./2017 3 RS.5,50,72,700/-. IN AY 2010-11, LD. CIT (A) ISSUE D DIRECTIONS TO THE AO TO ASSESS A SUM OF RS.4 CRORES IN THE HANDS OF ASSESSEE FOR AY 2009-10 ON THE BASIS OF SAME SEIZED DOCUMENT WHI CH WAS QUA PROPERTY PURCHASED BY THE ASSESSEE IN VASANT SQUARE MALL ON 13.05.2009 FROM SUNCITY PROJECTS (P) LTD. OUT OF WH ICH RS.4 CRORES WAS ALLEGEDLY RECEIVED BY THE ASSESSEE IN AY 2009-1 0. CONSEQUENTLY, AO MADE ADDITION OF RS.4 CRORES AND F RAMED THE ASSESSMENT U/S 147/143(3) OF THE ACT AT AN INCOME O F RS.5,61,49,690/-. 4, ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEAL WHO HAS DELETED THE ADDITION OF R S.4 CRORES BY FOLLOWING THE ORDER PASSED BY THE ITAT AND HONBLE DELHI HIGH COURT BY ALLOWING THE APPEAL. FEELING AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT (A), THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, LD. CIT (A) HAS DELETED THE AD DITION OF RS.4 CRORES BY FOLLOWING THE DECISIONS RENDERED BY THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO.3343/DEL/2013 & ORS. VIDE ITA NO.7382/DEL./2017 4 ORDER DATED 29.05.2015 , CONFIRMED BY THE HONBLE DELHI HIGH COURT IN ASSESSEES OWN CASE FOR AY 2010-11 REPORTED IN (201 7) 394 ITR 758 (DELHI), WHEREIN THE SAME DOCUMENT ANNEXURE A-1, PAGE 5, IS HELD TO BE OF LALIT MODI AND NOT OF THE ASSESSEE IN THIS CASE. 7. COORDINATE BENCH OF THE TRIBUNAL VIDE ORDER DATED 29.05.2015 (SUPRA) PASSED IN ASSESSEES OWN CASE FOR AY 2010- 11 HELD THAT, THE DOCUMENT, ANNEXURE A-1, PAGE 5, BELONGS TO LAL IT MODI AND THE ASSESSEE, VINITA CHAURASIA, HAS NO CON CERN WITH THE SAME BY RETURNING FOLLOWING FINDINGS :- 33. TURNING TO THE FACTS OF THE PRESENT CASE, WE N OTE THAT IT IS NOT THE CASE OF THE REVENUE THAT IT IS NOT THE CASE OF THE REVENUE THAT THE PERSON SEARCHED SHRI LALIT MODI HAD EXPRES SLY DISCLAIMED OR DISOWNED ANNEXURE A1 AS BELONGING TO HIM. IN VIEW OF RATIO LAID DOWN BY HON'BLE JURISDICTIONAL H IGH COURT IN THE CASE ITA NO.3551 & 3343/DE1/2013 329/DEL/2014 A SSTT.YEAR: 2010-1134 OF PEPSICO INDIA HOLDINGS PVT. LTD. VS AC IT (SUPRA) UNLESS AND UNTIL IT IS ESTABLISHED THAT THE DOCUMEN T DOES NOT BELONG TO THE SEARCHED PERSON, THE PROVISIONS OF SE CTION 153C OF THE ACT DO NOT GET ATTRACTED BECAUSE THE LANGUAGE U SED BY THE LEGISLATURE IN SECTION 153C OF THE ACT MANDATES THA T WHERE THE AO IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED OR REQUISITIONED BELONG OR BELONGED TO A PERSON OTH ER THAN THE PERSON REFERRED TO IN SECTION 153 A OF THE ACT. THE IR LORDSHIPS SPEAKING FOR HON'BLE HIGH COURT OF DELHI FURTHER HE LD THAT IT IS NECESSARY BEFORE THE PROVISIONS OF SECTION 153C OF THE ACT CAN BE INVOKED THAT THE AO OF THE SEARCHED PERSON MUST BE SATISFIED THAT THE SEIZED MATERIAL, (WHICH INCLUDES DOCUMENTS) DOE S NOT BELONG TO PERSON SEARCHED AND THE IMPUGNED SATISFACTION NO TE DATED 30.6.2011, THERE IS NOTHING TO INDICATE THAT THE SE IZED DOCUMENT ANNEXURE A-1 DOES NOT BELONG TO SHRI LALIT MODI AND WE ALSO NOTE THAT THERE IS NO DISCLAIMER ON THE PART OF SHR I LALIT MODI WITH REGARD TO THIS DOCUMENT ANNEXURE A-1. 34. WE FURTHER HOLD THAT FINDING OF A DOCUMENT IN P OSSESSION OF A SEARCHED PERSON DOES NOT NECESSARILY MEAN THAT THE SAME ITA NO.7382/DEL./2017 5 'BELONGS TO' OR 'BELONGED TO' THE OTHER PERSON WHOS E NAME IS MENTIONED THEREIN. WE HAVE NO HESITATION TO HOLD TH AT UNLESS IT IS ESTABLISHED THAT THE DOCUMENT IN QUESTION DOES NOT BELONG TO THE SEARCHED PERSON I.E. SHRI LALIT MODI THE QUESTION O F INVOKING SECTION 153C OF THE ACT DOES NOT ARISE. AS PER PROV ISIONS OF SECTION 153C OF THE ACT AND RATIO ITA NO.3551 & 334 3/DEL/2013 329/DE1/2014 ASSTT.YEAR: 2010-11. 8. THEN THIS ISSUE WAS EXAMINED AT LENGTH BY THE HO NBLE DELHI HIGH COURT IN THE ASSESSEES OWN CASE (SUPRA) AND CONFIRMED THE FINDINGS AS RETURNED BY THE TRIBUNAL THAT DOCUMENT, ANNEXURE A-1, PAGE 5, BELONGS TO LALIT MODI AND ON THE BASIS OF T HE SAME, PROCEEDINGS U/S 153C CANNOT BE INITIATED AGAINST TH E ASSESSEE BY RETURNING THE FOLLOWING FINDINGS :- 15. IT REQUIRES TO BE FIRST NOTED THAT THE DOCUME NT RELIED UPON BY THE REVENUE (ANNEXURE A-1 PAGE 5) TO SUSTAIN THE ADDITIONS MADE TO THE ASSESSABLE INCOME OF THE RESPONDENT HAS NOT BEEN SHOWN TO 'BELONG' TO THE ASSESSEE. IN ARRIVING AT T HIS CONCLUSION, THE ITAT FOLLOWED THE DECISION OF THIS COURT IN PEP SICO INDIA HOLDING LTD. V. ACIT (2015) 370 ITR 295 (DEL). MR. SHIVPURI ON THE OTHER HAND SUBMITTED THAT THERE HAVE BEEN SUBSE QUENT DECISIONS OF THE DBS OF THIS COURT WHICH HAVE EXPLA INED THE AFOREMENTIONED DECISION AND IN PARTICULAR THE PHRAS E BELONGS TO OCCURRING IN SECTION 153C OF THE ACT. HE PLACED PA RTICULAR RELIANCE ON THE DECISIONS IN PRINCIPAL COMMISSIONER OF INCOME- TAX-8 V. SUPER MALLS (P.) LTD. [2017] 291 CTR 142 ( DEL), PRINCIPAL COMMISSIONER OF INCOME TAX, CIRCLE-II V. SATKAR FINCAP (DECISION DATED 16TH NOVEMBER, 2016 IN ITA N O. 82 OF 2016) AND PRINCIPAL COMMISSIONER OF INCOME TAX (CEN TRAL)-2 V. NAU NIDH OVERSEAS PVT. LTD. (DECISION DATED 3RD FEB RUARY, 2017 IN ITA NO. 58/2017). 16. AT THE OUTSET, IT REQUIRES TO BE NOTICED THAT THE SEARCH IN THE PRESENT CASE TOOK PLACE ON 19TH JUNE 2009 I.E., PRIOR TO THE AMENDMENT IN SECTION 153 C (1) OF THE ACT WITH EFFE CT FROM 1ST JUNE 2015. THEREFORE, IT IS NOT OPEN TO THE REVENUE TO SEEK TO POINT OUT THAT THE DOCUMENT IN QUESTION, PERTAINS TO OR RELATES TO THE ASSESSEE. THE EXAMPLE GIVEN BY THIS COURT IN P EPSICO INDIA HOLDING LTD. (SUPRA) IS THAT OF A PHOTOCOPY O F A SALE DEED WHICH CONTAINS THE NAMES OF THE VENDOR AND THE VEND EE BEING FOUND WITH THE BROKER. THE MERE FACT THAT SUCH PHOT OCOPY OF THE SALE DEED WAS FOUND WITH THE BROKER WOULD NOT LEAD TO THE ITA NO.7382/DEL./2017 6 CONCLUSION THAT SUCH A DOCUMENT 'BELONGS TO EITHER THE VENDOR OR THE VENDEE. WHILE IN THE PRESENT CASE THE AO IN HIS SATISFACTION NOTE DOES RECORD THAT THE DOCUMENT IN QUESTION DOES NOT BELONG TO MR. LALIT MODI I.E. THE SEARCHED PERS ON, HE DOES NOT INDICATE ON WHAT BASIS HE PROCEEDS AS IF THE DOCUME NT BELONGED TO THE ASSESSEE. 17. IN THIS CONTEXT, IT REQUIRES TO BE NOTICED THAT A VERY DETAILED INTERROGATION OF MR. LALIT MODI IN RELATION TO THIS DOCUMENT TOOK PLACE, THE RELEVANT PORTIONS OF WHICH HAVE BEEN EXT RACTED BY THE ITAT IN THE IMPUGNED ORDER. QUESTION NO. 25 POSED T O MR MODI AND HIS ANSWER THERETO READS AS UNDER: Q.25. I AM SHOWING YOU PAGE NO. 5 TO 8 OF ANNEXURE A- 1, PLEASE EXPLAIN THE CONTENTS. ANS: PAGES NO. 5 TO 8 ARE ROUGH PLANNING ON PAGE 5 PROPOSAL FROM VASANT SQUARE MALL FOR SALE WAS RECEI VED AND THE DEAL DID NOT MATERIALISE THROUGH ME. 18. THE ABOVE STATEMENT WAS MADE IN THE COURSE OF THE SEARCH. IN THE ASSESSMENT PROCEEDINGS IN THE CASE O F SUNCITY PROJECT LTD. ALLEGEDLY INVOLVING MR. LALIT MODI, A SPECIFIC QUESTION WAS PUT TO HIM AND HIS ANSWER THERETO WAS RECORDED ON OATH ON 15TH MARCH, 2013 UNDER SECTION 131 OF THE A CT READS AS UNDER: Q.3. DURING THE COURSE OF SEARCH PROCEEDINGS AT YO UR RESIDENCE AT L-48, LAJPAT NAGAR-II, NEW DELHI, LOOS E PAPERS WERE FOUND AND SEIZED VIDE ANNEXURE A-1. I A M SHOWING YOU PAGE NO.5 OF THE SAID ANNEXURE A-1. KIN DLY EXPLAIN THE TRANSACTIONS MENTIONED IN IT. ANS. THE CHAURASIA FAMILY IS KNOWN TO ME. AT THE TI ME OF EXECUTION OF SALE DEED IN FAVOUR OF MRS. VINITA CHA URASIA BY M/S SUNCITY PROJECTS LTD. IN RESPECT OF COMMERCI AL SPACE PURCHASED IN VASANT SQUARE MALL, I WAS PRESEN T AS A WITNESS AND SIGNED ON THE DOCUMENTS CONVEYING TIT LES AS A WITNESS BEFORE SUB REGISTRAR. IT HAPPENED SOMEWHE RE IN MAY 2009. SINCE I AM IN REAL ESTATE BUSINESS, INCID ENTALLY AFTER COMING BACK FROM EXECUTION OF THE SAID SALE D EED, I WAS APPROACHED BY A BROKER AT MY RESIDENCE MAKING ENQUIRY ABOUT AVAILABILITY OF COMMERCIAL SPACE IN V ASANT SQUARE MALL AT VASANT KUNJ, NEW DELHI. SINCE I ACCOMPANIED MRS. VINITA CHAURASIA WHO HAS PURCHASED COMMERCIAL SPACE AT VASANT SQUARE MALI, I TELEPHONE D HER AND GOT THE DETAILS OF COST ETC. OF HER COMMERC IAL SPACE IN VASANT SQUARE MALL AND TOLD THESE FACTS TO THE SAID BROKERS. AFTER FEW DAYS, THE BROKER CAME TO MY RESIDENCE AND DELIVERED A PROPOSAL, WHICH IS NOTHIN G BUT ITA NO.7382/DEL./2017 7 THE SAME DOCUMENT SHOWN TO ME AS PAGE NO. 5 OF ANNEXURE A-1. THE SAID PROPOSAL REMAINED WITH ME AN D BEFORE THE SAME COULD BE FORWARDED TO MRS. VINITA CHAURASIA, A SEARCH AND SEIZURE OPERATION BY THE IN COME TAX DEPARTMENT AT MY RESIDENCE ON 19.06.2009, DURIN G WHICH THE ABOVE MENTIONED PAPER CONTAINING THE PROP OSAL WAS FOUND AND SEIZED. SINCE IT COULD NOT BE DELIVER ED TO SMT. VINITA CHAURASIA, THE PROPOSAL WAS NOT ACTED U PON, HENCE, NO TRANSACTION TOOK PLACE ON THE BASIS OF TH E SAID PAGE SEIZED AT PAGE NO. 5 OF ANNEXURE A-1. HAD THE SAID PROPOSAL MATERIALIZED, I WOULD HAVE EARNED BROKERAG E INCOME. SINCE NO SUCH TRANSACTION TOOK PLACE, NO COMMISSION WAS EARNED BY ME. 19. WHAT IS EVIDENT FROM THE ABOVE REPLY OF MR. LAL IT MODI IS THAT EVEN ACCORDING TO HIM THE DOCUMENT IN QUESTION DID NOT BELONG TO THE ASSESSEE. HE APPEARS TO SUGGEST THAT THE DOCUMENT WAS A PROPOSAL DELIVERED AT HIS RESIDENCE BY SOME O THER BROKER AND WHICH PROPOSAL REMAINED WITH HIM BEFORE IT COUL D BE FORWARDED TO THE ASSESSEE. IN THE MEANWHILE, THE SE ARCH AND SEIZURE OPERATION TOOK PLACE. 20. THERE IS NO MATERIAL WHATSOEVER PLACED ON RECOR D BY THE REVENUE BEFORE THE CIT (A) OR THE ITAT TO JUSTIFY T HE INVOCATION OF SECTION 153C OF THE ACT AGAINST THE ASSESSEE ON THE BASIS THAT THE ABOVE DOCUMENT BELONGED TO HER. 9. SLP FILED BY THE REVENUE AGAINST THE JUDGMENT PA SSED BY THE HONBLE DELHI HIGH COURT AND COORDINATE BENCH OF TH E TRIBUNAL HAS ALSO BEEN DISMISSED BY THE HONBLE SUPREME COUR T IN CASE CITED AS PR. CIT (CENTRAL 2), NEW DELHI VS. VINITA CHAURASIA (2018) 259 TAXMAN 88 (SC) . 10. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT WHEN ANNEXURE A-1, PAGE 5, WHI CH IS THE VERY BASIS OF ADDITION MADE BY THE AO IN THIS CASE, HAS BEEN HELD TO BE BELONGING TO LALIT MODI, THE VERY INITIATION OF PROCEEDINGS U/S 153C ON THE BASIS OF THE SAME AGAINST ASSESSEE ARE HELD TO BE NOT ITA NO.7382/DEL./2017 8 SUSTAINABLE BY THE HONBLE DELHI HIGH COURT. LD. C IT (A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO FOLLOWI NG THE ORDER PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE (SUPR A) AND CONFIRMED BY HONBLE DELHI HIGH COURT AND HONBLE S UPREME COURT. SO, FINDING NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT (A), PRESENT APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 22 ND DAY OF OCTOBER , 2020. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 22 ND DAY OF OCTOBER, 2020 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.