AMI LAL, Alwar V. ITO, Alwar

ITA 819/JPR/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2091 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 02-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VARINDAR MEHTA
• Assessee Lawyers: RAJIV SOGANI
• Keywords: Unexplained investment; Document seized; Corroborative evidences; Documents seized
• Section: 143(3); 153A; 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL ; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA- @ ITA NO. 819/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 SH. AMI LAL, S/O LATE SH. SANWAL RAM, VILLAGE-NANGLIA,NEAR SAMTAL CHOWK BHIWADI,ALWAR (RAJ.) CUKE VS. THE INCOME TAX OFFICER, WARD 2(2), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: CPZPS8050Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI RAJIV SOGANI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDAR MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/05/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 19/05/2017 VKNS'K@ ORDER PER: SHRI KUL BHARAT, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), ALWAR DATED 18.09.2014 PERTAINING TO A.Y. 2006-07. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E LD. AO IN ASSUMING JURISDICTION IN INITIATING PROCEEDINGS UND ER SECTION 153C AS WELL AS IN COMPLETING THE ASSESSMENT UNDER SECTI ON 153C OF THE IT ACT, 1961. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE ENTIRE ASSESS MENT BEING ILLEGAL AND VOID-AB-INITIO. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E LD. AO IN MAKING ADDITION OF RS. 6,73,500/- UNDER SECTION 69 AS UNEXPLAINED INVESTMENT IN AGRICULTURAL LAND. THE A CTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAI NST THE FACTS OF THE 2 ITA NO. 819/JP/2017 SH. AMI LAL VS. THE INCOME TAX OFFICER CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 6,73,500/- 3. THE ASSESSEE CRAVES HIS RIGHT TO ADD, AMEND OR A LTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEARCH ACTION WAS CARRIED OUT IN THE CASE OF SHRI S.K. SINGHAL GROUP, BHIWADI ON 17/18-09-2008. DURING THE COURSE OF SEARCH PROCEEDING REGISTERED DEED OF LAND AND OTHER INCREMENTING DOCUMENTS WHICH PERTAINED TO ASSESSEE WERE FOUND AND SEIZED FROM THE RESIDENCE OF SHRI S.K. SINGHAL, BHIWADI. 3. AS SUCH DOCUMENT WERE HANDED OVER TO ASSESSING O FFICER BY ACIT, CENTRAL CIRCLE, ALWAR ON 03.06.2010 AND THEREAFTER NOTICE U/S 153(C) WAS ISSUED ON 08.02.2011 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME WITHIN 30 DAYS OF SERVICE OF THIS NOTICE. 4. PURSUANCE TO THAT ASSESSEE FILED RETURN OF INCOM E ON 17 TH MARCH, 2011 DECLARING TOTAL INCOME AT RS. 42,000/- IN THE CASE. 5. SUBSEQUENTLY, THE ASSESSING OFFICER FRAMED ASSES SMENT U/S 143(3) R.W.S 153(C) OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT ) WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER MADE ADDITION OF RS. 6,73,500/- U/S 68 OF THE IT ACT, 1961 AS UNEXPLAINED INVESTMEN T IN AGRICULTURE LAND. 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISS ED THE APPEAL OF THE ASSESSEE. 7. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUN AL. 3 ITA NO. 819/JP/2017 SH. AMI LAL VS. THE INCOME TAX OFFICER 8. THE FIRST GROUND OF THE APPEAL WHICH AGAINST VAL IDITY OF THE ASSESSMENT U/S 153C. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION AS MADE IN THE WRITTEN SUBMISSION. SUBMISSIONS ARE AS UNDER: 3.1 LD. AO COMPLETED THE ASSESSMENT OF THE ASSESSE E U/S 153C OF THE INCOME TAX ACT, 1961 WHICH READS 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- (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUIS ITIONED PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, R ELATES TO; A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGA INST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR D OCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION O F THE TOTAL INCOME OF SUCH OTHER PERSON. 3.2 THUS, SECTION 153C CLEARLY SETS OUT THAT FOR CA RRYING OUT THE ASSESSMENT UNDER THE SAID SECTION, THE AO OF THE SE ARCHED PERSON HAS TO HAND OVER ALL THE ORIGINAL ASSETS OR DOCUMENTS TO THE AO OF THE OTHER PERSON TO WHOM THEY RELATES. IN THIS REGARD IT IS SUBMITT ED THAT LD. AO OF SH. S.K. SINGHAL HANDED OVER THE PHOTOCOPIES OF THE DOCUMENTS SEIZED, INSTEAD OF ORIGINAL DOCUMENTS . THIS FACT WAS FURTHER CONFIRMED BY LD. AO HIMSEL F IN THE REMAND REPORT, WHEREIN IT WAS STATED THAT REGARDIN G THE CUSTODY OF THE ORIGINAL DOCUMENTS INFORMATION WAS SOUGHT FROM THE ACIT, CENTRAL CIRCLE, ALWAR, HOWEVER, NO REPLY HAS BEEN RECEIVED SO FAR. (CIT(A) PAGE 8) THUS, IN VIEW OF ABOVE, THE PROCEEDINGS COMPLETED U /S 153C OF THE ACT ARE BAD IN LAW. 3.3 WITH PREJUDICE TO ABOVE, SECTION 153C OF THE AC T MAKES IT MANDATORY FOR AO FOR SEARCHED PERSON TO RECORD SATISFACTION T HAT THE SEIZED MATERIAL BELONGS TO THE PERSON OTHER THAN THE SEARCHED PERSO N, BEFORE HANDING OVER 4 ITA NO. 819/JP/2017 SH. AMI LAL VS. THE INCOME TAX OFFICER THE DOCUMENTS TO AO OF OTHER PERSON. RELIANCE IS PL ACED ON THE JUDICIAL PRONOUNCEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF PEPSI FOODS P. LTD. VS. ACIT [2014] 367 ITR 112 (DELHI)(HC) AND HONBLE ALLAHABAD HIGH COURT CIT V. CLASSIC ENTERPRISES [20 13] 358 ITR 465 (ALL.) . WHEREIN IT WAS HELD THAT THE AO HAS TO BE SATISFI ED THAT UNDISCLOSED INCOME FOUND DURING SEARCH OPERATIONS BELONGS TO TH E THIRD PERSON BEFORE NOTICE CAN BE ISSUED UNDER SECTION 153C. MERE USE OR MENTION OF THE WORD SATISFACTION IN THE ORDER OR NOTE WILL NOT MEET T HE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 158BD. 3.4 LD. AO OF THE SEARCHED PERSON HAS RECORDED THE SATISFACTION, WHICH IS APPEARING AT THE PAGE CIT(A) PAGE 5 PARA 4.3(II) . KEEPING IN VIEW THE ABOVE JUDICIAL PRONOUNCEMENTS AND FROM A CAREFUL PE RUSAL OF THE SAME IT CAN BE SAID THAT LD. AO OF SEARCHED PERSON FAILED TO DI SCHARGE HIS DUTY SINCE HE HAS RECORDED THE SATISFACTION IN A MECHANICAL MANNE R AND WITHOUT APPLICATION OF HIS MIND. 3.5 SECTION 153C OF THE ACT ALSO BOUNDS THE AO OF T HE OTHER PERSON TO RECORD SATISFACTION THAT THE SEIZED DOCUMENTS HAVE A BEARING ON DETERMINATION OF TOTAL INCOME OF OTHER PERSON. IN THIS REGARD IT IS SUBMITTED THAT LD. AO OF THE ASSESSEE WITHOUT RECORDING THE S ATISFACTION ISSUED A NOTICE U/S 153C ( AO PAGE 1 ). THUS, IT IS EVIDENT LD. AO FAILED TO ACT IN ACC ORDANCE WITH THE PROVISIONS OF THE SECTION AND ON THE BASIS OF SURMISE AND CONJECTURE COMPLETED THE ASSESSMENT U/S 153C. IN VIEW OF ABOVE, ASSESSMENT U/S 153C MADE BY LD. A O AND UPHELD BY LD. CIT(A) IS BAD IN LAW AND DESERVES TO BE QUASHED. 9. ON THE CONTRARY, THE LD. DR SUPPORTED THE ORDE R OF AUTHORITIES BELOW. 10. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MA TERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE ASSESSING OFFICER OF T HE SEARCHED PERSON HAS TO HAND OVER ALL THE ORIGINAL ASSETS OR DOCUMENTS TO THE AS SESSING OFFICER OF THE OTHER PERSON TO WHOM THEIR RELATES. HE SUBMITTED THAT THE ASSES SING OFFICER OF SHRI S.K.SINGHAL, BHIWADI AND PHOTOCOPIES OF THE DOCUMENTS SEIZED, IN STEAD OF ORIGINAL DOCUMENTS. HE FURTHER SUBMITTED THAT SECTION 153(C) MANDATES F OR THE ASSESSING OFFICER OF THE SEARCHED PERSON TO RECORD SATISFACTION THAT THE SEI ZED MATERIAL BELONGS TO THE PERSON OTHER THAN THE SEARCHED, BEFORE HANDING OVER THE DO CUMENTS TO AO OF OTHER PERSON. 5 ITA NO. 819/JP/2017 SH. AMI LAL VS. THE INCOME TAX OFFICER HE PLACED RELIANCE IN THE CASE OF PEPSI FOODS P. LTD. VS. ACIT [2014] 367 ITR 112 (DELHI). 11. HE SUBMITTED THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON HAS RECORDED THE SATISFACTION. HOWEVER, SUCH SATISFACTION WAS R ECORDED IN A MECHANICAL MANNER AND WITHOUT APPLICATION OF HIS MIND. 12. WE ARE UNABLE TO ACCEPT THIS. THESE CONTENTION S OF THE LD. COUNSEL FOR THE ASSESSEE. AS PER SECTION 153(C) WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR ANY BOOKS OF ACCOUNT OR DOCUMENTS, S EIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN , RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A THEN, THE BO OKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL HANDED OVER T O THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. 13. NOWHERE, IN THIS PROVISION, IT IS STATED THAT O RIGINAL OF THE DOCUMENT IS REQUIRED TO BE HANDED OVER TO THE ASSESSING OFFICER OF SUCH OTHER PERSON. MOREOVER, IF THE PHOTOCOPIES SEIZED. IT CANNOT BE ENVISAGED THAT THE ASSESSING OFFICER WOULD HAND OVER THE ORIGINAL OF SUCH PHOTOCOPIES. MOREOVE R, IT IS CASE WHERE ASSESSEE ITSELF HAS ADMITTED THE FACTUM OF THE TRANSACTION T HE ASSESSEE HIMSELF AS STATED THAT THE LAND WAS PURCHASED BY SH. S.K.SINGHAL FROM HIS OWN MONEY IN THE NAME OF THE ASSESSEE. HENCE THERE IS NO MERIT IN THE GROUND RAI SED BY THE ASSESSEE. THEREFORE, THE GROUND NO. 1 IS DISMISSED. 14. GROUND NO. 2 IS AGAINST CONFIRMING ACTION THE A SSESSING OFFICER FROM MAKING AN ADDITION RS. 6,73,500/- AS UNEXPLAINED. 6 ITA NO. 819/JP/2017 SH. AMI LAL VS. THE INCOME TAX OFFICER 15. THE LD. COUNSEL FOR THE ASSESSEE FURTHER REITERATED THE SUBMISSIONS MADE IN THE WRITTEN BRIEF 16. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER HELD TO TAKE NOTE OF THE ACT THAT THE ASSESSEE HAVING OPENING BA LANCE WHICH RS. 1,07,500/-. THE ASSESSING OFFICER ALSO HELD TO TAKE NOTE OF THE FAC T THAT THE SINCE ALL THE ASSESSEE CONTRIBUTED RS. 1,30,000/- AND RS. 4 LAC RESPECTIVE LY. 17. ON THE CONTRARY, THE LD. DR SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 18. WE FIND DURING THE COURSE OF SEARCH PROCEEDING, THE SUBMISSION OF THE ASSESSEE WAS RECORDED WHICH IS REPRODUCED IN THE AS SESSMENT ORDER IN ANSWER TO QUESTION NUMBER, IT WAS STATED BY THE ASSESSEE THAT THE INVESTMENT IN LAND IN QUESTION WAS MADE BY SH. S.K. SINGHAL. IN CONTRADIC TION TO THE STATEMENT, ASSESSEE NOW OWNED UP THE INVESTMENT. UNDER THESE FACTS, TH E EXPLANATION OF THE ASSESSEE DOES NOT INSPIRE CONFIDENCE. THE STAND OF THE ASSE SSEE IS CONTRADICTORY, AT ONE HAND HE STATED THAT HE WAS NOT HAVING SUFFICIENT MEANS A T THE OTHER HE IS CLAIMING OPENING BALANCE AND CONTRIBUTION BY OTHER FAMILY ME MBERS WITHOUT ANY SUPPORTING EVIDENCE. IN THE ABSENCE OF SUPPORTING EVIDENCE CL AIM OF THE ASSESSEE IS NOT PROVED. HENCE, THIS GROUND IS DISMISSED. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/05/2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) (BHAG CHAND ) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/05/2017 7 ITA NO. 819/JP/2017 SH. AMI LAL VS. THE INCOME TAX OFFICER GANESH KUMAR VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. AMI LAL, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- THE INCOME TAX OFFICER, ALWAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 819/JP/2014} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR