Shri Vittal Shripati Ladkat, Pune V. ACIT, Pune

ITA 982/PUN/2010

• Counselvise Citation: 98224514 RSA 2010
• Duration Of Justice: 4 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-07-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 05-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MAZHAR AKRAM
• Keywords: Loose papers; Document seized; Block assessment; Documents seized
• Section: 143(3); 54F; 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.982/PN/2010 (ASSESSMENT YEAR: 2001-02) SHRI VITTAL SHRIPATI LADKAT 288, BHAWANI PETH, PUNE 411001 PAN: AATPL9543N . APPELLANT VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE . RESPONDENT APPELLANT BY : SHRI KISHORE PHADKE RESPONDENT BY : SHRI MAZHAR AKRAM DATE OF HEARING : 21-11-2014 DATE OF PRONOUNCEMENT : 28-11-2014 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF C IT(A)- IV, PUNE DATED 26.02.2010 RELATING TO ASSESSMENT YEAR 20 01-02 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 153C OF THE INCOME- TAX ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A)-IV, PUNE, ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE JURISDICTION ASSUMED BY THE AC IT, CENTRAL CIRCLE 1(2), PUNE, U/S 153C R.W.S. 153 A IS INVALID FO R THE FOLLOWING REASONS A) NO SATISFACTION EXISTS TO THE EFFECT THAT SOME INCRIMINA TING MATERIAL BELONGING TO APPELLANT WAS FOUND IN SEARCH IN MR M ANISH LADKAT'S CASE; AND B) SUCH INCRIMINATING MATERIAL BELONGING TO THE APPELLANT DOE S NOT APPEAR TO HAVE BEEN HANDED OVER TO THE AO HOLDING JURISDI CTION ON THE APPELLANT. ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 2 2. THE LEARNED CIT(A)-IV, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT JURISDICTION OF A.Y. 2001-02 COULD NOT HAVE BEEN ASSUMED BY THE LEARNED AO SINCE A.Y. 2001-02 IS BEYOND THE PERIOD OF SIX (6) PRIOR YEARS FOR WHICH JURISDICTION U/S 153 A IS AVAILABLE. 3. THE LEARNED CIT(A)-IV, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT JURISDICTION U/S 153C CAN'T BE ASSU MED BY ANY MANNER OF ASSIGNMENT / TRANSFER OF A CASE U/S 127 O F THE ITA, 1961. HE OUGHT TO HAVE APPRECIATED THAT JURISDICTION U/S 153C HAS TO BE ASSUMED IN THE SPECIFIC MANNER PROVI DED U/S 153C. 4. THE LEARNED CIT(A)-IV, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT 7-12 EXTRACT OF LAND (HELD FOR PAST M ANY YEARS AS SUCH) CAN'T BE ANY INCRIMINATING MATERIAL WHICH CAN TRIGGER JURISDICTION U/S 153C. 5. THE LEARNED CIT(A), ERRED IN LAW AND ON FACTS IN SUSTA INING THE ADDITIONS OF RS.1,15,00,000 MADE BY THE AO IN THE HANDS OF THE APPELLANT WITH REGARD TO THE ALREADY OFFERED FOLLOWING C APITAL GAINS IN THE RESPECTIVE ASSESSEES : A. MR. JAIDEEP VITTHAL LADKAT - RS. 23 LACS B. MRS. MEENAKSHI VITTHAL LADKAT - RS. 23 LACS C. MRS. SHILPA JAIDEEP LADKAT - RS. 23 LACS D. MR. PRASANNA VITTHAL LADKAT - RS. 46 LACS 6. THE APPELLANT CRAVES LEAVE TO ADD / MODIFY / ALTER / DELETE ALL / ANY OF THE GROUNDS OF APPEAL. 3. THE GROUNDS OF APPEAL NOS.1, 2 AND 4 RAISED BY THE A SSESSEE ARE AGAINST THE DIFFERENT ASPECTS OF THE INVOKING THE JURISDICTIO N UNDER SECTION 153C R.W.S. 153A OF THE ACT. THE ISSUE IN GROUND OF APPEAL NO.5 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION OF RS .1,15,00,000/- IN THE HANDS OF THE ASSESSEE. 4. BRIEF FACTS OF THE CASE ARE THAT, SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF ONE SHR I MANISH PRABHAKAR LADKAT AND HIS WIFE SMT. KAVYA LADKAT, SITUATED AT PLOT NO.35, CLOUD-9, NIBM ROAD, PUNE. DURING THE COURSE OF SEAR CH, ONE LOOSE PAPER BUNDLE CONTAINING PAGES 1 TO 19 WERE SEIZED AS PER ANNEXURE A TO THE PANCHANAMA DATED 17.08.2006 FROM THE SAID ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 3 PREMISES. THE PAGE NUMBERS 15 TO 19 OF THE SAID BUNDLE WERE 7/12 EXTRACTS FOR THE LANDS OWNED BY THE ASSESSEE I.E. ELDER B ROTHER OF SHRI PRABHAKAR S. LADKAT. THE ASSESSING OFFICER THUS, ISSUED N OTICE UNDER SECTION 153C OF THE ACT ON 17.09.2008. THE ASSESSEE IN RESPONSE FILED THE RETURN OF INCOME ON 10.12.2008. THEREAFTER, NOTICE UND ER SECTION 143(2) AND 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 10.12.2008 . THE ASSESSEE APPEARED DURING THE ASSESSMENT PROCEEDIN GS AND FILED WRITTEN SUBMISSIONS. THE FIRST OBJECTION RAISED BY THE ASS ESSEE BEFORE THE ASSESSING OFFICER WAS THAT THE PROCEEDINGS INITIATED UN DER SECTION 153C OF THE ACT WERE BAD IN LAW SINCE THE CONDITIONS SPEC IFIED UNDER THE SAID SECTION WERE NOT SATISFIED. THE ASSESSING OFFICER NOTED THAT THE SEARCH WAS CONDUCTED AT THE RESIDENTIAL PREMISES AN D LOOSE PAPERS WERE FOUND FROM THE PREMISES WHICH RELATED TO THE ASSESS EE. THE CASE WAS ASSIGNED TO ACIT, CENTRAL CIRCLE 1(2), PUNE, AS THE JURIS DICTION OVER THE CASE OF THE ASSESSEE BEING WITH THE ASSESSING OFFICER, IT WAS HELD THAT THE PRE-REQUISITE FOR SECTION 153C OF THE ACT W AS SATISFIED AND THE CONTENTION OF THE ASSESSEE IN THIS REGARD WAS NOT TENABLE. 5. IN APPEAL BEFORE THE CIT(A), THE FIRST ISSUE RAISED BY TH E ASSESSEE WAS THE ASSUMPTION OF THE JURISDICTION BY THE ASSESSING O FFICER UNDER SECTION 153C OF THE ACT. THE CIT(A) NOTED THAT THERE WAS NO DISCUSSION IN THE ASSESSMENT ORDER RELATING TO ANY OBJEC TIONS FOR THE INITIATION OF ACTION UNDER SECTION 153C OF THE ACT. THEREFOR E, THE CIT(A) ASSUMED THAT THE ASSESSEE HAD NOT OBJECTED TO THE NOTICE DURING THE COURSE OF ASSESSMENT. THE CIT(A) FURTHER OBSE RVED HOWEVER, IT IS OBSERVED THAT THE APPELLANT IN THEIR S UBMISSIONS DATED 19.02.2010 HAS OBJECTED TO THIS NOTICE. THE CIT(A) WAS OF THE VIEW THAT THE SAID OBJECTION WAS NOT ENTERTAINABLE IN APPEAL AS THE SAME HAD NOT BEEN RAISED IN THE ASSESSMENT STAGE. FURTHER, REFERENCE WAS MADE TO ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 4 THE PROVISIONS OF SECTION 292B AND 292BB AND IT WAS HELD THAT IT WAS NOT SO COMMITTED. THE SECOND OBJECTION RAISED BY THE ASSESSEE THAT THE DOCUMENTS REPRESENTED THE LAND SALE WHICH HAD BEE N DECLARED IN THE RETURN OF INCOME AND HENCE THE DOCUMENT WAS NOT IN CRIMINATING, WAS ALSO REJECTED BY THE CIT(A). 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE THAT THE JURISDICTIONAL ASSESSING OFFICER OF THE ASSESSEE WA S ITO, WARD 5(3), PUNE. HOWEVER, THE PRESENT ASSESSMENT ORDER WAS P ASSED BY ACIT, CENTRAL CIRCLE 1(2), PUNE. IT WAS FURTHER STATED BY T HE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE AS SUMPTION OF JURISDICTION BY THE ACIT WAS INCORRECT AS NO SATISFACTION HAD BEEN RECORDED AND FURTHER, NO SEARCH MATERIAL HAD BEEN TRAN SFERRED FROM THE OLD ASSESSING OFFICER I.E. THE ASSESSING OFFICER OF SHRI MANIS H PRABHAKAR LADKAT TO THE NEW ASSESSING OFFICER I.E. ACIT, CENTRAL CIRCLE 1(2), PUNE. RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN MANISH MAHESHWARI VS. ACIT REPORTED IN (2007) 289 ITR 341 (SC) AND JINDAL STAINLESS LTD. VS. ACIT REPORTED IN (2009) 1 20 ITD 301 (DELHI), WAS PLACED. ANOTHER OBJECTION RAISED BY THE LEARNE D AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT TH E ASSUMPTION OF JURISDICTION BY THE ACIT WAS BECAUSE OF THE ASSIGNMENT O F THE CASES BY THE CIT AND SUCH ASSIGNMENT OF JURISDICTION HAD NOT CONFE RRED THE RIGHT ON THE ASSESSING OFFICER TO ASSUME JURISDICTION UNDER SECTION 153C OF THE ACT. IN THE ABSENCE OF ANY TRANSFER OF SEA RCH MATERIAL AND THE SATISFACTION NOTE BEING RECORDED BY THE ACIT TRANSFE RRING THE CASE TO THE OTHER ACIT WHO IS IN-CHARGE OF THE ASSESSMENT OF THE PRESENT ASSESSEE, THERE WAS INVALID ASSUMPTION OF JURISDICTION BY TH E ACIT, CENTRAL CIRCLE 1(2), PUNE. ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 5 7. ANOTHER PLEA RAISED BY THE ASSESSEE WAS THAT UNDER THE PROVISIONS OF SECTION 153C OF THE ACT IN CASE OF SEARCH, LAS T SIX ASSESSMENTS WERE ELIGIBLE FOR THE PROCEEDINGS UNDER SECTIO N 153A OF THE ACT AND ANY PENDING PROCEEDINGS FOR THE SAID SIX YE ARS WOULD ABATE AS PER THE SECTION TO PROVISO 153A OF THE ACT. T HE SAID SIX YEARS WERE TO BE COUNTED FROM THE ASSESSMENT YEAR IN WHICH S EARCH TOOK PLACE, IN THE CASE OF ASSESSMENT OF SEARCHED PERSON. UN DER SECTION 153C OF THE ACT, AS PER THE LEARNED AUTHORIZED REPRESEN TATIVE FOR THE ASSESSEE, THE DATE OF SEARCH IS TO BE UNDERSTOOD AS TH E DATE OF WHICH SATISFACTION WAS RECORDED AND THE REQUISITE SEARCH MATER IAL WAS HANDED OVER BY THE ASSESSING OFFICER OF THE SEARCHED PER SON TO THE ASSESSING OFFICER WHO IS IN-CHARGE OF THE PERSON WHOSE DOC UMENTS WERE FOUND. THE LEARNED AUTHORIZED REPRESENTATIVE FOR TH E ASSESSEE THUS, POINTED OUT THAT NOTICE UNDER SECTION 153C OF THE ACT WAS ISSUED ON 17.09.2008 AND IN CASE THERE WAS BACK CALCULATION OF T HE SIX YEARS, THEN, THE SIX YEARS ENDS IN ASSESSMENT YEAR 2003-04. THE YEAR UNDER APPEAL WAS ASSESSMENT YEAR 2001-02 AND AS PER THE AS SESSEE, THIS WAS THE EIGHTH YEAR FOR WHICH NO NOTICE UNDER SECTION 1 53C R.W.S. 153A OF THE ACT COULD BE ISSUED. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE R ATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SHIKSHAN A PRASARAK MANDALI VS. CIT & OTHERS REPORTED IN (2013) 352 ITR 53 (B OM). THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE VEHE MENTLY ARGUED THAT THE SEIZED DOCUMENTS WERE NOT ANY INCRIMINATING MAT ERIAL AS DEFINED UNDER THE ACT AS THE SAID 7/12 EXTRACTS BELONGIN G TO THE REVENUE AND WAS A PUBLIC DOCUMENT. IT WAS VEHEMENTLY ARGUE D BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THOUGH THE DOCUMENT WAS IN THE NAME OF THE ASSESSEE AND THE CONT ENTS BELONG TO THE ASSESSEE, BUT THE SAID DOCUMENT BEING A PUBLIC DOCU MENT, COULD ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 6 NOT BE HELD TO BE A INCRIMINATING DOCUMENT VIS--VIS ASSES SEE. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE PUNE BE NCH OF THE TRIBUNAL IN SINHGAD TECHNICAL EDUCATION SOCIETY VS. ACIT IN I TA NO.114 TO 117/PN/2010 REPORTED IN (2011) 140 TTJ (PUNE ) 233 AND ALSO ON VIJAYBHAI N. CHANDRANI VS. ACIT REPORTED IN (2011 ) 333 ITR 436 (GUJ). 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE POINTED OUT THAT UNDER THE PROVISIONS OF SECTION 127 OF T HE ACT, THE CIT FOR PROPER INVESTIGATION OF THE CASES, ASSIGNED BOTH THE CASES OF THE SEARCHED PERSON AND ALSO OF THE ASSESSEE, TO THE SAME ASSESSING OFFICER. SO, THE STAGE OF RECORDING OF SATISFACTION AND THE ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT WAS WITH THE SAME ASSESSING OFFICER. AS PER THE LEARNED DEPARTMENTAL REPRESENTATIVE FO R THE REVENUE, THE PERUSAL OF THE RECORD REFLECTED THAT SATISFAC TION WAS RECORDED IN THE CASE AND THEREAFTER, NOTICE ISSUED UNDE R SECTION 153C OF THE ACT. IT WAS FURTHER POINTED OUT BY THE LEARNED D EPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT THE STATUTE WAS C LEAR TO THE EXTENT THAT THE DOCUMENTS FOUND DURING THE SEARCH PROCEEDINGS , WHICH BELONGED TO OTHER PERSON, SATISFACTION WAS TO BE RECORDE D TO INITIATE THE ASSESSMENT PROCEEDINGS UNDER SECTION 153C OF THE ACT, IN THE HANDS OF SUCH PERSON AND THERE IS NO CONDITION OF THE RECORDING T HAT THE DOCUMENTS WERE INCRIMINATING, BEFORE THE ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT. THE LEARNED DEPARTMENTAL REPRES ENTATIVE FOR THE REVENUE FURTHER POINTED OUT THAT THERE IS NO MERIT IN THE PLEA OF THE ASSESSEE THAT THE DOCUMENT DOES NOT BELONG TO HIM . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ISSUE HAS BEEN ELABORATED UPON BY THE HONBLE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. VS. DY.CIT REPORTED IN (2012) 70 D TR (DEL) ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 7 275. IT WAS ALSO POINTED OUT BY THE LEARNED DEPARTMENT AL REPRESENTATIVE FOR THE REVENUE THAT THE AHMEDABAD BEN CH OF THE TRIBUNAL IN VIJAY M. VIMAWAL VS. ACIT REPORTED IN (2009) 124 T TJ (AHD) 508 HAS NOT CORRECTLY INTERPRETED THE PROVISIONS O F SECTION 153C OF THE ACT. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FURTHER POINTED OUT THAT THERE IS NO MERIT IN THE PLEA OF THE ASSESSEE VIS--VIS THE SIX YEARS TO BE CONSIDERED FOR WHICH THE S TART DATE IS DATE OF SEARCH I.E. 17.08.2006 AND THE YEAR UNDER APPEAL FOR THIS WITHIN THAT PERIOD OF SIX YEARS WHICH CAN BE REOPENED. 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THE TRANSACTION OF SALE OF THE PROPERTY MENTION ED IN THE SEIZED DOCUMENT HAS BEEN DECLARED BY THE ASSESSEE IN THE RET URN OF INCOME RELATING TO THE ASSESSMENT YEAR 2002-03. THE SATHBARI WHICH WAS FOUND FROM THE POSSESSION OF THE SEARCHED PERSON WAS DA TED 23.08.2007. HOWEVER, THE PROPERTY WAS SOLD PRIOR TO THE DATE MENTIONED IN THE SAID SATHBARI. IT WAS ALSO POINTED OUT THAT THE SAID PROPERTY WAS ORIGINALLY OWNED BY THE ANCESTORS OF THE A SSESSEE AND IT WAS PARTITIONED BETWEEN DIFFERENT MEMBERS OF HUF IN MARCH, 1974. THEREAFTER, ON 04.04.2000, THE FAMILY SETTLEMENT DEED OF TH E FAMILY MEMBERS OF THE ASSESSEE WAS ALSO EXECUTED AND ON 12.12 .2000, DEVELOPMENT AGREEMENT BETWEEN VARIOUS FAMILY MEMBERS O F VITTAL SHRIPATI LADKAT I.E. ASSESSEE BEFORE US AND M/S. KUMAR ASS OCIATES WAS ENTERED INTO AND THE CAPITAL GAIN ARISING ON THE SALE OF THE SAID SHARE IN THE PROPERTY WAS OFFERED TO TAX IN ASSESSMENT YEAR 2002-03 BY ALL THE MEMBERS. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E RECORD. THE FIRST ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE INVOKING THE ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 8 JURISDICTION UNDER SECTION 153C OF THE ACT. SEARCH AND S EIZURE OPERATIONS WERE CARRIED OUT AT THE PREMISES OF SHRI MAN ISH PRABHAKAR LADKAT AND HIS WIFE AND LOOSE PAPER BUNDLE WAS FOUND AND SEIZED FRO M HIS PREMISES. THE PAGE NOS.15 TO 19 OF THE SAID BUNDLE WE RE THE 7/12 EXTRACTS FOR THE LANDS OWNED BY THE ASSESSEE BEFORE US . PURSUANT TO THE SEARCH PROCEEDINGS, THE JURISDICTIONAL CIT TRANSFERRED THE CASES, BOTH OF THE PERSONS SEARCHED AND THE ASSESSEE TO THE ACIT, CENTRAL CIRCLE 1(2), PUNE. THUS, THE ASSESSING OFFICER HAD THE JURISD ICTION OVER THE PERSONS SEARCHED FROM WHOSE POSSESSION, THE DOCUME NTS RELATING TO THE ASSESSEE WERE FOUND AND ALSO OF THE ASSESSEE TO WHOM THE SAID PAPERS RELATED. THE ASSESSING OFFICER THEREFORE, ISSUED A N OTICE UNDER SECTION 153C OF THE ACT TO THE ASSESSEE. THE CONTENTIO N OF THE ASSESSEE BEFORE US WAS TWOFOLD, THAT NO SATISFACTION WAS R ECORDED BY THE ACIT BEFORE TRANSFER OF RECORDS AND ISSUE OF NOTICE U NDER SECTION 153C OF THE ACT. THE SECOND ASPECT OF THE SAID ISSUE R AISED BY THE ASSESSEE WAS THAT THE ASSUMPTION OF JURISDICTION BY THE ACIT BY WAY OF TRANSFER OF CASE UNDER SECTION 127 OF THE ACT, WAS NOT CORRECT. 11. WE FIND NO MERIT IN THE SAID PLEA OF THE ASSESSEE AS T HE JURISDICTIONAL CIT UNDER THE PROVISIONS OF SECTION 127 OF T HE ACT IS EMPOWERED TO TRANSFER THE JURISDICTION OF THE SPECIFIED PER SONS TO A DESIGNATED ASSESSING OFFICER. THE JURISDICTION IN THE CASE O F THE ASSESSEE WAS TRANSFERRED TO ACIT, IN-CHARGE OF THE CEN TRAL CIRCLE 1(2), PUNE WHO WAS ALSO HANDED OVER THE CHARGE OF THE PERSO NS SEARCHED FROM WHOSE POSSESSION DOCUMENTS RELATING TO THE ASSES SEE WERE FOUND. IN SUCH CIRCUMSTANCES, WHERE THE ASSESSING OFFICER OF THE PERSONS SEARCHED AND OF THE PERSONS TO WHOM THE DOCUMENTS BE LONG, WHICH WERE FOUND FROM THE POSSESSION OF THE SEARCHED PERSONS WAS SAME, IT CANNOT BE SAID THAT NO SATISFACTION WAS RECORDED THAT T HE MATERIAL ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 9 FOUND DURING THE SEARCH BELONGED TO THE ASSESSEE. WE FIN D NO MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD AS THE ASSESSING OFFICER WHILE GOING THROUGH THE SEARCH MATERIAL FOUND FROM THE POSSESS ION OF SHRI MANISH PRABHAKAR LADKAT CAME TO A FINDING THAT PAGES 1 5 TO 19 OF ANNEXURE-A TO PANCHANAMA DATED 17.08.2006 RELATED TO T HE ASSESSEE. IN SUCH CASES THERE WAS NO NECESSITY OF HANDING OVER O F RECORDS FROM ONE PERSON TO ANOTHER PERSON. UNDER SUCH CIRCUMSTANC ES, WE HOLD THAT THE ASSESSING OFFICER HAD CORRECTLY INVOKED THE JUR ISDICTION TO INITIATE THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. 12. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE HAD PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE SUPR EME COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA), WHEREIN IT HAS BEEN LAID DOWN THAT A CONDITION PRECEDENT FOR ASSESSING OFFICER TO TAKING RECOURSE TO BLOCK ASSESSMENTS IN TERMS OF SECTION 158BD OF THE ACT IS TO RECORD A SATISFACTION THAT SOME UNDISCLOSED INCOME BEL ONGS TO A PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM TH E SEARCH WAS MADE UNDER SECTION 132 OF THE ACT. IN THE ABSENCE OF R ECORDING OF THE REQUISITE SATISFACTION ON THE PART OF THE ASSESSING OFFICER A ND IN THE ABSENCE OF THE DOCUMENTS AND OTHER ASSETS RECOVERED DURING THE SEARCH HAVING BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION IN THE MATTER, THE HONBLE APEX COURT HELD THE PROCEEDIN GS TO BE INVALID. 13. IN THE FACTS OF THE PRESENT CASE AS POINTED OUT AT PARAS HEREIN ABOVE, THE ASSESSING OFFICER WAS HOLDING THE JURISDICTION OF T HE PERSON SEARCHED UNDER SECTION 132 OF THE ACT, FROM WHOSE POSS ESSION CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND. THE SAID OFFICER ALSO HELD THE JURISDICTION OF THE PRESENT ASSESSEE BEFORE US A ND THE ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 10 SATISFACTION IN SUCH CIRCUMSTANCES CAN BE SAID TO HAVE BE EN EXERCISED BY THE ASSESSING OFFICER BEFORE INITIATING THE PROCEEDINGS U NDER SECTION 153C OF THE ACT. 14. ANOTHER RELIANCE PLACED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS ON THE DECISION IN THE CASE O F VIJAY M. VIMAWAL (SUPRA), WHEREIN IT HAS BEEN HELD THAT WHERE TH E MATERIAL FOUND I.E. A LOOSE PAPER DID NOT RELATE TO THE PERSON, THEN THE NOTICE UNDER SECTION 153C OF THE ACT IS TO BE QUASHED AND THE PROCEEDINGS SET ASIDE. THE ISSUE RAISED BEFORE THE HONBLE GUJARAT H IGH COURT IN VIJAY M. VIMAWAL IS FACTUALLY DIFFERENT AND IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 15. ANOTHER ASPECT OF THE ISSUE RAISED BY THE ASSESSEE IS THAT IN THE ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND DURING THE CO URSE OF SEARCH, THE JURISDICTION INVOKED BY THE ASSESSING OFFICER IS INVALID. THE HONBLE DELHI HIGH COURT IN THE CASE OF SSP AVIATION L TD VS. DCIT (SUPRA) HAD ALSO CONSIDERED SIMILAR ISSUE AND HAD OBSERVED THAT FOR INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT, T HE REQUIREMENT IS THAT CERTAIN DOCUMENTS SHOULD BE FOUND WH ICH BELONGED TO A PERSON OTHER THAN THE PERSON SEARCHED, SO THAT IT CAN BE ASCERTAINED WHETHER THE TRANSACTIONS OF THE INCOME EMB ODIED IN THE DOCUMENTS HAS BEEN ACCOUNTED FOR IN THE CASE OF APPROP RIATE PERSON. AS PER THE HIGH COURT, THIS WOULD BE THE FIRST STEP OF ENQ UIRY, WHICH IS TO FOLLOWED BY THE ASSESSING OFFICER, WHO IS IN-CHARGE OF THE PERSON SEARCHED, WHO WOULD FORWARD THE DOCUMENTS TO THE ASSES SING OFFICER HAVING JURISDICTION OVER THE OTHER PERSONS, WHO IN TURN C OULD FOLLOW THE PRESCRIBED PROCEDURE UNDER SECTION 153A OF THE ACT , IN ORDER TO ENSURE THAT THE INCOME REFLECTED IN THE DOCUMENTS HAS BEEN ACC OUNTED ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 11 FOR BY SUCH OTHER PERSON. FOLLOWING THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN SSP AVIATION (SUPRA), WE FIND NO MERIT IN T HE PLEA OF THE ASSESSEE THAT THE DOCUMENT FOUND IN THE PRESENT CASE BEING 7/12 EXTRACTS, LANDHOLDING OF THE ASSESSEE, BEING A PUBLIC D OCUMENT, CANNOT BE SAID TO BE A DOCUMENT ON THE BASIS OF WHICH, T HE PROCEEDINGS UNDER SECTION 153C OF THE ACT COULD BE INITIATED. 16. NOW COMING TO THE MERITS OF THE ISSUE RAISED, THE PROP ERTY WAS OWNED BY THE ANCESTORS OF THE ASSESSEE FROM PRIOR TO THE YEAR 1932. IN THE YEAR 1974, THERE WAS A PARTITION OF BIGGER HUF AND O NE PART OF THE PROPERTY DEVOLVED UPON THE ASSESSEE CONSISTING OF HIMSELF, HIS WIFE, SON AND DAUGHTERS. THE SAID SMALLER HUF OF THE ASSESS EE FURTHER PARTITIONED THE PROPERTY IN APRIL, 2000 AND ALL THE FAMILY M EMBERS RECEIVED SPECIFIC RIGHTS IN THE SAID LAND IN THE SR.NO.44, WHI CH WAS TRANSFERRED TO M/S. KUMAR ASSOCIATES, VIDE DEVELOPMENT AG REEMENT DATED 12.12.2000. SIMULTANEOUSLY, THE ASSESSEE ALSO FILED WE ALTH TAX RETURNS ALONG WITH HIS FAMILY MEMBERS FOR THEIR INDIVIDUAL SH ARES IN THE PROPERTY, WHICH HAS BEEN ACCEPTED BY THE WEALTH TA X AUTHORITIES. THE ASSESSING OFFICER ON THE OTHER HAND, OBSERVED THAT 7/12 EXTRACT OF SR.NO.44, 2A DATED 23.08.2007 BEARS THE NAME OF THE ASSES SEE AS INDIVIDUAL AND NO OTHER PERSON HAS ANY RIGHT ON THE SAID PROPERTY. THUS, THE PROPERTY IN RELATION TO WHICH THE DEVELOPMENT AGREEMENT HAD BEEN ENTERED INTO WAS EXCLUSIVELY OWNED BY THE ASS ESSEE. THE ASSESSING OFFICER THUS, OBSERVED THAT THE CAPITAL GAIN ARISI NG ON THE SALE OF THE PROPERTY WOULD BE ASSESSED IN THE HANDS OF T HE ASSESSEE. AS PER THE ASSESSING OFFICER, THE FULL VALUE OF CONSIDERATION W HETHER RECEIVED IN PART OR IN DIFFERENT YEARS WAS TO BE TAKEN IN TO ACCOUNT FOR COMPUTING THE CAPITAL GAINS WHICH BECAME CHARGEABLE IN THE YEAR OF TRANSFER. THE ASSESSING OFFICER COMPUTED THE FULL VALUE OF THE ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 12 CONSIDERATION RECEIVED BY THE ASSESSEE AND HIS FAMILY MEM BERS AND OBSERVED THAT VALUE OF RS.1.38 CRORES IS TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE SINCE HE WAS THE SOLE AND EXCLUSIVE OWNE R OF THE PROPERTY. SINCE THE DEVELOPMENT AGREEMENT WAS ENTERED INTO ON 12.12.2000 I.E. RELATING TO ASSESSMENT YEAR 2001-02, THE CA PITAL GAIN WAS HELD TO BE TAXABLE IN THE YEAR OF TRANSFER. RELIANCE W AS PLACED UPON THE RATIO LAID DOWN IN THE CASE OF CHATURBHUJ DWAR KADAS KAPADIA VS. CIT REPORTED IN (2003) 260 ITR 491 (BOM). TH E ASSESSEE HAVING OFFERED CAPITAL GAIN IN ASSESSMENT YEAR 2002-03, WAS HELD TO BE INVALID AND THE TOTAL CAPITAL GAIN WAS ASSESSED IN THE HAND S OF THE ASSESSEE IN ASSESSMENT YEAR 2001-02. THE ASSESSEE HA D CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT FOR THE PURCHASE OF PROPERTY WHICH WAS NOT ALLOWED TO THE ASSESSEE BY THE ASSESSING OFFICER. 17. THE CIT(A) VIDE PARA 5.3 OF THE APPELLATE ORDER, UPHELD THE ORDER OF ASSESSING OFFICER BUT ALLOWED THE DEDUCTION UNDER SECTIO N 54F OF THE ACT IN RESPECT OF ONE FLAT. ON THE PERUSAL OF THE RELE VANT DOCUMENTS, EVIDENCE PRODUCED BY THE ASSESSEE INCLUDING THE DEVELOPMENT AGREEMENT ENTERED IN BETWEEN VARIOUS FAMILY MEMBERS OF THE ASSESSEE AND M/S. KUMAR ASSOCIATES DATED 12.12.2000 , IT IS APPARENT THAT THE SAID DEVELOPMENT AGREEMENT WAS ENTE RED INTO BY THE ASSESSEE AND HIS FAMILY MEMBERS IN THEIR INDIVIDUAL CAPACITIE S. THE ASSESSEE AND HIS FAMILY MEMBERS HAD FILED THE WEALTH TAX RETURNS ALSO FOR THE RESPECTIVE YEARS OF THE PERIOD OF HOLDING THE SAID PROPERTY WHICH HAS BEEN ACCEPTED BY THE INCOME TAX DEPARTMENT WHICH IN TURN ESTABLISHES THE CASE OF THE ASSESSEE THAT HE WAS HOLDING THE SAID PROPERTY JOINTLY ALONG WITH HIS FAMILY MEMBERS. ONCE THE PROPERTY IS BEING HELD BY THE ASSESSEE AND THEIR FAMILY MEMBERS FROM YEAR TO YEAR JOINTLY, WE FIND NO MERIT IN THE ORDER OF THE ASSESSING OFFIC ER, IN THIS ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 13 REGARD. THE ASSESSEE AT BEST COULD BE TAXED FOR THE IN COME ARISING IN HIS HANDS ONLY OF HIS SHARE IN THE PROPERTY AND NOT ON ACCOUNT OF INCOME ARISING ON ACCOUNT OF SHARE OF HIS FAMILY MEMBERS IN THE PROPERTY, EVEN THOUGH THE 7/12 RECORDS THE NAME OF AS SESSEE. THE ASSESSEE HAD ALREADY DECLARED HIS SHARE OF INCOME FROM C APITAL GAINS IN ASSESSMENT YEAR 2002-03. HOWEVER, THE GAIN ARISING FRO M THE SALE OF THE PROPERTY IS NOW BEING TAXED IN THE HANDS OF THE A SSESSEE IN ASSESSMENT YEAR 2001-02 HOLDING THE ASSESSEE TO BE TH E OWNER OF THE WHOLE PROPERTY. HOWEVER, WE FIND NO MERIT IN THE SAID STAN D TAKEN BY THE AUTHORITIES BELOW, ESPECIALLY IN VIEW OF THE FACTS AND CIR CUMSTANCES POINTED HERE-IN-ABOVE. ACCORDINGLY, WE DIRECT THE ASSESS ING OFFICER TO TAX THE SHARE OF THE ASSESSEE IN THE SAID PROPERTY IN H IS HANDS AND THE BALANCE SHARE OF THE PROPERTY IS TO BE TAXED IN THE HAN DS OF THE OTHER FAMILY MEMBERS WHO ARE JOINT OWNERS OF THE PROPERTY. TH E CIT(A) HAS VIDE PARA 6 OF THE APPELLATE ORDER HELD THE ASSESSEE TO BE ENTITLED TO THE DEDUCTION UNDER SECTION 54F OF THE ACT IN RESPECT O F ONE FLAT OWNED BY THE ASSESSEE, AGAINST WHICH THE REVENUE IS NOT IN APP EAL. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RE-COMPU TE THE INCOME OF THE ASSESSEE UNDER THE HEAD CAPITAL GAIN IN THE HANDS OF THE ASSESSEE VIS--VIS HIS SHARE IN THE PROPERTY AFTER ALLOWIN G THE BENEFIT OF DEDUCTION UNDER SECTION 54F OF THE ACT. 18. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASS ESSEE RAISED ANOTHER ASPECT THAT THE NOTICE UNDER SECTION 153C OF T HE ACT WAS ISSUED ON 17.09.2008 AND AT BEST, THE ASSESSING OFFICER COU LD GO BACK SIX YEARS UP TO 2003-04, SINCE THE YEAR UNDER CONSIDER ATION WAS THE ASSESSMENT YEAR 2001-02, THE INITIATION OF THE PROCEEDIN GS WERE INCORRECT. RELIANCE ON THIS REGARD PLACED ON THE RATIO LAID DOWN BY THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF VIJAY M. VIMAWAL ITA NO.982/PN/2010 SHRI VITTAL SHRIPATI LADKAT 14 (SUPRA). WE ARE NOT ADJUDICATING THIS ISSUE SINCE THE ASSE SSEE HAS GOT THE NECESSARY RELIEF. THE GROUNDS OF APPEAL RAISED BY TH E ASSESSEE ARE THUS, PARTLY ALLOWED. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF NOVEMBER, 2014. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 28 TH NOVEMBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-IV, PUNE; 4) THE CIT-IV, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE