Shri Babubhai Mavjibhai Mangukiya, Ahmedabad V. The ACIT.,Cent.Circle-1(2), Ahmedabad

ITSSA 110/AHD/2013

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5331 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1999-2000
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Income from undisclosed sources; Loose papers; Documents seized; Set aside
• Section: 153A; 132; 15

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER IT(SS)A NO.110/AHD/2013 / ASSTT.YEAR : 1999-2000 BABUBHAI MAVJIBHAI MANGUKIYA C-3, 503-504, ANUSHRUTHI TOWER OPP: NEW YORK TOWER SG HIGHWAY AHMEDABAD 380 065. PAN : ABCPM 8362 J VS. ACIT, CENT.CIR.1(2) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI ALOK SINGH, CIT-DR / DATE OF HEARING : 19/08/2019 / DATE OF PRONOUNCEMENT: /08/2019 45/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-I, AHMEDABAD DATED 9.2.2011 PASSED FOR THE ASSESSMENT YEAR 1999-2000. 2. ASSESSEE HAS TAKEN TWO GROUNDS OF APPEAL WHICH F URTHER CONTAINED SUB- GROUNDS. IN BRIEF HIS GRIEVANCE IS THAT THE LD.CIT (A) HAS ERRED IN UPHOLDING THE ACTION OF AO IN TAKING OF COGNIZANCE UNDER SECT ION 153C OF THE INCOME TAX ACT, 1961 BY THE AO, AND THEREAFTER CONFIRMED T HE ADDITION OF RS.5.00 LAKHS ON ACCOUNT OF UNEXPLAINED RECEIPTS. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH OPERAT ION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON SHRI VIKAS A SHAH (VAS FOR SHORT) ON 9.2.2005. IT(SS)A NO.110/AHD/2013 2 DURING THE COURSE OF SEARCH CERTAIN LOOSE PAPERS WE RE FOUND FROM TOYOTA VEHICLE BEARING REGISTRATION NO.GJ-1HF-251 OWNED BY SHRI VIKAS A. SHAH. ACCORDING TO THE AO A PERUSAL OF PAGES NO.56, 57 AN D 70 OF ANNEXURE A/124 IT REVEALED THAT VAS HAS MAINTAINED CERTAIN CASH BO OK WHEREIN PAYMENT OF RS.5 LAKHS WAS BEING NOTED ON PAGES 56, 57 AND 70 T O THE ASSESSEE. ON THE BASIS OF THESE LOOSE PAPERS, THE AO TOOK COGNIZANCE UNDER SECTION 153C OF THE ACT AND OBSERVED THAT PAPERS BELONGING TO THE ASSES SEE WERE FOUND, AND THEREFORE, THE ASSESSMENT UNDER SECTION 153C DESERV ES TO BE MADE AGAINST THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE LD.AO CONFRONTED THE ASSESSEE TO SHOW WHETHER PAYMENTS MADE BY VAS H AVE BEEN INCLUDED IN HIS INCOME OR NOT. IN RESPONSE TO THIS QUERY, IT WAS CONTENDED BY THE ASSESSEE THAT HE HAS NOT MADE ANY TRANSACTION WITH VAS. HE HAS NOT GIVEN OR RECEIVED ANY AMOUNT FROM THE SAID PERSON. THE AO OBSERVED T HAT VAS HAS MAINTAINED A CASH BOOK WHEREIN HE HAS DEBITED EXPENDITURE BEIN G PAYMENT MADE TO THE ASSESSEE. THEREFORE, THE VERACITY OF THE DOCUMENTS CANNOT BE DOUBTED MORE SO WHEN VAS HAS ADMITTED IN HIS STATEMENT ABOUT SUCH P AYMENTS. THE ASSESSEE FAILED TO GIVE ANY PLAUSIBLE EXPLANATION ACCORDINGL Y, HE MADE ADDITION OF RS.5.00 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT AMENDMENT IN SECTION 153C HAS BEEN EFFECTED W.E.F. 2015 WHEREBY EXPRESSION BELONGS TO HAD BEEN REPLACED WITH WORDS PERTAINS OR PERTAIN S TO. IN THE PRESENT ASSESSMENT YEAR EXPRESSION BELONGS TO WAS EMPLOYE D IN SECTION 153C, AND THIS SECTION WOULD BE APPLICABLE IF DOCUMENTS BELON GS TO THE ASSESSEE WERE FOUND AT THE PREMISES OF VAS. NO SUCH DOCUMENT WAS FOUND. THE ALLEGED LOOSE PAPER WAS NOT IN THE HAND-WRITING OF THE ASSE SSEE. IT WAS IN THE HAND- WRITING OF THE ACCOUNTANT OF VAS. IT CAN BIND VAS AND NOT THE THIRD PERSON. THEREFORE, NO NOTICE OUGHT TO HAVE BEEN ISSUED UPON THE ASSESSEE UNDER IT(SS)A NO.110/AHD/2013 3 SECTION 153C OF THE ACT. FOR BUTTRESSING HIS CONTE NTION, HE RELIED UPON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF VIJAYBHAI N. CHANDRANI VS. ACT, 333 ITR 436(GUJ). ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, HONBLE HIGH COURT HAS CONSIDERED THIS AS PECT IN THIS JUDGMENT. ON THE OTHER HAND, THE LD.DR RELIED UPON ORDERS OF THE REVENUE AUTHORITIES AND CONTENDED THAT NARRATIONS IN THE DOCUMENTS FOUND AT THE PREMISES OF THE VAS ARE RELATED TO THE ASSESSEE, THEREFORE, COGNIZANCE IN HIS CASE HAS RIGHTLY BEEN TAKEN. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. NO DOUBT, ASSESSMENT YEAR INVOLVED BEFO RE US IS ASSESSMENT YEAR 1999-2000. SEARCH WAS CONDUCTED ON 9.2.2005. DOCU MENT ALLEGED TO HAVE BEEN BELONGED TO THE ASSESSEE WERE FOUND FOR THE AS SESSMENT YEAR 1999-2000. THERE IS DISTINCTION BETWEEN THE EXPRESSION BELONG S TO AND PERTAINS TO. UNDER THE EXPRESSION BELONGS TO DOCUMENT HAS DIRE CT NEXUS WITH THE PERSON AGAINST WHOM IT IS ALLEGED THAT IT BELONGS TO THAT PERSON. UNDER THE EXPRESSION PERTAIN OR PERTAINS TO, IF NARRATIONS IN THE DO CUMENTS WERE FOUND TO BE RELATED TO THE ASSESSEE, THEN IT COULD BE CONSTRUED AS PERTAINS TO THE ASSESSEE. AS FAR AS THE CASE OF THE ASSESSEE IS CONCERNED, IN THAT YEAR EXPRESSION BELONGS WAS APPLICABLE AND DOCUMENTS COULD BE CON SIDERED AS BELONGS TO THE ASSESSEE, IF ANY FACSIMILE, TEXT MESSAGE, AGREE MENT UNDER THE SIGNATURE OF ASSESSEE OR IN HIS HAND-WRITING WAS FOUND AT THE PR EMISES OF VAS, THEN ONLY IT COULD BE ALLEGED THAT DOCUMENTS BELONGS TO THE ASSE SSEE WERE FOUND. HERE THE DOCUMENT WAS NOT IN THE HAND-WRITING OF THE ASSESSE E. IT IS IN THE HAND- WRITING OF THE THIRD PERSON. IT COULD NOT BIND THE ASSESSEE. AN IDENTICAL SITUATION HAS BEEN CONSIDERED BY THE HONBLE HIGH C OURT IN THE CASE OF VIJAYBHAI N. CHANDRANI (SUPRA) AND THE RELEVANT DIS CUSSION MADE BY THE HONBLE COURT READS AS UNDER: IT(SS)A NO.110/AHD/2013 4 12. ON A PLAIN READING OF THE AFORESAID PROVISIONS IT IS APPARENT THAT SS. 153A, 153B AND 153C LAY DOWN A SCHEME FOR ASSES SMENT IN CASE OF SEARCH AND REQUISITION. SEC. 153A DEALS WITH PROCED URE FOR ISSUANCE OF NOTICE AND ASSESSMENT OR REASSESSMENT IN CASE OF TH E PERSON WHERE A SEARCH IS INITIATED UNDER S. 132 OR BOOKS OF ACCOUN T, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER S. 132A AFTER THE 31ST DAY OF MAY, 2003. SEC. 153B LAYS DOWN THE TIME-LIMIT FOR COMPLE TION OF ASSESSMENT UNDER S. 153A. SEC. 153C WHICH IS SIMILARLY WORDED TO S. 158BD OF THE ACT, PROVIDES THAT WHERE THE AO IS SATISFIED THAT A NY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN S. 153A HE SHALL PRO CEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTIC E AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON. HOWEVER, THER E IS A DISTINCTION BETWEEN THE TWO PROVISIONS IN AS MUCH AS UNDER S. 1 53C NOTICE CAN BE ISSUED ONLY WHERE THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED OR REQUISITIONED BELONG TO SUCH OTHER PERSON, WHEREAS UNDER S. 158BD IF THE AO IS SATISFIED THAT ANY UNDISCLOSED INCOME BEL ONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH W AS MADE UNDER S. 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS WERE REQUISITIONED UNDER S. 132A, HE SHALL PROCEED AGAIN ST SUCH OTHER PERSON UNDER S. 158BC. 13. THUS A CONDITION PRECEDENT FOR ISSUING NOTICE U NDER S. 153C AND ASSESSING OR REASSESSING INCOME OF SUCH OTHER PERSO N, IS THAT THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH PERSON. IF THE SAID REQUIREMENT IS NOT SATISFIED, R ESORT CANNOT BE HAD TO THE PROVISIONS OF S. 153C OF THE ACT. 14. EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE AFORESAID STATUTORY SCHEME, IT IS AN ADMITTED POSITION AS EME RGING FROM THE RECORD OF THE CASE, THAT THE DOCUMENTS IN QUESTION, NAMELY THE THREE LOOSE PAPERS RECOVERED DURING THE SEARCH PROCEEDING S DO NOT BELONG TO THE PETITIONER. IT MAY BE THAT THERE IS A REFERENCE TO THE PETITIONER IN AS MUCH AS HIS NAME IS REFLECTED IN THE LIST UNDER THE HEADING 'SAMUTKARSH MEMBERS DETAILS' AND CERTAIN DETAILS ARE GIVEN UNDE R DIFFERENT COLUMNS AGAINST THE NAME OF THE PETITIONER ALONG WITH OTHER MEMBERS, HOWEVER, IT IS NOBODY'S CASE THAT THE SAID DOCUMENTS BELONG TO THE PETITIONER. IT IS NOT EVEN THE CASE OF REVENUE THAT THE SAID THREE DO CUMENTS ARE IN THE IT(SS)A NO.110/AHD/2013 5 HANDWRITING OF THE PETITIONER. IN THE CIRCUMSTANCES , WHEN THE CONDITION PRECEDENT FOR ISSUANCE OF NOTICE IS NOT FULFILLED A NY ACTION TAKEN UNDER S. 153C OF THE ACT STANDS VITIATED. 15. FOR THE FOREGOING REASONS, THE PETITION SUCCEED S AND IS ACCORDINGLY ALLOWED. THE IMPUGNED NOTICES DT. 7TH OCT., 2009 IS SUED BY THE RESPONDENT UNDER S. 153C OF THE ACT ARE HEREBY QUAS HED AND SET ASIDE. RULE IS MADE ABSOLUTE ACCORDINGLY WITH NO ORDER AS TO COSTS. 6. IN THE LIGHT OF THE ABOVE FACTS, IF THE FACTS ON HAND ARE CONSIDERED, THEN IT WOULD REVEAL THAT NO COGNIZANCE UNDER SECTION 15 3C OUGHT TO HAVE BEEN TAKEN AGAINST THE ASSESSEE, MORE SO, ADDITION ON AC COUNT OF UNACCOUNTED INCOME CANNOT BE MADE ON THE BASIS OF NARRATION WRI TTEN BY A THIRD PERSON IN HIS DIARY FOUND AT HIS RESIDENCE. THERE MAY BE HUN DREDS OF REASONS FOR VAS FOR WRITING SUCH NARRATIONS, BUT IT COULD NOT BE CO NSTRUED THAT IT WAS AN ESCAPED INCOME ASSESSABLE IN THE HANDS OF THE ASSES SEE. THEREFORE, WE ARE OF THE VIEW THAT THE LD.REVENUE AUTHORITIES HAVE FAILE D TO APPRECIATE THE FACTS IN RIGHT PERSPECTIVE WHILE CONFIRMING THE ADDITION IN THE HANDS OF THE ASSESSEE. WE ALLOW THE PRESENT APPEAL AND DELETE THE ADDITION OF RS.5.00 LAKHS MADE TO THE TOTAL INCOME OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 20 TH AUGUST, 2019 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 20/08/2019