ACIT, Circle - 31, Kolkata, Kolkata V. Vineet Dhingra, Kolkata

ITSSA 139/KOL/2011

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8492 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 20-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANIK
• Assessee Lawyers: D S DAMLE PER PRAMOD KU
• Keywords: Search and seizure; Loose papers; Document seized; Block assessment; Documents seized
• Section: 143(3); 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI PRAMOD KUMAR, A.M. & SHRI MAHAVIR SIN GH, J.M. ] I.T.(SS)A. NO.139/KOL/2011 ASSESSMENT YEAR :2005-06 A.C.I.T., CIRCLE-31, KOLKATA - VS- VINEET DHINGRA 19, GANESH CHANDRA AVEN UE KOLKATA 700 013 (PAN:ACWPD 6236F) ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 29.08.2012 DATE OF PRONOUNCING THE ORDER : 31.08.2012 APPEARANCES : FOR THE APPELLANT : SHRI A.K.P RAMANIK : FOR THE RESPONDENT : SHRI D.S.DAMLE O R D E R PER PRAMOD KUMAR 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER OF THE CIT(A)-XIX, KOLKATA DATED 16 TH MARCH, 2012 IN THE MATTER OF ASSESSMENT U/S.143(3) R.W.S. 153C OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2005-06, ON THE FOLLOWING GROUND:- 1) THAT THE LD. CIT(A) ERRED IN QUASHING THE ORDER OF THE A.O. U/S. 153C/143(3) OF THE I.T. ACT HOLDING THAT THE RELEVA NT DOCUMENTS DID NOT BELONG TO THE ASSESSEE DESPITE THE FACT THAT THE AS SESSEE DENIED ONLY THE CASH TRANSACTIONS NOTED THEREIN, WHILE THE TRANSACTIONS IN CHEQUE TALLIED WITH THE ASSESSEES TRANSACTIONS. 2. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE AS FOLLOWS: IT IS NOT A DISPUTE THAT SEARCH AND SEIZURE OPERATION WAS CARRIED OUT I N THE PREMISES OF M/S. OBEROI CONSTRUCTIONS PVT. LTD., MUMBAI AND CERTAIN INCRIMI NATING DOCUMENTS WERE FOUND IN THE SAID SEARCH AND SEIZURE OPERATION. THESE DOC UMENTS INCLUDED (A) SUMMARY OF ACCOUNTS OF VINEET DHINGRA I.E. THE ASSESSEE BEF ORE US, (B) DETAILS OF PAYMENTS 2 IT(SS)A NO.139/KOL/2011 VINEET DHINGRA ASSESSMENT YEAR: 2005-06 MADE ON BEHALF OF VINEET DHINGRA, (C) PARTICULARS O F THE PAYMENTS MADE ON BEHALF OF VINEET DHINGRA IN CHEQUE AND CASH AND OTHER RELE VANT PAPERS. ON PERUSAL OF THESE PAGES, IT WAS OBSERVED THAT THE ASSESSEE HAD PURCHASED TWO FLATS IN THE PREMISES KNOWN AS OBEROI CREST AND THE INTERIOR DES IGNING OF THESE FLATS WAS GIVEN TO M/S. OBEROI INTERIORS, PROPRIETARY CONCERN OF MS . BINDU OBEROI. THE TRANSACTIONS WITH RESPECT OF DETAILS REFLECTED IN T HE ABOVE DOCUMENTS WERE NOT ACCOUNTED FOR IN THE ACCOUNTS OF THE ASSESSEE. IT W AS IN THIS BACKGROUND THAT THE ASSESSEE WAS SUBJECTED TO ASSESSMENT UNDER SECTION 153C READ WITH SECTION 143(3) AND ADDITIONS WERE MADE IN RESPECT OF UNACCOUNTED T RANSACTIONS REFLECTED IN THE ABOVE DOCUMENTS. TO ADJUDICATE ON THIS APPEAL AND F OR THE REASONS BEING SET OUT IN THE SHORT WHILE, IT IS NOT NECESSARY TO GO INTO FUR THER FACTS OF THE CASE. SUFFICE TO SAY THAT IT WAS IN THE ABOVE BACKDROP THAT THE AO M ADE ADDITION WITH RESPECT TO TRANSACTION RELATING TO THE DOCUMENTS FOUND IN THE SEARCH ON 19/7/2007 BUT WHEN THE MATTER WAS CARRIED IN APPEAL BEFORE THE CIT(A), THE LD. CIT(A) DELETED THE ADDITION ON THE SHORT GROUND THAT UNLESS DOCUMENT F OUND IN THE SEARCH OF A THIRD PARTY DOES NOT BELONG TO THE ASSESSEE, NO ADDITION UNDER SECTION 153C CAN BE MADE. IT WAS UNDISPUTED POSITION THAT THE DOCUMENT WHICH WAS FOUND IN THE SEARCH DID NOT BELONG TO THE ASSESSEE EVEN THOUGH ADMITTEDLY I T HAD DETAILS PERTAINING TO THE TRANSACTIONS OF THE ASSESSEE. AGGRIEVED BY THE QUAS HING OF ASSESSMENT UNDER SECTION 153C ON THE SHORT JURISDICTIONAL GROUND SET OUT ABOVE, THE AO IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT UNLIKE SECTION 158BD, WHICH RE FERRED TO INCOME BELONGING TO A PERSON OTHER THAN THE PERSON WHOSE PREMISES WA S SUBJECTED TO SEARCH AND SEIZURE PROCEEDINGS, SECTION 153C REFERS TO ANY MO NEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED BELONG TO A PERSON OTHER THAN THE PER SON REFERRED TO IN SECTION 153A (I.E. THE PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR WHERE BOOKS OF 3 IT(SS)A NO.139/KOL/2011 VINEET DHINGRA ASSESSMENT YEAR: 2005-06 ACCOUNTS OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER 31 ST DAY OF MAY, 2003). IN OTHER WORDS, THEREFORE, WHI LE THE EMPHASIS WAS ON INCOME BELONGING TO OTHER PERSON UNDER THE OLD SC HEME OF THE BLOCK ASSESSMENT, THE CORRESPONDING PROVISION OF SECTION 153C REFERRE D TO SITUATION WHERE DOCUMENTS BELONGING TO OTHER PERSON OR OTHER ASSET S OR BOOKS OF ACCOUNTS BELONGING TO OTHER PERSON HAVE BEEN FOUND IN SEARC H OPERATION. HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI V S- ACIT REPORTED IN 333 ITR 436 HAS HELD THAT IT IS A CONDITION PRECEDENT FOR T HE ISSUANCE OF SECTION 153C IS THAT THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THINGS OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED SHOUL D BELONG TO SUCH PERSON, AND THAT WHETHER THIS REQUIREMENT IS NOT SATISFIED, RES ORT CANNOT BE HAD TO THE PROVISIONS OF SECTION 153C. IT IS THUS CLEAR THAT MERELY BECAU SE A DOCUMENT IS FOUND IN THE PREMISES OF A THIRD PERSON, EVEN IF IT INDICATES UN ACCOUNTED ENTRIES OF THE ASSESSEE, IT CANNOT BE THE REASON ENOUGH TO INVOKE SECTION 15 3C UNLESS THE SAID DOCUMENT BELONGS TO THE PERSON WHOSE ASSESSMENT IS BEING S OUGHT TO BE OPENED OR REOPENED UNDER SECTION 153C. WHILE ON THIS ISSUE, I T IS USEFUL TO REFER TO THE FOLLOWING OBSERVATIONS MADE BY HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI ( SUPRA ). 14. EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE AFORESAID STATUTORY SCHEME, IT IS AN ADMITTED POSITION AS EM ERGING FROM THE RECORD OF THE CASE, THAT THE DOCUMENTS IN QUESTION, NAMELY T HE THREE LOOSE PAPERS RECOVERED DURING THE SEARCH PROCEEDINGS DO NOT BEL ONG 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 SAMUTKARS H MEMBERS DETAILS AND CERTAIN DETAILS ARE GIVEN UNDER DIFFERENT COLUMNS AGAINST THE NAME OF THE PETITIONER ALONG WITH OTHER MEMBERS, HOWEVER, IT I S NOBODYS CASE THAT THE SAID DOCUMENTS BELONG TO THE PETITIONER. IT IS NOT EVEN THE CASE OF REVENUE THAT THE SAID THREE DOCUMENTS ARE IN THE HANDWRITI NG OF THE PETITIONER. IN THE CIRCUMSTANCES, WHEN THE CONDITION PRECEDENT FOR IS SUANCE OF NOTICE IS NOT FULFILLED ANY ACTION TAKEN UNDER S.153C OF THE ACT STANDS VITIATED. 4. WE HUMBLY BOW BEFORE THE VIEWS EXPRESSED BY A H IGHER FORUM IN JUDICIAL HIERARCHY. UNDOUBTEDLY, AT THE FIRST SIGHT, THIS LE GAL POSITION IS SIMPLY INCONGRUOUS 4 IT(SS)A NO.139/KOL/2011 VINEET DHINGRA ASSESSMENT YEAR: 2005-06 INASMUCH AS EVEN WHEN DOCUMENT INDICATING UNACCOUNT ED INCOME OF THIRD PARTY IN A SEARCH PROCEEDINGS BUT SINCE THIS DOCUMENT DID NO T BELONG TO THAT THIRD PERSON, PROVISIONS OF SECTION 153C CANNOT BE INVOKED. HOWEV ER, WHEN CLEAR WORDS OF THIS STATUTE FAIL AN INCOME BEING BROUGHT TO TAX, IT IS NOT FOR US TO SUPPLY ANY UNINTENDED OMISSION EVEN IF IT BE SO. LEARNED DEPAR TMENTAL REPRESENTATIVES RELIANCE ON HONBLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF SSP AVIATION LTD. VS. DCIT (20 TAXMANN.COM 214) IS OF NO AVAIL EITHER , AS IT MERELY HOLDS THAT EVEN IF DOCUMENTS BELONGING TO THE ASSESSEE IS FOUND IN THE PREMISES OF PERSON SEARCHED DOES NOT SHOW ANY UNDISCLOSED INCOME, IT CAN STILL BE REASON ENOUGH TO TRIGGER ASSESSMENT U/S.153C IN THE CASE OF THE PERSON TO WH OM DOCUMENT BELONGS. THE DOCUMENTS FOUND IN THAT CASE WERE AGREEMENTS WHICH THE ASSESSEE HAD ENTERED INTO WITH THE PERSON SEARCHED. IN THE SAID CASE, IT WAS NOT EVEN THE PLEA OF THE ASSESSEE THAT DOCUMENTS DID NOT BELONG TO THE ASSESSEE. IN C ONTRAST, IN THE CASE BEFORE US, ASSESSEE HAS CLAIMED THAT DOCUMENTS SEIZED DID NOT BELONG TO THE ASSESSEE, AND HIS CONTENTION IS SUPPORTED BY INTERPRETATION OF EXPRES SION BELONGS TO BY BINDING JUDICIAL PRECEDENTS. IN THE LIGHT OF THE DECISIONS OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI-VS- ACIT AND IN THE LIGHT OF THE COORDINATE BENCHES DECISIONS IN THE CASE OF MEGHMANI ORGANICS LTD. VS- DCIT REPORTED IN 129 TTJ 255 (AHD.), MS. SHYAM LATA KAUSHIK VS- ACI T REPORTED IN 114 TTJ (DEL) 940 AND SHIVNATH RAIHARNARAIN (INDIA) LTD. RE PORTED IN 117 TTJ (DEL) 480, WE UPHOLD THE ACTION OF THE CIT(A) AND DECLINE TO I NTERFERE IN THE MATTER ON THE FACTS OF THIS CASE AND IN THE LIGHT OF THE UNDISPUT ED SITUATED THAT SEIZED DOCUMENTS DO NOT BELONG TO THE ASSESSEE, THE ASSESSMENT UNDER SECTION 153C WAS RIGHTLY QUASHED. WE UPHOLD THE SAME AND DECLINE TO INTERFER E IN THE MATTER. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSING OFFICER IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.201 2. SD/- SD/- (MAHAVIR SINGH) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER 5 IT(SS)A NO.139/KOL/2011 VINEET DHINGRA ASSESSMENT YEAR: 2005-06 COPY OF THE ORDER FORWARDED TO: 1. VINEET DHINGRA, 19, GANESH CHANDRA AVENUE, KOLKAT A 700 013 2 A.C.I.T.,CIRCLE-31, KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.)