The DCIT, Central Circle-1(1), Ahmedabad V. Shri Alkesh M.Patel, Ahmedabad

ITSSA 144/AHD/2010

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8291 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 12-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Income from undisclosed sources; Document seized; Documents seized

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , ! '#, $% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER APPEAL(S) / CO(S) BY SL. NO(S). IT(SS)A NO(S) / CO NO(S) ASSESSMENT YEAR APPELLANT (S) RESPONDENT(S) 1. 144/AHD/2010 2005-06 DCIT CENTRAL CIRCLE- 1(1) AHMEDABAD SHRI ALKESH M.PATEL 51, SHYAM SHARAN BUNGALOWS BOPAL AHMEDABAD PAN:AAMPP7018F 2. 145/AHD/2010 2005-06 -DO- SHRI GAURANG P.PATEL WHITE CROSSING BLDG, 15 PATEL SOCIETY GULBAI TEKRA AHMEDABAD PAN:ABHPP4313P 3. 146/AHD/2010 2005-06 -DO- SHRI PRAFUL G.PATEL 27,RAGHUKUL BUNGALOWS BHUYANGDEV,SOLA RD PAN:ABCPP4796R 4. CO NO.90/AHD/10 (O/O ITSS 144/AHD/10) 2005-06 SH.ALKESH M.PATEL DCIT CENTRAL CIR-1(1) 5. CO NO.91/AHD/10 (O/O ITSS 145/AHD/10) 2005-06 SH.GAURANG P.PATEL -DO- 6. CO NO.105/AHD/10 (O/O ITSS 146/AHD/10) 2005-06 SH.PRAFUL G.PATEL -DO- REVENUE BY : SHRI PHAGU ORAM, SR.D.R. ASSESSEE(S) BY : SHRI S.N.SOPARKAR, SR.ADV. WITH SHRI P.M.MEHTA !' ( % / / / / DATE OF HEARING : 21/08/2012 *+, ( % / DATE OF PRONOUNCEMENT : 24/08/12 IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 2 - $- / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : ALL THESE APPEALS AND CROSS OBJECTIONS ARE CONNECTE D BEING EMANATED FROM A COMMON SEARCH U/S.132 AND DIRECTED AGAINST THE ORDERS OF LEARNED CIT(APPEALS)-I AHMEDABAD ALL IDENTICALLY DATED 15/12/2009. FOR THE SAKE OF CONVENIENCE, THESE APPEALS ARE CONS OLIDATED AND HEREBY DECIDED BY THIS COMMON ORDER. [A] IT(SS)A NO.144/AHD/2010 IN THE CASE OF SHRI ALKES H M.PATEL 2. GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BE LOW AND ARE HEREBY DECIDED AS FOLLOWS: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.15,300/- (RS.102000-86700) MADE ON ACCOUNT OF UNDISCLOSED INCOME BASED ON SEIZED DOCUMENTS. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.18,23,883/- BASED ON SEIZED DOCUMENTS. 3. A SEARCH U/S.132(1) WAS CONDUCTED IN THE CASES O F ONE SHRI SANJAY R.SHAH & MEGHMANI GROUP ON 22/09/2005. THEREAFTER, AN ASSESSMENT ON THIS ASSESSEE WAS MADE U/S.153C R.W.S.143(3) OF THE I.T.ACT DATED 30/09/2008. IT WAS NOTED BY THE ASSESSING OFFICER THAT A DIARY MARKED AS ANNEXURE A-5 WAS FOUND DURING THE COURSE OF SEARCH FROM THE BUSINESS PREMISES OF M/S.MEGHMANI DYES & INTERMEDIATES LTD. PANCHVATI, AHMEDABAD. THIS DIARY WAS FOUND TO BE BELONGED TO THE ASSESSEE, NAMELY, SHRI ALKESH M.PATEL. IT WAS FOUND THAT THE ASSESSEE WAS WORKING AS MANAGER (IMPORT & EXPORT) OF M/S.MEGHMANI DYES & INTERMEDIATES IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 3 - LTD. A STATEMENT WAS RECORDED U/S.132(1) ON 28/11/ 2005 AND IN A REPLY THE ASSESSEE HAS CONFIRMED THAT THE SAID DIARY BELO NGED TO HIM. THE ASSESSING OFFICER HAS ALSO NOTED THAT ON THE SAID D IARY, THE NAME AND PHONE NUMBERS OF THE ASSESSEE WERE NOTED. SINCE TH E SAID DIARY BELONGED TO THE ASSESSEE, THEREFORE THE REVENUE DEPARTMENT H AD INITIATED PROCEEDINGS AGAINST THE ASSESSEE U/S.153C R.W.S. 15 3A OF THE I.T.ACT. A NOTICE U/S.153C R.W.S.153A OF THE I.T.ACT WAS SERVE D ON 05/04/2006. THEREAFTER, THE ASSESSEE HAS FILED A RETURN OF INCO ME ON 30/04/2007 DECLARING TOTAL INCOME AT RS.1,75,973/-. AS AGAINS T THAT, THE ASSESSING OFFICER HAS ASSESSED TOTAL INCOME AT RS.21,01,856/- . 4. APROPOS TO GROUND NO.1, THE OBSERVATION OF THE A SSESSING OFFICER WAS AS UNDER: IN VIEW OF THE ABOVE DISCUSSION IT IS CONCLUSIVELY PROVED FROM THE SEIZED MATERIAL THAT THE ASSESSEE HAS RECEIVED SALA RY AND BONUS IN CASH OVER AND ABOVE TO SALARY SHOWN IN HIS RETURN O F INCOME. AS PER THE SEIZED DOCUMENT, IT IS SEEN THAT THE ASSESS EE HAS NOT DISCLOSED THE TOTAL AMOUNT REFLECTED IN THE SEIZED DOCUMENTS. SL. NO. A.Y. AS ACCEPTED BY THE ASSESSEE BEFORE SETTLEMENT COMMISSION FOR THE RELEVANT FINANCIAL YEAR AMOUNT MENTIONED FOR THE RELEVANT FINANCIAL YEAR IN THE SEIZED DOCUMENTS DIFFERENCE 1. 2005-06 RS.86700 RS.1,02,000 RS.15300 THE ASSESSEE HAS, IN HIS SUBMISSION, OFFERED A LOWE R AMOUNT TO TAX (BY CLAIMING WILLINGNESS TO OFFER THE AMOUNT OF TAX , IF PENALTY PROCEEDINGS ARE NOT INITIATED). THE AMOUNT MENTION ED IN THE SEIZED DOCUMENTS (WHICH IS PROPOSED TO BE ADDED) IS OVER AND IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 4 - ABOVE THE AMOUNT OF SALARY SHOWN IN THE REGULAR RET URNS OF THE ASSESSEE. THE ABOVE AMOUNT OF RS.1,02,000 IS ACCORDINGLY ADDE D TO THE RETURNED INCOME OF THE ASSESSEE AS UNDISCLOSED RECE IPTS. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, THE LEARNED CIT(APPEALS) HAS GRANTED RELIEF ON THE GROUND THAT THE REMUNERATION DISCLOSED AS PER THE RETURN WAS RS.1,5 9,300/-, HOWEVER, THE ASSESSING OFFICER HAS ONLY TAXED RS.1,02,000/- WHIC H WAS FOUND TO BE INCLUSIVE OF THE REMUNERATION OFFERED, THEREFORE, D IRECTED TO DELETE THE IMPUGNED ADDITION. 6. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTICED THAT THE APPELLANT HAD SHOWN RS.2,46,000/- TOWARDS REMUNERATION PLUS ADDITIONAL INCOME IN THE FOLLOWING MANNER:- SR.NO. PARTICULARS AMOUNT (RS.) 1. REMUNERATION OFFERED IN THE RETURN FILED U/S.139(1) OF` THE ACT 159,300 2. ADDITIONAL INCOME OFFERED BEFORE SETTLEMENT COMMISSION 86,700 TOTAL 246,000 6.1. DUE TO THIS REASON THAT AN AMOUNT OF RS.1,50,3 00/- HAD ALREADY BEEN OFFERED AS REMUNERATION FROM THE SAID CONCERN, THEREFORE THE AMOUNT OF RS.1,02,000/- WHICH WAS NOT ALLEGED TO HAVE BEEN MENTIONED IN THE SEIZED DOCUMENT, THEREFORE NO SEPARATE ADDITION WAS WARRANTED BEING THE IMPUGNED AMOUNT OF RS.1,02,000/- HAD ALREADY BEEN O FFERED BY THE ASSESSEE. RESULTANTLY, THE VIEW TAKEN BY THE LEARN ED CIT(APPEALS) IS HEREBY CONFIRMED. THEREFORE, THIS GROUND IS DISMIS SED. IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 5 - 7. APROPOS TO GROUND NO.2, IT WAS NOTED BY THE ASSE SSING OFFICER THAT CONSEQUENT UPON A SEARCH U/S.132 OF THE I.T.AC T AT THE RESIDENCE OF SHRI LALIT K.PATEL A PEN-DRIVE WAS SEIZED BY THE RE VENUE DEPARTMENT WHICH CONTAINED CERTAIN NOTINGS REGARDING OF THE SA LARY TO EMPLOYEES. IN THE SAID PEN-DRIVE, CASH AMOUNT HAS ALSO BEEN MENTI ONED AND IN THE STATEMENT RECORDED U/S.131(1A) OF THE I.T.ACT DATED 21/11/2005, MR.PATEL HAS STATED THAT THE CASH MENTIONED REPRESENTED THE EXPENDITURE TO BE INCURRED BY THOSE RESPECTIVE PERSONS. THE ASSESSIN G OFFICER HAS NOTED THAT THE NAME OF SHRI ALKESH PATEL APPEARED IN THE SEIZED DOCUMENTS AS AN EMPLOYEE OF MEGHMANI GROUP. IT WAS FURTHER EXPL AINED BY MR.PATEL THAT BEING A RESPONSIBLE EMPLOYEE OF MEGHMANI GROUP , THEY WERE ALLOWED TO INCUR SEVERAL EXPENSES WHILE PERFORMING THEIR DUTIES AND THE CASH AMOUNT WAS GIVEN WITH THE PERMITTED LIMIT FOR INCURRING BUSINESS EXPENSES. 7.1. IN THE ASSESSMENT ORDER, THERE IS A MENTION OF CERTAIN PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION. HOWEVER, DUE TO NON-COMPLIANCE ON THE PART OF THIS APPELLANT, THE ASSESSING OFFICER H AD NOTED THAT THE ORDER OF SETTLEMENT COMMISSION COULD NOT BE PASSED WITHIN THE STIPULATED TIME AS PRESCRIBED UNDER THE PROVISIONS OF SECTION 245HA OF THE I.T.ACT. HOWEVER, THE ASSESSING OFFICER HAS NOTED THAT THIS APPELLANT HAD MADE A DISCLOSURE BEFORE THE SETTLEMENT COMMISSION AS FOLL OWS:- IT IS SEEN THAT BEFORE HON'BLE INCOME-TAX SETTLEME NT COMMISSION YOU HAVE MADE A DISCLOSURE OF RS.4,46,000/-, WHICH IS AS UNDER:- SR.NO. A.Y. ADDL.INCOME OFFERED (IN RS.) ADDL.TAX PAYABLE (IN RS.) 1. 2000-01 17600 3526 2. 2001-02 32300 7164 3. 2002-03 36700 6646 4. 2003-04 111000 36255 IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 6 - 5. 2004-05 93700 27343 6. 2005-06 86700 25700 7. 2006-07 68000 13872 446000 120506 HOWEVER, IT IS NOTICED THAT THE FOLLOWING INCOME HA S NOT BEEN OFFERED TO TAX: SR.NO. F.Y. SALARY AND BONUS RECEIVED BUT NOT SHOWN IN THE RETURN OF INCOME 1. 2004-05 102000 2. 2005-06 102000 7.2. THE ASSESSING OFFICER HAS EXPRESSED THAT THE D ETAILS FILED BEFORE THE SETTLEMENT COMMISSION WERE TO BE TREATED AS DET AILS PRODUCED BEFORE THE ASSESSING OFFICER BY VIRTUE OF THE PROVISIONS O F SECTION 245HA OF THE I.T.ACT. HE HAS ALSO NOTED THAT THE ASSESSEE HAD B EEN PROVIDED THE REASONS RECORDED ON 18.09.2008 WHILE INITIATING THE PROCEEDINGS U/S.153C OF THE I.T.ACT. THE ASSESSING OFFICER HAS ALSO NOT ED THAT THE RELEVANT DOCUMENTS WERE SHOWN TO THE ASSESSEE AND ALSO PROVI DED THE COPIES OF THE DOCUMENTS TO THE ASSESSEE. ACCORDING TO ASSESS ING OFFICER, THE PEN- DRIVE AND THE ZIP DRIVE CONTAINED VARIOUS WORK BOOK S HAVING DATAS OF SALARY AND BONUS AS WELL AS CASH PAID TO CERTAIN IN DIVIDUALS INCLUDING THIS ASSESSEE. THE SAID FACT WAS ADMITTED IN THE STATEM ENT OF SHRI LALIT K.PATEL. THE ASSESSING OFFICER HAS ALSO NOTED AS F OLLOWS:- 4. PAGE NO 93 OF A-4 FOUND AND SEIZED FROM THE RESIDEN TIAL PREMISE OF SHRI LALIT K PATEL IN ADDITION TO ABOVE ON PAGE NO 93 OF A-4 FOUND AND SEIZED FROM THE RESIDENTIAL PREMISE OF SHRI LALIT K PATEL (ENCL OSED AS ANNEXURE 2) PENCIL WRITTEN STATEMENT OF CERTAIN REC EIPT AND PAYMENTS FOR THE PERIOD 01.10.04 TO 31.03.05 ARE RE CORDED. ON THE SAID PAGE THERE IS A NOTING MAFATLAL INDUSTRIES LKP SHRIJI IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 7 - FERTILISER NARODA SAHIBA DYECHEM UDAIPUR SHAK UNTAL ENTERPRISE RUPEN MARKETING PVT.LTD., LOAN A/C. HIGHMEN MUMBAI JOBWORK PURNIMA ENTERPRISE. RETURNBACK M ANGLAM A/C. ALKESHBHAI RS.18,23,883 WHICH HAS NOT BEE E XPLAINED BY THE ASSESSEE. 7.3. IN RESPECT OF ABOVE CASH GIVEN TO THE EMPLOY EES, THE EXPLANATION OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THERE WERE CERTAIN DISCLOSURES ON THE PART OF MEGHMANI GROUP CONCERNS AND IN TOTAL RS.5.90 CRORES HAVE BEEN OFFERED AS AN ADDITION INC OME IN THE FOLLOWING MANNER:- 2. SOME OF THE MAJOR ISSUES COVERED IN THE SAID S TATEMENT ARE SUMMARIZED BELOW. I. AS REGARDS PAGE NO.94 OF ANNEXURE-A-4, IN REPLY TO QUESTION NO.37 & 38, HE ADMITTED THAT THE AMOUNT OF RS.1,01, 00,000/- IS PAID OUT OF HIS UNDISCLOSED INCOME II. AS REGARDS PAGE NO.93 OF ANNEXURE A-4, IN REP LY TO QUESTION NO.39, HE STATED THAT THE SAID PAGE CONTAINS DETAIL S OF RECEIPT- PAYMENT TRANSACTIONS OF HIS FAMILY MEMBERS, WHO ARE DIRECTOR/PARTNER IN MEGHMANI GROUP CONCERNS. HE AL SO ADMITTED THAT OF ADMITTED THAT THE SAID TRANSACTIONS SHOWS U NACCOUNTED INCOME OF RS.4 CRORES. III. AS REGARDS PAGE NO.1 TO 49 OF ANNEXURE A-6, I N REPLY TO QUESTION NO.40, HE ADMITTED THAT THE SAID PAGES CON TAIN TRANSACTIONS OF UNACCOUNTED INCOME OF RS.1.5 CRORES . IV. IN REPLY TO QUESTION NO.41, HE AGREED TO SHOW THE AMOUNT OF RS.6.50 CRORES AS INCOME IN HIS RETURN OF INCOME OF HIS FAMILY GROUP CONCERNS. 3. OUT OF THE ABOVE AMOUNT OF RS.6.50 CRORES, THE AMOUNT COVERED BY POINT NO.2(I) AND 2(III), I.E. RS.2.5(1+1.5) CRO RES, ARE RELATED TO THE LALIT K.PATEL AND HAS NO RELEVANCE WITH THE ASS ESSEE COMPANY. 4. IN RESPECT OF THE REMAINING AMOUNT OF RS.4.00 C RORES, THE ADDITIONAL INCOME IS DISCLOSED IN THE RETURN OF INC OME FOR THE IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 8 - A.Y.2005-06, IN CASE OF VARIOUS MEGHMANI GROUP CONC ERNS IS AS UNDER: NAME AMOUNT MEGHMANI INDUSTRIES LTD. 27500000 MEGHMANI DYES & INTERMEDIATES LTD. 20000000 MEGHMANI CHEMICALS 1500000 TOTAL: 49000000 ADD: TAPASHEEL ENTERPRISE 10000000 TOTAL : 59000000 THUS, THE TOTAL AMOUNT OF ADDITIONAL INCOME SHOWN B Y THE VARIOUS GROUP CONCERNS IS RS.5.90 CRORES. AS TAPASHEEL ENT ERPRISE WAS PREPARING TO FILE A SETTLEMENT PETITION BEFORE HON BLE SETTLEMENT COMMISSION, A LUMP SUM AMOUNT OF RS.1.00 CRORE WAS SHOWN AS ADDITIONAL INCOME IN THE RETURN OF INCOME OF TAPASH EEL ENTERPRISE FOR THE A.Y. 2005-06. FURTHER, THE AMOUNT OF RS.4. 90 CRORES WAS BIFURCATED AMONG THE REMAINING GROUP CONCERNS ON TH E BASIS OF THEIR TURNOVER FOR THE FINANCIAL YEAR 2004-05. ACC ORDINGLY, THE AMOUNT OF RS.2.75 CRORE WAS SHOWN AS ADDITIONAL INC OME IN THE HANDS OF THE ASSESSEE COMPANY FOR THE YEAR UNDER CO NSIDERATION. 7.4. HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINC ED AND HE HAS CONCLUDED THAT THE IMPUGNED AMOUNT OF RS.18,23,883/ - WAS NOTHING BUT REPRESENTED UNACCOUNTED REMUNERATION RECEIVED BY TH IS APPELLANT. IN THE RESULT, THE SAID AMOUNT WAS TAXED AS UNACCOUNTED RE MUNERATION IN THE HANDS OF THE ASSESSEE. 8. BEFORE THE LEARNED CIT(APPEALS), IT WAS REITERAT ED THAT THE IMPUGNED AMOUNT DID NOT REPRESENT THE REMUNERATION BUT IT WAS GIVEN TO THE ASSESSEE AGAINST VARIOUS EXPENSES TO BE INCURRE D IN RESPECT OF FEW CONNECTED CONCERNS. AFTER APPRECIATING THE FACTS O F THE CASE, THE LEARNED CIT(APPEALS) HAS HELD AS UNDER:- IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 9 - 5.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E APPELLANTS CONTENTION REPRODUCED AS ABOVE. IT IS NOTICED THAT AS PER THE SEIZED PAPERS FOUND FROM SHRI LALIT PATEL OF MEGHMA NI GROUP BEING PAGE 93 AND 94 THERE ARE RECEIPTS AND PAYMENT S. THE A.OS OBSERVATION THAT THE DISCLOSURE MADE BY THE MEGHMAN I GROUP IN DIFFERENT CASES IS ON ACCOUNT OF SUCH RECEIPTS. TH E PAYMENT SIDE IS REFLECTED TO BE PAYMENT MADE TO DIFFERENT PERSONS. IT IS SUBMITTED THAT AGAINST THE AMOUNT OF RS.18,23,885/- WHICH IS CONSIDERED IN THE APPELLANTS HANDS, THE NARRATION WHICH IS REFLE CTED IN THE ASSESSMENT ORDER CLEARLY SHOWS THAT THIS AMOUNT REP RESENTS SOME EXPENDITURE BY MEGHMANI GROUP WHICH IS PAID TO DIFF ERENT PARTIES AND NOT TO THE APPELLANT. THIS ITSELF SUGGEST THAT IT IS WITH REFERENCE TO CERTAIN EXPENSES OF MEGHMANI GROUP. T HE APPELLANT IS AN EMPLOYEE OF MEGHMANI GROUP, DOING VARIOUS DUT IES AND IT IS ALSO NOTED BY THE A.O. THAT THE EXPENDITURE INCURRE D THROUGH STAFF MEMBER. IT CANNOT BE CONSIDERED TO BE IN NATURE OF REMUNERATION ON PRESUMPTION BASIS. EVEN OTHERWISE, THE ENTIRE A MOUNT CANNOT BE CONSIDERED AS RECEIPT OF THE APPELLANT PARTICULA RLY WHEN THERE ARE VARIOUS NAMES WRITTEN AGAINST THAT FIGURE. EVE N THE NARRATION ITSELF SUGGEST THAT IT IS EXPENDITURE INCURRED BY M EGHMANI GROUP FOR ITS BUSINESS AND NOT ANY PAYMENT TO THE APPELLA NT LIKE REMUNERATION. ACCORDINGLY, I AM OF THE VIEW THAT T HE PRESUMPTION OF THE A.O. THAT SUCH PAYMENT IS INCOME OF THE APPE LLANT IS TOTALLY BASELESS. THE ADDITION IS, THEREFORE, DELETED. 8.1. WITH THIS BRIEF BACKGROUND, WE HAVE HEARD BOTH THE SIDES. WE FIND NO INFIRMITY IN THE JUDGEMENT OF LEARNED CIT(APPEAL S) SPECIALLY WHEN THE FACTS OF THE CASE HAVE CLEARLY DEMONSTRATED THA T THE IMPUGNED AMOUNT WAS NOT PAID TO THIS ASSESSEE AS A REMUNERATION BUT IT WAS MERELY HANDED OVER TO THE ASSESSEE TO INCUR CERTAIN EXPENSES ON B EHALF OF THE EMPLOYER- COMPANY. FURTHER, LEARNED CIT(APPEALS) HAS ALSO CO NSIDERED THE DISCLOSURE MADE BY THE SAID GROUP TO COVER UP SUCH DISCREPANCIES. UNDER THE TOTALITY OF THE CIRCUMSTANCES OF THE CASE, WE H EREBY CONFIRM THE FACTUAL AS ALSO LEGAL FINDING OF LEARNED CIT(APPEAL S) AND DISMISS THIS GROUND OF THE REVENUE. IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 10 - 9. IN THE RESULT, REVENUES APPEAL, I.E. IT(SS)A NO .144/AHD/2010 FOR A.Y. 2005-06 IS DISMISSED. CROSS OBJECTION NO.90/AHD/2010 FILED BY THE ASSESSE E (SHRI ALKESH M.PATEL) 10. GROUNDS ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN NOT UPHOLDING THE ASSESSEES CONTENTION TH AT IT WAS NOT AT ALL A FIT CASE FOR INVOKING THE PROVISIONS OF SECTI ON 153C OF THE I.T. ACT. 2. THE RESPONDENT CRAVES LEAVE TO ADD, ALTER, AMEN D AND/OR WITHDRAW ANY GROUND OR GROUNDS OF CROSS-OBJECTION E ITHER BEFORE OR DURING THE COURSE OF HEARING OF THE SAME. 10.1. IN RESPECT OF THIS GROUND AS RAISED BY THE CR OSS-OBJECTOR, AT THE OUTSET, IT IS WORTH TO MENTION THAT THE LEGAL ISSUE IN RESPECT OF APPLICABILITY OF THE PROVISIONS OF SECTION 153C OF THE I.T.ACT HAS ONLY ACADEMIC INTEREST BECAUSE ON FACTS OUR VERDICT HAD ALREADY GONE IN FAVOUR OF THE ASSESSEE AND THE IMPUGNED ADDITIONS HAVE ALR EADY BEEN DELETED. AS FAR AS THE LEGAL SIDE OF THIS ISSUE IS CONCERNED , THE LD.ARS MR.S.N.SOPARKAR AND MR.P.M.MEHTA HAVE ARGUED THAT THE PROVISIONS OF SECTION 153C CAN ONLY BE ATTRACTED IF ANY MONEY, BU LLION, JEWELLERY, OR BOOKS OF ACCOUNT OR DOCUMENTS, ETC. FOUND BELONGING TO A PERSON OTHER THAN THE PERSON SEARCHED. ACCORDING TO HIM, NO SUC H DOCUMENT OR AN ASSET WAS FOUND WHICH COULD BE SAID TO BE BELONGING TO THIS ASSESSEE, THEREFORE THE ACTION U/S.153C OF THE I.T.ACT WAS WR ONGLY INITIATED AGAINST THIS ASSESSEE. IN SUPPORT OF THIS ARGUMENT, LD.AR HAS CITED FEW DECISIONS AS FOLLOWS:- IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 11 - SL.NO(S) DECISION IN THE CASE OF REPORTED IN / IN ITA NO./TAX APPEAL NO. 1. VIJAYBHAI N.CHANDRANI VS. ASST.CIT (2011) 333 ITR 436 (GUJ.) 2. CIT VS. MEGHMANI ORGANICS LTD. TAX APPEAL NO.2077 OF 2099 WITH TAX APPEAL NO.2078 OF 2009 TO TAX APPEAL NO.2086 TO 2009 (GUJARAT HIGH COURT) DATED 27/04/2011 3. CIT VS. AMRISH R.PATEL TAX APPEAL NO.444 OF 2010 TO TAX APPEAL NO.449 OF 2010 (GUJARAT HIGH COURT) DATED 26/07/2011 4. CIT VS. M/S.GAMBHIR SILK MILLS TAX APPEAL NO.1493 OF 2010 (GUJARAT HIGH COURT) DATED 21/12/2011 5. CIT VS. JYOTINDRA V.VASA TAX APPEAL NO.99 OF 201 1 (GUJARAT HIGH COURT) DATED 20/03/2012 11. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE , LD.SR.DR MR.PHAGU ORAM HAS INFORMED THAT THERE WERE SPECIFIC DOCUMENTS WHICH WERE FOUND BELONGING TO THE ASSESSEE; NAMELY, A DIA RY WHICH HAD ASSESSEES NAME AND OTHER ASSESSEES INFORMATION DU LY RECORDED THEREIN AS WELL AS A PEN-DRIVE IN WHICH AN AMOUNT OF REMUNE RATION WAS NOTED. HE HAS PLACED RELIANCE ON CERTAIN OBSERVATION IN TH IS REGARD MADE IN THE ASSESSMENT ORDER. 12. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. T HE UNDISPUTED FACT IS THAT A DIARY WAS FOUND DURING THE COURSE OF SEAR CH AND THAT DIARY WAS UNDISPUTEDLY BELONGING TO THE ASSESSEE. THE ASSESS EE HAS NOT DENIED THAT THE SAID DIARY IN FACT BELONGED TO HIM. APART FROM THE SAID DIARY, THE ASSESSING OFFICER HAS NOTED THAT THERE WAS A PEN-DR IVE/ZIP-DRIVE WHICH IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 12 - CONTAINED VARIOUS WORK BOOKS INCLUDING SALARY PAID TO THE EMPLOYEES. THE ASSESSEE IS ALSO ONE OF THE EMPLOYEES, HENCE, T HE MENTIONING OF THE SALARY AMOUNT IN THE SAID PEN-DRIVE/ZIP-DRIVE DID BELONG TO THE ASSESSEE. THERE IS NO DISPUTE ABOUT THE SAID FACT THAT THE SA LARY AS NOTED THEREIN HAD BELONGED TO THE ASSESSEE. FURTHER, IT HAS ALSO BEEN FOUND THAT A SUM OF RS.18,23,883/-WAS GIVEN TO THE ASSESSEE.ON THE BASI S OF ALL THOSE INFORMATION AND DOCUMENTS, THE ASSESSING OFFICER HA S INITIATED THE PROCEEDINGS BY INVOKING THE PROVISIONS OF SECTION 1 53C OF THE I.T.ACT. NOW THE QUESTION IS THAT WHETHER ALL THOSE DOCUMENT S AND INFORMATION WERE SUFFICIENT TO INVOKE THE PROVISIONS OF SECTION 153C AGAINST THIS ASSESSEE. IN THIS REGARD, WE HAVE CAREFULLY PERUSE D ALL THE CASE LAWS AS CITED BY LD.AR. IN ALL THESE CASE LAWS,IT HAS BEEN CONSISTENTLY HELD THAT THE CONDITION PRECEDENT FOR ISSUING NOTICE U/S.153C IS THAT VALUABLE ARTICLES OR DOCUMENTS,ETC.WHICH WERE SEIZED OR REQU ISITIONED SHOULD BELONG TO SUCH PERSON OTHER THAN THE PERSON SEARCHE D. THE HON'BLE COURTS HAVE EXAMINED THE FACTS OF ALL THOSE CASES AND THEN GIVEN A FINDING THAT ADMITTEDLY THE DOCUMENTS IN QUESTION DID NOT BELONG TO THE ASSESSEE. ON THE BASIS OF THE SAID ADMITTED FACTUAL POSITION THA T THOSE DOCUMENTS IN QUESTION DID NOT BELONG TO THE ASSESSEE, IT WAS HEL D THAT THE CONDITION PRECEDENT FOR ISSUANCE OF NOTICE WAS NOT FULFILLED. AS AGAINST THAT, IN THE PRESENT APPEALS, THE UNDISPUTED FACT WAS THAT THE S AID DIARY DID BELONG TO THE ASSESSEE AND THAT THE SAID AMOUNT WAS IN FACT G IVEN TO THE ASSESSEE. ACCORDING TO US, SINCE THE DIARY AND THE AMOUNT WAS INTRICATELY LINKED WITH THE ASSESSEE, THEN THOSE FACTS WERE SUFFICIENT ENOUGH TO TRIGGER THE START OF THE PROCEEDINGS U/S.153C BY ISSUANCE OF R EQUISITE NOTICE. THE NEXT STEP IS THE DETERMINATION OF QUANTUM OF UNDISC LOSED INCOME. IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 13 - ON THE BASIS OF THE DOCUMENTS WHICH BELONGED TO THE ASSESSEE THE QUANTUM OF UNDISCLOSED INCOME CAN BE DETERMINED. S UCH A QUANTIFICATION CAN BE OF ANY FIGURE DEPENDING UPON THE CONTENTS OR THE NOTINGS FOUND IN THE SEIZED DOCUMENTS BELONGING TO THE ASSESSEE. BUT THE SECOND STEP CAN ONLY BE TAKEN AFTER TAKING THE FIRS T STEP OF ISSUANCE OF NOTICE FOR THE PROCEEDINGS U/S.153C OF THE I.T.ACT. ONLY ON INITIATION OF THESE PROCEEDINGS, THE ASSESSING OFFICER IS AUTHORI ZED AND HAVE JURISDICTION TO ARRIVE AT THE CORRECT FIGURE OF UND ISCLOSED INCOME. THEREFORE, IN OUR CONSIDERED OPINION, THE ASSESSING OFFICER HAS RIGHTLY ACQUIRED THE JURISDICTION IN INITIATING THE PROCEED INGS U/S.153C OF THE I.T.ACT. RESULTANTLY, WE FIND NO FORCE IN THE CROS S-OBJECTION RAISED BY THE ASSESSEE. THEREFORE, THIS CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. [B] IT(SS)A NO.145/AHD/2010 IN THE CASE OF SHRI GAURA NG P.PATEL 13. GROUNDS RAISED BY THE REVENUE ARE REPRODUCED B ELOW AND ARE HEREBY DECIDED AS FOLLOWS: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.90,000/- MADE ON ACCOUNT OF UNDISCLOSED INCO ME BASED ON SEIZED DOCUMENTS. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.26,63,305/- BASED ON SEIZED DOCUMENTS. 13.1. IN THIS CASE, ASSESSMENT WAS MADE U/S.153C R. W.S.143(3) OF THE I.T.ACT DATED 30/09/2008 ON TOTAL INCOME OF RS.36,3 8,811/- AGAINST THE ADDITIONAL INCOME OFFERED OF RS.7,36,000/-. IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 14 - 13.2. WE HAVE BEEN INFORMED THAT FACTS IN RESPECT O F BOTH THESE GROUNDS WERE IDENTICAL WITH THE FACTS AS DISCUSSED HEREINAB OVE IN THE APPEAL OF SHRI ALKESH M.PATEL(SUPRA). WE HAVE ALREADY TAKEN A VIEW AND THEREUPON AFFIRMED THE FINDINGS OF THE LEARNED CIT( APPEALS). IN IDENTICAL MANNER, WE HEREBY DISMISS THESE GROUNDS O F THE REVENUE. REVENUES APPEAL IS DISMISSED. CROSS OBJECTION NO.91/AHD/2010 FILED BY THE ASSESSE E (SHRI GAURANG P.PATEL) 14. THE ISSUE OF INVOCATION OF JURISDICTION U/S.153 C OF THE I.T.ACT HAS ALREADY BEEN DECIDED IN FAVOUR OF THE REVENUE, HENC E THE CROSS-OBJECTION FILED BY THE ASSESSEE IS HEREBY DISMISSED. [C] IT(SS)A NO.146/AHD/2010 IN THE CASE OF SHRI PRAFU L G.PATEL 15. GROUNDS RAISED BY THE REVENUE ARE REPRODUCED B ELOW AND ARE HEREBY DECIDED AS FOLLOWS: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.84,000/- MADE ON ACCOUNT OF UNDISCLOSED INCO ME BASED ON SEIZED DOCUMENTS. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.13,68,000/- BASED ON SEIZED DOCUMENTS. 15.1. IN THIS CASE, ASSESSMENT WAS MADE U/S.153C R. W.S.143(3) OF THE I.T.ACT DATED 30/09/2008 ON TOTAL INCOME OF RS.23,7 1,694 AGAINST THE ADDITIONAL INCOME OFFERED OF RS.8,39,000/- 15.2. WE HAVE BEEN INFORMED THAT FACTS IN RESPECT O F BOTH THESE GROUNDS WERE IDENTICAL WITH THE FACTS AS DISCUSSED HEREINAB OVE IN THE APPEAL OF SHRI ALKESH M.PATEL(SUPRA). WE HAVE ALREADY TAKEN A VIEW AND IT(SS )A NOS.144,145 & 146/AHD/2010 (BY REVENUE) AND CO NOS.90,91 & 105/AHD/2010 RESPECTIVELY (BY ASSESSEE) ASST.YEAR 2005-06 - 15 - THEREUPON AFFIRMED THE FINDINGS OF THE LEARNED CIT( APPEALS). IN IDENTICAL MANNER, WE HEREBY DISMISS THESE GROUNDS O F THE REVENUE. REVENUES APPEAL IS DISMISSED. CROSS OBJECTION NO.105/AHD/2010 FILED BY THE ASSESS EE (SHRI PRAFUL GANPATBHAI PATEL) 16. THE ISSUE OF INVOCATION OF JURISDICTION U/S.15 3C OF THE I.T.ACT HAS ALREADY BEEN DECIDED IN FAVOUR OF THE REVENUE, HENC E THE CROSS-OBJECTION FILED BY THE ASSESSEE IS HEREBY DISMISSED. 17. AS A RESULT, ALL THE APPEALS OF THE REVEN UE AND CROSS OBJECTIONS FILED BY THE ASSESSEE(S) ARE DISMISSED. SD/- SD/- ( ! '# ) ( ) $% ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 24/ 8 /2012 ...!, .!../ T.C. NAIR, SR. PS $- ( 01 2$1, $- ( 01 2$1, $- ( 01 2$1, $- ( 01 2$1,/ COPY OF THE ORDER FORWARDED TO : 1. 34 / THE APPELLANT 2. 0534 / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-I, AHMEDABAD 5. 19: 0! , , / DR, ITAT, AHMEDABAD 6. : ;' / GUARD FILE. $-! $-! $-! $-! / BY ORDER, 51 0 //TRUE COPY// < <<