Prashant Vithoba Navale, Solapur V. Deputy Commissioner of Income-tax, Central Circle -2 (2), Pune

ITSSA 16/PUN/2019

AI Insights

This case involves two separate appeals by Prashant Vithoba Navale and Santosh Mahadeo Navale against the orders of the Commissioner of Income Tax (Appeals) -12 Pune, which were based on the assessment orders under section 143(3) read with section 153C of the Income Tax Act. The appeals were directed against the additions made to their incomes following a search operation under section 132 of the Act, which revealed undisclosed cash deposits and investments. The main legal issues revolved around the validity of the notices issued under section 153C, the ownership of the incriminating documents, and the source of the cash deposits and investments.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134446 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-08-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-05-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 25-02-2019
• Other Referred Cases: PCIT Vs. Dreamcity Buildwell Pvt. Ltd., CIT vs. Renu Construction (P) Ltd., CIT vs. Arpit Land Pvt. Ltd., CIT v. Sinhagad Technical Education Society, DCIT vs. Late Shri Pravinsinh N Zala, Pradeep Sharma vs. ACIT, CIT v. RRJ Securities Ltd, PepsiCo India Holdings (P.) Ltd. vs. ACIT, Kamlesh Bhai Dharamshi Bhai Patel v. CIT, PCIT (Central) - 2 v. Index Securities (P.) Ltd., Tanvir Collections (P.) Ltd. v. ACIT, ARN Infrastructure Ltd. V. ACIT, Natural Products Bio Tech Ltd. v. DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRASHANT VITHOBA NAVALE
• Keywords: Gift; Document seized; Deemed to accrue or arise in india; Corroborative evidences; Accommodation entries; Onus to prove; Documents seized
• Section: 131; 68; 132; 143(3); 69A; 113; 13; 153C

Judgement Text

आयकर अपीलीय अिधकरण ”बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / IT(SS)A No.16/PUN/2019 िनधाᭅरण वषᭅ / Assessment Year : 2013-14 Prashant Vithoba Navale, At Post Ekhatpur, Taluka – Sangola, Dist – Solapur – 413307. PAN: AJUPN 2009 F V s The DCIT, Central Circle-2(2), Pune. Appellant/ Assessee Respondent /Revenue आयकर अपील सं. / IT(SS)A No.26/PUN/2019 िनधाᭅरण वषᭅ / Assessment Year :2013-14 Santosh Mahadeo Navale, At Post Ekhatpur, Taluka – Sangola, Dist – Solapur – 413307. PAN: AEQPN 3245 N V s The DCIT, Central Circle-2(2), Pune. Appellant/ Assessee Respondent / Revenue Assessee by Shri Suhas Bora – AR Revenue by Shri Shashank Deogadkar – DR Date of hearing 23/05/2023 Date of pronouncement 31/07/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: These two appeals filed by the two different Assessees i.e. Mr.Prashant Vithoba Navale and Santosh Mahadeo Navale are IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 2 directed against the separate orders of ld.Commissioner of Income Tax(Appeal)-12 Pune dated 30/11/2018 and 28.12.2018 emanating from the separate Assessment Orders u/s.143(3) r.w.s. 153C both dated 29/03/2016. The Assessee Mr.Prashant Vithoba Navale in IT(SS)A No.16/PUN/2019 has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case CIT(A) has erred in not properly appreciating the fact that the seized papers showing the cash deposits and investment in companies alleged to be incriminating documents belong and pertaining to the appellant’s HUF namely Shri Vithoba N Navale (smaller HUF) and such notice u/s 153C should have been issued to this smaller HUF and not to the appellant. Thus Assessing Officer had no jurisdiction to assess the appellant. 2. On the facts and in the circumstances of the case and without prejudice to the above ground the Id. CIT(A) has erred in not appreciating the proven fact cash deposits in bank and investment in companies are made out of agricultural income of Shri Vithoba N Navale (Smaller HUF) and not by appellant 3. On the facts and in the circumstances of the case and without prejudice to above grounds CIT has erred in sustaining addition of Rs 2,78,000/- for cash deposits made in the bank and Rs 3,00,000/- investment in shares without IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 3 providing the details thereof. 4. On the facts and in the circumstances of the case and without prejudice to above grounds CIT has erred in estimating the agricultural income of Appellant’s HUF incorrectly and further holding that the same is not sufficient to support the deposits made in bank. The above grounds of appeal may kindly be allowed to be altered, amended, modified, deleted etc in the interest of natural justice.” 2. The Assessee Prashant Vithoba Navale in IT(SS)A No.16/PUN/2019 has raised Additional Ground of appeal as under : “A. Additional Ground: In the case of the appellant, the search action U/Sec.132 of the Act has been carried out on 06.08.2013 and therefore provisions of Section 153C of the Act stating "belongs to or belong to a person" shall prevail and therefore notice issued U/Sec.l53C of the Act is bad in law and void ab initio since.” 3. The Assessee Santosh M Navale in IT(SS)A No.26/PUN/2019 AY 2013-14 has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case the order passed u/s 153C is bad in law as much as the seized IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 4 papers which are claimed to be pertaining to the appellant are, in fact and in law, pertaining to the appellant’s HUF and thus rendering the notice u/s 153C as invalid. Additionally, the A. O. had no jurisdiction to assess the appellant u/s 153C. 2. On the facts and in the. circumstances of the case the order dated 29/03/2016 passed by the A. O. u/s 143(3) r. w. s. 153C is bad in law as much as the deposits made in bank and investments made in companies are out of the agricultural income of the HUF of which the appellant is a member and the bank accounts in which the deposits are made are also held and operated by the said HUF. 3. On the facts and in the circumstances of the case and without prejudice to Ground No. 1 & 2 above, the A. O. has erred in making addition of Rs.2,42,800/- towards cash deposits in bank accounts without providing any details of the same and further disregarding the fact that actual cash deposits in bank accounts are Rs. 2,00,000/- only. 4. On the facts and in the circumstances of the case and without prejudice to Ground No. 1 & 2 above, the A. O. has erred in making addition of Rs. 3,00,000/- towards share application money deposited in cash without providing details of the same. 5. On the facts and in the circumstances of the case and without prejudice to Ground No. 1 & 2 above, the A. O. IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 5 has erred in not appreciating the fact that these cash payments were out of the agricultural income of the appellant's HUF and that the same were made for and on behalf of the said HUF. 6. On the facts and in the circumstances of the case and without prejudice to Ground No. 1 & 2 above, the A. O. has erred in estimating the agricultural income of the appellant’s HUF incorrectly and holding that the same is not sufficient to justify cash deposits in the banks and investments in companies. The above grounds of appeal may kindly be allowed to be amended, altered, modified etc., in the interest of natural justice.” Brief Facts of the case : 4. The assessee Mr.Prashant Vithoba Navale is an Individual. Mr.Prashant Vithoba Navale had not filed Original Return of Income u/s139 of the Act for A.Y.2013-14. There was a search u/s132 of the Act in the case of Sinhagad Technical Education Society and Maruti Navale group on 06/08/2013, the search was concluded on 01/10/2013. Certain incriminating documents were found and seized during the search which were belonging to the Assessee Mr.Prashant Vithoba Navale. Accordingly the Assessing Officer Deputy Commissioner of Income Tax, Central IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 6 Circle 2(2) Pune recorded the satisfaction dated 13/01/2016 and issued notice u/s 153C in the name of Mr.Prashant Vithoba Navale. The said notice was duly served on the assessee. The Assessing officer passed the order u/s 143(3) rws153C after giving opportunity to the assessee Mr.Prashant Vithoba Navale. Assessing Officer made addition of Rs.5,78,000/-. The AO rejected the Assessee’s claim on following grounds : i. All the transaction, investments in shares, bank loans, savings accounts, gift deed have been made in the individual capacity of assessee and not as a Karta of HUF. ii. No documentary evidences were produced in support of earning of agricultural income by HUF, except confirmation of Karta. iii. Mere confirmation of Karta of HUF that investments are of his HUF and the same are made out of agricultural income (i.e. exempt under the income tax Act, 1961) of his HUF is not sufficient and corroborative evidence of income earned by HUF and investment made by HUF out of that income. iv. In respect of claim of assessee that, sale of gold jewellery of HUF to Ms Apte Jewellers, Solapur, the partners of said jewellers in their statement U/s 131 have themselves accepted that no such sale were taken place and those were accommodation entries. IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 7 v. In addition to above, as can be seen from details of investment in shares, all the investment in shares of three companies were ultimately transferred to Shri. Maruti Nivrutti Navale by way of Gift Deed i.e. without consideration. vi. Interestingly, all the following brother of Mr. Maruti Nivrutti Navale had furnished similar submissions and all of them have transferred all the shares to him by executing Gift Deed: a. Mr. Sadashiv Nivrutti Navale b. Mr. Vithoba Nivrutti Navale c. Mr. Mahadev Nivrutti Navale vii. Till the aforesaid assessment years, neither the aforesaid individual assessee’s nor the respective brother’s HUF had invested in shares / other assets or deposited that much amount of cash in banks. viii. Thus, there is only one possibility that the claim of agricultural income to have supported all these investments/cash deposits/jewellery acquisitions, etc is merely a façade for the consumption of Income Tax Department. In reality, it appears, all this money has come from Shri. Maruti Nivrutti Navale himself, which is the money he has siphoned off from Sinhagad Technical Education Society, where it is generated through capitation fees collection. IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 8 ix. The Assessing Officer has produced a Chart of Cash Deposits either in bank or for share application money made by these family members as under : Name 2010-11 2011-12 2012-13 2013-14 2014-15 Total Sadashiv Nivrutti Navale 4,50,000 10,08,000 1,03,13,000 1,88,65,000 1,70,000 3,08,06,000 Ashok Sadashiv Navale -- 1,45,000 36,37,600 1,25,52,000 1,00,000 1,64,34,600 Sanjay Sadashiv Navale -- 4,15,000 22,61,200 28,20,000 20,000 55,16,200 Prasanth VithobaNavale -- -- -- 5,78,000 -- 5,78,000 Total 4,50,000 15,68,000 1,62,11,800 3,48,15,000 2,90,000 5,33,34,800 Thus, according to the Assessing Officer, there is massive cash deposit of Rs.5,33,34,800/- by the Group. 4.1 Aggrieved by the order of the AO the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) confirmed the Assessment Order. Aggrieved by the order of the Ld.CIT(A), the assessee filed this appeal. Submission of Ld.AR : 5. The Ld.AR submitted that the satisfaction recorded by the AO is defective and hence the notice u/s.153C is bad in law. The Ld.AR made following written submission: “1. Section 153C of the Act relates to assessment of income of any other person. With effect from the 1st day of June, 2015 Section 153C has been amended and provides IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 9 that where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to: or (b) any books of account or documents, seized 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 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 against 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 documents or assets, seized or requisitioned, have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub- section (1) of section 153A. 2. The earlier provisions contained in sub-section (1) of the said Section 153C provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to any person, other than the person referred to in Section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 10 having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of Section 153A. 3. It is pertinent to mention here that the said amendment is prospective and is applicable for the searches conducted after 01.06.2015 and as such the old provisions of "belongs to or belong to a person" shall prevail in case of search made before 01.06.2015. 4. Now, in the course of search, the dept, seized mainly the cheque deposit slip and memorandum of confirmation of gift. On the basis of the said material found in the course of search, the learned AO has issued notice U/Sec.l53C of the Act to the appellant. The copy of the satisfaction note is enclosed at Page No.5 to 6 of Paper Book No.1. The learned AO has referred to 3 Bundles namely Bundle No.2, 11 and 12. In the satisfaction note, the learned AO states that these documents pertain to the Shri. Prashant VithobaNavale and also stated that from the verification of these documents, it reveals that Shri. Prashant VithobaNavale has certain undisclosed income for AY 2013-14 and therefore, the notice U/Sec.l53C of the Act is being issued. The copies of the papers seized which are referred in the satisfaction note are enclosed at Page No.7 to 13 of Paper Book No.l. All these papers are basically the cheque deposit slip and memorandum of confirmation of gift. The appellant submits IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 11 that these documents are not incriminating evidences in order to issue notice U/Sec.l53C of the Act. 5. It is submitted that for issue of notice U/Sec.l53C of the Act, they should be incriminating evidences belonging to the appellant seized in the course of search on a third person. Merely because a document is found but which is not incriminating, no notice U/Sec. 153C of the Act can be issued. In the present case, the documents seized which are being referred in the satisfaction note are not incriminating documents. The cheque deposit slip and memorandum of confirmation of gift cannot be considered as incriminating. In fact, all these documents are available in government record and are duly recorded in the books of accounts and therefore, such documents cannot be treated as incriminating evidence to justify the issue of notice U/Sec. 153C of the Act. Accordingly, it is submitted that no incriminating evidence was found as a result of search relating to the appellant. ....................... 8. Further, in the case of the appellant, the search action U/Sec.132 of the Act has been carried out on 06.08.2013 and therefore provisions of Section 153C of the Act stating "belongs to or belong to a person" shall prevail and the AO in the satisfaction note has categorically stated that “the incriminating documents found and seized during the course of search at the office premises of Sinhagad Technical Education Society pertains to Shri. Prashant IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 12 Vithoba Navale”. Accordingly, it is submitted that the notice issued U/Sec.l53C of the Act is bad in law and void ab initio. 9. Without prejudice to above, it is further submitted that the notice issued U/Sec. 153C of the Act and the assessment order passed on the basis of said notice is bad in law as no incriminating document has been found during the course of search U/Sec. 132 of the Act at the premises of Sinhagad Technical Education Society which belongs to the appellant which indicate the undisclosed income. ....................... 11. In support of this contention, we wish to rely upon following decisions: a. PCIT Vs. Dreamcity Buildwell Pvt. Ltd. [2019] 110 taxmann.com 28 (Delhi) b. CIT vs. Renu Construction (P) Ltd. [2018] 99 taxmann.com 426 (Delhi) c. CIT vs. Arpit Land Pvt. Ltd. [2017] (Bombay HC) d. CIT v. Sinhagad Techinical Education Society [2017] Civil Appeal No.11080 of 2017 (Supreme Court) e. DCIT vs. Late Shri Pravinsinh N Zala [2020] (ITAT Ranchi Bench) f. Pradeep Sharma vs. ACIT [2021] (ITAT Indore Bench) g. CIT v. RRJ Securities Ltd [2017] 79 taxmann.com 115 (SC) (Supreme Court) h. PepsiCo India Holdings (P.) Ltd. vs. ACIT [2014] 50 taxmann.com 299 i. Kamlesh Bhai Dharamshi Bhai Patel v. CIT [2013] 214 Taxman 558 j. PCIT (Central) - 2 v. Index Securities (P.) Ltd. [2017] 86 taxmann.com 84 (Delhi) k. Tanvir Collections (P.) Ltd. v. ACIT [2015] 54 taxmann.com 379 (Delhi - Trib.) IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 13 l. ARN Infrastructure Ltd. V. ACIT [2017] 81 taxmann.com 260 m. Natural Products Bio Tech Ltd. v. DCIT [2015] 53 taxmann.com 400 (Delhi - Trib.) n. ACIT v. Pepsi Foods India (P) Ltd. [2018] 89 taxmann.com 10” 5.1 The ld.AR made elaborate submission on merits of addition mainly that the cash deposits were sourced from the Agricultural Income of HUF. Submission of Ld.DR: 6. Ld.DR relied on the orders of the AO and ld.CIT(A). The Ld.DR submitted that there was incriminating material as mentioned in the satisfaction note of the AO. The AO of the assessee Mr.Prashant Navale and the searched Person is same as the cases of the entire Navale group were centralized with one AO. The Ld.DR read out the satisfaction note which is at page number 5 to 6 of the Assessee’s Paper Book and pleaded that there was incriminating material. The AO has rightly invoked jurisdiction u/s.153C of the Act. Findings and Analysis : 7. We have heard both the parties and perused the records. We will discuss and decide each ground hereonwards. 7.1 It is an admitted fact that there was a search u/s 132 of the Act in the case of Sinhagad Technical Education Society and Maruthi Navale Group on 06/08/2013. IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 14 7.2 The Assessing Officer Dy. Commissioner of Income Tax, Central Circle-2(2), Pune recorded following satisfaction in the case of the Assessee Mr.Prashant Vithoba Navale before issuing notice u/s 153C of the Act. Quote, “During the course of search action at the Office premise of M/s Jaishreeram Sugar and Agro Products Ltd, M/s NEEMCO Spineers Ltd., M/s NEEMCO Investment and Finance Ltd (Formerly M. N. Navale Investment and Finance Ltd), 10/12, St. Crispins Home, Karve Road, Pune-411004 certain .incriminating documents were seized / impounded. After examination of these seized documents it is noticed that these documents pertains to Shri. Prashant Vithoba Navale such as Page No. 35 of Bundle No. 2, Page No. 116 to 118 Bundle No. 11, Page No. 130 to 132 Bundle No.12. The case of Shri. Prashant Vithoba Navale has been centralized to this office vide CIT-IV, Pune’s centralization order NO/N/CIT- IV/TECH/Centralisation/Sinhagad Grp/2013-14Ab6x) dated 27/02/2014. Frpm the verification of these seized documents itreveals that Shri. Prashant Vithoba Navale has certain undisclosed income for A.Y. 2013-14. In view of the facts mentioned above and after careful perusal of seized documents I am satisfied that the seized document has bearing undisclosed income of the assessee. Verification of the seized documents revels large cash deposits and gifts given by Shri. Prashant V. Navale. Further, it is seen that the assessee has not even filed his return of income for the A.Y. 2013-14.” Unquote. IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 15 7.3 The Dy. Commissioner of Income Tax, Central Circle-2(2), had observed that verification of seized documents revealed that large cash deposits were made by Prashant V Navale and Gifts given by Prashant V Navale. It is also a fact that the Assessee Mr.Prashant V Navale had never filed Return of Income for AY 2013-14. Thus, from the plain reading of the Satisfaction Note, it is observed that Assessee Prashant Vithoba Navale had deposited Large cash and he had also given Gifts. Since, the assessee Prashant Vithoba Navale had never filed return of Income for AY 2013-14, the transactions of cash Deposits, Gifts were never disclosed to the Income tax Department by the Assessee Prashant Vithoba Navale. Therefore, the seized documents referred by the AO, such as Bundle Number 2, page number 35, Bundle Number 11 page number 116-118, Bundle Number 12 page numbers 130-132 disclosing the transactions of cash Deposits by Prashant Vithoba Navale and Gifts by Prashant Vithoba Navale are incriminating documents as these transactions have never been disclosed by Mr.Prashant Vithoba Navale to the Income tax Department prior to the Search. Therefore, the Assessee’s claim that there were no incriminating documents is misplaced. Assessee also claimed that the IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 16 impugned documents were in the knowledge of Government Authorities is also baseless as these documents were never brought to the notice of the Income tax Department by Mr.Prashant Vithoba Navale. 7.4 The Assessee has taken plea in Ground Number 1 that the impugned documents belongs to Vithoba N Navale(HUF), hence notice should have been issued in the name of the HUF. We have verified the documents, it is observed that assessee’s name Prashant Vithoba Navale is clearly appearing in the impugned documents. Mr.Prashant Vithoba Navale has also signed impugned Memorandum of Confirmation of Gift documents. Nowhere in the documents name of the HUF is mentioned. Therefore, the AO was legally right in issuing notice to the Assessee Prashant Vithoba Navale. Therefore the Ground Number 1 of the Assessee Mr.Prashant Vithoba Navale is dismissed. 7.5 The second plea taken by the Ld.AR is that the Search took place prior to 01/06/2015 i.e. the Date of amendment to Section 153C. Therefore, the un-amended provisions of Section 153C IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 17 will be applicable in the case of the Assessee. The Section 153C prior to the amendment was as under : “153-C. Assessment of income of any other person.—(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and Section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153-A, 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 against each other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A” (emphasis supplied) 7.6 Thus, prior to the Amendment to Section 153C, the requirement of Section 153C was that the documents, money, bullion shall belong to a person other than the Searched person. 7.7 However, the Section 153C was amended in 2015 w.e.f. 01.06.2015 which replaced the word ‘belongs to’ by ‘pertain to’ 7.8 The Hon’ble Supreme Court in the case of ITOVs Vikram Sujit Kumar Bhatia 453 ITR 417 vide order dated 6 April 2023 has held as under : IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 18 Quote, “Therefore, it is observed and held that the amendment brought to section 153C of the Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted under section 132 of the Act, 1961 before 1-6-2015 ” Unquote. 7.9 Thus, Hon’ble Supreme Court has held that the amendment to Section 153C replacing the words “belongs to” by ‘pertains to’ is applicable to searches made prior to the date of amendment also. 7.10 The Assessing officer has used the word, ‘pertains to’ in the satisfaction note. Since the Amendment has introduced the words “Pertains to” replacing words “Belongs to” and Hon’ble SC has held that the amendment is applicable to searches caried out before 01.06.2015 also and in this case search was carried out on 06.08.2013, respectfully following the law as explained by the Hon’ble Supreme Court(supra), it is held that the satisfaction recorded by the AO is as per the law and hence the notice u/s.153C is valid as per the law. 7.11 The Ld.AR has relied on various case laws mentioned in his written submission,however, after the recent judgment of the Hon’ble Supreme Court in the case of Vikram Bhatia(supra) , all those case laws are not applicable to the present case. IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 19 7.12 Therefore, the Additional Ground and Ground Number 1 of the Assessee Prashant Vithoba Navale are dismissed. Ground No.2 : 8. Vide this ground the Assessee Prashant Navale has made the plea that cash deposits in Bank and Investments were made out of Agricultural income of Shri. Vithoba N Navale HUF and not the assessee Prashant V Navale. 9. The Assessee Prashant Vithoba Navale is an Individual, his Bank account is in his name. The Assessee Prashant Vithoba Navale is a Teacher in Anand Vidyalaya, earning Salary of only Rs.2,62,442/- during the year. During the year Cash of Rs.2,78,000/- was deposited in the Bank Account of the Assessee by the Assessee Prashant Vithoba Navale. Also, Rs.300000/- was invested in cash for Share Application Money by Mr.Prashant Vithoba Navale. The impugned Cash Deposits were in the Bank Account which was in the name of the Assessee Prashant V Navale. During the Assessment proceedings the Assessee had not filed any evidence to prove the contention that the amount was out of Agricultural Income of the Vithoba N Navale (HUF). Even before us the assessee has not IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 20 filed any documentary evidence to prove his pleading. He has merely relied on the oral averments. In this fact and circumstances, it cannot be believed that the Cash Deposits were sourced from the Agricultural Income of the Vithoba Navale (HUF). There is no reason why the Vithoba Navale (HUF) does not have a Bank Account. We are not concerned with the fact whether the Vithoba Navale (HUF) had sufficient cash at that point or not, we are concerned with the fact that the Assessee Prashant Navale had failed to file documentary evidence to prove that the Cash deposits were sourced from the Vithoba Navale (HUF). For the purpose of Income tax Act, the Vithoba Navale (HUF) and Assessee Prashant Navale are different distinct entities. 9.1 The Hon’ble Delhi High Court in the case of Shashi Garg Vs Pr.CIT has on identical facts held as under, which has been upheld by Hon’ble Supreme Court [2020] 113 taxmann.com 93 (SC) by dismissing SLP : Quote, “ 9.Burden to explain the source of cash deposit was on the appellant-assessee, who as per the finding has not been able to discharge this burden. The evidence on record is undisputed, and the inference and factual findings recorded we would observe are supported by cogent and weighty reasoning. Explanation of the appellant-assessee has been duly considered and not ignored. Implausible and lame justification for making cash withdrawals has exposed and dented the IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 21 concocted explanation regarding source of the cash deposit. Factual findings are based on cumulative effect of all facts covering all essential points. We would not interfere with factual findings unless they are irrational and absurd, which no perso n acting judicially and properly instructed in the field of law of taxation would have passed.” Unquote. 9.2 Thus, the Hon’ble High Court has categorically explained that the Burden to prove the source of cash deposits is on the assessee. In this case the assessee failed to prove the same. Therefore, in the absence of the Documentary evidence, the claim of the assessee that the Cash Deposits were sourced from the Vithoba Navale (HUF) is rejected. 9.3 Similarly, the assessee has claimed that the investments in shares was sourced from the income of Vithoba Navale (HUF), however, assessee has not filed any documentary evidence. Hence, the claim of the assessee is rejected. It is an admitted position that the Shares were in the name of the Assessee Prashant Vithoba Navale. 9.4 We find support from the order of ITAT Pune in the case one of the members of this family Mr.Sukhdeo Navale in ITA(SS)A No.30/PUN/2019 which has been decided by ITAT IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 22 Pune against the assessee Sukhdeo Navale. The pleadings and grounds of appealwere absolutely identical in the case of Sukhdeo Navale and Assessee Prashant Navale. The relevant part of the said order is reproduced here as under : Quote, “We have considered the submissions placed on record by the parties herein, analysed the facts and circumstances in this case. The assessee is the karta of HUF. It was noticed during the assessment proceedings by the ld. A.O that the assessee had undertaken various investments in shares, sold gold jewellery and deposited large amount of cash in the bank account. It was claimed by the assessee that the source of income for all these transactions were the income of HUF and not his individual income. The HUF had earned agricultural income and from this income transactions were completed. However, the assessee miserably failed before the revenue authorities and even before this Bench to substantiate the source of income of HUF through corroborative evidences except the declaration of the karta i.e. assessee, that these transactions were of the HUF. In absence of any corroborative evidences, the department had made the addition in the hands of the assessee. The assessee has neither furnished any evidence of agricultural income, nor the assessee has given a copy of income-return of the HUF where these transactions could be located for the purpose of tax, no explanations were furnished by the assessee as to why the bank accounts were in individual name when the claim is that these deposits are of HUF. There has been no supporting evidences also filed by the assessee neither before the department nor before this Bench to IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 23 justify that the transactions, bank deposits were of the HUF. Accordingly, it was found that for this year, there was a cash deposit of Rs.13,00,000/- and that was added to the total income of the assessee by the ld. A.O u/s 68 of the Act. Section 68 of the Act reads as follows: “68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the A.O satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year.” 8. With regard to this provision, the ld. Counsel for the assessee submitted that it is not applicable to the case of the assessee, because the assessee is not maintaining any books of accounts and the very fact that the provision opens with the words “where any sum is found credited in the books of an assessee maintained for any previous year” makes it clear that the applicability of the provision of section 68 of the Act is only in a case where the books of accounts were maintained. However, we find that the correct applicability of provision and the addition made in this case has been done by the ld. CIT(A) where section 69A of the Act has been invoked and the additions were confirmed. Section 69A of the Act reads as follows: “69A: Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable, article and such money, bullion, jewellery or IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 24 valuable article is not recorded in the books of accounts, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the A.O satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.” 9. That on perusal of this provision it encompasses a situation where the assessee is found to be the owner of any money etc. which are not recorded in the books of accounts, if any, maintained by him. Therefore, this provision is more wide in nature and focussing not on the maintenance of books of accounts by the assessee but on the fact that if any money, etc. of which the assessee is the owner and that he has not offered any explanation regarding the nature and source of acquisition of the said money, etc. and even if the assessee had offered explanation, if it is in the opinion of Assessing Officer is not satisfactory then such money, etc. may be deemed to be the income of the assessee for such financial year. Essentially the trigger point for applicability of this provision is not books of account, it may be there or it may not be there. But it is the fact that assessee is the owner of some money etc., the source of which is not explained by him or even if he has explained, as per the opinion of the A.O it is not satisfactory, then such income will be deemed income of the assessee. The Hon‟ble Kerala High Court in the case of P.P. Bhaskaran Vs. CIT (2017) 394 ITR 258 Ker) has held the said proposition. The IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 25 Hon‟ble Delhi High Court in the case of Dineshkumar Jain Vs. Pr. CIT (2018) 407 ITR 65 (Del) has held the deposits made in bank account which was not substantiated by providing evidence by the assessee, the additions were leviable u/s 69A of the Act. Reverting to the facts of the present case, the assessee claimed the said money, deposits were that of HUF but neither before the revenue authorities nor before this Bench the assessee has been able to provide any corroborative evidences except the statement of karta that such money belongs to HUF. On the contrary, the monies were found deposited in the bank account belonging to the assessee. Therefore, the ownership is explained and since the source was not substantiated it is a deemed income in the hands of the assessee. Whether he has maintained books of account or not is immaterial so far as applicability of section 69A of the Act is concerned. If the assessee claims that he is not the owner of the money found deposited in his account then he has to establish his claim. This has been held by the Hon‟ble Madras High court in the case of CIT Vs. KTMS Mehmood (1997) 228 ITR 113 (Mad). In the mentioned case, when the assessee has failed to establish that he is not the owner of the amount found in his possession in a search conducted by the Officers of E.D. i.e. Enforcement Directorate such amount was liable to be treated as income of the assessee by virtue of provision of section 69A of the Act. Therefore, the assessee can only escape section 69A of the Act if he proves that he is not the owner of the said money etc. found in his possession but in the instant case before us, the assessee was not able to refute the facts on record nor he was able to establish that the HUF was the owner of the money deposited and that the assessee was not the owner of the said IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 26 money found in the bank account. Therefore, applicability of section 69A does not depend on whether the assessee maintains books of account or not. Once the department unearthed that the assessee is the owner of money etc. for which he has not explained the source and even if he has explained that is not satisfactory as per the reasoning of the A.O. in such circumstances, the said money etc. will be the deemed income of the assessee. In this case, it was claimed that the cash deposits of Rs. 13,00,000/- in the bank account was that of the HUF and not of the assessee as an individual. However, as already examined the assessee has not been able to establish the source of the money and whether it belongs to the HUF. It was claimed that the HUF has done the deposits from the agricultural income. However, the assessee has also not proved this claim. There has been no corroboration of the statement given by the assessee as the karta of HUF that those deposits made in the bank for this relevant year pertains to the HUF. The bank account also was not in the name of the HUF. No income-tax return has also been filed by the HUF. Admittedly, the cash of Rs.13,00,000/- was deposited in the bank account which is in the name of the assessee and therefore, he is the established owner of that money. The assessee has not explained the source of that money. Therefore, the additions have been correctly made in the hands of the assessee u/s 69A of the Act. Before us, the ld. Counsel for the assessee contended that no opportunity was given to the assessee by the ld.CIT(A) before changing the provision from section 68 to 69A of the Act. However, on going through the entire order of the ld. CIT(A) nothing comes out that such opportunity was not given since it was during the course of IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 27 first appellate proceedings in which the assessee was present through his counsel and he was made aware that applicability of provision is section 69A of the Act. The ld. Counsel also relied on some case-laws which are on record. However, all of them are substantially different from the present facts in the assessee‟s case. Here, the assessee who has been found to be the owner of cash being deposited in his account and he has dnot been able to substantiate the source of such cash through corroborative evidences and justified explanation. The revenue authorities have exhaustively verified the claim of the assessee and thereafter made the addition. Considering the totality of the facts and circumstances and upon analysing them hereinabove, we do not find any infirmity with the findings of the ld.CIT(A) and the same is upheld. Grounds of appeal of the assessee are dismissed.”Unquote. 9.5 The assessee has raised a plea in Ground Number 3 that the details of cash deposits were not provided to the assessee. We do not agree with the plea taken by the assessee. The bank account is in the name of the assessee so he has access to all the information about his bank account. Similarly, the investments made in shares was in the name of the assessee hence assessee has full information of the investments made by him. Accordingly said plea is rejected. In this case the AO had made addition u/s.68 but the Ld.CIT(A) had invoked section 69A of the Act for the cash deposits. IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 28 9.5.1 Ld.CIT(A)’s powers are coterminous with that of the Assessing Officer. Hon’ble SC has observed in the Case of CIT vs Kanpur Coal Syndicate 1965 AIR 325 as under : Quote, “The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is coterminous with that of the Income- tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do.” Unquote. 9.5.2 We agree with the ld.CIT(A), for the elaborate reasons discussed in the order of the ITAT in the case of Sukhdeo Navale in IT(SS)A No.30/PUN/2019 (supra), we adopt the same reasoning. 9.6 Therefore, for all the reasons discussed, the Ground Number 2 and 3 of the Assessee Prashant Vithoba Navale are rejected. Ground Number 4: 10. The assessee has not filed any documents to prove that he had agricultural income. Assessee has not even filed copy of 7/12 extract to prove that Land is in his name . In the absence of IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 29 the documents to prove the claim of agricultural Income, the ground number 4 of the assessee is rejected. 11. In the result appeal of the Assessee Prashant Vithoba Navale in IT(SS)A No.16/PUN/2019 for AY 2013-14 is dismissed. IT(SS)A No.26/PUN/2019 Santosh M.Navale : 12. We have already discussed the issues at length in the case of Prashant Vithoba Navale in IT(SS)A No.16/PUN/2019 for A.Y. 2013-14 above, in the present appeal the assessee i.e. Santosh M. Navale in IT(SS)A No.26/PUN/2019 has raised identical grounds and facts are also identical. These cases were heard together with the approval of the ld.AR and ld.DR. In these facts and circumstances of the case which are similar, our findings given in Prashant Vithoba Navale in IT(SS)A No.16/PUN/2019 for AY 2013-14 will apply mutatis-mutandis to this appeal of Santosh M. Navale in IT(SS)A No.26/PUN/2019 for A.Y.2013-14. 12.1 However, in Ground No.3 of Santosh M.Navale IT(SS)A No.26/PUN/2019, the assessee has raised a plea that actual cash deposits were Rs.2 lacs instead of Rs.2,42,800/- mentioned in IT(SS)A No’s 16/PUN/2019 & 26/PUN/2019 Prashant Vithoba Navale & Santosh Navale [A] 30 the assessment order, the issue of actual quantum of cash deposits is set-aside to the AO for verification after giving opportunity to the assessee. In principle, we are confirming the addition made on account of cash deposits following the findings given in Prashant Vithoba Navale in IT(SS)A No.16/PUN/2019 for A.Y. 2013-14. Accordingly, grounds of appeal raised by the assessee are dismissed. 13. To sum up, appeals of both assessee’s i.e. Prashat Vithoba Navale in IT(SS)A No.16/PUN/2019 & Santosh Mahadeo Navale in IT(SS)A No.26/PUN/2019 are dismissed. Order pronounced in the open Court on 31 st July, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 31 st July, 2023/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, Central, Pune. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.