The Deputy Commissioner of Income Tax, Central Circle-1, Baroda V. Shri Mayur B. Patel, Baroda

ITSSA 229/AHD/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3096 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-07-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 17-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Document seized; Documents seized
• Section: 131; 69; 132; 143(2); 139(1); 153C

Judgement Text

IT(SS)A No.229/Ahd/2017 A.Y. 2012-13 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER IT(SS)A No.229/Ahd/2017 Assessment Year: 2012-13 Dy. Commissioner of Income Tax, vs. Shri Mayur B. Patel, Central Circle-1, 2, Shivam Enclave, Baroda. B/h. Gokuldham Society, Manjalpur, Bqaroda – 390 011. [PAN – AVCPP 0604 L] (Appellant) (Respondent) Appellant by : Shri James Kurian, CIT DR Respondent by : Shri D.K. Parikh, AR Date of hearing : 14.07.2022 Date of pronouncement : 26.08.2022 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the Revenue against the order dated 28.01.2017 passed by the CIT(A)-12, Ahmedabad for the Assessment Year 2012-13. 2. The Revenue has raised the following grounds of appeal :- “1 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the AO is not specific and categorical as to whether the document pertains to the assessee. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has also erred in holding that there should be some incriminating material seized in the case of the assessee from other persons though section 153C of the IT Act does not provide for incriminating material. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in quashing the assessment u/s.153C of the Act. IT(SS)A No.229/Ahd/2017 A.Y. 2012-13 Page 2 of 4 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has also erred in holding that the notice u/s.153C was wholly unsupported by credible incriminating material adverse to the assessee and neither expressly nor impliedly leading to a bonafide satisfaction that the document has a bearing on the total income of the assessee though it is clear from the purchase deed that the assessee is owner of the property, however, he has disclaimed his ownership. Therefore, this property is clearly not appearing in the assessee’s record though he is a legal owner of the property as per the purchase deed. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has also erred in not considering the stamp duties valuation of the impugned property. As per the Stamp Duty Valuation Authority, the valuation of the property was Rs.2,67,14,285/- and the assessee has accordingly made payments of stamp duty amounting to Rs.13,09,000/-. 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has also erred in holding that the purchase documents Annexure A-8, page 10 to 38 is not incriminating documents although it is apparent from the document that the value of the property as per stamp duty valuation authority was Rs.2,67,14,285/- and the assessee has paid stamp duty of Rs.13,09,000/-. This has a bearing on the determination of income of the assessee. 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions of Rs.2,65,79,260/- on account of unexplained investment in land at Rs. No.238, Jambuva.” 3. The assessee furnished return of income under Section 139(1) of the Income Tax Act, 1961 on 18.03.2013 declaring total income of Rs.5,19,670/-. Subsequently search action under Section 132 of the Act was carried out in the Bafna Panchal Group of cases on 07.01.2014. Certain documents pertaining to the assessee were found and seized from the search conducted in the above group cases as per the observations of the Assessing Officer and, therefore, proceedings under Section 153(c) of the Act were initiated. The Assessing Officer made addition of Rs.2,65,79,260/- towards unexplained investment in land. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. DR submitted that during the search proceedings the land related to sale deed in respect of land dealings was seized. The documents pertained to Shri IT(SS)A No.229/Ahd/2017 A.Y. 2012-13 Page 3 of 4 Mayurbhai Bhailalbhai Patel (purchaser) and Smt. Nila Rajesh Patel & others (confirming party). From the seized documents and the statement of Shri Mayurbhai B. Patel recorded under Section 131 of the Act. It was revealed that the assessee has purchased the land for Rs.93,43,000/- as per the document dated 15.12.2011. The deal was allegedly made by the assessee on behalf of his NRI friend Shri Prafulbhai Soni. The actual deal price was for an amount of Rs.3,59,22,260/- as accepted by the assessee. Thus, the Assessing Officer has rightly made addition under unexplained investment in land. Ld. DR further submitted that the CIT(A) erred in holding that there should be some incriminating material seized in the case of the assessee from other persons though Section 153C of the Act does not provide for incriminating material. The Ld. DR further submitted that notice under Section 153Cwas supported by credible incriminating material adverse to the assessee and since the assessee is the owner of the property it is an incriminating documents in the hands of the assessee. 6. The Ld. AR submitted that return of income was filed on 18.03.2013 so notice under Section 143(2) of the Act should have been issued by 30.09.2013. The search took place on 07.01.2014 and the assessee has demonstrated before the Assessing Officer that the land deal was between the assessee and the confirming parties. Since the sale deed was found at the property of confirming parties that cannot be stated as incriminating material in assessee’s case. This is unabated assessment and addition cannot be made since there is no incriminating material found during the search. Ld. AR relied upon the decision of the Hon’ble Gujarat High Court in the case of Soumya Construction, 387 ITR 529. The Ld. AR further submitted that the amendment pertains to apply prospectively for search conducted after 01.06.2015 as held by Gujarat High Court in the case of Anilkumar Gopikishan Agarwal vs. ACIT dated 02.04.2019. Ld. AR further submitted that law is settled that unabated assessment can be disturbed only to the extent of incriminating material found during search at the place of the assessee but there was no search in assessee’s premises. If the purchase deed is in name of assessee, it does not permit addition under Section 69 since nothing more than documentary consideration is paid and source of the said consideration is not in dispute. IT(SS)A No.229/Ahd/2017 A.Y. 2012-13 Page 4 of 4 7. We have heard both the parties and perused all the relevant material available on record. The assessee has purchased the land and the sale deed which was found during the search was second copy of the confirming parties and the same cannot be stated as incriminating martial found during search at the place of the assessee. The document cannot be stated as belonging to the assessee. This is an unabated assessment and thus no addition can be made under Section 69 of the Act. The decision of the Hon’ble Gujarat High Court in the case of Soumya Construction (supra) is relevant in the present case as out of these assessment years only pending assessment or reassessment shall abate. In other words, there can be assessment or reassessment pending till 30.09.2013 and not pending on 07.01.2014 i.e. date of search and the same cannot stated to be abated. If the documents found was in the name of the assessee and the explanation was given by the assessee as the same does not belong to the assessee but is a copy of confirming party then that cannot amount to incriminating material. Thus, the CIT(A) has rightly deleted the addition. There is no need to interfere with the findings of the CIT(A) as the same are in detail. 8. In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on this 26 th day of August, 2022. Sd/- Sd/- (ANNAPURNA GUPTA) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 26 th day of August, 2022 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad