Asst. Commissioner of Income Tax, Central Circle-3, Surat, Surat V. Shri Pitamber B Ruchandani, Surat

ITSSA 34/SRT/2022

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6795 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-08-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers; Document seized; Documents seized; Set aside
• Section: 119; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER IT(SS)A No. 34/SRT/2022 (AY: 2008-09) (Physical Hearing) A.C.I.T., Central Circle-3, Surat. Vs. Shri Pitamber B Ruchandani, 60, Narmad Nagar, Near Adarsh Society, Athwalines, Surat. PAN No. AAQPR 4470 F Appellant/ Revenue Respondent/ Assessee Assessee represented by Shri Rasesh Shah, C.A. Department represented by Shri Ashok B. Koli, CIT-DR with Shri Vinod Kumar, Sr.DR Date of hearing 11/08/2023 Date of pronouncement 05/10/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the Revenue is directed against the order of learned Commissioner of Income Tax (Appeals)-4, Surat (in short, the ld. CIT(A)) dated 19/03/2022 for the Assessment Year (AY) 2008-09. The Revenue has raised following grounds of appeal: “(i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 7,63,29,140/- made by the Assessing Officer on account of undisclosed Long Term capital Gain without appreciating the fat that the AO has brought on records various material evidences and analysed to prove that assessee has received on money. (ii) On the facts and circumstances of the case and in law, the ld. CIT(A) has failed to appreciate the fact that the seized documents should have been considered as valid and the contents therein should be considered as true as per the provision of Section 292C of the Act, as the documents were seized from the possession of the assessee and the contents of the documents were logically and rightly analysed by the Assessing Officer. IT(SS)A No. 34/Srt/2022 ACIT Vs Sh. Pitamber B Ruchandani 2 (iii) On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs. 7,63,29,140/- made by the Assessing Officer on account of undisclosed LTCG relying upon the decision of the Ld. CIT(A)-1, Surat in the case of co-seller viz Shri Maheshkumar G. Patel HUF, against which appeal is pending before the Hon’ble ITAT as in these cases, the analysis of seized documents substantiated the involvement of on-money received and the relief granted by the ld. CIT(A) is without considering the provisions of Sec. 292C of the Act and dehors provisions contained in the said section. (iv) It is, therefore, prayed that the order of ld. CIT(A)-4 may be set aside and that of the AO may be restored to the above extent. (v) The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal.” 2. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that the Assessing Officer made addition of on money received on the sale of land forming part of survey No. 104 Village Magdalla Surat, on the basis of alleged incriminating material found during the course of search action carried out on 05/03/2013. The said land which was jointly owned by assessee with Maheshbhai Patel HUF. The Assessing Officer made addition on account of on money on the basis of page No. 117 of Annexure-A1 seized from the premises of assessee, by taking view that such piece of land admeasuring 9927 square yard of land was sold at the rate of Rs. 15,777/- per square yard. The ld AR for the assessee submits that similar addition (1/2) was made by the assessing officers of nine purchasers. And all such additions made against the purchasers has been deleted by the Tribunal vide order dated 25/10/2019 passed in ITA No. 386 to 388/Ahd/2017, ITA No. 396/Ahd/2017 and ITA No. 2220 to 2222/Ahd/2016, ITA No. IT(SS)A No. 34/Srt/2022 ACIT Vs Sh. Pitamber B Ruchandani 3 2304/Ahd/2016 as well as ITA No. 378/Srt/2019 order dated 18/06/2021. The ld. AR of the assessee furnished the copy of decision of Tribunal in case of purchasers wherein the similar addition was deleted. The ld. AR of the assessee further submits that the impugned land was jointly owned by assessee with Maheshchandra G. Patel (HUF). Further, similar addition was made against the order was made in the hand of Maheshchandra G. Patel (HUF), and on appeal before ld CIT(A), the entire addition in the hand of co-owner has been deleted by ld CIT(A). the ld CIT(A) while granting relief to the assessee has followed the order of his predecessor in case of Maheshchandra G. Patel (HUF). The revenue has filed against Maheshchandra G. Patel (HUF) vide ITA No. 20/Srt/2020. The appeal of revenue in case of Maheshchandra G. Patel (HUF) has been heard on 26/07/2023, therefore, the order passed in case of Maheshchandra G. Patel (HUF) (supra) may be followed. 3. On the other hand, the learned Commissioner of Income Tax- Departmental Representative (ld. CIT-DR) for the revenue submits that after going through the decision of Tribunal in case of purchasers referred above would submit that he relied on the order of Assessing Officer. However, he agreed that case of co-owner has been heard on 26/07/2023 and the order passed in Maheshchandra G. Patel (HUF) may be followed in the present case. IT(SS)A No. 34/Srt/2022 ACIT Vs Sh. Pitamber B Ruchandani 4 4. We have considered the submissions of both the parties and perused the orders of the lower authorities carefully. We find that the facts involved in the present appeal is common with the facts in Maheshchandra G. Patel (HUF) in ITA No. 20/Srt/2020 which has been decided by this combination vide order dated 27/09/2023. We further find that in case of purchasers, similar addition on account of same alleged on money was made on the basis of page No. 117 of Annexure-A1 which has already been deleted by the Tribunal vide order dated 25/10/2019 passed in ITA No. 386 to 388/Ahd/2017, ITA No. 396/Ahd/2017, ITA No. 2220 to 2222/Ahd/2016, ITA No. 2304/Ahd/2016 and ITA No. 378/Srt/2019 order dated 18/06/2021 as well as order dated 18/06/2021 passed in ITA No. 378/Srt/2019. For completeness of this order, the relevant part of order in case of Maheshchandra G. Patel (HUF) in ITA No. 20/Srt/2020 is extracted below: “16. We have considered the rival submissions of both the parties and have perused the orders of the lower authorities carefully. We have also deliberated on various case laws relied upon by both the parties. We find that the Assessing Officer made addition of Rs. 7.63 crores on the basis of seized material found during the course of search action at the premises of Pitamberbhai Ruchandani by taking a view that during the search action, certain writing on the diary seized vide Annexure-A1 wherein on page No. 117 and 119 there were certain writing which contained Revenue survey number, area of land and the rate of land sold was written. The assessee was one of the co-owner of the land with Shri Pitamberbhai Ruchandani. As IT(SS)A No. 34/Srt/2022 ACIT Vs Sh. Pitamber B Ruchandani 5 per seized material the land was sold on sale consideration of Rs.15,66,18,279/-. The assessee was owner of 50% of the share. As per registered sale deed the land was sold at Rs. 39,60,000/-. Thus, after reducing the value shown on the sale deed the share of assessee comes to Rs.6,63,29,140/-. The Assessing Officer worked out the figure of Rs. 7.63 crores and made addition of long term capital gain. Before the ld. CIT(A), the assessee filed a very detailed and exhaustive written submission taking all factual and legal objection. The assessee also brought it to the notice of ld. CIT(A) that in case of purchasers, similar additions were made by different Assessing Officers. However, on further appeal, the different ld. CIT(A)s of having different jurisdiction in Surat, deleted all the additions and on further appeal by the Revenue, such order was upheld. The ld. CIT(A) on considering such submission of assessee noted that the Assessing Officer made addition of Rs. 7.63 crores in the hands of assessee being co-owner of agricultural land of Revenue survey no. 104. The Assessing Officer also held that another co-owner Shri Pitamberbhai Ruchandani sold agricultural land admeasuring 9927 square yard @ Rs. 15777 per square yard. The Assessing Officer made addition by relying upon the noting appearing on page No. 117 and 119 of Annexure-A1 found during the search action on Shri Pitamberbhai Ruchandani. The Assessing Officer assumed such figure on the basis of writing on page No. 117 and 119. Such page number do not contain either name or code words to the denote purchasers and no dates are mentioned. There is no other evidence to corroborate such noting. The ld CIT(A) also held that the assessee has denied to receive any additional amount on sale of such property. It was also held that neither the Assessing Officer nor the authorised officer tried to make any effort to IT(SS)A No. 34/Srt/2022 ACIT Vs Sh. Pitamber B Ruchandani 6 establish in whose hand, such noting was made when Shri Pitamberbhai Ruchandani denied the writing in his hand. The land was purchased by nine persons. The Assessing Officer on said nine purchasers, by estimating similar addition on account of undisclosed investment. The ld. CIT(A) on further appeal in case of purchasers, deleted the addition. The ld. CIT(A) extracted the relevant part of order of ld. CIT(A) in case of purchaser. 17. We find that the ld. CIT(A) after referring the relevant part of jurisdictional CIT(A) held that there is nothing in the handwriting in the assessee or the buyers. No date is mentioned nor any data about the name. It does not bear the signature of either of the parties and treated such document as a dumb document. The ld. CIT(A) after referring various decisions of Hon'ble Jurisdictional High Courts and other Hon'ble High Court as well as Tribunal’s decisions, deleted the entire addition. The ld. CIT(A) also held that the decision of ld. CIT(A) in case of purchasers was also upheld by the Jurisdictional Tribunal. The ld. CIT(A) referred the decision of Tribunal in ITA No. 386, 387, 388, 396/Ahd/2017 and ITA No. 2220, 2221, 2222 & 2394/Ahd/2016 dated 25/10/2019 and extracted the relevant part of order of Tribunal and on the basis of such reference, the ld. CIT(A) in para 7.8 of his order held that the addition of Rs. 7.63 crores in hands of assessee is not supported by evidence or cogent reasoning. The addition is solely based on dumb document and price adopted is unrealistic and improbable and devoid of merits and granted full relief to the assessee. On careful consideration of the facts of the present case, as well as in case of the purchasers, we find that there is no independent or corroborative evidence in possessing of the assessing officer form making such huge addition. The assessing officer made additions merely on the basis of figure mentioned on IT(SS)A No. 34/Srt/2022 ACIT Vs Sh. Pitamber B Ruchandani 7 the loose papers, without connecting it either to the persons, whose possession it was found. Moreover, the cases of all the co-owners were reopened on the basis of such seized material, wherein all the additions were deleted by the respective jurisdictional CIT(A). thus, in view of the aforesaid factual and legal position, we do not find any infirmity or illegality in the order passed by the ld CIT(A) in granting relief to the assessee. No contrary facts of law is brought to our notice to take other view. Hence, we affirm the order of ld CIT(A) on merit. 18. Considering the fact, that we have affirmed the order of ld CIT(A) on merit, therefore, adjudication on various legal contentions of the ld AR for the assessee on the validity of the order on reopening in absence of valid satisfaction under section 153C or on the issuance of notice by the assessing officer, other than jurisdictional officer, have become academic. In the result, the grounds of appeal raised by the revenue are dismissed.” 5. In view of the aforesaid factual discussion, we find that the grounds of appeal raised by the revenue is covered by the decision of this combination in Maheshchandra G. Patel (HUF) in ITA No. 20/Srt/2020 as well as in case of purchaser in ITA No. 378/Srt/2019 dated 18/06/2021. We also find that the ld. CIT(A) while granting relief to the assessee, the ld CIT(A) followed the order of Tribunal in ITA No. 386, 387, 388, 396/Ahd/2017 and ITA No. 2220, 2221, 2222 & 2394/Ahd/2016 dated 25/10/2019. Thus, in view of the aforesaid discussion, we do not find any merit in the grounds of appeal raised by IT(SS)A No. 34/Srt/2022 ACIT Vs Sh. Pitamber B Ruchandani 8 the revenue, accordingly, we dismiss the same. In the result, all the grounds of appeal raised by the revenue are dismissed. 6. In the result, this appeal of revenue is dismissed. Order announced in open court on 05 th October, 2023. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 05/10/2023 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat