Shri Narendra N.Thakkar, Ahmedabad V. The ACIT.,Cent.Circle-1(2), Ahmedabad

ITSSA 495/AHD/2012

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5703 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-07-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 28-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Loose papers; Document seized; Documents seized
• Section: 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ( (( ( ) )) ) ./ IT(SS)A NO. 441/AHD/2012 / ASSESSMENT YEAR: 2009-10 ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(2), AHMEDABAD VS. SHRI NARENDRA N. THAKKAR, 43, ALOK BUNGALOWS, SUN N STEP CLUB ROAD, THALTEJ, AHMEDABAD [PAN : ABCPT 9921 E] ( (( ( ) )) ) ./ IT(SS)A NO. 495/AHD/2012 / ASSESSMENT YEAR: 2009-10 SHRI NARENDRA N. THAKKAR, 43, ALOK BUNGALOWS, SUN N STEP CLUB ROAD, THALTEJ, AHMEDABAD [PAN : ABCPT 9921 E] VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(2), AHMEDABAD / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI O P SHARMA, CIT-DR ASSESSEE BY : SHRI TUSHAR HEMANI, AR ' / DATE OF HEARING : 18/07/2019 / DATE OF PRONOUNCEMENT: 05/08/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE AND ASSESSEE ARE IN CROSS-APPEALS AGAI NST THE ORDER OF LEARNED CIT(A)-I, AHMEDABAD DATED 23.07.2012 PASSED FOR ASSESSMENT YEAR 2009-10. IT(SS)A NOS. 441 & 495/AHD/2012 ACIT VS. NARENDRA N THAKKAR & VICE-VERSA FOR AY: 2009-10 2 2. THE REVENUE HAS TAKEN THREE GROUNDS OF APPEAL, B UT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE NAMELY LEARNED CIT(A ) HAS ERRED IN DELETING THE ADDITION OF RS. 2,39,55,483/- OUT OF T OTAL ADDITION OF RS.2,62,08,519/-. 3. ON THE OTHER HAND, ASSESSEE HAS TAKEN TEN GROUND S OF APPEAL. ASSESSEES GRIEVANCES CAN BE SUMMARIZED UNDER TWO F OLDS, I.E. (I) THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ASSESSMEN T ORDER PASSED UNDER SECTION 153C R.W.S. 153A OF THE INCOME-TAX AC T, WHEREAS THE ASSESSING OFFICER HAS NO SUCH JURISDICTION TO PASS THE ASSESSMENT ORDER AND (II) THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION AT RS.22,53,036/- BY ESTIMATING PROFIT @ 10% IN THE AL LEGED UNDISCLOSED RECEIPT OF RS.2,25,30,368/-. 4. BOTH THE ISSUES ARE INTERCONNECTED WITH EACH OTH ER; THEREFORE, WE TAKE THEM TOGETHER. THE BRIEF FACTS OF THE CASE A RE THAT A SEARCH OPERATION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE J IGNESH K THAKKAR GROUP OF CASES ON 5 TH FEBRUARY 2009. M/S. ANAND CORPORATION WAS HAVING ITS BUSINESS PREMISES AT 131/3, KABUTAR KHANA , CHOKHA BAZAR, KALUPUR, AHMEDABAD. A CONSEQUENTIAL SEARCH WAS COND UCTED ON M/S. ANAND CORPORATION ON 6 TH FEBRUARY 2009. ULTIMATELY, THE ASSESSING OFFICER HAS OBSERVED THAT CERTAIN LOOSE PAPERS WERE FOUND AT 131/3, KABUTAR KHANA, CHOKHA BAZAR, KALUPUR, AHMEDABAD AND H E ASSUMED THAT THREE CONCERNS OWNED BY THE ASSESSEE WERE OPER ATING FROM THIS ADDRESS. THESE PAPERS ALLEGED TO HAVE BEEN RELATED OR BELONGING TO THE ASSESSEE. HE NOTED THE DETAILS OF THOSE CONCERNS ON PAGE NO. 2 OF THE ASSESSMENT ORDER WHICH READS AS UNDER:- IT(SS)A NOS. 441 & 495/AHD/2012 ACIT VS. NARENDRA N THAKKAR & VICE-VERSA FOR AY: 2009-10 3 NAME OF THE CONCERN OWNER NATURE OF BUSINESS ACTIVITY M/S. SHIVAM PHARMA NARENDRA NARANLAL THAKKAR HUF TRADING IN PHARMACEUTICALS M/S. THAKKAR NARANLAL DEVARAM SHRI NARENDRA NARANLAL THAKKAR SARAFI M/S. C.T. CORPORATION SHRI NARENDRA NARANLAL THAKKAR SHRI CHANDUBHAI THAKKAR SARAFI AND COMMISSION AGENT 5. ON THE BASIS OF SUCH LOOSE PAPERS, HE ISSUED NOT ICE UNDER SECTION 153C OF THE ACT ON 02.08.2010. THE ASSESSING OFFIC ER THEREAFTER TOOK COGNIZANCE OF THE DETAILS OF PAGES AT SR. NOS. 2-8, 15, 16 & 23 OF THE SEIZED DOCUMENTS ANNEXURE-A1. HE FOUND THAT THE SHARAFI B USINESS (CHEQUE DISCOUNTING BUSINESS) APPEARS TO HAVE BEEN NOTICED ON THESE PAGES, WHOSE TOTAL VALUE OF THE TRANSACTIONS IS RS.2,29,26 ,071/- AS WELL AS CASH TRANSACTIONS OF RS.36,28,449/-. HE MADE ADDITIONS OF THESE TRANSACTIONS BY TREATING THEM AS UNDISCLOSED INCOME OF THE ASSES SEE. 6. ON APPEAL, LEARNED CIT(A) HAS ESTIMATED THE PROF IT ELEMENT INVOLVED IN ALLEGED RECEIPT AND CONFIRMED ADDITION TO THE EXTENT OF RS.22,53,036/- BEING 10% OF RS.2,25,30,368/-. 7. BEFORE US, AT THE VERY OUTSET, LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT FOR TAKING COGNIZANCE UNDER SECTION 153C OF THE INCOME- TAX ACT, THE ASSESSING OFFICER OF THE SEARCHED PERS ON OUGHT TO HAVE RECORDED A SATISFACTION EXHIBITING THE FACT THAT DO CUMENTS BELONGING TO THE ASSESSEE WERE FOUND AT THE PREMISES OF THE SEAR CHED PERSON DURING THE COURSE OF SEARCH. THESE DOCUMENTS OR EVIDENCES DISCLOSE UNDISCLOSED INCOME OF OTHER PERSON, I.E. ASSESSEE IN THE PRESEN T CASE. THE ASSESSING OFFICER OF THE SEARCHED PERSON THEREAFTER WOULD TRA NSMIT THOSE IT(SS)A NOS. 441 & 495/AHD/2012 ACIT VS. NARENDRA N THAKKAR & VICE-VERSA FOR AY: 2009-10 4 DOCUMENTS ALONGWITH HIS SATISFACTION TO THE ASSESSI NG OFFICER OF THE OTHER PERSON, I.E. ASSESSEE IN THE PRESENT CASE, FOR TAKI NG THE ASSESSMENT PROCEEDINGS. IN THE ABSENCE OF ANY SATISFACTION NOT E, NO COGNIZANCE UNDER SECTION 153C COULD BE TAKEN BY THE ASSESSING OFFICE R. HE FURTHER CONTENDED THAT IDENTICAL SITUATION WAS PROVIDED UND ER SECTION 158BD OF THE INCOME-TAX ACT AND HONBLE SUPREME COURT HAS CO NSIDERED THIS ASPECT IN THE CASE OF CIT VS. M/S. CALCUTTA KNITWEAR S, REPORTED IN 362 ITR 673 (SC). HE ALSO MADE REFERENCE TO THE FOLLOW ING TRIBUNAL ORDERS:- I. ZAIDUN LEENG SDN BHD ARTEFACT PROJECTS LTD V. DY. C IT, [2017] 186 TTJ (NAGPUR) 91 II. ASSTT. CIT V. JAY DEE SECURITIES & FINANCE LTD, [20 17] 57 ITR (TRIB.) 681 / 188 TTJ 593 (DELHI) III. DY CIT VS. KM NAGARAJ [2017] 166 ITD 53 / 189 TTJ 5 98 (BENG.) 8. HE FURTHER CONTENDED THAT SPECIFIC PLEA WAS RAIS ED BEFORE THE CIT(A) IN THIS REGARD, BUT IT WAS NOT ADJUDICATED. HENCE, ACCORDING TO HIM, THE ASSESSMENT ORDER DESERVES TO BE QUASHED. 9. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE WAS UNABLE TO CONTROVERT THE CONTENTIONS OF LEARNED COU NSEL FOR THE ASSESSEE. 10. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND G ONE THROUGH THE RECORDS CAREFULLY. A PERUSAL OF SECTION 153C WOULD INDICATE THAT SATISFACTION OF THE ASSESSING OFFICER OF THE SEARCH ED PERSON IS MUST EXHIBITING THE FACT THAT DOCUMENTS/EVIDENCES SHOWN ESCAPEMENT OF UNDISCLOSED INCOME OF A PERSON OTHER THAN THE SEARC HED PERSON IS AVAILABLE WHICH REQUIRED TO BE ASSESSED; THEREAFTER , HE WOULD TRANSMIT HIS SATISFACTION NOTE ALONG WITH THAT EVIDENCES TO THE ASSESSING OFFICER OF SUCH OTHER PERSON HAVING TERRITORIAL JURISDICTION. IN CASE SATISFACTION BY IT(SS)A NOS. 441 & 495/AHD/2012 ACIT VS. NARENDRA N THAKKAR & VICE-VERSA FOR AY: 2009-10 5 THE ASSESSING OFFICER OF THE SEARCHED PERSON IS BEI NG NOT RECORDED, THEN NO ASSESSMENT UNDER SECTION 153C IS SUSTAINABLE. TH ESE APPEALS ARE LYING IN THE TRIBUNAL SINCE 2012 AND THE DEPARTMENT HAS F ILED PAPER-BOOK, BUT FAILED TO PLACE ON RECORD THE COPY OF THE SATISFACT ION NOTE. PUTTING RELIANCE ON THE SUBMISSIONS OF THE ASSESSEE AND, IN THE ABSE NCE OF ANY DETAILS, WE ARE SATISFIED THAT THE ASSESSMENT ORDER IS NOT SUST AINABLE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT (SUPRA) AS WE LL AS THE ORDERS OF THE TRIBUNAL (SUPRA) ON THIS POINT. WE, THEREFORE, QUASH THE ASSESSMENT ORDER. HOWEVER, IN CASE OF RE-VERIFICATION IT EMER GES OUT THAT THE SATISFACTION NOTE IS AVAILABLE WITH THE DEPARTMENT, THEN THE REVENUE WILL BE AT LIBERTY TO FILE MISCELLANEOUS APPLICATION TO RECALL OF THIS ORDER. THE MA BE FILED WITHIN TIME LIMIT PROVIDED IN THE ACT. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS TRE ATED AS DISMISSED, WHEREAS THE APPEAL OF THE ASSESSEE IS TREATED AS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 05/08/2019 BIJU T., SR.PS ' '() *) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' / CONCERNED CIT 4. ' ( ) / THE CIT(A) 5. % , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD