Shri Mukeshbhai Kalidas Patel, Ahmedabad V. The ITO, Int.-Tax.-1, Ahmedabad

ITSSA 61/AHD/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4931 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 07-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Block assessment; Set aside
• Section: 131; 132; 153A; 143(2); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH (Conducted Through Virtual Court) Before: Ms. Annapurna Gupta, Accountant Member And Shri TR Senthil Kumar, Judicial Member Shri Mukeshbhai Kalidas Patel 2A, Tirthnagar Society III, Sola Road, Ghatlodia, Ahmedabad PAN No: APWPP8438E (Appellant) Vs The Income Tax Officer, International Taxation- 1, Ahmedabad (Respondent) Appellant by : Ms. Urvashi Shodhan, Adv. Respondent by : Shri A.P. Singh, CIT/DR Date of hearing : 07-03-2022 Date of pronouncement : 25-03-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeal has been filed by the Assessee against the order passed by the Commissioner of Income Tax (Appeals)-13, Ahmedabad, (in short referred to as CIT(A)), dated 06-03-2020, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2011-12. 2. Brief facts relating to the case are that proceedings u/s. 153C of the Act were initiated on the assessee on the basis of documents found during search action u/s/ 132 of the Act carried out in the office/residential premises of Shri Anil Hiralal Shah Shri Sanjket J Shah, Sarthav Infrastructure Pvt. Ltd. and other group entities on 04.12.2014 which documents were noted by the Assessing Officer (A.O.) of the IT(SS)A No. 61/Ahd/2020 Assessment Year 2011-12 I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 2 searched person to be belonging to the assessee. The assessment order notes the documents seized from the searched persons as being MS Excel sheet in file CCCC.xls (at path “DATA FROM ANILALIENWARE/PESENTE/FILES’XLS FILES’’) at the residence of Shri Anil Hiralal Shah. The assessment order notes that some excel sheets were also seized in the form of e-data from the residence of Mr.Sanket Jitendra Shah (Vora). It further notes that in the course of assessment proceedings in the case of searched persons above, the data recorded in the Excel file was analyzed threadbare and it was noted that it contained records of receipts and payments made during the period 2.4.2010 to 26.08.2010 relating to the construction/real estate activities of Abhishree Group/Sarthav Infrastructure Pvt. Ltd. The A.O. noted that the contents of the excel sheet were correlated with the entries in the bank account of the parties noted in the sheet. The analysis of the data revealed that the entries recorded in the sheet were with regard to receipt and payment of cash and revealed on money received in cash from various parties who had booked units in the scheme floated by the builders. This data included the name of the assessee also, who was found to have paid on money of Rs. 23,86,000/- for acquiring unit in Abhishree Orchid Scheme of SIPL. The assessee was confronted with the information in the possession of the assessing officer, due reply to which was filed by the assessee, after considering which the A.O. held that it had been conclusively proved that the assessee had made on money payment of Rs. 23,86,000/- towards purchase of plot no. 139 in Abhishree Orchid Scheme developed by SIPL over and above the documented price of Rs. 36,90,000/-. And since the source of on money payment remained unexplained the same was added to the income of the assesse as unexplained investment from undisclosed sources. 3. The assessee went in appeal before the ld. CIT(A) wherein he raised both legal grounds challenging the initiation of proceedings u/s. 153C of the Act as well as on merits of the case. Ld.CIT(A) dismissed all the contentions raised by the assessee and upheld the order of the A.O. I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 3 4. Aggrieved by the same, the assessee has come up in appeal before us the raising following grounds: 1 . The learned Commissioner of Income Tax (Appeals-13 ) Ahmedabad has erred both in law and on facts of the case in passing an appellate order u/s.250 of the I. T. Act for AY 201 1-12 dtd. 06.03.2020 2. The learned CIT(A)-13 Ahmedabad has erred in upholding the proceeding initiated u/s.153C of the I. T, Act. For Ay 2011-12 by the learned Assessing Officer, International Taxation -1 Ahmedabad 3. The learned CIT(A)-13 Ahmedabad has greviously erred in confirming the addition of Rs. 23,86,000/- made by the learned Assessing Officer, International Taxation 1 Ahmedabad as unexplained Investments. 4. The learned CIT(A)-13 Ahmedabad has erred in not adjudicating ground relating to levying interest u/s.234A and u/s.234B of the I. T. Act. 5. The learned CIT(A) -13 Ahmedabad has erred in rejecting grounds relating to initiation of penalty proceeding u/s.271 (1 )(c ) and u/s.2726 of the I T. Act, 1 961 6 Your appellant craves leave to add, alter, amend, delete all or any of the grounds of appeal before the appeal is finally heard and decided. 5. The assessee has also raised the following additional ground before us vide application received in the Registry on 08.11.2021 as under: Appellant craves leave to raise this additional ground of appeal before the Hon'ble ITAT. This is a legal ground and therefore as per the decision of Hon'ble Supreme Court in the case of National Thermal Power (229 ITR 383) it can be raised before the Hon'ble ITAT. 1. Both the lower authorities erred in law and on facts in framing assessment 0:1 the basis of material found from the premises of third person and addition was made on that basis ignoring fact that amended provision of Section 153C(1) which includes “material pertains to or any information relates to" has been brought in statute from 01/06/2015 and applicable prospectively in cases where search carried out on or after 01/06/2015. 6. On going through the additional grounds it was noted that the ground was an off shoot of ground no. 2 raised by the assessee before us as above wherein the order of the Ld. CIT(A) upholding the proceedings u/s. 153C of the Act was challenged by the assessee, while in the additional ground the challenge to the validity of the assessment order passed u/s 153C of the Act was raised on the specific ground that it was based on amended provision of section 153C of the Act which had a prospective application and did not apply to the case of the assessee. Ld. Counsel for the I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 4 assessee was asked at bar as to whether this specific challenge to the validity of the assessment framed u/s. 153C of the Act was not raised before the Ld. CIT(A) and hence not part of ground no. 2 raised before us. To this ld.counsel for the assessee confirmed that the challenge raised in the additional ground was raised before the ld. CIT(A) also and in this regard drew our attention to the arguments made by the assessee reproduced at para 5.3 of the CIT(A) orders containing the contention of the assessee raised vide the additional grounds before us. She admitted therefore that this additional ground was a part of and included in ground no. 2 raised before us and there was no need for raising additional ground and seeking admission of the same. The Ld. D.R. was unable to controvert the above, that the additional ground arose from the order of the Ld. CIT(A) and could well be said to be included in the legal ground raised by the assessee before us in ground no. 2. 7. In view of the above since the assessee has already raised a legal ground before us in ground no. 2 challenging the validity of the proceedings initiated on the assessee u/s. 153C of the Act and the additional ground raised is but an off shoot of the said ground only and arises from the orders of the Ld. CIT(A) before us, We see no reason for raising this additional ground by the assessee. Therefore we do not consider it necessary to deal with the admission of the same also, since the issue raised therein can be well addressed in ground no. 2 raised by the assessee before us. 8. Having said so, we shall now the adjudicate the appeal before us. 9. Ld. Counsel for the assessee began with making arguments first on the legal ground raised in ground no. 2 challenging the validity of the assessment framed u/s. 153C of the Act. To this effect, ld. Counsel for the assessee pointed out that initiation of proceedings u/s/. 153C of the Act in the present case were not sustainable in law, since the requirement in law of certain documents” belonging” to the assessee being found during the course of search conducted on persons other than the assessee and I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 5 being the basis of initiation of the proceedings, was not fulfilled. Ld.Counsel for the assessee pointed out that for the impugned year the provisions of section 153C of the Act required incriminating material “belonging” to the assessee being found during search, for initiating proceedings under the section. She further pointed out that there was an amendment to Section 153C of the Act effected from 01.06.2015 expanding the scope of the Section to proceedings thereunder being initiated on the basis of material/documents “pertaining” to the assessee being found during search. Ld. Counsel for the assessee pointed out that this amendment was held by the Hon’ble Jurisdictional High Court in the case of Anilkumar Gopikishan Agrawal vs. ACIT Circle3(2), Ahmedabad reported in (2019) 418 ITR 25 (Guj.) to be prospective and applicable only on searches conducted post 01.06.2015 when the amendment came into effect. She pointed out that in the present case, the search was conducted on 04.12.2014 and therefore the amended provisions of section 153C of the Act were not applicable and proceedings u/s. 153C could have been initiated only on the basis of documents found to be belonging to the assesse and not pertaining to the assessee. She evidenced and substantiated her arguments by first pointing out the documents on the basis of which the proceedings u/s. 153C was initiated on the assessee. In this regard, she drew our attention to the satisfaction note of the assessing officer of the assessee dated 22.03.2018 as under: SATISFACTION NOTE Information received from the DCIT, Central Circle-1(2), Ahrnedabad that a search was conducted in the case of Shri Anil Hiralal Shah, Sanket J Shah and Sarthav Infrastructure Private Limited & Others on 04/12/2014. During the course of search u/s. 132(1) of the Income tax Act in the case of Shri Anil Hiralal Shah, Sanket J Shah and Sarthav Infrastructure Private Limited 85 Others on 04/12/2014, purchase deed, title deed, mortgage application, power of attorney, sale deed was seized as per Annexure-A- /2 Hard disc at premise-1, A/28 & A/29 at premise-2, and A/7 Hard disc in premises-3 path on 04/12/2014 and panchhama dated 05/12/2014, 06/12/2014 subsequent dates from (premise-l)residence of Shri Hiralal Shah at 36, Amrasirish Bunglows, opp. Shri Chimanbhai Patel Institue, Nr. Prahladnagar Garden, Prahladnagar, Ahmedabad, (premise-2) residence of Shri Sanket J Shah at C-104, Pushkar-3, Opp. Vitrag Society, PT College Road, Paldi and (Premise-3) office of Sarthav Infrastructure Private Ltd (SIPL) at 203-204, Abhishilp Complex, Opp: Keeshav Baug Party Plot, Vastrapur, Ahmedabad I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 6 which contained the various details of various residential and commercial projects. In the same there is data of Nirvana Scheme carried out by M/s. Abhishree Orchid Scheme of SIPL. The said data contained name of the members/client / customers, unit/plot number, payment details through cheque and cash, details of outstanding etc. are mentioned. On perusal of the said data, it is found that Shri Mukesh Kalidas Patel has paid on-money to Sarthav Infrastructure Pvt. Ltd.,.in CD for the purpose of purchasing unit of Abhishree Orchid Scheme of SIPL as detailed below: The assessee, on-money has been paid for the F.Y. 2010-11 relevant to A.Y. 2011-12 as per the FINAL sheet. In view of the above facts, the A.O. of Sarthav Infrastructure Pvt. Ltd is satisfied that the documents were pertained to Shri Mukesh Kalidas Patel, which has bearing on the determination of total income for the A.Y. 2011-12. Considering the facts of the case and the documents found during the course of Search, I am satisfied that it is fit case for initiation of proceedings U/S.153C r.w.s. 153A of the Income-tax Act. Accordingly notice U/S.153C r.w.s.!53A of the Income tax Act is issued to the assessee on 20/03/2018 for the Assessment year 2011-12. 5. Since the proceedings U/S.153C is required to be initiated for one year only i.e. for the A.Y. 2011-12, approval to initiate U/S.153C is required to be obtained from Joint CIT. Therefore, necessary approval may kindly be accorded. Yours faithfully, (D K. Parmar) Income Tax Officer, Ward-4(2)(3), Ahmedabad 10. Referring to the above, she pointed out that the document on the basis of which proceedings u/s. 153C were initiated on the assessee was certain data from the hard disks obtained from the searched persons which contained details of investment made by different persons in the Abhishree Orchid Scheme of SIPL. She drew our attention to the fact mentioned in the satisfaction note that on perusal of the data it was noted by the A.O. that the assessee paid on money to SIPL in C.D. for the purpose of purchasing unit of Abhishree Orchid Scheme of SIPL. She pointed out that the information of on money paid by the assessee during the impugned year was extracted from the final sheet and further A.O. noted that since these documents I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 7 “pertained” to the assessee it was a fit case for initiation of proceedings u/s. 153C of the Act. She further referred to the assessment order at para 4.1 reiterating the above fact that it was on the basis of excel sheet found during search at the residence of Sri Anil Hiralal Shah and others that information pertaining to the assessee of having allegedly paid on money in cash for purchasing of unit constructions scheme of SIPL was found: 4.1 During the course of search at the residence of Shri Anil Hiralal Shah. Ms. Excel sheet in file named “CCCC/xis” (at path “DATA FROM ANILIENWARE/PESENT FILES /XLS FILES’) data contained in computer was seized. During the course ofsearch, some Excel sheet was also seized in the form of e-data from the residence of Sanket Jitendra Shah (Vora). During the course of assessment proceedings in the cases of person covered under section 153A of the Act, the data recorded in the Excel file was analysed threadbare. Relevant abstract of Excel Sheet is reproduced below for illustrative purpose. 17.04.10 65044.91 CASH BALANCE 16.04.10 1 10000.00 SIPL ABHISHREE ECOSTEAD RUSHABH MODI 1 8035.60 SIPL AC.RAJUBHAI MAKARBA SERVE NO. 541/1 DASTAVAGE STAMPING FEES 2 2000.00 SSD ABHISHREE RESIDENCY 1 BUN NO. 12/A 1 20000.00 SIPL RAJUBHAI ATULBHAI 542/1 RUTULBHAI 75044.91 30035.60 45009.3 18.04.10 45009.31 CASH BALANCE 17.04.10 45009.3 19.04.10 45009.31 CASH BALANCE 18.04.10 I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 8 1 23860.00 SIPLABHISHREE ORCHID MUKESHBHAI PATEL PLOT 149 3 150.00 SHRENA M SUTARIA PROGRSIVE AC 1 22560.00 SIPLABHISHREE ORCHID MUKESHBHAI PATEL PLOT 172 3 100.00 SHREYASI SUTARIA PROGRESIVE AC 1 25000.00 SIPLABHISHREE ECOSTEAD SANJAY/ANKITBHAI PLOT 59 3 1500.00 V M SUTARIA LOAN AC. JASHUBHAI RAJPUT UCHAK 1 20000.00 SIPLABHISHREE ECOSTEAD RAJNIKANTVORA PLOT 53 1 10000.00 SIPLAC. ABHISHREE CORPORATE 1 55000.00 SIPLMULSANAAC SERVE NO. 5125/5 AUDA KAPJA KARAR 2 20000.00 SB AMD RTGS 1 50000.00 SIPL ABHISHREE ORCHID ASHOKBHAI T T 1 100000.00 SIPLABHISHREE RESIDENCY GANPATBHAI BECHARJI SERVE NO. 508 211429.31 161750.00 49679.3 4.2 The sheet contained records of receipts and payments made during the period 02.04,2010 to 26.08.2010 relating to the construction activities of Abhishree Group/Sarthav Infrastructure Pvt. Ltd. On verification of the contents of the excel sheet, it has been found that the entries recorded in the seized e-data correlates with the entries in the bonk account of the party. On the left side of the sheet credit transactions along with date and narration have been recorded. • the term cash balance is issued at the end of each day. • On the right side of the sheet debit transactions are recorded as on the date recorded in Column "A" of the excel sheet. • the amount of the credit transactions are recorded in Column "C" I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 9 • The amount of debit transactions are recorded in Column "E" • in Column "F" the closing balance at the end of each day is recorded under the heading "Shilat". • Further, it is seen that various abbreviations like "SIPL", "SMS", "DMS" are also used. • The said sheet contains transitions for the period 02.04.2010 to 27.08.2010. 4.3 It is also imperative to discuss the coding used in this sheet with regard to the narrations used and the amounts record. Primary perusal of the noting made in this sheet Indicated that the words "HDFC" stands for HDFC bank, "CUB" stands for City Union Bonk, "SIPL." stands 'for Sarthav Infrastructure, "SB" for Sarthav Builders, "SMS" for Sanajay Mahendrabhai Sutaria, "DMS" for Dhoromn mahendrabhai Sutaria etc. 4.4 Transactions with regard to deposits in bank also found to have been recorded in the "CCCC.xls" sheet. Some of the said transactions as recorded in the sheet are summarized as under. DR 05.04.10 3 5000.00 SMS SB AC. HDFC 05.04.10 3 5000.00 SMSHUFAC. HDFC 05.04.10 3 5000.00 DMS HUF AC. HDFC 05.04.10 3 5000.00 DMS SB AC. HDFC 05.04.10 3 5000.00 SMS SB AC. HDFC 02.08.10 3 5000.00 DMS HUF CUB AC 4.5 On analysis, the deposits were found to be made in two banks (1) QUB i.e. City Union Bank and (2) HDFC Bank. Accordingly, the details of the bank accounts as receded in the sheet were verified and it was found that as per the dotes recorded in the seized sheet "CCCC.xls" cash deposits have been mode in the bank accounts |of the persons as recorded in the said sheet. Analysis in this regard is given below in tabular form for illustrative purpose. DR Name of the bank Name of the account holder A/c No. Date as per bank statement Narration as per bank statement Amt. as per ban statement 05.04.10 5000.00 SMS SB AC. HDFC HDFC Bank Sanjay M Sutaria 48193000679 9 05.04.10 Cash DEPAHMEDABA D -VEJ 500000 05.04.10 5000.00 SMS HUF AC. HDFC HDFC Bank Sanjay M Sutaria HUF 48193000579 9 05.04.10 Cash Deposite 500000 I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 10 05.04.10 5000.00 DMS HUF AC. HDFC HDFC Bank Dharemen M Sutaria HUF 05.04.10 Cash DEPAhmedabad- Vej 500000 05.04.10 5000.00 DMS SB AC. HDFC HDFC Bank Dharmen M Sutaria 48193000576 2 05.04.10 Cash Deposite 500000 02.08.10 5000.00 SMS SB AC. HDFC City Union Bank Dharemn M Sutaria HUF SB -463205 02.08.10 49-19163691 - Cash Deposite 500000 4.6 From perusal of the above, it is clearly evident that the entries recorded in this sheet (cccc.xls) are with regard to receipt and payment of cash. It is further evident that the amounts have been recorded in codes wherein "5000.00" means Rs.5,00,000. On further analysis of the sheet, it was found by Assessing Officer having jurisdiction over the persons covered u7s 153A that during the period 02.04.20:0 lo 26.08,2010 total funds aggregating to Rs.69,31,41,997/- was received in cash-and cash aggregating to Rs,68,86,46,970/- was paid lo various persons, deposited in bank accounts in cash, used for personal expenses in cash etc. It was further, seen from the seized sheet that with regard to the Abhishree Orchid. Scheme developed by SIPL, an amount of Rs.6,60,41,690/- by the developer from its clients during the period 02.04.2010 to 27.08.2010. Most part of the cash collected by SIPL as recorded in "cccc.xis" was found to be deposited in various bank accounts of held in the names of Sanjay Sutaria (director/shareholder of SIPL), his family members and concerns managed & controlled by him. 4.7 From the seized e-data being "cccc.xls", it has been found by the Assessing Officer having jurisdiction over the person covered u/s 153A of the Act that the following transaction of payment in cash is found recorded in the name of the assessee. Dote Amount . 19.04.2010 23,86,000/- Accordingly, the AO having jurisdiction over the assessee covered u/s 1S3A of the Act has recorded his satisfaction for initiation of proceedings u/s 153C of the Act in the case of assessee and forwarded to the some to the AO along with relevant extracts of the seized excel sheets. 11. Ld. Counsel for the assessee contended that the excel sheet found at the premises of the search person containing data of all its customers who had bought units in their real estate scheme, though contained information pertaining to the assessee but the said document clearly did not belong to it but belonged to the searched person I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 11 only since information of business activities carried out by them was contained therein. 12. With regard to the proposition laid down by the Hon’ble Jurisdictional High Court in the case of Anilkumar Gopikishan Agrawal(supra) that the amendment to Section 153C substituting the word “belonging” with “pertaining” was held to be prospective and applicable only to search action conducted further 01.06.2015, our attention was drawn to page 25 of the order as under: In view of the fact that this court has held that though the provisions of section 153C of the Act are machinery provisions, the amendment brings into its fold persons who are otherwise not covered by the said provisions and therefore, affects the substantive rights of such person, the above decision in facts supports the case of the petitioners inasmuch as it has been held that a statute which while procedural in its character, affects vested rights adversely is to be construed as prospective. 19.23 The decision of this court in case of Dilip Avtar Construction Pvt. Ltd. (supra) on which reliance had been placed by the learned senior standing counsel for the revenue, would not be applicable to the facts of the present case, inasmuch as the same was rendered in the context of totally different facts and the controversy involved therein was whether proceedings under section 153C of the Act would stand vitiated if the authorisation of search under section 132 of the Act has been set aside in case of the searched person. 19.24 The decision of this court hi Udhna Udyog Nagar Sahkari Sangh Ltd. (supra) also does carry the case of the revenue any further inasmuch as in that case the court had found that it was not a case where a vested right was being taken away by an amendment in the statute and the notice under section 143(2) of the Act had not yet become time barred by the time the amendment in the statute took place. In the facts of the present case, the legislature has specifically made the amended provisions of section 153C of the Act applicable with prospective effect from 1-6-2015. If such amended provisions are made applicable to searches carried out prior to 1-6-2015, they affect the substantive rights of persons who are brought within the ambit of section 153C of the Act by virtue of such amendment, and hence, the above decision would have no applicability to the facts of the present case. I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 12 13. Our attention was further drawn to various decisions of the Coordinate Bench of the ITAT applying the above proposition of law laid down by the Hon’ble Gujarat High Court as under: 1) Parthiv Mahendrakumar Mehta vs. DCIT in IT(SS)A No. 372/Ahd/2019 dated 05.08.2021 and 2) SBG Infrastructure LLP vs. DCIT Central Circle-2, Baroda reported in (2021) 130 Taxmann.com 319. 14. Our attention was also invited to the decision of the Co-ordinate Bench in the case of ACIT Central Circle 1(2), Vs. Shri Robin Ravavtar Goenka in IT(SS)A No. 52/Ahd/2020 ,order dated 28.02.2022 , where , it was pointed out, proceedings u/s153C of the Act was initiated on the basis of the same search action as in the case of the assessee before us and on the basis of the same excel sheet found and on account of identical issue of on money found to have been paid by the assessee concerned as noted in the said excel sheet. Ld. Counsel for the assessee pointed out that the ITAT in the said case had upheld the order of the Ld. CIT(A) holding the proceedings to be invalid, finding the documents ,on the basis of which action u/s. 153C of the Act had been initiated, to be not belonging to the assessee and further holding that the requirement of document pertaining to the assessee brought on the statute by amendment to Section 153C of the Act with effect from 01.06.2015 was prospective. Copies of all the orders were placed before us. 15. Ld. Counsel for the assessee further drew our attention to the averments made before ld. CIT(A) in this regard at para 5.3 of the order. 5.3 In this regard it has to be held that the initial presumption u/s.!32(4A)/292C of the Act of a particular document found to be true and belonging to/ related to the person searched from whose possession it was found was against such person searched. Accordingly it was for Shri Anil Hiralal Shah and Shri Sanket J Shah or any other responsible person of SIPL to rebut the said initial presumption of the Revenue. The AC.) has not made any mention of any statement u/s.132(4) or 131 or any other response of I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 13 either of these two persons during the search/post search investigation/assessment proceedings against the persons searched where either or both of these two persons might have identified the name "Mukeshbhai Patel" mentioned in the excel sheet as the appellant Shri Mukeshkumar Kalidas Patel and the nature of the amount of Rs.23860.00 or Rs.23,86,000/- mentioned therein. It is definitely not the burden of the appellant to rebut the presumption of the Revenue u/s. 132(4) which was not against him. Prima facie the appellant appears to be justified in contending that without statement of the persons searched from whose possession such incriminating material was found, the AO of the persons searched could not have derived satisfaction that such incriminating material or any transaction contained in such incriminating material pertained to related to the other person i.e. the appellant against whom proceedings U/S.153C was required to be initiated. However, I am of the considered view that in mere absence of such statement of the person searched, the proceedings u/s.!53C cannot become bad in law. The requirement of proceedings u/as.!53C is that the assessing officer of the person searched should arrives at his satisfaction t either the incriminating material belongs to the person other than person searched or any set of transaction in the incriminating material relates to the person other than person searched and the AO can have other ways and means to arrive at his own satisfaction. The manner in which the AO will arrive at his satisfaction for the purpose of S153C is not spelled. 16. She further pointed out that para 5.8 of the order of the Ld.CIT(A) taking note of the submission as under: 5.8 It is also contended by the appellant that the Excel sheet was found from the premises of the persons at whose residence / office the search was conducted and that they only needed to explain the content and source of data and thus the conclusion of the AO is his presumption only and there is no clinching evidences to support the contention of the AO. In this regard the appellant has drawn attention to the amendment in the Provisions of section 153C of the I. T. Act, 1961, substituting the word "belongs to" with "relates to" which indicates that even if the books of account do not belong to the person who has not been searched U/s.132, he can still be proceeded with for block assessment if the books found during the search reveal any income which has a bearing on him, which has been made effective from 01-06-2015 whereas the search action from which the case of the appellant emanates was carried out on 04.12.2014 and therefore in view of the finding given by the HonTDle High Court of Gujarat the I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 14 proceeding initiated u/s.153 in the case of the appellant are invalid and therefore same deserves to be quashed. The relied upon cases are -Rajesh Nanubhai Jhaveri V. ACIT Central Circle 1(1) in C.A. No. 949 of 2019, Principal CIT V. Himanshu Chandulal Patel in Tax Appeal No. 342 of 2019, and Anilkmnar Gopikishan Agrawal V. ACIT Circle 3(2) 418 ITR 25 (Guj) 2019. 17. She thereafter drew out attention to the findings of the Ld. CIT(A) at para 5.10 & 5.11 as under: 5.10 The flaw in the approach of the AO for making the addition in the assessment U/S.153C in the hands of the appellant has already been dealt before. No doubt it would have been a better case if the ADIT (Inv.)/the AO had examined the persons - Shri Anil Hiralal Shah or Shri Sanket Jitendra Shah or some responsible person of SIPL and statement(s) could have been obtained that SIPL or its directors had been collecting on money in cash over and above the documented cost for the property being sold in the Scheme developed by SIPL, and also that Shri Mukeshbhai Patel who is Shri Mukeshbhai Kalidas Patel who had booked unit 149 had paid Rs.23,86,000/- in cash over and above the accounted payment of Rs.36,98,300/- in cheques. As per the principles laid down by the courts such a statements should have been also confronted to the appellant and the appellant should have been given the opportunity the cross examine the persons who had given the statements adverse to the appellant. However with so much time elapsed it appears that no fruitful outcome could be achieved if the above mentioned exercises are taken at this stage. But it has been hinted before that there is not only one method to arrive at the satisfaction for the AO. and the AO in his wisdom may emphasise one aspect of evidence(s) for the purpose of his assessment arid that would not, in any way, undermine the true affairs and the factum of unaccounted payment(s). 5.11 At the same time and already held before that the name "Mukeshbhai Patel" and "Plot 149" appearing against the amount of Rs.23,86,000/- in the incriminating excel sheet discovered during the course of search and the name of the appellant Shri Mukeshbhai Kalidas Patel having booked the unit no. 149 in the same Scheme are definitely such evidences which cannot be ignored inspite of the discussion made in the above Para and denial by the appellant. Coupled with this is also the fact of the real estate that there are always transactions in cash outside the books of account over and above the disclosed cost mentioned in the books. In my considered view the best fit approach at this juncture would be to go by the doctrine of preponderance of human probabilities. Under the circumstances the balance surely tilts against the appellant and it has to be upheld that Rs.23,86,000/- was paid in cash by the appellant on 19.04.2010 and as it is not the case of the appellant being nonresident that the said amount was paid out of his income/fund earned outside not liable to be tax in India. The transaction I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 15 is of sale & purchase and thus while SIPL/recipient of the said money is liable for tax on that on money cash amount (on account of undisclosed receipts), the buyer also is liable for tax thereon (on account of unaccounted/unexplained investment). Thus the addition of Rs.23.,86,000/- has to be confirmed and related ground no.4 is dismissed. 18. Referring to the above, she pointed out that Ld. CIT(A) had failed to address this specific contention made by the assessee that the document on the basis of which proceedings u/s. 153C were initiated not belonging to the assessee the proceedings were invalid. 19. The ld. D.R. on the other hand relied on the order of the Ld. CIT(A). 20. We have heard the contentions of the both the parties and have gone through all the documents and case laws relied upon before us. The assessee before us has challenged the validity of proceedings initiated u/s. 153C of the Act on the basis that the same could have been initiated only when documents belonging to the assssee were found during search action on a third person and in the present case no such document being found the proceedings initiated u/s. 153C of the Act in the case of the assessee were invalid. 21. We have gone through the various decisions relied upon by the ld. Counsel for the assessee before us beginning from the decision of the Jurisdictional High Court in the case of Anilkumar Gopikishan Agrawal (supra), relied upon further in various decisions of the Co-ordinate Bench of the ITAT referred to before us and we have noted the proposition of law laid down therein, that in search conducted prior to 01.06.2015 the pre amended provisions of Section 153C would apply, as per which the proceedings can be initiated only when documents belonging to the assessee are found during the search conducted at some third person. That the amendment to the section effected from 01.06.2015 enlarging the scope of Section 153C to be initiated on the basis of documents found pertaining to the assessee was to apply only on I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 16 searches conducted subsequent to 01.06.2015. The ld. D.R. has not brought to our notice any subsequent judgment of the Jurisdictional High Court to the contrary or any decision on the Hon’ble Apex Court to the contrary in this regard. 22. Having said so, it is fact on record that the search in the present case in relation to which proceedings u/s. 153C were initiated on the assessee was conducted prior to 01.06.2015 i.e. 04.12.2014 on Shri Anil Hiralal Shah Shri Sanjket J Shah, Sarthav Infrastructure Pvt. Ltd. and others. Therefore for a valid assumption of jurisdiction u/s 153C of the Act, the documents found during search should be belonging to the assessee. It is a fact on record, emanating from the satisfaction note of the A.O. of the assessee and also from the assessment order of the assessee, that the document on the basis of which proceedings u/s. 153C were initiated was an excel sheet found in the data base of the searched persons which contained records of receipt and payments of a real estate project being undertaken by of the searched persons and which in sum and substance revealed on money paid in cash by various purchasers of units in the scheme. It included the name of the assessee and revealed that the assessee had paid 23,86,000/- as on money. Clearly this sheet containing details of all investors/buyers of the searched persons is a document belonging to the searched person only and can by no stretch be said to be belonging to various parties whose names are entered in the excel sheet. The documents can be said to contain information pertaining to the parties but not belonging to them. The revenue has been unable to controvert this fact before us. The proceedings u/s 153C of the Act in the present case, we find, have been initiated on the basis of documents which did not belong to the assessee. 23. The search action being prior to 01-06-2015 and documents found therein not belonging to the assessee, the initiation of proceedings u/s 153C of the Act in the present case, we hold, is not in accordance with law. I.T.(SS)A No. 61/Ahd/2020 A.Y. 2011-12 Page No Shri Mukeshbhai Kalidas patel vs.ITO 17 24. Moreover, we find that on the basis of identical information, proceedings initiated u/s. 153C in the case of another party mentioned in the said list was held to be not in accordance with law by the Co-ordinate Bench of the ITAT in the case of Shri Robin Ramavtar Goenka (supra) . 25. In view of the above since the initiation of proceedings in the present case is not on the basis of documents belonging to the assessee which was pre-requisite for a valid assumption of jurisdiction u/s. 153C of the Act, in case of searches conducted prior to 01.06.2015 ,as per the proposition of law laid down by the Jurisdictional High Court in the case of of Anilkumar Gopikishan Agrawal, We have no hesitation in holding that the proceedings initiated in the present case u/s. 153C of the Act is not in accordance with law. The assessment order therefore passed as a consequence is not valid in the eyes of law and is directed to be set aside. 26. Ground of appeal no. 2 raised by the assessee is allowed. 267. Since we have set aside the assessment order passed in the present case holding it to be not having been validly passed the grounds raised by the assessee on the merits of the case become academic and are therefore not being dealt with by us. 28. In effect, appeal filed by the Assessee is allowed in above terms. Order pronounced in the open court on 25 -03-2022 Sd/- Sd/- (TR SENTHIL KUMAR) (ANNAPURNA GUPTA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad : Dated 25/03/2022 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee