Shri Pravinbhai Keshavbhai Patel, Ahmedabad V. The Dy.CIT.,Cent.Circle-1(2), Ahmedabad

ITSSA 796/AHD/2010

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0054 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-02-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 22-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Loose papers; Document seized; Non compliance; Onus to prove; Documents seized
• Section: 153A; 132

Judgement Text

FIT FOR PUBLICATION SD/- SD/- (AM) (JM) IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL 10, KAMALNAYAN SOCIETY, NR. INCOME TAX, NARNAGPURA, AHMEDABAD. V/S. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : S/SHRI SUBHASH BAINS, CIT-D.R. ASSESSEE(S) BY : SHRI P.M. PATEL A.R. / DATE OF HEARING : 17/02/2014 / DATE OF PRONOUNCEMENT: 28/02/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LEARNED CIT(A)-III, AHMEDABAD, DATED 08.09.2010 AND THE GROUNDS RAISED ARE REPRODUCED BELOW: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-III, AHMEDABAD HAS ERRED IN DECIDING VALIDITY OF SERVICE OF NOTICE TO THE ASSESSEE, CONSEQUENTLY DECIDING VALIDITY OF ASSESSM ENT THOUGH NO PROPER NOTICE HAVE BEEN SERVED TO THE ASSESSEE, HEN CE ASSESSMENT ORDER IS BAD IN LAW, HENCE LIABLE TO BE ANULLED. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -III, AHMEDABAD HAS ERRED IN CONFIRMING THE ASSESSMENT OF RS.12,24,000.00 WRONGLY ADDED TO TOTAL INCOME BY LEARNED AO. 3. AS ASSESSEE NEITHER RECEIVED ANY AMOUNT NOR ANY PLOT FROM MR. VIKAS SHAH, THE ADDITION OF RS.12,24,000.00 IS LIAB LE TO BE DELETED FROM THE ASSESSMENT ORDER. IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 2 - 2. AT THE OUTSET, LEARNED AR HAS MADE A STATEMENT A T BAR THAT THROUGH GROUND NO.1, THE VALIDITY OF THE ASSESSMENT IS CHALLENGED ON THE GROUND OF SERVICE OF NOTICE; BUT IN THE LIGH T OF AN ADDITIONAL GROUND RAISED; THIS GROUND NO.1 IS NOT TO BE PRESS ED. CONSIDERING THE STATEMENT OF LEARNED AR, GROUND NO.1 IS DISMISS ED BEING NOT PRESSED. 2.1 THE APPELLANT HAD RAISED THE FOLLOWING ADDITIO NAL GROUND. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE SEIZED MATERIAL FOUND FROM SHRI VIKAS A. SHAH BELONGS TO T HE ASSESSEE AND ASSESSMENT MADE ON THE BASIS OF SAID MATERIAL IS IN CONFIRMATION OF SECTION 153C OF INCOME TAX ACT. 2.2 AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES , WE HEREBY ADMIT THIS ADDITIONAL GROUND BEING A LEGAL GROUND E MERGING FROM THE FACTS ALREADY ON RECORD BY FOLLOWING THE JUDGME NT OF HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD., (1998) 229 ITR 383 (SC) . 3. LEARNED AR HAS CONTESTED THAT THE DOCUMENT IN QU ESTION, I.E., MOU; WAS NOT FOUND FROM THE POSSESSION OF THE ASSESSEE . THE SAID DOCUMENT WAS RECOVERED FROM ONE SRI VIKASH A. SHAH WHO WAS SEARCHED U/S.132(2) ON 9 TH OF FEBRUARY, 2005. THE IMPUGNED MOU WAS SEIZED FROM HIS VEHICLE. THAT VEHICLE WAS O WNED BY SRI VIKASH A. SHAH AND NOT BY THE ASSESSEE. BECAUSE THE SAID DOCUMENT WAS FOUND IN POSSESSION OF SRI VIKASH A. S HAH, THEREFORE, IN THE LIGHT OF THE PROVISIONS OF SECTIO N 132(4A) , THE SAME BELONGED TO SRI VIKASH A. SHAH AND NOT TO THE ASSESSEE. LEARNED AR HAS REFERRED SEC.132 (4A) FOR THE LEGAL PROPOSITION IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 3 - THAT THE STATUTE PRESCRIBES THAT A DOCUMENT OR A VA LUABLE ARTICLE BELONGS TO A PERSON IN WHOSE POSSESSION IT WAS FOUN D. HE HAS FURTHER ADVANCED HIS ARGUMENT THAT THE PROCEEDINGS AGAINST THIS ASSESSEE WERE INITIATED BY INVOKING THE PROVISIONS OF SECTION 153C OF IT ACT WHEREIN THE STATUTE HAS PRESCRIBED THAT W HERE THE AO IS SATISFIED THAT ANY MONEY, JEWELLERY, BOOKS OF ACCOU NT, DOCUMENTS ETC, SEIZED OR REQUISITIONED BELONG TO A PERSON OTH ER THAN THE PERSON REFERRED IN SECTION 153A THEN THE BOOKS OF A CCOUNT SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SEAR CH OTHER PERSON. HE HAS ARGUED THAT THE ADMITTED FACTUAL POS ITION WAS THAT THE MOU WAS FOUND IN POSSESSION OF SRI VIKASH A. SH AH, THEREFORE, THE SAID DOCUMENT BELONGED TO HIM AND NO T TO THE ASSESSEE. SINCE, THE SAID DOCUMENT BELONGED TO VIKA SH A. SHAH, THEREFORE, THE PROCEEDINGS U/S. 153C WERE WRONGLY I NITIATED AGAINST THE ASSESSEE. IN RESPECT OF THIS ARGUMENT, LEARNED AR HAS ALSO CITED A DECISION OF HONBLE GUJARAT HIGH COURT PRONOUNCED IN THE CASE OF VIJAYBHAI N. CHANDRANI VS. ACIT, (2011) 333 ITR 436 . 4. HIS NEXT PLANK OF ARGUMENT IS THAT THE PROPERTY IN QUESTION FOR WHICH THE IMPUGNED AMOUNT OF RS.12,24,000/- WAS ALLEGED TO HAVE BEEN RECEIVED BY THE ASSESSEE DID NOT BELONG T O THE ASSESSEE. ONCE THE PROPERTY ITSELF DID NOT BELONG TO THE ASSE SSEE, THEREFORE, THERE WAS NO QUESTION OF TAXING THE SAID AMOUNT IN THE HANDS OF THE ASSESSEE. LEARNED AR HAS ALSO CITED A DECISION OF PRARTHANA CONSTRUCTION PVT. LTD. VS. DCIT , ORDER DATED 20 TH DECEMBER, 1999, 70 TTJ 122 (AHD) FOR THE LEGAL PROPOSITION TH AT REVENUE WAS NOT JUSTIFIED IN RESTING ITS CASE ON THE LOOSE PAPE R AND DOCUMENTS IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 4 - FOUND FROM THE RESIDENCE OF A THIRD PARTY, EVEN IF SUCH DOCUMENT CONTAINED NARRATION OF TRANSACTION WITH THE ASSESSE E COMPANY. 5. FROM THE SIDE OF THE REVENUE, LEARNED CIT-DR, MR . SUBHASH BAINS HAS SUPPORTED THE VIEW TAKEN BY THE R EVENUE AUTHORITIES. HE HAS PLEADED THAT THE MOU IN QUESTIO N WAS DULY SIGNED BY THE ASSESSEE IN THE PRESENCE OF WITNESSES . TO ARGUE THAT THE SAID MOU DID BELONG TO THE ASSESSEE LD. DR HAS PLEADED THAT ONCE THE DOCUMENT WAS SIGNED BY A PERSON THEN NATUR ALLY THAT DOCUMENT BELONGED TO THE PERSON WHO HAD PUT THE SIG NATURES ON IT. IN SUPPORT, HE HAS PLACED RELIANCE ON KAMLESHBHAI DHARAMSHIBHAI PATEL VS. CIT , (2013) 31 TAXMANN.COM 50 (GUJ.). 5.1 IN ADDITION TO THE ABOVE SECTIONS QUOTED BY BOT H THE SIDES A DISCUSSION HAS ALSO BEEN HELD IN RESPECT OF THE PRO VISIONS OF SECTION 292 C OF IT ACT. HOWEVER, LEARNED AR HAS PL EADED THAT SECTION 153C AND SECTION 158BD ARE IDENTICALLY WORD ED SECTIONS AND THE CASE LAWS EITHER DEALING ANY OF THESE TWO S ECTIONS ARE APPLICABLE ON THE ISSUE OF INCOME BELONGS TO ANY P ERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MAD E U/S. 132. LEARNED AR HAS PLEADED THAT THE FIRST CONTENTION IS THAT THE DOCUMENT OR THE INCOME SHOULD BELONG TO SUCH OTHE R PERSON THEN ONLY THE PROCEEDINGS U/S.153C COULD BE INITIATED. 6. WE HAVE HEARD BOTH THE SIDES. WE HAVE PERUSED TH E CASE LAW CITED IN THE LIGHT OF THE FACTS OF THE CASE. A SEAR CH WAS CONDUCTED IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 5 - ON SRI VIKASH A. SHAH U/S.132 OF IT ACT ON 9 TH OF FEBRUARY, 2005 AND THEREUPON CERTAIN DOCUMENTS WERE RECOVERED / SE IZED FROM A VEHICLE STATED TO BE OWNED BY SRI VIKASH A. SHAH. T HERE WAS A DOCUMENT IN THE NATURE OF MEMORANDUM OF UNDERSTAND ING. A PHOTOCOPY OF THE SAID DOCUMENT IS PLACED BEFORE US AT PAGES (15) AND (16) OF THE PAPER BOOK. ADMITTEDLY, ONE OF THE SIGNATORY IS ASSESSEE IN QUESTION. ON THE BASIS OF THE SAID DOCU MENT, THE AO HAD INITIATED THE PROCEEDINGS U/S.153C OF IT ACT. 6.1 NOW THE LEGAL QUESTION BEFORE US IS THAT WHETHE R UNDER THESE FACTS THE AO WAS LEGALLY JUSTIFIED IN INVOKING THE PROCEEDINGS U/S.153C OF IT ACT. THE APPELLANTS ARGUMENT IS THA T IN A SITUATION WHEN THE IMPUGNED DOCUMENT WAS NOT FOUND IN THE PO SSESSION OF THE ASSESSEE THEN IT DID NOT BELONG TO THE ASS ESSEE. CONSEQUENTLY, THE PROCEEDINGS U/S. 153C WERE ILLEGA LLY INITIATED AGAINST THE ASSESSEE. 6.2 WE HAVE PERUSED SECTION 132(4A) OF IT ACT WHICH IS A DEEMING SUB SECTION AND STATES THAT WHERE ANY BOOKS OF ACCOUNT, OR OTHER DOCUMENTS ETC, IS FOUND IN POSSESSION OR CONT ROL OF ANY PERSON IN A COURSE OF A SEARCH THEN IT MAY BE PRESU MED THAT SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENT ETC. BELONGS T O SUCH PERSON WHO IS SEARCHED. NOW, THE QUESTION IS THAT WHETHER THIS SECTION IS TO BE APPLIED WHILE INTERPRETING THE WORD BELONG T O; ALSO INCORPORATED IN SECTION 153C OF IT ACT. ACCORDING T O US, SECTION 132(4A) IS A DEEMING PROVISION; THEREFORE, THE SCOP E OF SUB SECTION (4A) IS NOT TO BE EXTENDED TO ANY OTHER SECTION. A DEEMING IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 6 - PROVISION SHOULD REMAIN CONFINED TO THAT VERY SECTI ON FOR WHICH IT IS INTRODUCED IN THE STATUTE. IN SECTION 132(4A) TH E TERMINOLOGY USED IS PRESUMED, WHICH MEANS A DEEMING PROVISION IS INTRODUCED. FOR INTERPRETING SUCH PROVISION IT IS D ESIRABLE FIRST TO ASCERTAIN THE PURPOSE FOR WHICH SUCH FICTION IS CRE ATED. BUT IN SO CONSTRUING FICTION, IT IS NOT TO BE EXTENDED BEYOND THE PURPOSE FOR WHICH IT IS CREATED. IT IS WELL SETTLED THAT A DEEM ING PROVISION MUST NOT BE EXTENDED BY IMPORTING ANOTHER FICTION. RATHE R A LEGAL FICTION IS TO BE INTERPRETED NARROWLY. THERE IS A DISTINCTION BETWEEN THE REALITY AND THE FICTION. IN SECTION 153 C IN REALITY THE AO HAS TO SATISFY THAT THE IMPUGNED INCRIMINATING M ATERIALS BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED. IN CONT RAST, THE AO IS TO DRAW A PRESUMPTION THAT IF A SEIZED MATERIAL IS IN POSSESSION THAT IT BELONGS TO THAT PERSON U/S. 132(4A) OF THE ACT. 6.3 IN ANY CASE, APART FROM THE ABOVE LOGIC, IF WE ACCEPT THE ARGUMENT OF LEARNED AR THEN THE BASIC PURPOSE OF TH E INTRODUCTION OF SECTION 153C/158BD SHALL BE DEFEATED. HEADING OF SECTION 153C IS ASSESSMENT OF INCOME OF ANY OTHER PERSON; THEREFORE IT IS TO BE APPLIED IF PRIMA FACIE THE AO IS OF THE OP INION OR SATISFIED THAT ANY MONEY, JEWELLERY, BOOKS OF ACCOUNT OR DOCU MENTS SEIZED BELONG TO SUCH OTHER PERSON OTHER THAN THE PERSON REFERRED IN SECTION 153A. AFTER A CLOSE READING OF THE RELEVANT SECTION IT IS WRONG AS WELL AS ILLOGICAL TO INTERPRET SECTION 153 C THAT A DOCUMENT ETC, WOULD BELONG TO OTHER PERSON ONLY I F IT WAS FOUND IN HIS POSSESSION OR CONTROL. THE VERY PURPOSE OF T HE INTRODUCTION OF SECTION 153C WOULD BE DEFEATED IF WE INTERPRET I N THIS MANNER. IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 7 - THE PURPOSE OF INTRODUCTION OF SECTION 153C WAS TO ROPE-IN OTHER PERSON WHO HAS NOT BEEN RAIDED OR SEARCHED HOWEVER THE INCRIMINATING MATERIAL RELATED TO HIM WAS FOUND IN POSSESSION OF A PERSON SEARCHED. 6.2 AT THIS JUNCTURE, IT IS WORTH TO MENTION THAT S ECTION 292C HAS ALSO BEEN INTRODUCED IN THE PROVISIONS OF IT ACT AN D SUB SECTION (1) OF THIS SECTION PRESCRIBES THAT WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENT, MONEY, ETC., IS FOUND IN THE POSSES SION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH U/S. 132, I T MAY BE PRESUMED THAT SUCH BOOKS OF ACCOUNT, ETC., BELONGS TO SUCH PERSON. UPTO THIS EXTENT THE LANGUAGE TALLIES WITH THE LANG UAGE OF SECTION 132(4). HOWEVER, SUB SECTION (2) OF SECTION 292C HA S CLARIFIED THE CONTROVERSY IN RESPECT OF THE TERMINOLOGY BELONG T O COULD HAVE ARISE WHILE CHALLENGING U/S. 153C OF THE IT ACT FOR READY REFERENCE, SECTION 292C (2) IS REPRODUCED BELOW: WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSE TS HAVE BEEN DELIVERED TO THE REQUISITIONING OFFICER IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 132A, THEN, THE PROVISIONS OF SUB-SECTION (1) SHALL APPLY AS IF SUCH BOOKS OF ACCOUNT, OTHER DOCU MENTS OR ASSETS WHICH HAD BEEN TAKEN INTO CUSTODY FROM THE PERSON R EFERRED TO IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C), AS THE CASE MAY BE, OF SUB SECTION (1) OF SECTION 132A, HAD BEEN FOUND IN THE POSSESSION OR CONTROL OF THAT PERSON IN THE COURSE OF A SEARCH UN DER SECTION 132. THIS SUB SECTION PRESCRIBES HOW TO TREAT THE MATERI AL DELIVERED ON REQUISITION. THIS SUB SECTION (2) IS CLARIFYING THE CONTROVERSY WHICH SOMETIMES ARISE IN A SITUATION WHEN THE SEIZED MATE RIAL IS TRANSFERRED TO THE AO HAVING JURISDICTION OVER OTH ER PERSON. THIS SUB SECTION SAYS THAT WHERE ANY BOOKS OF ACCOUNT ET C., HAVE BEEN DELIVERED TO THE REQUISITIONING OFFICER THEN THE PR OVISIONS OF SUB IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 8 - SECTION 1 OF SECTION 292C SHALL APPLY THAT AS IF SU CH BOOKS OF ACCOUNT ETC. WHICH HAS BEEN TAKEN INTO CUSTODY FROM THE PERSON SEARCHED, AS THE CASE MAY BE, HAD BEEN FOUND IN POS SESSION OR CONTROL OF THAT PERSON (IN WHOSE CASE MATERIAL RE QUISITIONED) IN THE COURSE OF A SEARCH U/S.132. OUR HUMBLE INTERPRE TATION OF THIS SUB SECTION IS THAT WHERE ANY SEIZED MATERIAL IS TR ANSFERRED OR HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON THEN THAT SEIZED MATERIAL SHALL BE TREATED AS IF SU CH MATERIAL WAS FOUND IN POSSESSION OR CONTROL OF SUCH OTHER PERSO N. HENCE, A CONCLUSION CAN BE DRAWN THAT IN SPITE OF ANYTHING C ONTAINED IN ANY OF THE PROVISIONS OF THE ACT WHERE THE AO IS SATISF IED THAT THE SEIZED MATERIAL RECOVERED AT THE TIME OF SEARCH FRO M THE POSSESSION OF THE PERSON SEARCHED BUT IT IS REQUIRED TO BE PRO CEEDED AGAINST OTHER PERSON, THEN AT THE TIME WHEN THE SEIZED MA TERIAL IS HANDED OVER TO THE AO HAVING JURISDICTION OVER OTHER PERS ON THEN IT SHALL BE DEEMED THAT THE SAID SEIZED MATERIAL WAS FOUND I N POSSESSION OR CONTROL OF SUCH OTHER PERSON. THEN THE CONSEQUENCES THAT IF IT IS FOUND IN POSSESSION OF SUCH OTHER PERSON THEN THE P ROVISIONS OF SECTION 132(4A) SHALL ALSO BE APPLIED IPSO FACTO. BECAUSE OF THIS LOGIC WE THUS TURN DOWN THE ARGUMENT OF LD. AR. 6.3 AS FAR AS THE DECISION OF VIJAYBHAI N. CHANDRANI , 333 ITR 436 (SUPRA) AS CITED BY LEARNED AR IS CONCERNED THA T THE MAIN FINDING OF THE HONBLE GUJARAT HIGH COURT WAS THAT, QUOTE, IT IS NOBODYS CASE THAT THE SAID DOCUMENTS BELONG TO THE PETITIONER UNQUOTE. ON THE CONTRARY IN THE PRESENT CASE, THE C ASE OF THE REVENUE DEPARTMENT IS THAT THE APPELLANT BEING ONE OF THE IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 9 - SIGNATORY, THEREFORE, THE DOCUMENT IN QUESTION BELO NGED TO THE ASSESSEE. WE HAVE ALSO PERUSED THE DECISION OF PRARTHANA CONSTRUCTION (SUPRA), CITED BY LEARNED AR, AND NOTICED THAT THE FACTS WERE NOT MATCHING WITH THE FACTS OF THE APPEA L IN HAND. THE RESPECTED CO-ORDINATE BENCH HAD RESTED ITS DECISION ON THE QUESTION WHETHER THE LOOSE PAPERS WERE TO BE TREATE D AS DOCUMENT HAVING ANY VALUE. FOR THIS PURPOSE, THE RESPECTED B ENCH HAS ALSO CITED CBI VS. V.C. SHUKLA AND OTHERS , (1998) 3 SCC 410. RATHER, THE DECISION OF GUJARAT HIGH COURT IN THE C ASE OF KAMLESHBHAI DARMESHBHAI PATEL (SUPRA) AS CITED BY LEARNED DR IS RELEVANT TO FOLLOW, FIRSTLY BECAUSE OF THE REASO N THAT THE DECISION CITED BY LEARNED AR OF VIJAYBHAI N. CHANDRANI (SUPRA) HAS DULY BEEN CONSIDERED BY THE HONBLE GUJARAT HIGH COURT A ND THAT DECISION WAS ALSO DISTINGUISHED. THE HONBLE COURT HAS DISCUSSED THE PROVISIONS OF SECTION 153C OF IT ACT AND THEREU PON IT WAS HELD THAT, QUOTE LIKEWISE, THE DOCUMENTS OF SALE ALSO CAN BE STATED TO BELONG TO THE PETITIONERS. IT IS NOT IN DISPUTE THA T THE PETITIONERS WERE THE SELLERS OF THE LANDS. THEY DO NOT EITHER D OUBT OR DISPUTE THE DOCUMENTS OF SALE, OR THEIR RESPECTIVE SIGNATUR ES THEREON. TERM BELONG IS NOT DEFINED AND DOES NOT HAVE LEGALLY T ECHNICAL CONNOTATION AND THEREFORE, WE ONCE AGAIN FALL BACK ON THE DICTIONARY MEANING OF THE SAME. WE NEED TO ASCERTAI N IF SUCH DOCUMENT CAN BE STATED TO HAVE RELATION OR REFEREN CE TO TO THE PETITIONERS. AS NOTED, THE PETITIONERS WERE AS SELL ERS OF THE LAND, PARTIES TO THE DOCUMENTS. THEY HAD ADMITTEDLY EXECU TED SUCH SALE DEEDS. IT CANNOT BE STATED THAT THE SALE DEEDS DO N OT BELONG TO THEM. LIKEWISE, THE RECEIPTS OF PAYMENTS ALSO ARE D OCUMENTS IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 10 - BELONGING TO THE PETITIONERS. THEY ARE ALLEGED TO H AVE RECEIVED VARIOUS PAYMENTS IN CASH FROM THE PURCHASERS. IF TH ERE ARE DOCUMENTS EVIDENCING SUCH PARTICULARS AND IF SUCH D OCUMENTS ARE ALSO SIGNED BY THE PETITIONERS, IT CAN CERTAINLY BE STATED THAT SUCH DOCUMENTS DO BELONG TO THE PETITIONERS. UNDER CIRCU MSTANCES, WE ARE OF THE OPINION THAT THE ACTION INITIATED UNDER SECTION 153C OF THE ACT CANNOT BE QUASHED ON THE GROUND ON WHICH WR IT PETITIONS ARE PRESENTED BEFORE US. PETITIONS ARE THEREFORE DI SMISSED UNQUOTE. THE BASIC QUESTION WHICH IS ANSWERED BY TH E HONBLE COURT WAS THAT AFTER EXAMINING THE DOCUMENT IT WAS FOUND THAT IT BELONGED TO THE ASSESSEE ALTHOUGH IT WAS REQUISITIO NED FROM THE POSSESSION OF AN ANOTHER PERSON, HENCE, THE ACTION U/S. 153C WAS RIGHTLY INITIATED AGAINST THE ASSESSEE. HAVING REGA RD TO THE AFORESAID DISCUSSION, WE HEREBY REJECT THE LEGAL IS SUE RAISED BY THE PETITIONER AND DISMISS THIS ADDITIONAL GROUND. 6.4 NOW, WE ARE LEFT WITH GROUND NO.2 WHICH IS IN R ESPECT OF THE MERITS OF THE ADDITION. IT WAS NOTED BY THE AO THAT THE MEMORANDUM OF UNDERSTANDING DATED 16.05.2001 WAS DE TECTED AT THE TIME OF SEARCH. THIS MEMORANDUM WAS MADE BETWEE N THE ASSESSEE AND ONE SRI VIKASH A. SHAH. SRI SHAH IS TH E CHAIRMAN OF MANSI BUILDER LTD. THIS MEMORANDUM WAS DULY SIGNED BY THESE TWO PERSONS/PARTIES IN THE PRESENCE OF FEW WITNESSE S. AS PER AO A PLOT WAS ALLOTTED ADMEASURING 3.65 SQ. YARD IN CHIT WAN SCHEME DEVELOPED BY MANSI BUILDER LTD. FOR A CONSIDERATION OF RS.12,24,000/-. THE AO HAD INQUIRED THROUGH A SHOW CAUSE NOTICE THAT WHETHER THE ASSESSEE HAD SHOWN THE SAID TRANSA CTION IN HIS IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 11 - REGULAR BOOKS OF ACCOUNT. THE ASSESSEE HAS PREFERRE D NOT TO ATTEND THE ASSESSMENT PROCEEDINGS BEFORE THE AO. AS PER AO , THE ASSESSEE HAD NOT DISCLOSED THE SAID INVESTMENT IN T HE DEPARTMENT AND OFFERED NO EXPLANATION, THEREFORE, IT WAS HELD AS UNACCOUNTED INVESTMENT IN THE HANDS OF THE ASSESSEE. THE RELEVA NT OBSERVATION OF THE AO IS AS UNDER: HERE IT IS WORTH TO MENTION THAT CERTAIN SEIZED PAP ERS FOUND AND SEIZED FROM THE VEHICLE NO.GJ-1-HF-251 LIKE (1) PAG E NO.3 OF ANNEXURE A-20 AND PAGE NO.63 OF A-73, WHICH IS MOU BETWEEN THE ASSESSEE, VIKAS A. SHAH AND AMIT K. PATEL, (2) PAGE NO.1 AND ITS BACK SIDE OF A-178, WHICH IS THE MOU BETWEEN ASSESSEE AN D VIKAS A. SHAH DULY SIGNED, CLEARLY ESTABLISH THAT THE ASSESSEE HA S ENTERED INTO VARIOUS TRANSACTIONS WITH VIKAS A. SHAH AND MANSI B UILDERS AND ASSESSEE IS CLOSELY ASSOCIATED WITH VIKAS A. SHAH A ND MANSI BUILDERS LTD. IT IS ALSO ESTABLISHED FROM THE ABOVE DISCUSSI ON THAT THE SEIZED PAPER BELONG TO ASSESSEE AND TRANSACTIONS NOTED ON SAID PAPERS ARE GENUINE. IN THE CASE OF ROGER ENTERPRISES (P.) LTD. VS. DEPU TY COMMISSIONER OF INCOME TAX HONBLE ITAT, DELHI (88 ITD 95 ITAT DELH I B BENCH) HAS HELD THAT NAY STATEMENT OF A PERSON WHO IS ONE OF T HE PARTY OF THE TRANSACTION/TRANSACTIONS HAS EVIDENTIARY VALUE AND THEREFORE CANNOT BE IGNORED. HERE IN THE INSTANT CASE BOTH THE ASSESSEE AND SHRI VIKAS A. SHAH HAS SIGNED THE MOU DATED 16.5.2001 IN WHICH AN AMOUNT OF RS.12,24,000/- WAS SHOWN TO BE PAID BY THE ASSESSEE TO VIKAS A. SHAH AGAINST ALLOTMENT OF A PLOT ADMEASURING 3675 SQ. YD S. IN CHITVAN SCHEME DEVELOPED BY SHRI VIKAS SHAH AND MANSI BUILD ERS. MOREOVER, SEIZED DOCUMENTS ALSO CLEARLY ESTABLISH BUSINESS TR ANSACTIONS RELATING TO LAND BETWEEN ASSESSEE AND SHRI VIKAS A. SHAH. SI NCE, THE ASSESSEE HAS NOT DISCLOSED SAID INVESTMENT / EXPENDITURE TO THE DEPARTMENT, THE SAME IS LIABLE TO BE CONSIDERED AS UNACCOUNTED INVE STMENT / EXPENSES FOR THE YEAR IN QUESTION. 7. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, LEARNED CIT(A) HAS EXAMINED THE CONTENTS OF THE SAID SEIZED MOU. THE SAID DOCUMENT WAS WRITTEN IN GUJARA TI AND ENGLISH TRANSLATION IS REPRODUCED BY THE LEARNED CI T(A). THE RELEVANT REFERENCE IN RESPECT OF IMPUGNED UNDISCLOS ED INCOME WAS AS UNDER: IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 12 - EXPENSES ON INCOME TAX (I.T.) / TDS / SALES TAX (S .T.) / AUDIT OF SOCIETY IN RESPECT OF AROHAN I WILL BE SHARED BY BO TH THE PARTIES IN PROPORTION OF THEIR SHARE OF PROFIT IN THE FIRM. TODAY AS PER THE UNDERSTANDING OF BOTH THE PARTIES IN RESPECT OF SETTLEMENT OF ACCOUNTS TILL DATE, THE PARTY OF FIRS T PART IS TO RECEIVE RS.12,24,000/- (TWELVE LAKHS TWENTY FOUR THOUSAND O NLY) FROM THE PARTY OF THE SECOND PART AGAINST WHICH PLOTS ADMEAS URING 3675 SQ. YD. IN CHITVAN SCHEME @ RS.333/- PER SQ. YD. AMOUNTING TO RS.12,24,000/- IS AGREED TO BE ALLOTTED TO THE PARTY OF THE FIRST PART IN ANY NAME WHICH HE WISHES. 8. LEARNED CIT(A) HAS OBSERVED THAT THE MOU WAS DUL Y SIGNED BY THE ASSESSEE IN THE PRESENCE OF FIVE WITN ESSES. ACCORDING TO HIM, ONCE THE SAID MOU WAS SIGNED BY THE ASSESSE E, THEREFORE, IT BELONGED TO THE ASSESSEE. HE HAS HELD THAT THE N OTICE U/S.153C WAS RIGHTLY ISSUED IN THE CASE OF THE ASSESSEE. LEA RNED CIT(A) HAS ALSO NOTED THAT THERE WAS PROPER SERVICE OF NOTICE BUT THERE WAS DELIBERATE NON COMPLIANCE ON THE PART OF THE ASSESS EE. IN RESPECT OF THE TRANSACTION, LEARNED CIT(A) HAS NOTED AS FOLLOW S: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT. THE MAIN CONTENTION OF THE APPELLANT IS THAT THE DOCUMENT SE IZED FROM THE PREMISES OF VIKAS SHAH IN THE FORM OF MOU CANNOT BE RELIED UPON UNLESS THE APPELLANT IS GIVEN A CROSS EXAMINATION O F SHRI VIKAS SHAH AND THAT HE NEVER GOT RS.12,24,000/- FROM HIM NOR W AS ALLOTTED ANY PLOT IN CHITVAN AS MENTIONED IN THE MOU. I DONT AG REE WITH THIS CONTENTION OF THE AR FOR THE SIMPLE REASON THAT THE MOU IS SINGED BY SHRI VIKAS SHAH AS WELL AS THE APPELLANT IN THE PRE SENCE OF 5 WITNESSES. AS PER THIS MOU, ALL THE TRANSACTIONS/DEALINGS DONE TILL 16/05/2001 SUCH AS AAROHAN, -AAROHAN-II, CASH, SHRAFI, BORROWI NGS, PROFIT, INTEREST, ETC. ARE MUTUALLY AGREED. AS PER WHICH TH E APPELLANT WAS TO RECEIVE RS.12,24,000/- AGAINST WHICH PLOTS ADMEASUR ING 3675 SQ.YD. IN CHITVAN SCHEME @ RS.353/- PER SQ. YARD AMOUNTING TO RS.12,24,400/- IS AGREED TO BE ALLOTTED TO THE APPELLANT IN ANY NA ME WHICH HE WISHES. THIS MOU CLEARLY STATES THAT THE APPELLANT HAD TO R ECEIVE RS.12,24,000/- FROM SHRI VIKAS SHAH AND IN LIEU OF THAT A PLOT AT CHITVAN WAS TO BE ALLOTTED EITHER IN THE NAME OF TH E APPELLANT OR IN ANY OTHER NAME HE WISHES. IT IS NOT NECESSARY THAT THE PLOT WAS ALLOTTED IN THE NAME OF THE APPELLANT AS PER MOU. ONCE THE APPE LLANT IS ONE OF THE SIGNATORY OF THE MOU, HE BECOMES PARTY TO IT. I N THAT CASE (THE DOCUMENTS SEIZED FROM) VIKAS SHAH DOES NOT BECOME T HIRD PARTY BUT SECOND PARTY. THE CASE OF THE APPELLANT IS DIFFEREN T FROM THE CASE LAWS CITED BY THE APPELLANT BECAUSE IN THOSE CASES SOME ENTRIES WERE IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 13 - APPEARING IN THE DOCUMENTS OF SEIZED PARTY. HERE TH E DOCUMENT DOES NOT REPRESENT ANY ENTRY BUT IT IS AN AGREEMENT DULY SIGNED BY THE APPELLANT IN THE PRESENCE OF FIVE WITNESSES. PRIMA FACIE THIS MOU WOULD BE PRESUMED TO BE CORRECT, UNLESS THE APPELLA NT PROVES OTHERWISE. THE ONUS TO PROVE THAT THE TRANSACTIONS AS PER MOU ARE NOT CORRECT, LIES ON THE APPELLANT AND NOT ON THE DEPAR TMENT, AS ALLEGED BY THE APPELLANT IN HIS SUBMISSION. THE APPELLANT HAS NOT DISOWNED THE SIGNATURES IN THE MOU. ONCE HE ACCEPTS THAT HE HAS SIGNED THE MOU, THEN HE HAS TO PROVE THAT ANY CONTENTS THEREOF, IF ANY, ARE INCORRECT OR NOT ACTED UPON. THERE IS NO NEED TO GIVE ANY CROSS EXAMINATION OF SHRI VIKAS SHAH BECAUSE THE ONUS TO PROVE THE CONTENTS O F THE MOU TO BE UNTRUE, IS ON THE APPELLANT AND NOT ON THE DEPARTMENT. FURTHER , THE APPELLANT HAS NOT STATED ANYWHERE AS TO WHY THE MOU WAS SIGNED BY HIM AND WHAT WAS THE PURPOSE THEREOF. IN FACT, THIS MOU TALKS ABOUT VARIOUS TYPE OF TRANSACTIONS BETWEEN THE APPELLANT AND SHRI VIKAS SHAH SUCH AS AAROHAN, AAROHAN-II PROJECTS, CASH, SH ARAFI, BORROWINGS, PROFIT, INTEREST, ETC. AS THE APPELLANT MISERABLY FAILED NOT ONLY BEFORE THE AO BUT BEFORE ME ALSO TO DISPROVE T HE CONTENTS OF THE SEIZED MOU, I HAVE NO HESITATION IN UPHOLDING THE A DDITION OF RS.12,24,000/- MADE BY THE AO. 9. LEARNED AR, MR. P.M. PATEL HAS CONTESTED THAT TH ERE WAS NO EVIDENCE IN POSSESSION OF THE REVENUE DEPARTMENT TH AT THE IMPUGNED AMOUNT HAS ACTUALLY BEEN RECEIVED BY THE A SSESSEE SUBSEQUENTLY. THE SAID AMOUNT WAS TO BE RECEIVED AS PER THE MOU BUT IT WAS NEVER RECEIVED BY THE ASSESSEE. HE HAS P LEADED THAT EVEN THE SAID AMOUNT HAD NOT ACCRUED IN FAVOUR OF THE AS SESSEE BECAUSE THE TRANSACTION OF THE PLOT NEVER TOOK PLACE. THE A DDITION WAS MERELY ON PRESUMPTION THAT THE AMOUNT WAS AN INCOME OF THE ASSESSEE; HENCE, THE SAME SHOULD BE DELETED. HE HAS PLACED RELIANCE ON A DECISION OF PRARTHANA CONSTRUCTION PV T. LTD., 70 TTJ 122 (AHD) FOR THE LEGAL PROPOSITION THAT MERELY ON THE BASIS OF A DOCUMENT WHICH WAS RECOVERED FROM A THIRD PARTY NO ACTION SHOULD BE TAKEN AGAINST OTHER PERSON. LEARNED AR HAS ALS O PLACED RELIANCE ON UNIQUE ORGANIZER AND DEVELOPERS, 70 TTJ 131 (AHD) FOR THE LEGAL PROPOSITION THAT THE PRESUMPTION U/S. 132 (4A) WOULD IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 14 - NOT BE APPLICABLE TO A THIRD PARTY FROM WHOSE POSSE SSION SUCH DOCUMENT HAD NOT BEEN RECOVERED BY THE REVENUE. IN THE ABSENCE OF ANY EVIDENCE OF PASSING OF ON MONEY AND THE AS SESSEE HAVING DENIED THE PAYMENT OF ON MONEY, AS IT WAS CONTESTED IN THAT CASE; NO ADDITION WAS CALLED FOR. LEARNED AR HAS ALSO CIT ED CIT VS. MAULIK KUMAR K. SHAH, 307 ITR 137 GUJARAT WHEREIN T HE HONBLE COURT HAS HELD THAT IN A SITUATION WHEN BOTH CIT(A) AND ITAT HAVE FOUND THAT ON THE BASIS OF THE LOOSE PAPERS NO ADDITION WAS JUSTIFIED; HENCE, NO INTERFERENCE WAS CALLED FOR. 10. WE HAVE HEARD BOTH THE SIDES, THE SEIZED MATERI AL AND THE CONNECTED CASE LAWS HAVE BEEN CONSIDERED. THE DOCUM ENT IN QUESTION IS WRITTEN IN GUJARATI WHICH WAS DULY SIGN ED BY THE CONCERNED TWO PARTIES IN THE PRESENCE OF THE WITNES SES. ON THE TOP OF THE DOCUMENT DATED 16.05.2001, AS CUSTOMARY, NAM E OF THE LORD GANESHA IS ALSO NOTED. UNDISPUTEDLY, THE DOCUMENT I N QUESTION HAS BEEN SIGNED IN THE NAME OF GOD AS ALSO IN THE PRESE NCE OF THE WITNESSES. CONSIDERING THE NATURE AS WELL AS THE TE XT OF THE DOCUMENT IT IS DIFFICULT TO HOLD THAT THE SAID DOCU MENT WAS MERELY A DUMB DOCUMENT OR AN IRRELEVANT DOCUMENT. IN THIS DOCUMENT, THE AMOUNT OF THE CONSTRUCTION, I.E., RS.12,24,000/- AS WELL AS THE DETAILS OF THE PLOT HAVE CLEARLY BEEN NOTED. THEREF ORE, WE ARE NOT CONVINCED WITH THE ARGUMENT OF THE LEARNED AR THAT THE UNDISCLOSED INVESTMENT DID NOT BELONG TO THE ASSESS EE. THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY TO REBUT THE SAID DOCUMENT BUT HE HAS PREFERRED NOT TO ATTEND PROPERL Y THE PROCEEDINGS BEFORE THE AO. IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 15 - 11. AS FAR AS THE DECISIONS RELIED UPON BY THE ASSE SSEE ARE CONCERNED THOSE ARE DISTINCTLY DISTINGUISHABLE ON F ACTS AS WELL AS ON LAW. IN THE CASE OF PRARTHANA CONSTRUCTION (SUPRA), THE DOCUMENT IN QUESTION HAS NOT ESTABLISHED THE INVOLV EMENT OF THE SAID ASSESSEE AND IN THE ABSENCE OF THE NEXUS IT WA S HELD THAT THE IMPUGNED DOCUMENT DID NOT BELONG TO THE ASSESSEE. L IKEWISE, IN THE CASE OF UNIQUE ORGANIZER (SUPRA) THE QUESTION OF ON MONEY TRANSACTION WAS NOT PROVED BY THE REVENUE DEPARTMEN T. THERE WAS A FINDING ON FACTS THAT THE SAID ADDITION WAS BASED ON SUSPICION AND SURMISES. WE HAVE ALSO PERUSED THE DECISION OF MAULIK KUMAR K. SHAH (SUPRA) AND NOTED THAT THE DECISION OF THE AO WAS DEVOID OF EVIDENCE IN SUPPORT OF HIS ALLEGATION. WE, THEREFOR E, CONCLUDE THAT THE DECISION CITED BY THE ASSESSEE WERE PRIMARILY O N THEIR OWN FACTS; HENCE NOT MATCHED WITH THE FACTS OF THE APPE AL IN HAND. WE ALSO CONCLUDE THAT IN A SITUATION WHEN ANY BOOKS OF ACCOUNT OR DOCUMENTS, ETC. HAVE BEEN DELIVERED TO THE REQUISIT IONING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON I.E., OTHER THAN THE PERSON WHO HAS BEEN SEARCHED; THEN THOSE DOCUMENTS, ETC., DELIVERED OR REQUISITIONED SHALL BE DEALT WITH AS I F THEY HAVE BEEN FOUND IN THE POSSESSION OR CONTROL OF SUCH OTHER P ERSON AGAINST WHOM THE PROCEEDINGS HAVE BEEN INITIATED U/S.153C O F IT ACT. SUCH BOOKS OF ACCOUNT OR DOCUMENTS SHALL BE DEEMED TO HAVE BEEN FOUND IN THE POSSESSION OR CONTROL OF SUCH OTHER PE RSON AS IF RECOVERED IN THE COURSE OF SEARCH U/S. 132 OF IT AC T. MOREOVER, IN THIS CASE THE ASSESSEE BEING ONE OF THE SIGNATORY O F THE CONTENTS RECORDING THE TRANSACTIONS HENCE THE DOCUMENTS WAS BELONGING TO IT(SS)A NO.796/AHD/2010 PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, CENTRAL CIRCL E 1(2), AHMEDABAD A.Y. 2002- 03 - 16 - THE ASSESSEE. THEREFORE, THE AMOUNT IN QUESTION WAS RIGHTLY ASSESSED IN HIS HAND. WE FIND NO FORCE IN THIS GROU ND OF THE ASSESSEE; HENCE, DISMISSED. 12. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 28/02/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD