Case Law Details
Rajesh Sajjanraj Bafna Vs DCIT (ITAT Ahmedabad)
Income Tax Proceedings based on documents found by DGCEI during search not sustainable if CESTAT treat such document as DUMB documents
At this stage, it is also imperative to remind that the proceedings under the service tax and the income tax are distinct and independent to each other. Therefore, a question may arise that the outcome of the service tax proceeding with respect to any litigation can be used to draw an inference in the proceedings initiated under the income tax Act? Principally, it appears that both the proceedings being service tax and income tax are distinct and independent to each other on legal count but the factual aspect will be always remain the same in either of the proceeding. In the given case also, the fact is constant that an excel sheet was found by DGCEI during search procedure which was containing some amounts in cash which was recorded against particular flats number of particular project from some person. The cash entry recorded in such excel was treated by both service tax authority and authority under income tax as the unaccounted cash received by the CPIPL against booking of flats. Based on this fact, the income tax proceeding was triggered in the hands of the assessee for making unaccounted investment as such sheet contained the assessee’s name. However the Hon’ble CESTAT in appeal before it against demand raised under service tax held that such excel sheet as dumb document having no evidentiary value with respect to cash transactions. This finding of the Hon’ble CESTAT was based on facts and not on legal principle which will remain the same in any proceeding under any other Act. Therefore, once the basis of the addition has gone away, then to our considered view all other consequential proceedings will have no legs to stand.
It is also interesting to note that there was search operation under the provisions of section 132 of the Act carried out at the premises of the assessee but no document of whatsoever was recovered from the premises of the assessee suggesting that assessee has purchased any flats in the project of CPIPL or payment in cash was made by him (the assessee) to CPIPL. Thus, in the absence of any documentary evidence found during the course of search, no adverse inference can be drawn against the assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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