Kalpesh Mafatlal Patel Vs DCIT (ITAT Surat)
ITAT Surat held that addition on the basis of un-signed/un-stamped Satakhat, which has not been registered and which is found from CD of computer of person, unsustainable.
Facts-
AO during the course of survey proceedings u/s. 133A at the office premises of Turmish B. Kania, Advocate and Meera T. Kania, at A Sai Leela Associates, certain documents of incriminating nature were recovered from the office. It includes backup hard disc of computers installed in the office. On perusal of working copy of the same hard disc, it was noticed that various satakhats/kabja Rashid/sale deed/purchase deed/promisary note/ memorandum of understanding and other documents related to land/property were prepared by Turmish B. Kania and Meera T. Kania.
Accordingly, the case of the assessee was reopened u/s 148 of the I.T. Act for scrutiny. After examining the details filed & test checking the details with return income and document furnished, the income returned by the assessee was examined by AO. Wherein, it was found that the satakhats was made by the assessee but the amount of satakhats was not appearing in the book of account of the assessee. Accordingly, such impounded satakhat was treated as unexplained investment u/s 69 of I.T. Act.
Conclusion-
Held that the documents, which were found in the possession of other person, does not bear the name of the assessee, that is, the name of the assessee is not mentioned in the statement of another person. No addition can be made, if documents impounded during survey are unsigned and incomplete. No addition of unaccounted investment can be sustained when Assessing Officer had not made any further investigation. No statement recorded of land owners or purchasers as mentioned in the sale deed by AO to corroborate contents of impounded Satakhat. No specific query raised in respect of impounded Satakhat or the assessee to Turmish or Meera Kama by investing wing or AO. Therefore, no addition can be made in respect of un-signed, unstamped, Satakhat, which has not been registered and is found from CD of computer of a person who is not connected with the assessee. In view of these facts and circumstances and in law, the addition so made by the AO is without any basis, without any corroborating evidences and without allowing due opportunity of cross-examination to the assessee and is therefore, unsustainable in law. Therefore, we delete these additions.
FULL TEXT OF THE ORDER OF ITAT SURAT
Captioned both appeals filed by the assessee, pertaining to Assessment Years (AY) 2011-12 and 2012-13, are directed against the common order passed by the Learned Commissioner of Income Tax (Appeals)-4, Surat [in short “the ld. CIT(A)”], which in turn arise out of separate assessment orders passed by the Assessing Officer under section 143(3) r.w.s 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
2. Since, the issues involved in these two appeals are common and identical; therefore, these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in ITA No.48/SRT/2017, for assessment Year 2011-12, have been taken into consideration for deciding the above appeals en masse.
3. First, we shall take assessee’s appeal in ITA No. 48/SRT/2017 for AY.2011-12, ( lead case) wherein the grounds of appeal raised by the assessee are as follows:
“1. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs. 12,50,000/- on account of alleged payments made to Chetanbhai Chanabhai & other vide Satakhat Deed dated 09-10-2010 for purchase of land at Bamroli Block No.45 as unexplained investment u/s. 69 of the Income Tax Act.
2. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs.10,00,000/- on account of alleged payments made to Lakhiben Chimanbhai & Others vide Satakhat Deed dated 09-10-2010 for purchase of land at Bamroli, Block No.45 as unexplained investment u/s. 69 of the Income Tax Act.
3. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs.50,00,000/- on account of alleged payments made to Maniben Balabhai & Others vide Satakhat Deed dated 16-08-2010 for purchase of land at Bamroli, Block No.45 as unexplained investment u/s. 69 of the Income Tax Act.
4. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs. 17,50,000/- on account of alleged payments made to Bhaniben Bhanabhai & Others vide Satakhat Deed dated 12.10.2010 for purchase of land at Bamroli, Block No.45 as unexplained investment u/s 69 of the Income Tax Act.
5. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs. 1,00,000/- on account of alleged payments made to Lilaben Dayyabhai & Others vide Satakhat Deed dated 14-03-2012 for purchase of land at Jiav, R.S.No.358/1 & 358/2, Block No.437 as unexplained investment u/s. 69 of the Income Tax Act.
6. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs.1,00,000/- on account of alleged payments made to Dahiben Parshotambhai & Others vide Satakhat Deed dated 25-10-2011 for purchase of land at Jiav, R.S.No.358/1 & 358/2, Block No.437 as unexplained investment u/s. 69 of the Income Tax Act.
7. The appellant craves leave to add, amend, alter, modify or delete any of the above grounds as well as to submit additional grounds at the time of hearing of the appeal.”
4. Grounds of appeal raised by the assessee in ITA No. 49/SRT/2017, for A.Y. 2012-13 are as follows:
“1. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O in making an addition of Rs.25,00,0000/- on account of alleged payments made to Dahiben Parsottambhai & Others vide Satakhat Deed dated 25-10-2011 for purchase of land at Jiav R.S.No.358/1 & 358/2, Block No.437 as unexplained investment u/s 69 of the Income Tax Act.
2. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O in making an addition of Rs.25,00,000/- on account of alleged payments made to Lilaben Dahyabhai &Others vide Satakhat Deed dated25-10-2011 for purchase of land at Jiav R.S.No.358/1 & 358/2, Block No.437 as unexplained investment u/s 69 of the Income Tax Act.
3. The appellant craves leave to add, amend, alter, modify or delete any of the above grounds as well as to submit additional grounds at the time of hearing of the appeal.
5. Since, all the grounds raised by assessee are inter-connected and mixed, therefore we shall take these grounds together.
6. Brief facts, as per lead case, are as follows: The assessing officer observed that during the course of survey proceedings under section 133A on 27.12.2012 at the office premises of Turmish B. Kania, Advocate and Meera T. Kania, at A Sai Leela Associates, certain documents of incriminating nature were recovered from the office and impounded as BI-1, BI-2, BI-3 & BI-4. It includes backup hard disc of computers installed in the office. On perusal of working copy of the same hard disc, it was noticed that various satakhats/kabja Rashid/sale deed/purchase deed/promisary note/ memorandum of understanding and other documents related to land/property were prepared by Turmish B. Kania and Meera T. Kania. So with an intention to obtain hard copy of the same satakhat purchase/sale deed, Mazhernama of the impounded hard disc was done on 27.02.2013. The print results and purchase/sale deed//Kabja rasids as available in the impounded hard disc were taken. The print results so recovered were impounded as per Annexure A-l, Page Nos.1 to 149, Annexure-A-2, Page Nos. 1 to 32, Annexure-A-3, Page Nos. 1 to 102 and Annexure-A-4, Page Nos. 1 to 154. On perusal of the said files following Satakhat in the name of the assessee was found:
