DCIT Vs Late Shri Pravinsinh N Zala (ITAT Rajkot)
Whether the amendment brought under the provisions of section 153C of the Act, where the word ‘belong’ was replaced with the word ‘pertain’ is applicable for the year under consideration. It was only on 1st June, 2015 when the amended provisions came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the petitioners.
In this regard we note that the search was conducted prior to the amendment i.e. 16th October 2014 but the notice was issued under section 153C of the Act subsequent to such amendment dated 29th of July 2016. Thus the controversy arises whether the provisions of prior to the amendment or subsequent to the amendment under section 153C of the Act as discussed above will be applicable in the case on hand.
From the jurisdictional High Court judgment in the case of Anil Kumar Gopikisan Agrawal vs. ACIT reported in 106 Taxman.com 137 it is transpired that the provisions of section 153C as applicable on the date of search will be applied to the proceedings initiated therein.
Thus there remains no ambiguity to the fact that the provisions of section 153C of the Act prior to the amendment therein, will be applicable in the case on hand which requires the AO to arrive at a satisfaction that the documents found from the premises of the 3rd party in the course of search belongs to the assessee. We have already explained the meaning of the word belongs in the preceding paragraph.
In view of the above, we are conscious to the fact that the seized material found from the premises of the 3rd party in the course of search does not belong to the assessee. Thus in our considered view the proceedings under section 153C of the Act, cannot be initiated. Hence, the assessee succeeds on his technical ground of appeal. Accordingly the technical ground raised by the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeals and cross objections have been filed at the instance of the Revenue and assessee. First we take IT(SS)A No 15/RJT/2018 and CO No. 10/RJT/2018 in case of Late Shri Parvinsinh Nanubhai Zala
2. The assessee has raised the following grounds of appeal in the CO bearing No. 10/RJT/2018.
“1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another.
2.0 The ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961.
2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed.”
3. The Revenue has raised the following grounds of appeal bearing No. 15/RJT/2018.
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 2,55,88,999/- being on-money paid on the purchase of agricultural land.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 3,94,631/-.
3. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date.
4. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the statements.”
4. First, we take up CO. No. 10/RJT/2018, filed by the assessee.
5. The assessee in all the grounds of appeal has challenged the validity of the assessment framed by the AO under section 153C read with section 143(3) of the Act, on the ground that there was no document found during the search which is either incriminating in nature or belonging to the assessee.
6. At the outset the learned AR before us objected on the initiation of the proceedings under section 153C of the Act, by contending that there is no name, address, phone numbers PAN, banking details or any other specific detail related to assessee was found from the seized documents. The learned AR in support of his contention drew our attention on page 21 of the paper book where the seized material was placed.
The learned AR further submitted that there may be some reference in the seized documents about the assessee but that is not sufficient to initiate the proceedings under section 153C of the Act, until and unless there is some nexuses with the assessee based on cogent materials. As such the assessee had no connection of whatsoever with the company namely M/s Amidhara Developers Pvt. Ltd. (in short ADPL) where the search was conducted. Neither the assessee nor persons closely connected with him were having any dealing of whatsoever with such company. Accordingly the documents seized from the premises of the search party does not belong to the assessee.
The learned AR also contended that the impugned seized document was made on 14th April 2014 whereas the assessee has purchased the impugned survey numbers on 18th December 2013 and 3rd February 2014. Therefore there cannot be any reference on such seized documents for the year under consideration.
7. On the other hand, the learned DR vehemently supported the order of the authorities below.
8. We have heard the rival contentions of both the parties and perused the materials available on record before us. The facts in brief as culled out from the order of the authorities below are that there was a search and seizure operation carried out at the premises of ADPL dated 16 October 2014. As a result of search various documents incriminating in nature were found including two file bearing BOOK1(1) and BOOK1(2) which were extracted from the hard disk drive of the computer of the searched person. These documents were excel sheets containing various details such as survey numbers, size (vigha), amount paid and legal status etc. On the top of excel sheet date was mention i.e. 14 April 2014. Out of various survey numbers mentioned in the excel sheet, two survey numbers bearing 1214 and 1215 were representing the lands purchased by the assessee.
The AO on verification of the sale deeds of the impugned survey numbers found that the amount mentioned therein viz a viz the amount mention in the seized document does not match. As such the amount mentioned in the seized documents was greater than the amount mentioned in the sale deeds. Accordingly he was of the view that the assessee has made investment in the impugned lands without recording the same in the books of accounts. Accordingly, the AO initiated the proceedings under section 153 C of the Act. From the preceding discussion we note certain undisputed facts as detailed under:
i. The excel sheets were found from the hard disk drive (HDD) of the company namely ADPL in the course of search conducted under section 132 of the Act.
ii. There was no direct or indirect relationship between the assessee and the searched person as discussed above.
iii. There was no name, signature, banking details, PAN of the assessee except the survey numbers registered in the name of the assessee.
iv. There was no information about the author of such seized materials. Similarly the purpose of such noting in the seized material was also not ascertainable. The searched party has also not brought anything on record such as the purpose and the author of such noting.
v. The seized document was neither written by the assessee being the purchaser nor by the seller of the impugned survey numbers.
vi. The date mentioned on the seized document was 14th April 2014 whereas the assessee has purchased the impugned lands bearing survey numbers 1214 and 1215 dated 18thDecember 2013 and 3rdFebruary 2014 i.e. much before the date mentioned in the seized document.
Now the question arises, whether the document found from the premises of the 3rd party belongs to the assessee as provided under section 153C of the Act, prior to the amendment therein which is effective from 1stJune 2015. The provisions of section 153C (1) of the Act, prior to the amendment reads as under:
153C. 3[(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person 3a [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] :]
From the above it is transpired that the document found during the search at the place of searched party must belong to the assessee for initiating the proceedings under section 153C of the Act. The word belong used in section 153C requires that there has to be control and possession of the assessee (person other than searched person) on such document even though the assessee is not legal owner. As such the document found in the case on hand from the premises of the 3rd party, the assessee had no control of whatsoever on such document. Therefore in our considered view such document cannot be termed as belonging to the assessee. Once a document does not belong to the assessee as mandated under the provisions of section 153C of the Act, prior to the amendment, does not authorize the AO to initiate the proceedings against the assessee. In this connection we draw support and guidance from the judgment of Hon’ble Delhi High Court in the case of Pepsico India Holding (P.) Ltd. vs ACIT reported in 370 ITR 295 wherein it was observed that:
“the Assessing Officers should not confuse the expression ‘belongs to’ with the expressions ‘relates to’ or ‘refers to’. A registered sale deed, for example, ‘belongs to’ the purchaser of the property although it obviously ‘relates to’ or ‘refers to’ the vendor. In this example if the purchaser’s, premises are searched and the registered sale deed is seized, it cannot be said that it ‘belongs to’ the vendor just because his name is mentioned in the document. In the converse case if the vendor’s premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy ‘belongs to’ the purchaser just because it refers to him and he (the purchaser) holds the original sale deed. In this light, it is obvious that none of the three sets of documents – copies of preference shares, unsigned leaves of cheque books and the copy of the supply and loan agreement – can be said to ‘belong to’ the petitioner”
We also find that the Hon’ble Gujarat High Court in the case of PCIT vs. Himanshu Chandulal Patel reported in 109 taxmann.com 202 after making a reference to the judgment of Hon’ble Delhi High Court in case of Pepsico India Holding (P.) Ltd (Supra) as discussed above has held as under:
“In the instant case, the documents, which were seized during the course of search, there may be some reference of the assessee, but that it-self would not be sufficient. It is necessary to show some nexus on the basis of some cogent materials between the documents seized and the assessee.”
From the above, it can be concluded that there cannot be any question of initiating the proceedings under section 153C of the Act, until and unless the documents found during the course of search from the premises of the 3rd party belongs to the assessee.
It is also pertinent to note that the assessee also raised similar contentions before the AO during the assessment proceedings but the same were rejected by the AO by holding that the case law relied by the assessee relate to the assessments completed prior to amendment in section 153C of the Act. The relevant finding of the AO stands as under:
“8. As far as case laws quoted by you in support of your claim kindly note that all these case laws are related to assessment completed prior to amendment in the section 153C and therefore will not be applicable in this case. In view of the above your objections to the assessment proceedings u/s 153C for AY 2014-15 and 2015-16 are hereby disposed off.”
In view of the above finding of the AO, the 2nd controversy arises whether the amendment brought under the provisions of section 153C of the Act, where the word ‘belong’ was replaced with the word ‘pertain’ is applicable for the year under consideration. The amended provisions of section 153C of the Act reads as under:
153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,—
(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or
(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to,
a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person 2[for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A
In this regard we note that the search was conducted prior to the amendment i.e. 16th October 2014 but the notice was issued under section 153C of the Act subsequent to such amendment dated 29th of July 2016. Thus the controversy arises whether the provisions of prior to the amendment or subsequent to the amendment under section 153C of the Act as discussed above will be applicable in the case on hand. The controversy has been resolved by the jurisdictional High Court in the case of Anil Kumar Gopikisan Agrawal vs. ACIT reported in 106 Taxman.com 137 wherein it was held as under:
“19.9 In the facts of the present case, the search was conducted in all the cases on a date prior to 1st June, 2015. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to the effect that the seized material belongs or belong to the other person. In the present case, the harddisc containing in the information relating to the petitioners admittedly did not belong to them, therefore, as on the date of the search, the essential jurisdictional requirement to justify assumption of jurisdiction under section 153C of the Act in case of the petitioners, did not exist. It was only on 1st June, 2015 when the amended provisions came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the petitioners.
19.10 In this backdrop, to test the stage of applicability of the amended provisions, a hypothetical example may be taken. The search is carried out in the case of HN Safal group on 4.9.2013. If the Assessing Officer of the searched person had recorded satisfaction that some of the seized/requisitioned material belongs to a person other than the searched person and forwarded the material to the Assessing Officer of the other person, had issued notice under section 153C of the Act prior to the coming into force of the amended provision. The notice under section 153C of the Act was challenged before the appropriate forum on the ground that the seized material does not belong to such other person and such issue was decided in favour of such person on a finding that the seized material does not belong to the other person. Thereafter, in view of the amendment in section 153C (1) of the Act, since the books of account or documents did not belong to the other person but did pertain to him or the information contained therein related to him, can the Assessing Officer of the searched person once again record satisfaction as contemplated under the amended provision and forward the material to the Assessing Officer of such other person. The answer would be an emphatic “no” as the Assessing Officer of the searched person after recording the earlier satisfaction would have already forwarded the material to the Assessing Officer having jurisdiction over the other person, therefore, there would be no question of his again forming a satisfaction as required under the amended provisions of section 153C of the Act.
19.11 In the opinion of this court, if a date other than the date of search is taken to be the relevant date for the purpose of recording satisfaction one way or the other, it would result in an anomalous situation wherein in some cases, because the notices under section 153C of the Act were issued prior to the amendment, they would be set aside on the ground that the books of account or documents seized or requisition did not belong to the other person though the same pertained to or the information contained therein related to such person, whereas in other cases arising out of the same search proceedings, merely because the notices are issued after the amendment, the same would be considered to be valid as the books of account or documents seized or requisitioned pertain to or the information contained therein relate to the other person. It could not have been the intention of the legislature to deal with two sets of identically situated persons differently, merely because in one case the Assessing Officer of the searched person records satisfaction as required under section 153C of the Act prior to the coming into force of the amended provisions and in any another case after the coming into force of the amended provisions.”
From the above judgment it is transpired that the provisions of section 153C as applicable on the date of search will be applied to the proceedings initiated therein. Thus there remains no ambiguity to the fact that the provisions of section 153C of the Act prior to the amendment therein, will be applicable in the case on hand which requires the AO to arrive at a satisfaction that the documents found from the premises of the 3rd party in the course of search belongs to the assessee. We have already explained the meaning of the word belongs in the preceding paragraph.
In view of the above, we are conscious to the fact that the seized material found from the premises of the 3rd party in the course of search does not belong to the assessee. Thus in our considered view the proceedings under section 153C of the Act, cannot be initiated. Hence, the assessee succeeds on his technical ground of appeal. Accordingly the technical ground raised by the assessee is allowed.
9. In the result the CO. filed by the assessee is allowed.
Coming to the IT(SS)A No. 15/RJT/2018 an appeal by the Revenue:
10. At the outset it is pertinent to note that we have already held that initiation of the proceeding under section 153C of the Act, in the case of the assessee is not valid vide paragraph No. 8 of this order. For the detailed discussion please refer the relevant paragraph. Once, the proceedings initiated under section 153C of the Act have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these not required to be adjudicated separately. Hence the appeal filed by the Revenue is dismissed as infructuous.
11. In the result the appeal filed by the revenue is dismissed as infructuous.
12. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the revenue is dismissed as infructuous.
Coming to the IT(SS)A No. 16/Rjt/2018 by Revenue and CO No. 21/Rjt/2018 by the assessee in the case of Smt. Monaben Harikishanbhai for A.Y. 2014-15
13. The assessee has raised the grounds in the cross objection as detailed under:
“1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another.
2.0 The ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961.
2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed.”
14. The Revenue has raised the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 5,58,67,080/- being on-money paid on the purchase of agricultural land.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 7,91,253/- and Rs.22,00,000/- (wrongly added as Rs.2,00,000/- in the computation of income.).
3. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date.
4. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the statements.”
15. At the outset it is pertinent to note that in the identical facts and circumstances in the case of Late Shri Parvinsinh Nanubhai Zala in CO No. 10/Rjt/2018, we have already held that initiation of the proceedings under section 153C of the Act, are not valid vide paragraph number 8 of this order.
For the detailed discussion please refer the relevant paragraph. Therefore respectfully following the same and in order to maintain parity with finding we hold that the proceedings initiated under section 153C of the Act are not sustainable. Hence, the cross objection filed by the assessee is allowed.
16. Once, the proceedings initiated under section 153C have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these are not required to be adjudicated separately. Hence the appeal filed by the revenue is dismissed as infructuous.
17. In the result the appeal filed by the revenue is dismissed as infructuous.
18. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the revenue is dismissed as infructuous.
Coming to the IT(SS)A No. 17/RJT/2018 by Revenue and CO No. 26/RJT/2018 by the assessee in case of Shri. Akshayrajsinh V Gohil for A.Y. 2014-15
19. The assessee has raised the grounds in the cross objection as detailed under:
“1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another.
2.0 The ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961.
2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed.”
20. The Revenue has raised the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 3,38,75,060/- being on-money paid on the purchase of agricultural land.
2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 5,58,670/-.
3. The CIT(A) has erred in facts in observing that name of the village is not matched by failing to appreciate that Lagdana and Keshardi are adjacent villages and the fact that the survey number matches exactly.
4. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date.
5. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the ”
21. At the outset it is pertinent to note that in identical facts and circumstances in the case of Late Shri Parvinsinh Nanubhai Zala in CO No. 10/RJT/2018, we have already held that initiation of the proceedings under section 153C of the Act, are not valid vide paragraph number 8 of this order. For the detailed discussion please refer the relevant paragraph. Therefore respectfully following the same and in order to maintain parity with finding we hold the proceedings initiated under section 153C of the Act are not sustainable. Hence, the objection filed by the assessee is allowed.
22. Once, the proceedings initiated under section 153C have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these are not required to be adjudicated separately. Hence the appeal filed by the Revenue is dismissed as infructuous.
23. In the result, the appeal filed by the Revenue is dismissed as infructuous.
24. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the Revenue is dismissed as infructuous.
Coming to the IT(SS)A No. 19/Rjt/2018 by Revenue and CO No. 9/Rjt/2018 by the assessee in case of Shri. Ketanbhai G Shobhana for A.Y. 2014-15
25. The assessee has raised the grounds in the cross objection as detailed under:
“1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another.
2.0 The ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961.
2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed.”
26. The Revenue has raised the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs.2,47,36,148/- being on-money paid on the purchase of agricultural land.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs. 9,42,859/-.
3. The CIT(A) has erred in facts in observing that name of the village is not matched by failing to appreciate that Lagdana and Kalyangadh are adjacent villages and the fact that the survey number matches exactly.
4. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date.
5. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the statements.”
27. At the outset it is pertinent to note that in identical facts and circumstances in the case of Late Shri Parvin sinh Nanubhai Zala in CO No. 10/RJT/2018, we have already held that initiation of the proceedings under section 153C of the Act, are not valid vide paragraph number 8 of this order. For the detailed discussion please refer the relevant paragraph. Therefore respectfully following the same and in order to maintain parity with finding we hold that the proceedings initiated under section 153C of the Act are not sustainable. Hence, the objection filed by the assessee is allowed.
28. Once, the proceedings initiated under section 153C have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these are not required to be adjudicated separately. Hence the appeal filed by the Revenue is dismissed as infructuous.
29. In the result the appeal filed by the revenue is dismissed as infructuous.
30. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the revenue is dismissed as infructuous.
Coming to the IT(SS)A No. 21/Rjt/2018 by Revenue and CO No. 13/Rjt/2018 by the assessee in case of Smt. Dhara Harsadrai Pandaya/Dharaben Mahijitbhai Bhatt for A.Y. 2014-15
31. The assessee has raised the grounds in the cross objection as detailed under:
“1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another.
2.0 The Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961.
2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be ”
32. The Revenue has raised the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs.5,50,22,256/- being on-money paid on the purchase of agricultural land.
2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs.9,65,298/-.
3. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date.
4. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the ”
33. At the outset it is pertinent to note that in identical facts and circumstances in the case of Late Shri Parvin sinh Nanubhai Zala in CO No. 10/RJT/2018, we have already held that initiation of the proceedings under section 153C of the Act, are not valid vide paragraph number 8 of this order. For the detailed discussion please refer the relevant paragraph. Therefore respectfully following the same and in order to maintain parity with finding we hold that the proceedings initiated under section 153C of the Act are not sustainable. Hence, the objection filed by the assessee is allowed.
34. Once, the proceedings initiated under section 153C have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these are not required to be adjudicated separately. Hence the appeal filed by the Revenue is dismissed as infructuous.
35. In the result the appeal filed by the revenue is dismissed as infructuous.
36. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the revenue is dismissed as infructuous.
Coming to the IT(SS)A No. 22/Rjt/2018 by Revenue and CO No. 25/Rjt/2018 by the assessee in case of Shri Dharmendra Singh B Chudasma for A.Y 2014-15
37. The assessee has raised the grounds in the cross objection as detailed under:
“1.0 The grounds of cross-objections mentioned hereunder are without prejudice to one another.
2.0 The ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in dismissing the ground of appeal related to the validity of notice issued u/s 153C of the Income tax Act, 1961.
2.1 The notice issued u/s 153C of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed.”
38. The Revenue has raised the following grounds of appeal
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs.1,81,37,650/- being on-money paid on the purchase of agricultural land.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition made on account of unexplained expenditure of Rs.2,97,847/-.
3. The CIT(A) has erred in facts in observing that name of the village is not matched by failing to appreciate that Lagdana and Keshardi are adjacent villages and the fact that the survey number matches exactly.
4. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date.
5. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the statements.”
39. At the outset it is pertinent to note that in identical facts and circumstances in the case of Late Shri Parvin sinh Nanubhai Zala in CO No. 10/RJT/2018, we have already held that initiation of the proceedings under section 153C of the Act, are not valid vide paragraph number 8 of this order. For the detailed discussion please refer the relevant paragraph. Therefore respectfully following the same and in order to maintain parity with finding we hold that the proceedings initiated under section 153C of the Act are not sustainable. Hence, the objection filed by the assessee is allowed.
40. Once, the proceedings initiated under section 153C have been held as invalid, there is no reason to decide the issue raised by the Revenue on merit. Hence, we dismiss the grounds of appeal of the Revenue on merit as infructuous as these are not required to be adjudicated separately. Hence the appeal filed by the Revenue is dismissed as infructuous.
41. In the result the appeal filed by the revenue is dismissed as infructuous.
42. In the combined result, the CO. of the assessee is allowed whereas the appeal filed by the revenue is dismissed as infructuous.
Coming to the ITA No. 22/Rjt/2018, an appeal by Revenue in case of Smt. Dhara Harsadrai Pandaya/Dharaben Mahijitbhai Bhatt pertaining to A.Y. 2015-16
43. The Revenue has raised the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs.4,87,24,277/- being on-money paid on the purchase of agricultural land.
2. The CIT(A) has erred in facts and law in giving relief to the assessee by ignoring the contents of the seized document and the original statements given by the 4 sellers, and in relying on affidavits of the sellers submitted by the assessee at a much later date.
3. The CIT(A) has erred in facts and law by giving relief to the assessee ignoring the discrepancies in the statements of the farmers pointed out by the AO regarding the inconsistency in the ”
44. The only effective ground raised by the Revenue is that the learned CIT (A) erred in deleting the addition of Rs. 4,87,24,277/- on account on-money paid against purchase of agricultural land.
45. The facts in brief as culled out from the order of the authorities below are that the assessee the present case is an individual and engaged in the trading business of dress materials running in her proprietary concern under the name and style M/s Dhara The assessee in the year under consideration filed her return of income under section 139 of the Act dated 23rd March 2016 declaring total income at Rs. 7,81,470/- only. The assessee during the year has purchased 2 piece of plots bearing survey No. 1223 and 1242 at Rs. 27,75,000/- and Rs. 58,40,000/- respectively. The assessee purchased both the plots dated 21st February 2015. The assessee claimed that the area of the plots bearing No. 1223 and 1242 consists of the area 8.21 and 17.31 Bigha respectively.
However, the AO during the assessment proceedings found that there was a search and seizure operation carried out at the premises of ADPL dated 16 October 2014. As a result of search various documents incriminating in nature were found including two excel sheets bearing BOOK1(1) and BOOK1(2) which were extracted from the hard disk drive of the computer of the searched person. These documents were excel sheets containing various details such as survey numbers, size (vigha), amount paid and legal status etc. On the top of excel sheet, the date was mentioned i.e. 14 April 2014. Out of various survey numbers mentioned in the excel sheet, one survey bearing No. 1223 was representing the land purchased by the assessee.
The AO on verification of the sale deeds of the impugned survey Nos. found that the amount mentioned therein viz a viz the amount mentioned in the seized document does not match. As such the amount mentioned in the seized documents was greater than the amount mention in the registered documents. Accordingly he was of the view that the assessee has made investment in the impugned lands without recording the same in the books of accounts. Accordingly, the AO proposed to make the following additions by issuing a show cause notice dated 10th December 2016:
“6. Further as per your submission for AY 2015-16 you have also purchased survey number 1223 and 1242 at village Gangad during the year. As per the seized data the average on-money figure per “bigah” is arrived at Rs 12,58,700/-. Therefore the average on-money paid on the purchase for these survey numbers is calculated as tabulated below:
