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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI ANIL CHATURVEDI, AM & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM :
This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals), Pune-5 dated 23.12.2016 for the assessment year 2011-12 as per the grounds of appeal on record.
2. That apart, the assessee also filed additional grounds and based on the decision of the Hon‟ble Supreme Court of India in the case of NTPC Vs. CIT reported in 229 ITR 383 (SC), the Ld. AR of the assessee submitted that since these additional grounds goes into the root of the matter and therefore, the same may be admitted in this case. The Ld. AR of the assessee further submitted that if the assessee succeeds in ground No.1 of the additional grounds in that case, all other grounds in the appeal memo and any others grounds in the additional grounds appeal memo will become academic in nature. The additional ground No.1 reads as under:
“1. The assessee submits that the learned AO erred in making an addition of Rs.37,00,000/- u/s.143(3) without appreciating that the addition was being made on the basis of the paper seized from Shri Gajendra Pawar and hence, if at all, any addition was required to be made, the same should have been made by invoking the provisions of Section 153C.”
That the facts on record as per the assessment order wherein search and seizure action u/s.132 of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) was conducted in the case of Pinnacle Group, Pune. Shri Gajendra D Pawar Prop. M/s. Pinnacle Constructions had constructed the project “Pinnacle Kalpataru” CTS No.1173, Erandwane, Pune. That as per the statement of Shri Gajendra D. Pawar recorded u/s.132(4) of the Act on 11.02.2011wherein in reply to Question No. 15, Shri Gajendra D Pawar has accepted that he had received cash of Rs.37,00,000/- over and above the agreement value of Rs.71,75,000/- from Shri Ravindra B. Naik i.e. the assessee.
The Ld. AR of the assessee vehemently argued that in the given facts and circumstances, provisions of section 153C of the Act should have been invoked and not section 143(3) of the Act while framing the assessment. This is particularly because search action was conducted at the premises of Shri Gajendra D Pawar and based on his statement the Assessing Officer has made the addition. The Ld. AR further submitted that in for assessment year 2010-11, the facts and circumstances were substantially similar and similar grounds were to be decided before the Tribunal that whether action of the Assessing Officer in not resorting to section 153C of the Act was correct or not in the given facts and circumstances. That therein, the Tribunal referred to another decision of the Co-ordinate Bench of the Tribunal, Pune in ITA No.1971/PUN/2014 for the assessment year 2006-07 wherein the issue was “where the basis of making investigation and assessment thereafter in the hands of assessee is on the basis of information unearthed during the course of search action on the premises of some other person other than the assessee, then whether proceedings are to be initiated under section 147/148 or under section 153C of the Act.” The Tribunal in ITA No.1971/PUN/2014 (supra.) at Para 6 of that order has discussed the decision at length which is also part of that order. Thereafter, the Tribunal has observed in the succeeding paragraphs as follows:
“7. Reverting to the facts of the present case, the assessment was completed u/s.143(3) r.w.s147 of the Act. Then at Page 11 of the assessment order, seized document impounded during the search action in the business premises of Shri Gajendra Pawar (Builder of Pinnacle Kalpataru) regarding cash payment of Rs.87,07,500/- over and above the agreement value by the assessee for the purchase of Flat No. 604, 605 and 606. Therefore, search action had taken place in the premises of Shri Gajendra D Pawar wherein some documents were found suggesting that some money was paid in cash over and above agreement value by the assessee.
8. Now coming to the section 153C of the Act that when any document or books of account or other assets as referred to therein is found in the premises which does not belong to the person whose premises is being searched but actually belongs to some other person, in this case, the assessee, in such scenario, Section 153C only shall apply. The very
opening of statement in Section 153C states that notwithstanding anything contained in sections 139, 147, 148, 149, 151 and 153 of the Act which ascertains the overriding effect of section 153C of the Act vis-à- vis other provisions referred therein. On examination of facts, application of Section 153C of the Act is absolutely justifiable.
Respectfully following the decision of the Co-ordinate Bench of the Tribunal, Pune in ITA No.1971/PUN/2014(supra.), we hold that the Assessing Officer after receipt of information belonging to the assessee should have invoked the provisions of Section 153C of the Act and not the provisions of Section 147/148 of the Act. Consequently, reassessment order passed u/s.147 of the Act does not stand. The Assessing Officer is, thus, directed to cancel the same.”
Per contra, the Ld. DR placed strong reliance on the orders of the Sub- ordinate Authorities.
We have perused the case records and heard the rival contentions. We have also analyzed the judicial pronouncements placed on record. We observe that in the present case as well as in the case referred before us by the Ld. AR of the assessee in the facts are substantially similar wherein search and seizure action u/s.132 of the Act was conducted in the case of Pinnacle Group, Pune and Proprietor Shri Gajendra D Pawar had made a statement u/s.132(4) of the Act accepting that he has received certain amount of cash over and above agreement value. The only difference is, in the case of the assessee assessment was completed u/s.143(3) of the Act whereas, in the case referred by the Ld. AR in ITA No.751/PUN/2016 (supra.) section resorted to was 147/148 of the Act. However, facts remains that the entire addition by the Assessing Officer was made in the hands of the assessee when search was conducted in the premises of some other person and as per statements of that other person recorded u/s.132(4) of the Act. In such scenario, the Assessing Officer after receipt of information relating to the assessee should have invoked provisions of section 153C of the Act and not the provision of section 143(3) of the Act. This view has been unanimously taken by the Co-ordinate Bench of the Tribunal, Pune in ITA No. 1971/PUN/2014 (supra.) and in ITA No.751/PUN/2016 (supra.) Consequently therefore, assessment order passed u/s.143(3) of the Act does not stand. The Assessing Officer is directed to cancel the same.
Since the assessee succeeds in ground No.1 of the additional grounds of appeal, all other grounds filed before us becomes academic in nature.
In the result, appeal of the assessee is allowed.
Order pronounced on 06th day of January, 2020.
Sd/- Sd/- ANIL CHATURVEDI PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 06th January, 2020. SB आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2.
3. The CIT(Appeals), Pune-5, Pune.