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Facts
The Revenue challenged an ITAT order that deleted additions made to the assessee's income, which were based on seized material alleging 'out of book' transactions for a shop sale. The Revenue contended that the ITAT failed to provide independent reasoning and ignored evidence showing a nexus between the seized documents and the assessee's transactions.
Held
The High Court dismissed the Revenue's appeal, finding no substantial question of law. It upheld the ITAT's decision that there was no corroborative evidence or statement to prove that payments beyond the cheque amount were received by the assessee, and no nexus between the seized documents (found from a third party) and the assessee.
Key Issues
Whether the ITAT erred in deleting additions made based on seized material by failing to establish a nexus between the seized documents and the assessee, and whether there was sufficient corroborative evidence for alleged 'out of book' transactions.
Sections Cited
Section 153C
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ITA No.174/2021 Page 1 of 3 $~27 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 15.12.2021 + ITA 174/2021 & CM 45209/2021 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-3 ..... Appellant Through Ms.Vibhooti Malhotra, Adv. Versus M/S STC DEVELOPER PVT. LTD. ..... Respondent Through Mr.Ved Jain, Ms.Richa, Advs. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE NAVIN CHAWLA MANMOHAN, J. (Oral) CM 45209/2021 (exemption) Allowed, subject to all just exceptions. ITA 174/2021 1. Present appeal has been filed challenging the order of the ITAT dated 28th February, 2020 passed in ITA 2738/DEL/2016. 2. Learned Counsel for the Appellant states that the ITAT has not recorded any independent reasoning to deviate from the findings recorded in the assessment order that the Respondent had failed to discharge its onus to prove the genuineness of the sale transaction with regard to the shop in the Cross River Mall. 3. Learned Counsel for the Appellant states that the impugned order is erroneous as it fails to appreciate that the seized material 2021:DHC:4196-DB
ITA No.174/2021 Page 2 of 3 indicated that certain portion of the transaction was conducted ‘out of book’ as the total consideration recorded is at Rs.14,62,91,143/-. She further states that the amount payable by cheque recorded in the seized material bears complete resemblance to the cheque amount actually received by the Respondent and the particulars of the cheque numbers also match. She also states that the square footage of the shop between the seized document and the actual shop sold by the respondent also match. 4. Learned counsel for the Appellant further states that the ITAT has grossly erred in relying on the decision of this Court in the case of Pr. CIT (Central -2) v. Vinita Chaurasia ITA 1104/2015 without appreciating the distinction on facts. She emphasis that this Court in Vinita Chaurasia (supra) had deleted the additions on account of Revenue's failure to satisfy the jurisdictional benchmark of 'belong to' under Section 153C of the Act. However, she states that the Tribunal failed to appreciate that in the present case, the assessing officer having jurisdiction over the respondent had duly recorded his satisfaction that the seized material belonged to the respondent. 5. Having heard learned counsel for the appellant, this Court finds that the name of the assessee nowhere appears in the computer generated loose sheets found from the residence of Mr.Lalit Modi, the alleged broker. 6. ITAT in its impugned order has concluded that there was no corroborative evidence or statement to prove that the payment had been received by the assessee other than cheque amount as entered in the sale agreement. The Tribunal had observed that on the bare 2021:DHC:4196-DB
ITA No.174/2021 Page 3 of 3 perusal of the seized document it cannot be inferred or concluded that seized document belongs to or has any nexus with the assessee. 7. In our opinion, the Tribunal/ITAT has given cogent reasons for arriving at its decision. 8. This Court also finds that in the case of Vinita Chaurasia (supra), who had purchased a number of properties from the assessee, this Court had dismissed a similar appeal filed by the Revenue being ITA No.1104/2020. Further, the Division Bench in the said case had not only dismissed the appeal on the ground of jurisdiction but also on merits. 9. A Special Leave Petition filed against the said judgment has also been dismissed by the Supreme Court. 10. Consequently, this Court is of the view that no substantial question of law arises for consideration in the present appeal. Accordingly, the same is dismissed. MANMOHAN, J NAVIN CHAWLA, J DECEMBER 15, 2021 RN 2021:DHC:4196-DB