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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER VIKAS AWASTHY, JM :
These are bunch of appeals from Tupe Group. Since, the issues involved in all these appeals are identical and are arising from same set of facts, these appeals are taken up together for adjudication and are being disposed of vide this common order.
The brief facts of the case as emanating from records are : A search and seizure operation u/s. 132 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) was taken in the case of Tupe Group on 13-02-2009. During search operation incriminating documents which
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inter alia includes notebooks, diaries and loose papers were seized. The documents/diaries seized contained entries related to the land transactions of the entire Tupe family and the distribution of money among the family members. In the present set of appeals assessments were made u/s. 143(3) r.w.s. 153A in the case of Vitthal D. Tupe, Sandeep B. Tupe and Bhanudas D. Tupe. In the case of rest of the assessees i.e. Sopan D. Tupe, Badrinath D. Tupe, Ramdas B. Tupe and Dynaneshwar D. Tupe, assessments were made u/s. 143(3) r.w.s. 147 of the Act. However, the addition that runs through all the aforementioned assessees is primarily on account of land transactions with City Corporation. In First Appellate proceedings the additions made by the Assessing Officer were confirmed by the Commissioner of Income Tax (Appeals). Now, all the assessees are in appeal against the additions confirmed by the First Appellate Authority. The assessees in ITA Nos. 2109, 2112, 2113 and 2118/PUN/2013 have raised additional ground challenging reopening of assessment u/s. 147 of the Act.
Smt. Deepa Khare appearing on behalf of all the assessees submitted that in search action u/s. 132 of the Act diaries and loose papers were found and seized from the residence of Shri Vitthal D. Tupe. Therefore, she would be making submissions on merits of the addition taking the appeal of Shri Vitthal D. Tupe as the lead case. The said submissions would apply to the additions made in the case of other assessees in appeal, as well. The ld. Counsel for the assessees contended that while recording of statement u/s. 132(4) on 13-02-2009 Shri Vitthal D. Tupe on behalf of the entire family declared Rs.500 lakhs on account of various land transactions. Subsequently, Shri Vitthal D. Tupe vide letter dated 03-04-2009 retracted from his statement and restricted the declaration to Rs.169.31 lakhs. Shri Vitthal D. Tupe in the said letter explained the
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reasons for reducing the amount of declaration. The assessee explained that some of the amounts included in the statement made u/s. 132(4) were in respect of the transactions prior to the block period of 6 years. In the course of assessment proceedings of Shri Vitthal D. Tupe and other assessees the Assessing Officer proceeded to make additions on the basis of loose papers without referring to the declaration made by Shri Vitthal D. Tupe. The Assessing Officer made additions on the basis of loose papers by cherry picking the transactions. The Assessing Officer selected the transactions from loose papers seized reflecting high amounts and ignored the loose papers showing same transactions at lower amounts. There was no independent enquiry and verification carried out by the Assessing Officer with respect to the transactions. The Assessing Officer in the case of Shri Vitthal D. Tupe made addition of Rs.68,58,719/- in assessment year 2006-07 and Rs.15,00,000/- in assessment year 2009-10. All the additions were made on the basis of loose papers seized during search action independent of the declaration made by assessee.
3.1 In First Appellate proceedings the nature of transactions recorded in diaries and loose papers seized during search, the retraction of statement and its evidentiary value were explained to Commissioner of Income Tax (Appeals). The assessee also denied the exchange of cash in respect of all the additions. The Commissioner of Income Tax (Appeals) confirmed all the additions by making reference to only one transaction in para 7 (sub paras 7.3 to 7.7) relating to Bagwan plot. No finding has been given by the Commissioner of Income Tax (Appeals) about the other transactions / additions. The order of the Commissioner of Income Tax (Appeals) is silent qua the other land transactions. The ld. Counsel for the assessee further submitted that even the findings of Commissioner of Income Tax (Appeals) on Bagwan plots is based purely on the entries in the seized material. The
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Commissioner of Income Tax (Appeals) has made addition in a mechanical manner without proper application of mind and without making proper enquiries to verify the veracity of entries in the seized material. The ld. Counsel for the assessee asserted that the authorities below should have made enquiries to verify the correctness of transactions, as various loose papers seized during search showed same transactions with different amounts. There were inconsistency in the documents seized such as mistake in the totaling, bifurcation of amounts in different names, difference in the amounts vis-à-vis the registered document.
3.2 The ld. Counsel for the assessee submitted that similar is position in assessment year 2009-10 where addition of Rs.15,00,000/- is made on account of receipts from Shri Harpale without any verification or enquiry.
3.3 The ld. Counsel for the assessee further explaining the additions made in respect of alleged land transactions with City Corporation submitted that in the case of Shri Vitthal D. Tupe addition of Rs.1,50,569/- has been made. The Assessing Officer has observed that there are cash transactions of Rs.1 crore between Tupe Group and City Corporation. The assessee (Shri Vitthal D. Tupe) as well as City Corporation has denied any such transactions. The assessee in his statement recorded u/s. 132(4) initially admitted, however, subsequently the declaration was revised and after verification the initial amount declared by the assessee in the said statement was retracted. The retraction made by the assessee (Shri Vitthal D. Tupe) was accepted by the Assessing Officer, as no addition has been made on that count. The amounts admitted in the revised declaration dated 03-04-2009 included income from sale of Bhosale plot Rs.36.53 lakhs and Rishikesh plots Rs.13 lakhs. There was no corroborative evidence to show that the amounts
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reflected in loose papers seized during survey were in fact received by Tupe family at any point of time. The presumption u/s. 132(4A) is rebutted by denial of City Corporation in their assessment proceedings. The ld. Counsel furnished copy of the assessment order dated 18-03-2014 for assessment year 2006-07 in the case of City Corporation Ltd.
3.4 The ld. Counsel for the assessee in order to substantiate that different amounts were mentioned in different loosesheets with respect to same transactions, as a sample referred to pages 1, 3, 16 and 37 of Bundle No. 1. The ld. Counsel for the assessee contended that in page No. 1 of Bundle No. 1 aggregate amount of transactions is mentioned as Rs.2,81,98,754/-. The same transactions are recorded at pages 16 and 37 of Bundle No. 1 and the aggregate of the transactions on this pages is Rs.2,25,24,837/-. Whereas, the actual consideration for the same transaction as per agreement is Rs.4,07,14,000/-. The page No. 3 of Bundle No. 1 shows payments of Rs.83,50,000/- to different persons in family on 04-02-2006. The balance amount of Rs.16,50,000/- is mentioned as expenditure. The entries on the page nowhere mention that the cash payments are relatable to City Corporation land.
3.5 The ld. Counsel further pointed that on page No. 25 of Bundle No. 2 there is mention of Rs.1 crore as cash against City Land but at the end of the page, it mentions „Expected Amount‟. The entries on the said page clearly indicate that the amount of Rs.1 crore is yet to be received. The denial of cash payments by City Corporation in their assessment proceedings supports the case of assessee that the assessee has not received any cash payments.
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3.6 The ld. Counsel submitted that in the case of all the assessees, except Shri Bhanudas D. Tupe in assessment year 2005-06, the addition on account of Long Term Capital Gain has been made in respect of land transaction with City Corporation. In the case of Shri Bhanudas D. Tupe, the Assessing Officer made addition of Rs.23.29 lakhs in assessment year 2005-06 on account of Long Term Capital Gain on sale of land to Binawat.
3.7 The ld. Counsel submitted that the authorities below have made additions without conducting proper enquiries. The ld. Counsel submitted that for proper adjudication on merits the appeals be restored to the file of Assessing Officer for reexamination of the facts.
The ld. Counsel raised additional ground challenging the validity of reopening in following appeals : ITA No. 2109/PUN/2013 (Shri Sopan Dhondiba Tupe) “On fact and circumstances of the case and as per provisions of the Act, it be held that, the proceedings initiated u/s. 147 by issue of notice u/s. 148 is without jurisdiction and contrary to the provisions and scheme of the Act. The order passed u/s. 147 in contravention to the provisions of the Act may be held invalid ad-initio and is set aside.”
ITA No. 2112/PUN/2013 (Shri Badrinath Dhondiba Tupe) “On fact and circumstances of the case and as per provisions of the Act, it be held that, the proceedings initiated u/s. 147 by issue of notice u/s. 148 is without jurisdiction and contrary to the provisions and scheme of the Act. Since the Appellant was subjected to search action and the year under consideration was covered within the period specified in Section 153A. The proper proceedings were proceedings u/s. 153A and not u/s. 147. The order passed u/s. 147 in contravention to the provisions of the Act may be held invalid ad-initio and is set aside.”
ITA No. 2113/PUN/2013 (Shri Ramdas Bhanudas Tupe) “On fact and circumstances of the case and as per provisions of the Act, it be held that, the proceedings initiated u/s. 147 by issue of notice u/s. 148 is without jurisdiction and contrary to the provisions and scheme of the Act. The order passed u/s. 147 in contravention to the provisions of the Act may be held invalid ad-initio and is set aside.”
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ITA No. 2118/PUN/2013 (Shri Dnyaneshwar Dhondiba Tupe) “On fact and circumstances of the case and as per provisions of the Act, it be held that, the proceedings initiated u/s. 147 by issue of notice u/s. 148 is without jurisdiction and contrary to the provisions and scheme of the Act. The order passed u/s. 147 in contravention to the provisions of the Act may be held invalid ad-initio and is set aside.”
4.1 The ld. Counsel for the assessee filed written submissions assailing invoking of jurisdiction by Assessing Officer u/s. 148 of the Act. The written submissions filed by the ld. Counsel are as under : Note on Additional Ground relating to challenge to Proceedings u/s 147: 1. The additional ground pertains to validity of reassessment proceedings u/s 147 on the ground that the appropriate and correct action should have been u/s 153C since the material relied upon was found and seized during the course of search action u/s 132 in case of Vitthal Tupe. Reliance is placed on decision of AMRITSAR BENCH in case of INCOME TAX OFFICER Vs. ARUN KUMAR KAPOOR (2011)140 TT] 0249 :(2011) 58 DTR 0201 wherein it is held that Reassessment under s 147 on the basis of incriminating material against assessee found in search of third party and forwarded to assessee by the search Officer was illegal and void ab initio as in such a situation assessment could be made only under s 153C which specifically ousted the application of ss. 147 and 148". 2. The provisions of Section provided at the relevant time that "Notwithstanding anything contained in Section 139, 147, 148, 149, 151, 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 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 ..... " 3. The Section thus contemplated that the documents must belong to the other person. In view of the words and scope of the Section, a question therefore needs to be decided whether the papers found belong to other persons so as to invoke the jurisdiction u/ s 153C. The question therefore rests on the factual context of nature of documents found and its relation to the other persons other than the searched person. On this aspect, my submissions are as under-
The Id AO in para 4 notes that Various incriminating materials in the form of notebooks, diaries and loose papers were seized. These mostly contained entries relating to the land transactions of the entire Tupe Family members for various purposes. In para 5and 6 the Id AO has discussed the entire Tupe Family. It is important fact to note that the family is conventional joint family though having separate residential units with changing times, however are joint in financial matters. A close look at the Diary no. 1 itself would show that the diary contains various financial transactions including purchase and sale of properties which as ancestral and joint as well as other family household or other expenses like marriage expenses. The pet names of the family like Bhau,
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Appa, Tai, Nana, Tatya, Kaka suggests that the entries of expenditure relates to all in common. 5. The bundle no. 1 of the seized bundle is a diary which was found during the course of search at the residence of Shri Vitthal Tupe. The content of the diary shows that there is different handwriting of different persons. Shri Vitthal Tupe in the statement recorded at the time of search stated that the entries are made on the instructions of his brother Shri Badrinath Tupe. On this reply, the statement of Shri Badrinath Tupe was also recorded and his explanation on the entries of the diary was sought. This fact has been stated by the Id AO at para 7 of the assessment order. 6. Having noted the nature of family and nature of seized material, it is to be decided as to whether the material belongs only to searched person or the entire family as such. It is respectfully submitted that the diary belongs to the entire family. It is undisputed that at the time of search the physical custody of the diary was found with Shri Vithhal Tupe. However, it is submitted that a distinction is to be drawn between custody and belonging. The scope of the term 'Belonging' is larger than just custody. Each of the family member can ask inspection of the diary, make entries in the said diary as well as claim possession of the same. More so when the entries are relating to the whole family. It is not the case of the Revenue that entries only relating to Shri Vithhal Tupe were made in the diary. In absence of that finding coupled with the fact that entries relating to all were made and balance of the available funds is drawn in common and not separated or identified with that of only Shri Vithhal Tupe. Reliance is a placed on the following decisions- 7. KAMLESHBHAI DHARAMSHIBHAI PATEL Vs. COMMISSIONER OF INCOME TAX, HIGH COURT OF GUJARAT (2013) 263 CTR 0362 ( Guj ) :(2013) 95DTR 0088 (Guj ): (2013)214 Taxman 0558 held that Assessee and other family members sold three parcels of land situated in city Ahmedabad to a sanghvi infracon Pvt LTD.- certain documents belonging to assessee and other family members found from business premises of said searched person- notice u/s 153 C was issue by AO against assessee- assesses filed petition, challenging order passed by CIT u/s 127(2) as also notice issued u/s 153 C - held, documents executed between tenant of assessee regarding eviction of tenant upon acceptance of sizeable payment by assessee belonged to assessee- - It may be that as an evidence of passing on vacant and peaceful possession of property, assesses handed over such documents to purchasers to protect interest of purchaser against any action that may be initiated by erstwhile tenants-- nature of document or fact that it belonged to assessee would not in any Tanner change - assessee were seller of lands - they did not either doubt or dispute documents of sale, or their respective signatures thereon - Assessee had admitted executed such sale deed- receipts of payment also were documents belonging to assessee--they are alleged to have received various payment in cash from purchasers if there are documents evidencing such particulars and if such documents are also signed by assessee if can certainly be stated that such documents do belong to assessee.
The term "belong to" has not been defined in the act. In the Webster third new intl. Dictionary the word "belong" is describe as "to have relation or reference to a person or thing" in advanced law lexicon by P. Ramanatha Aiyar (3rd edition) the term "belong” in context of section 400IPC means" implied something more than the idea of casual association ; it involves a notion of continuity and indicates a more or less intimate connection with a body of person extending
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over a period of time sufficiently long to warrant the inference that the person affected was identified himself with a band the common purpose of which is the habitual commission of dacoity.
RAJAT SHUBRA CHATTERJI Vs. ASSISTANT COMMISSIONER OF INCOME TAX ITAT, DELHI TRIBUNAL (D) (2016) 47CCH 01035 Del trib The facts in brief are that the assessee is a doctor derived income from business and profession from salary and other sources. During the year return of income filled by him on 25-10-2007 was processed under section 1403(1) of Act. The assessing officer on the basis of information received from the investigation wing of the department initiated reopening proceeding under section 147 of the Act after recording reason to belief that there was escapement of assessment of taxable income. The assessing Officer had received information that a search & seizure operation under section.lS2 of the Act was carried out by the Direct of income tax (Inv) on 06109/2011 on the Rockland group of cases after going through the information received as well as the documents available in the office of the Assessing Officer, the Assessing Officer found that Rockland hospital L TD (in short 'RHL') had issued sweat equity shares without any amount being paid as consideration to the director/employee/professional in this chain ,the assessee had also received sweat equity share without any consideration. The assessing Officer initiated the reassessment proceeding on 8/7/2013 and in response to the notice issued under section 148 the assessee filed his reply on 11/3/2013. The Hon IT A T held that – Reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by assessee before the learned CIT( Appeals) and the learned CIT (Appeals) vitiated the proceedings. The same was questioned by the Revenue before that ITAT and the ITAT after discussing the case of the party and relevant provision in detail has come to the conclusion that in the above situation, provisions of sec.15SC were application which excludes the application of section 147 and 148 of Act. The ITAT held the notice issued under section 148 and proceeding under section 147 as illegal and void ab initio it was held that Assessing Officer having not followed procedure under section 153C, reassessment order was rightly quashed by the learned CIT (Appeals). It is an admitted fact, as also evident from the reason recorded and the assessment order that the initiation of reopening proceeding was made by the Assessing Officer on the basis of information received from the directorate of income tax (Inv) on the basis of search and seizure operation conducted at the premises of rock land group of case and the documents related to the assessee found during the course of search were made available to the Assessing Officer of the present assessee. ITAT thus respectfully following the decision of co-ordinate Bench of the IT A T in the case of hold that provision of sec 153C of the Act were application of sec 147 of the Act, hence, notice issued under section 148 of the act and assessment framed in furtherance thereto under sec 147 read with sec 143(3) of the act are void ab initio. The reassessment in question is accordingly quashed.
Decision of Delhi High Court in case of Canyon Financial Services Ltd V ITO reported in 84 Taxmann.com 71 relied upon by the Ld DR on facts has come to the conclusion that documents found in case of searched case does not belong to the other person. It is therefore submitted that the decision does not have any adverse effect on the facts of the case of the appellant.
The decision of Pune ITAT in case of Sushilkumar N adkarni ITA no. 826/PN/201O also in para 10 of its order observed that in case of any other person i.e. a person who is not put to search u/s 132(1) of the Act or a
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requisition u/s 132A of the Act, the requirements contained in Section 153C of the Act have to be satisfied. Thus the Hon IT AT has considered the scope of Section 153C and held that the Section would come into play if the conditions are satisfied. It is therefore submitted that the condition of documents belonging to the assessee getting satisfied, the right course of action was Section 153C and not 147. 12. Recently the Hon Mumbai IT A T in case of Rayoman Carriers Pvt Ltd V ACIT (ITA 3275-3276/MUM/2015 held that provisions of Section 153C are non- obstantive and specifically exclude the operation of Section 147.”
On the other hand Shri Ajay Modi representing the Department vehemently defended the order of Commissioner of Income Tax (Appeals) in respective cases. The ld. DR concurred with the submissions of the Counsel for assessees that the First Appellate Authority while passing the order has failed to take into consideration vital facts regarding sale of various lands by the Tupe family and restricted the addition qua sale of land to City Corporation. The ld. DR agreed that transactions undertaken by the Tupe family in respect of sale of land requires reexamination.
5.1 In response to the objection raised by the assessee by way of additional ground challenging the action of Assessing Officer in invoking reassessment proceedings u/s. 147 vis-à-vis proceedings u/s. 153C, the ld. DR controverted the written submissions filed on behalf of the assessee by filing written submissions on behalf of the Department. The relevant extract of the same is reproduced here-in-below : “02. .......... note on whether or not contents of documents found during the course of search proceedings u/s 132(4) of the IT Act at the premises of Shri Vithal Tupe would qualify as belonging to the above mentioned assessees within the meaning of section 153C that was prevailing in the Act on the date of search viz. 13/02/2009, At the first instance it is relevant to mention that provisions of section 153C of the IT Act underwent an amendment w.e.f. 01/06/2015. The pre-amended section read as under: Sec. 153 C : '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 if account or documents seized or requisitioned belongs or belong to
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a person other than the person referred to in section 153A,then the books if account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person”.
As can be seen, the pre-amended section 153C was applicable only when any document seized or requisitioned 'belonged to' a person other than the person on whom action u/s 132 was conducted, Post amendment i.e. after 01/06/2015 section was expanded to also include within its fold documents which 'pertained to' or 'related to' a person other than the person referred to in section 153A. Very clearly in this case the alleged exercise book was seized from the residence of Shri Vitthal Tupe and not from the residence of any of the above mentioned assessees. As such the contents of the diary, and the diary itself, pertained to or related to the above mentioned asses sees but did not 'belong to' the above mentioned assessees. The concept of 'belong to' has been clarified by various judicial authorities and I am placing my reliance on the following decisions:
i. Sushilkumar S Nadkarni, Pune vs ITO [ITA No.826/PN/2010] Pune ITAT. ii. CIT, Central-Ill, Mumbai v. Arpit Land (P.) Ltd. [2017] 78 taxmann.com 300 (Bombay) iii. CIT, Central-Ill, Mumbai v. Lavanya Land (p.) Ltd. [2017] 83 taxmann.com 161 (Bombay) iv. Pepsico India Holdings (p.) Ltd. v. ACIT [2014] 50 taxmann.com 299 (Delhi) v. Canyon Financial Services Ltd. v. ITO [2017] 84 taxmann.com 71 (Delhi)
Copies of these cases are enclosed herewith for ready reference.
Further, I would like to mention that under the Income Tax Act every individual is a different assessee irrespective of the fact whether or not they are family members. In the instant case, notwithstanding that the above mentioned assessees and Shri Vitthal Tupe, from whose premises the alleged exercise book was seized, are family members, they are still different asses sees in the eyes of law. As such, the said exercise book having been seized from the premises of Shri Vitthal Tupe, in view of the legal pronouncements relied upon mentioned above, the said exercise book cannot be stated be belonging to any of the above mentioned assessees. Also there was a contention of the Ld. AR of the assessee that although the exercise book did not belong to any of the above mentioned asssessees, the contents therein definitely belong to all of them. In this regard it would be suffice to say that the contents of any documents would only make the documents worth seizing and being relied upon by the IT Authorities for making any addition to the total income of the concerned assessees. A blank document is of no relevance at all. Therefore, when the statute mentions the word document, it definitely meant contents of the documents without which, as stated earlier, the document would only be blank sheets of papers. As such this argument of the assessee does not hold any ground.”
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We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. We have also considered the written submissions and case laws relied by the respective sides reinforcing their contentions.
Findings on issuance of notice u/s. 148 vis-à-vis u/s. 153C of the Act
We will first take up the legal issue raised by the assessee by way of additional grounds. The assessees in ITA Nos. 2109, 2112, 2113 & 2118/PUN/2013 have contended that the Assessing Officer should have issued notice u/s. 153C instead of section 148, as the additions made during assessment are relatable to material seized in search operation from the premises of Shri Vitthal D. Tupe.
Before proceeding further it would be relevant to refer to Section 153C of the Act : “153C. 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 by the Finance Act, 2015, w.e.f. 1-6-2015.”
A bare perusal of the provisions of section 153C would show that section starts with non-obstante clause to the exclusion of provisions contained in sections 139, 147, 148, 149, 151 and 153 of the Act. The provisions of Section 153C are invoked where during the course of search any money, bullion, jewellery or other valuable article or thing or documents belong to a person other than the person searched are seized. In the present case, we find that the documents on the basis of which notice u/s. 148 has been issued gives the information about sharing of „on-
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money‟ received on sale of land to City Corporation. However, the said document is not of the nature which „belongs or belong to‟ to the assessees in ITA Nos. 2109, 2112, 2113 & 2118/PUN/2013.
The expression „belongs or belong to‟ used in Section 153C as it was applicable to the assessment year under appeal connotes different meaning from the expressions „relates to‟ or „pertains to‟ inserted by the Finance Act, 2015 to enlarge the scope of section 153C of the Act.
The Hon‟ble Bombay High Court in the case of Commissioner of Income Tax Vs. Arpit Land (P.) Ltd. (supra) has held that where seized document forming basis of proceedings u/s. 153C did not belong to assessee. The said proceedings would be null and void. In the present case the additions have been made on the basis of loose papers and diaries seized from the premises of Shri Vitthal D. Tupe. The land transactions recorded in the diaries mentioned the names of all the family members including the names of assessees in the aforementioned appeals. Merely for the reason the diaries contain the names of assessees it does not mean that the diaries belong to the assessees, we do not find any infirmity in the action of Assessing Officer in invoking the provisions of section 147 as the documents seized during search operation constitute tangible material for reopening the assessment.
The Hon‟ble Delhi High Court in the case of Pepsico India Holdings (P.) Ltd. Vs. Assistant Commissioner of Income Tax (supra) has explained the meaning of expressions „belongs to‟ „relates to‟ or „refers to‟. The relevant extract of the judgment in the aforesaid case is reproduced here- in-below : “16. Thirdly, we would also like to make it clear 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
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purchaser of the property although it obviously “relates to’ or “refers to’ the vendor. In this example if the purchasers 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.”
Merely for the reason that the documents seized bear the name of assessees does not lead to the conclusion that documents belong to them. Hence, we are of considered view that the Assessing Officer was right in not issuing notice u/s. 153C to the assessee. Since, during the course of search in the premises of Shri Vitthal D. Tupe a diary was seized indicating the names of assessees and there was recording of payment of on-money to the assessees, the document has attributes of tangible material, thus, providing handle to the Assessing Officer to invoke jurisdiction u/s. 148 r.w.s. 147 of the Act. Accordingly, notice u/s. 148 was issued to the assessees. We do not find any wrong in the action of Assessing Officer in issuing notice u/s. 148 of the Act. Thus, in view of the facts of the case and the judgments referred above, we do not find merit in the additional ground raised by the assessees in ITA Nos. 2109, 2112, 2113 & 2118/PUN/2013. Accordingly, the additional ground in the said appeals is dismissed being devoid of any merit.
Findings on the merits of the Additions
Now, we will take up the merits of the additions in respect of all the assessees. It is an undisputed fact that during search operation the assessee – Shri Vitthal D. Tupe made a statement declaring Rs.500 crores in respect of various land transactions. Subsequently, Shri Vitthal D.
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Tupe retracted from his statement and revised the declaration vide letter date 03-04-2009 in respect of following land transactions :
Revised Declaration as per letter dt. 3.4.2009
Rs.1.54 Lacs being - 101.78 lacs from sale of City Corp Land 36.53 Lacs from Bhosale Plot 10.00 lacs from Binawat Plot
Rs.2.00 Lacs being - Sale of Bhosale Plot Rs.13.00 Lacs being - Sale of Rishikesh Plots falling in Block Period ----------------------------------- TOTAL Rs.169.31 Lacs ------------------------------------
The additions made by Assessing Officer in the case of the assessees in appeal are summarized as under : Name of A.Y. Additions Amount assessee Sandip B. 2005-6 4.42% share in sale Rs.5,48,621/- Tupe consideration received from City Corp., amount added as LTCG Sopan D. 2006-07 1.31% share in sale Rs.1,50,569/- Tupe consideration received from City Corp., amount added as LTCG Vitthal D. 2006-07 1.31% share in sale Rs.1,50,569/- Tupe consideration received from City Corp., amount added as LTCG STCG on sale of Bagwan plot Rs.18,00,000/- Unexplained investment in Rs.49,08,150/- purchase of land/house 2009-10 Amount received from Shri Rs.15,00,000/- Harpale Bhanudas D. 2005-06 LTCG on sale of land to Binawat Rs.23,29,781/- Tupe 2006-07 1.31% share in sale Rs.2,50,569/- consideration received from City
18 ITA Nos. 2108 to 2113 & 2116 to 2118/PUN/2013
Corp., amount added as LTCG Badrinath D. 2006-07 1.31% share in sale Rs.1,50,569/- Tupe consideration received from City Corp., amount added as LTCG Ramdas B. 2006-07 4.42% share in sale Nil Tupe consideration received from City Corp., amount added as LTCG Dnyaneshwar 2006-07 1.31% share in sale Rs.1,50,569/- D. Tupe consideration received from City Corp., amount added as LTCG
The Assessing Officer without taking into consideration the declaration made by the assessee proceeded on to make additions in the case of all the assessees on selective sale transactions of the land. We observe that the Commissioner of Income Tax (Appeals) in the case of Shri Vitthal D. Tupe has also confirmed the additions on all land sale transactions without even discussing them. The Commissioner of Income Tax (Appeals) in para 7 of the impugned order has expressed his views only in respect of sale of Bagwan plot. In so far as other assessees the Commissioner of Income Tax (Appeals) has confirmed the addition made by Assessing Officer by referring to the findings in the case of Shri Vitthal D. Tupe in a mechanical manner. Thus, we are of considered opinion that the authorities below have erred in not examining all the land transactions entered into by the assessees. Therefore, we deem it appropriate to restore all these appeals back to the file of Assessing Officer with a direction to reexamine all the land transactions entered into by the assessees and also take note of the declaration made by Shri Vitthal D. Tupe. Thus, the grounds raised by the assessees in appeal challenging the additions on merits are allowed for statistical purpose.
19 ITA Nos. 2108 to 2113 & 2116 to 2118/PUN/2013
Before parting with the order we would like to make it clear that the Assessing Officer while reexamining the issue shall grant reasonable opportunity of hearing to the assessees, in accordance with law.
To sum up, ITA Nos. 2108, 2110, 2111, 2116 & 2217/PUN/2013 are allowed for statistical purpose and ITA Nos. 2109, 2112, 2113 & 2118/PUN/2013 are partly allowed for statistical purpose.
Order pronounced on Wednesday, the 19th day of September, 2018.
Sd/- Sd/- (डी. करुणाकरा राव/D. Karunakara Rao) (ववकास अवस्थी / Vikas Awasthy) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 19th September, 2018 RK आदेश की प्रयिलऱवऩ अग्रेवषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त (अऩीऱ) / The CIT(A) Central, Pune 3. आयकर आयुक्त / The CIT Central, Pune 4. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, “ए” बेंच, 5. ऩुणे / DR, ITAT, “A” Bench, Pune. गाडड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रयत // True Copy// आदेशानुसार / BY ORDER,
यनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune