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Facts
The assessee, a real estate developer, faced search and survey actions where a director's seized cash of Rs. 12.26 lakhs was admitted as undisclosed income for AY 2017-18. Additionally, impounded diaries revealed 'on-money' receipts from flat sales, leading the Assessing Officer (AO) to make additions based on extrapolated income and estimated profit rates, along with an addition under Section 43CA for AY 2017-18. Assessments for AYs 2013-14 to 2016-17 were completed under Section 153C, while AY 2017-18 was assessed under Section 143(3).
Held
The tribunal held that assessments for AYs 2013-14 to 2016-17 under Section 153C were invalid because additions were based on survey-impounded material, not on incriminating material seized during a search that pertained to those specific years. For AY 2017-18, the assessment was quashed as the AO incorrectly proceeded under Section 143(3) instead of Section 153C read with Section 153A, by wrongly applying the reckoning date for the six preceding assessment years for 'other persons'. Due to these jurisdictional defects, the merits of additions were not adjudicated.
Key Issues
1. Jurisdictional validity of assessment proceedings under Section 153C when additions are based on survey-impounded material not directly pertaining to the assessment years. 2. The correct interpretation of the six preceding assessment years for 'other persons' under Section 153C read with Section 153A, specifically concerning the date from which the period should be reckoned.
Sections Cited
Income-tax Act, 1961, Section 131, Section 132, Section 132(4), Section 132A, Section 133A, Section 139, Section 143(2), Section 143(3), Section 147, Section 148, Section 149, Section 151, Section 153, Section 153A, Section 153C, Section 234A, Section 234B, Section 234C, Section 271AAB(1A), Section 271(1)(c), Section 274, Section 43CA
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Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SUNIL KUMAR SINGH
These appeals by the assessee are directed against a common order dated 30.11.2023 passed by the Ld. Commissioner of Income- tax (Appeals) -52, Mumbai [in short ‘the Ld. CIT(A)’] for assessment years 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 respectively.
D G Land Developers Pvt. Ltd. 2 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024
All these appeals are arising from All these appeals are arising from assessments made assessments made consequent to a search action u/s 132 of the Income search action u/s 132 of the Income-tax Act, 1961 search action u/s 132 of the Income (in short ‘the Act’) dated 18.12.2016 on one person namely ‘Shri (in short ‘the Act’) dated 18.12.2016 on one person (in short ‘the Act’) dated 18.12.2016 on one person Ishwardev Shukla’ and therefore, issue in dispute raised in these and therefore, issue in dispute raised in these and therefore, issue in dispute raised in these appeals being common appeals being common, all these appeals were heard together and were heard together and disposed off by way of this consolidated order for convenience and disposed off by way of this consolidated order for convenience and disposed off by way of this consolidated order for convenience and avoid repetition of facts. avoid repetition of facts.
First of all, relevant grounds raised by the assessee for relevant grounds raised by the assessee for relevant grounds raised by the assessee for assessment year 2017 assessment year 2017-18 are reproduced as under:
1. The Ld. CIT(A) erred in confirming the action of the Ld. AO in 1. The Ld. CIT(A) erred in confirming the action of the Ld. AO in 1. The Ld. CIT(A) erred in confirming the action of the Ld. AO in making addition of Rs. 5,25,04,953/ making addition of Rs. 5,25,04,953/-as business income.
2. The Ld. CIT(A) erred in upholding the action of Ld.AO in estimating 2. The Ld. CIT(A) erred in upholding the action of Ld.AO in estimating 2. The Ld. CIT(A) erred in upholding the action of Ld.AO in estimating the on-money received for the year under money received for the year under reference using extrapolation reference using extrapolation technique.
3. The Ld. CIT(A) erred in upholding the action of Ld.AO in assuming The Ld. CIT(A) erred in upholding the action of Ld.AO in assuming The Ld. CIT(A) erred in upholding the action of Ld.AO in assuming the profit element in the on the profit element in the on-money received for new construction at money received for new construction at 36% instead the 36% instead the reasonable profit that is earned in appellants line of reasonable profit that is earned in appellants line of business being business being in the range of 10% to 12%. Similarly, the learned A.O. Similarly, the learned A.O. erred in assuming profit element at 16% for redevelopment projects erred in assuming profit element at 16% for redevelopment projects erred in assuming profit element at 16% for redevelopment projects instead at 8% to 10% being the reasonable profit. instead at 8% to 10% being the reasonable profit. Without prejudice to above, the learned A.O. erred in taxing the pro Without prejudice to above, the learned A.O. erred in taxing the pro Without prejudice to above, the learned A.O. erred in taxing the profit element of the gross receipts in element of the gross receipts in 4. the year under reference for projects where no sales are booked 4. the year under reference for projects where no sales are booked 4. the year under reference for projects where no sales are booked during the year since no income was accrued following percentage during the year since no income was accrued following percentage during the year since no income was accrued following percentage completion method. completion method. 5. The Ld. CIT(A) erred in confirming the action of the Ld. AO in The Ld. CIT(A) erred in confirming the action of the Ld. AO in The Ld. CIT(A) erred in confirming the action of the Ld. AO in making disallowing of Rs.1,08,40,272/ disallowing of Rs.1,08,40,272/- being difference in stamp being difference in stamp duty value and sale price of some properties sold during the year, duty value and sale price of some properties sold during the year, duty value and sale price of some properties sold during the year, under section 43CA of the Act. under section 43CA of the Act. 6. The Ld. AO has erred in initiating penalty proceedings u/s 274 The Ld. AO has erred in initiating penalty proceedings u/s 274 The Ld. AO has erred in initiating penalty proceedings u/s 274 r.w.s 271AAB(IA) of the Act r.w.s 271AAB(IA) of the Act vide letter dated 30.12.2018. The vide letter dated 30.12.2018. The Appellant prays that the penalty proceedings u/s 274 r.w.s Appellant prays that the penalty proceedings u/s 274 r.w.s Appellant prays that the penalty proceedings u/s 274 r.w.s 271AAB(1A) of the Act be dropped. 271AAB(1A) of the Act be dropped.
D G Land Developers Pvt. Ltd. 3 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024
7. The Ld. CIT (A) has erred upholding the action of The Ld. CIT (A) has erred upholding the action of AO in levying AO in levying interest u/s 234B of the Act of Rs. 47,09,940/ interest u/s 234B of the Act of Rs. 47,09,940/- and u/s 234C o and u/s 234C of Rs. 2,57,430/- of the Act. of the Act. 3.1 The assessee also filed additional grounds The assessee also filed additional grounds for AY 2017 for AY 2017-18, which are reproduced as under: reproduced as under:
9.0 The assessment order passed u/s.143(3) of the Income Tax Act, 9.0 The assessment order passed u/s.143(3) of the Income Tax Act, 9.0 The assessment order passed u/s.143(3) of the Income Tax Act, 1961 by the assessing officer is bad in law. 1961 by the assessing officer is bad in law. 9.1 In doing so, he ha 9.1 In doing so, he has not considered the fact that the cases were s not considered the fact that the cases were centralized on 12.07.2018 and his satisfaction note was recorded on centralized on 12.07.2018 and his satisfaction note was recorded on centralized on 12.07.2018 and his satisfaction note was recorded on 16.07.2018 and as such the initial year for assessment u/s. 143(3) 16.07.2018 and as such the initial year for assessment u/s. 143(3) 16.07.2018 and as such the initial year for assessment u/s. 143(3) would be assessment year 2019 would be assessment year 2019-2020 and not the assessment year 2020 and not the assessment year 2017-2018. 9.2 In doing so, he has disregarded the decision of the honourable Apex .2 In doing so, he has disregarded the decision of the honourable Apex .2 In doing so, he has disregarded the decision of the honourable Apex Court in Commissioner of Income Court in Commissioner of Income-tax v. Jasjit Singh [2023 155 tax v. Jasjit Singh [2023 155 Taxmann.com 155 (SC)] in as much as the initial year for invocation of Taxmann.com 155 (SC)] in as much as the initial year for invocation of Taxmann.com 155 (SC)] in as much as the initial year for invocation of proceedings u/s.153C would be the year in which the proceedings u/s.153C would be the year in which the case material is case material is handed over to the assessee which would in this case be assessment handed over to the assessee which would in this case be assessment handed over to the assessee which would in this case be assessment year 2019-2020 and not 2017 2020 and not 2017-2018. 3.2 The grounds raised in AY 2013 3.2 The grounds raised in AY 2013-14 to AY 2016-17 are identical, 17 are identical, therefore, for brevity, the grounds raised in AY therefore, for brevity, the grounds raised in AY 2013 2013-14 are only reproduced as under: reproduced as under:
The notice issued u/s 153C of the Act dated 16.07.2018 is bad in The notice issued u/s 153C of the Act dated 16.07.2018 is bad in The notice issued u/s 153C of the Act dated 16.07.2018 is bad in law and the Ld. AO has erred in assuming jurisdiction u/s 153C of the law and the Ld. AO has erred in assuming jurisdiction u/s 153C of the law and the Ld. AO has erred in assuming jurisdiction u/s 153C of the Act as the mandatory condition to invoke the jurisdiction under Sec. Act as the mandatory condition to invoke the jurisdiction under Sec. Act as the mandatory condition to invoke the jurisdiction under Sec. 153C of the Act did not exis 153C of the Act did not exist and consequently the assessment is liable t and consequently the assessment is liable to be set aside. to be set aside.
2. The order u/s 143(3) r.w.s. 153C of the Act dated 30.12.2018 is bad The order u/s 143(3) r.w.s. 153C of the Act dated 30.12.2018 is bad The order u/s 143(3) r.w.s. 153C of the Act dated 30.12.2018 is bad in law and liable to be set aside in law and liable to be set aside.
3. The Ld. CIT(A) erred in confirming the action of the Ld. The Ld. CIT(A) erred in confirming the action of the Ld. AO erred in making addition making addition of Rs. 77,07,062/- treated as business income. treated as business income. 4. The Ld. CIT(A) erred in upholding the action of Ld. AO erred in The Ld. CIT(A) erred in upholding the action of Ld. AO erred in The Ld. CIT(A) erred in upholding the action of Ld. AO erred in making the impugned addition of Rs. 77,07,062/ making the impugned addition of Rs. 77,07,062/-as the entire as the entire assessment is made on the basis of documents found at the time of assessment is made on the basis of documents found at the time of assessment is made on the basis of documents found at the time of survey u/s. 13 survey u/s. 133A and not on the basis of documents found and seized 3A and not on the basis of documents found and seized in the course of search u/s. 132 of the Act. The use of documents in the course of search u/s. 132 of the Act. The use of documents in the course of search u/s. 132 of the Act. The use of documents collected during survey u/s. 133A for the assessment u/s. 153C is not collected during survey u/s. 133A for the assessment u/s. 153C is not collected during survey u/s. 133A for the assessment u/s. 153C is not permissible under law. permissible under law.
D G Land Developers Pvt. Ltd. 4 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024
5. The Ld. CIT(A) erred in upholding the ac The Ld. CIT(A) erred in upholding the action of Ld. AO in tion of Ld. AO in estimating the on-money received for the year under reference using extrapolation money received for the year under reference using extrapolation money received for the year under reference using extrapolation technique.
6. The Ld. CIT(A) erred in upholding the action of Ld. AO in assuming The Ld. CIT(A) erred in upholding the action of Ld. AO in assuming The Ld. CIT(A) erred in upholding the action of Ld. AO in assuming the profit element in the on the profit element in the on-money received for new construction at 36% money received for new construction at 36% instead the reasonable profit that tead the reasonable profit that is earned in appellants line of is earned in appellants line of business being in the range of 10% to 12%. Similarly, the learned A.O. business being in the range of 10% to 12%. Similarly, the learned A.O. business being in the range of 10% to 12%. Similarly, the learned A.O. erred in assuming profit element at 16% for redevelopment projects erred in assuming profit element at 16% for redevelopment projects erred in assuming profit element at 16% for redevelopment projects instead at 8% to 10% being the reasonable profit. instead at 8% to 10% being the reasonable profit.
7. Without prejudice to above, the learned A.O. erred in taxing the profit ithout prejudice to above, the learned A.O. erred in taxing the profit ithout prejudice to above, the learned A.O. erred in taxing the profit element of the gross receipts in the year element of the gross receipts in the year under reference for projects under reference for projects where no sales are booked during the year since no income was where no sales are booked during the year since no income was where no sales are booked during the year since no income was accrued following percentage completion method. accrued following percentage completion method. 8. The Ld. AO has erred in initiating penalty proceedings u/s The Ld. AO has erred in initiating penalty proceedings u/s The Ld. AO has erred in initiating penalty proceedings u/s 274 r.w.s 271(1)(c) of the Act vide letter dated 30.12.2018. 271(1)(c) of the Act vide letter dated 30.12.2018. The Appellant prays The Appellant prays that the penalty proceedings u/s 274 r.w.s 271(1)c) of the Act be that the penalty proceedings u/s 274 r.w.s 271(1)c) of the Act be that the penalty proceedings u/s 274 r.w.s 271(1)c) of the Act be dropped. 9. The Ld. CIT (A) has erred upholding th The Ld. CIT (A) has erred upholding the action of AO in levying e action of AO in levying interest u/s 234A of the Act of Rs. 47,630/ interest u/s 234A of the Act of Rs. 47,630/-, u/s 234B of the Act of Rs. 234B of the Act of Rs. 13,57,445/- of the Act. of the Act. 3.3 The additional ground The additional grounds raised being purely legal in nature and raised being purely legal in nature and not requiring any investigation of the fresh facts, nvestigation of the fresh facts, nvestigation of the fresh facts, therefore, after hearing both the parties hearing both the parties, the additional grounds are admitted for the additional grounds are admitted for adjudication in view of the settled law in the case of NTPC Ltd. 229 adjudication in view of the settled law in the case of adjudication in view of the settled law in the case of ITR 283 (SC).
Briefly stated, facts of the case for disposal of the legal issue Briefly stated, facts of the case for disposal of the legal issue Briefly stated, facts of the case for disposal of the legal issues raised are that the assessee co that the assessee company was engaged in the business mpany was engaged in the business of real estate development during the period under consideration i.e of real estate development during the period under consideration of real estate development during the period under consideration AY 2013-14 to AY 2017 14 to AY 2017-18. The Assessing Officer noted that Shri The Assessing Officer noted that Shri Ishwardev Shukla (Director of the assessee company), was carrying Ishwardev Shukla (Director of the assessee company) Ishwardev Shukla (Director of the assessee company) cash of Rs.12.26 lakhs cash of Rs.12.26 lakhs while travelling from Delhi to Mumbai, by while travelling from Delhi to Mumbai, by Spice Jet Flight SG- -161 on 16.12.2016. The Air Intelligence Unit 161 on 16.12.2016. The Air Intelligence Unit D G Land Developers Pvt. Ltd. 5 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 (AIU) of the Investiga (AIU) of the Investigation Wing Income-tax Department tax Department, Mumbai intercepted him on 16.12.2916, at Mumbai Airport on his arrival. intercepted him on 16.12.2916, at Mumbai Airport on his arrival. intercepted him on 16.12.2916, at Mumbai Airport on his arrival.
4.1 Thereafter, a su Thereafter, a survey proceeding u/s 133A of the Act u/s 133A of the Act was carried out on 17.12.2016 at business premises of assessee. In the carried out on 17.12.2016 at business premises of assessee. In the carried out on 17.12.2016 at business premises of assessee. In the survey proceedings various documents including diaries and data survey proceedings various documents including diaries and data survey proceedings various documents including diaries and data on computer relating to real estate business transactions were on computer relating to real estate business transaction on computer relating to real estate business transaction found and impounded. D found and impounded. During the survey proceedings uring the survey proceedings, statement of Shri Ishwardev Shukla was recorded u/s 131 of the Act on Shri Ishwardev Shukla was recorded u/s 131 of the Act on Shri Ishwardev Shukla was recorded u/s 131 of the Act on 17.12.2016 and 18.12.2016. 17.12.2016 and 18.12.2016.
4.2 Subsequently, on 18.12. Subsequently, on 18.12.2016, a search action action u/s 132 of the Act was carried out on Shri Ishwardev Shukla and cash of Rs.12.26 Act was carried out on Shri Ishwardev Shukla and cash of Rs. Act was carried out on Shri Ishwardev Shukla and cash of Rs. lakhs was seized. The The Place of the search has been mentioned Place of the search has been mentioned in ‘panchnama’ ( paper book page 1 to 2) ‘panchnama’ ( paper book page 1 to 2) as Air Intelligence Unit ( Air Intelligence Unit (AIU) Office Terminal-1-B Chatrapati Shivaji Maharaj International B Chatrapati Shivaji Maharaj International B Chatrapati Shivaji Maharaj International Airport, Mumbai. A A statement of Shri Ishwardev Shukla statement of Shri Ishwardev Shukla was recorded u/s 132(4) of the Act on 18.12.2016 recorded u/s 132(4) of the Act on 18.12.2016, wherein he stated wherein he stated that said cash found with him represented unaccounted income of found with him represented unaccounted income of found with him represented unaccounted income of the company M/s D.G. Land Developers Pvt. Ltd. (i.e. the assessee the company M/s D.G. Land Developers Pvt. Ltd. (i.e. the assessee the company M/s D.G. Land Developers Pvt. Ltd. (i.e. the assessee company) and he was unable to produce any documentary evidence company) and he was unable to produce any documentary eviden company) and he was unable to produce any documentary eviden to support the source thereof in respect of cash of Rs.12.26 lakhs source thereof in respect of cash of Rs.12.26 lakhs, source thereof in respect of cash of Rs.12.26 lakhs therefore, he requested to treat the same as undisclosed income of therefore, he requested to treat the same as undisclosed income of therefore, he requested to treat the same as undisclosed income of the assessee company for financial year 2016 the assessee company for financial year 2016-17 i.e. corresponding 17 i.e. corresponding to assessment year 2017 to assessment year 2017-18.
D G Land Developers Pvt. Ltd. 6 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 4.3 The case of the as The case of the assessee was centralized with the Assistant sessee was centralized with the Assistant Commissioner of Income Commissioner of Income-tax, Central Circle 4(4), Mumbai tax, Central Circle 4(4), Mumbai (i.e. the Assessing Officer) and thereafter the Assessing Officer recorded and thereafter the Assessing Officer recorded and thereafter the Assessing Officer recorded satisfaction for invoking section 153C of the Act on 16.07.2018. satisfaction for invoking section 153C of the Act on 16.07.2018. satisfaction for invoking section 153C of the Act on 16.07.2018. This fact has been noted by the Assessing Officer in the assessment n noted by the Assessing Officer in the assessment n noted by the Assessing Officer in the assessment order for assessment year 2013 order for assessment year 2013-14. After recording satisfaction, the 14. After recording satisfaction, the Assessing Officer issued notice u/s 153C of the Act for assessment Assessing Officer issued notice u/s 153C of the Act for assessment Assessing Officer issued notice u/s 153C of the Act for assessment years 2010-11 to 2016 11 to 2016-17 and issued notice u/s 143(2) of the Act 17 and issued notice u/s 143(2) of the Act for assessment year 2017 assessment year 2017-18. The Assessing Officer in the 18. The Assessing Officer in the assessment proceedings u/s 153C of the Act for assessment year assessment proceedings u/s 153C of the Act for assessment year assessment proceedings u/s 153C of the Act for assessment year 2013-14 to 2016-17 and 17 and assessment proceeding u/s 143(3 /s 143(3) of the Act for assessment year 2017 Act for assessment year 2017-18, has referred to material has referred to material impounded during t impounded during the course of survey at the premises of the he course of survey at the premises of the assessee, interalia, Annexure A-1 and A-12 containing entries 12 containing entries related to cash received related to cash received in financial year 2015-16 and 2016 16 and 2016-17 respectively. The assessee submitted entity respectively. The assessee submitted entity-wise break wise break-up of receipts and expenses receipts and expenses in respect of various entities of the group. respect of various entities of the group. The assessee also provided details of nature of receipt. The The assessee also provided details of nature of receipt The assessee also provided details of nature of receipt Assessing Officer has tabulated year Assessing Officer has tabulated year-wise receipt in the natu wise receipt in the nature of the income on account of ‘on the income on account of ‘on-money’ received on sale of flats on sale of flats by the assessee totaling to Rs.36,85,32,734/ to Rs.36,85,32,734/- from assessment year from assessment years 2014-15 to assessment year 2017 15 to assessment year 2017-18. Then, he worked Then, he worked out average on-money for one year, one year, and that average ‘on-money money’ was then applied for all the years under assessment before him. T for all the years under assessment before him. T for all the years under assessment before him. The project- wise extrapolated amo wise extrapolated amount computed by the Assessing Officer is unt computed by the Assessing Officer is D G Land Developers Pvt. Ltd. 7 407, 404, 403 & 402/MUM/2024 ITA Nos. 411, 407, 404, 403 & 402/MUM/2024 available on page 16 of the assessment order available on page 16 of the assessment order for AY 2017 for AY 2017-18. For ready reference, said table is reproduced as under: said table is reproduced as under:
Extrapolated Amount (in Rs. Project | 2013-14 2014-15 15 2015-16 2016-17 2017-18 2017 Total (in Rs.) Aniket 1,05,11,704 4,16,45,786 4,16,45,786 5,21,57,490 Anjali 22,61,056 70,45,612 2,51,68,668 2,51,68,668 3,44,75,336 Deep 2,11,74,805 3,19,58,660 3,19,58,660 41,67,120 2,91,67,155 2,57,78,685 2,57,78,685 11,22,46,425 Height 3,16,07,198 3,16,07,198 1,64,31,590 1,99,80,352 1,81,70,642 1,81,70,642 8,61,89,782 Jtyot 2,33,700 47,52,720 47,52,720 36,86,310 25,41,795 17,35,530 17,35,530 1,29,50,055 Kund 52,18,598 52,18,598 88,78,394 13,67,87,296 3,23,08,834 3,23,08,834 18,31,93,122 Kutir 2,51,41,634 1,81,82,696 6,16,94,262 6,16,94,262 10,50,18,592 OJA 20,39,832 20,39,832 40,79,664 1,53,48,492 1,99,42,260 1,99,42,260 4,14,10,248 Sejal 2,07,30,360 2,07,30,360 5,88,61,968 3,09,04,916 79,07,492 79,07,492 11,84,04,736 Shakutala 1,29,59,550 1,29,59,550 1,39,68,444 1,60,53,120 38,46,060 38,46,060 4,68,27,174 Sweet Seven 13,22,392 13,22,392 91,16,064 1,56,82,303 32,07,504 32,07,504 2,93,28,263 Walawalkar 93,81,042 93,81,042 93,81,042 Total 2,14,08,505 11,05,89,310 11,05,89,310 14,65,92,244 30,22,05,441 25,07,86,765 25,07,86,765 83,15,82,265 4.4 The Assessing Officer justified the extrapolation for the reason The Assessing Officer justified the extrapolation for the reason The Assessing Officer justified the extrapolation for the reason that during the search or survey full evidence that during the search or survey full evidences (of on (of on-money) could not be recovered as no assessee not be recovered as no assessee would keep full evidence evidences against itself and therefore, extrapolation itself and therefore, extrapolation was held to be a logical and to be a logical and reasonable method to arrive at the correct income of the assessee. to arrive at the correct income of the assessee. to arrive at the correct income of the assessee. Further, after extrapolation of the income for the search period from Further, after extrapolation of the income for the search period from Further, after extrapolation of the income for the search period from assessment year 2013-14 to 2017-18 to Rs. 83,15,82,265 83,15,82,265/-, the assessment year 2013 Assessing Officer show cause Assessing Officer show caused to the assessee as why the 36% to the assessee as why the 36% profit on ‘on-money’ receipts from ‘new projects’ and 16% profit on ’ and 16% profit on ‘on-money’ received from received from ‘redevelopment projects’ be assessed in the case of the assessee. The assessee however the case of the assessee. The assessee however without prejudice without prejudice, submitted that his profit in both new as well as redevelopment submitted that his profit in both new as well as redevelopment submitted that his profit in both new as well as redevelopment D G Land Developers Pvt. Ltd. 8 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 projects was not more than 8% to 10% and therefore, profit if any was not more than 8% to 10% and therefore, profit if any was not more than 8% to 10% and therefore, profit if any should be restricted to 8% of the on uld be restricted to 8% of the on-money. The Ld. Assessing he Ld. Assessing Officer however rejected the contention of the assessee and made Officer however rejected the contention of the assessee and made Officer however rejected the contention of the assessee and made addition estimating profit at the rate of 36% on new projects and estimating profit at the rate of 36% on new projects and estimating profit at the rate of 36% on new projects and 16% on redevelopment project 16% on redevelopment projects in respect of AY 2013 s in respect of AY 2013-14 to AY 2017-18.
4.5 The detail of the profit of Rs of the profit of Rs.5,25,04,953/- computed on the computed on the ‘on-money’ of Rs.23,57,56,179/ of Rs.23,57,56,179/-, which was claimed by the AO to , which was claimed by the AO to be received for assessment year assessment year 2017-18, is reproduced as under: is reproduced as under:
9.20 In view of discussion made above and facts & circumstances of the 9.20 In view of discussion made above and facts & circumstances of the 9.20 In view of discussion made above and facts & circumstances of the case, net on-money money receipts of the assessee for A.Y. 2017-18 are worked 18 are worked out at Rs. 23,57,56,179/ out at Rs. 23,57,56,179/-. Considering the nature of business of the . Considering the nature of business of the assessee, 36% of the extrapolated amount of on assessee, 36% of the extrapolated amount of on-money for the projects money for the projects done with land and 16% of the extrapolated amount for the redeve done with land and 16% of the extrapolated amount for the redeve done with land and 16% of the extrapolated amount for the redeveloped projects is determined to be income of the assessee. The net extrapolated projects is determined to be income of the assessee. The net extrapolated projects is determined to be income of the assessee. The net extrapolated amount for the normal real estate projects is Rs. 7,39,19,826/ amount for the normal real estate projects is Rs. 7,39,19,826/ amount for the normal real estate projects is Rs. 7,39,19,826/- and 36% of the same Rs. 2,66,11,137/ of the same Rs. 2,66,11,137/-. Similarly, net extrapolated amount for the . Similarly, net extrapolated amount for the redeveloped real estate projec redeveloped real estate projects is Rs. 16,18,36,353/- and 16% of the and 16% of the same comes at Rs. 2,58,93,816/ same comes at Rs. 2,58,93,816/-. Thus, the addition of Rs. 5,25,04,953/ . Thus, the addition of Rs. 5,25,04,953/ - has been taken as the profit of the assessee and the same is added has been taken as the profit of the assessee and the same is added has been taken as the profit of the assessee and the same is added back to the total income of the assessee for A.Y. 2017 back to the total income of the assessee for A.Y. 2017-18 as business 18 as business income. In the instance case assessee received on In the instance case assessee received on-money but not admitted in the money but not admitted in the returns filed for the year under consideration. Accordingly, penalty returns filed for the year under consideration. Accordingly, penalty returns filed for the year under consideration. Accordingly, penalty proceedings are initiated u/s 271AAB (IA) (b) of the IT Act separately. proceedings are initiated u/s 271AAB (IA) (b) of the IT Act separately. proceedings are initiated u/s 271AAB (IA) (b) of the IT Act separately.
4.6 For assessment year 2017 For assessment year 2017-18, the Assessing Officer also made ssessing Officer also made addition invoking section 43CA of the Act, wherever difference addition invoking section 43CA of the Act, wherever difference addition invoking section 43CA of the Act, wherever difference between the agreement value for sale of the flats and stamp duty between the agreement value for sale of the flats and stamp duty between the agreement value for sale of the flats and stamp duty value recorded in registered sale deed of the flat was found. The value recorded in registered sale deed of the flat was found. The value recorded in registered sale deed of the flat was found. The addition u/s 43CA of the Act u/s 43CA of the Act has been worked out at en worked out at Rs.1,08,40,272/- for AY 2017 for AY 2017-18.
D G Land Developers Pvt. Ltd. 9 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024
On further appeal, the assessee challenged the reassessment On further appeal, the assessee challenged the reassessment On further appeal, the assessee challenged the reassessment proceedings u/s 153C of the Act for assessment year 2013-14 to proceedings u/s 153C of the Act for assessment year 2013 proceedings u/s 153C of the Act for assessment year 2013 2016-17 and challenged the addition on merit in all the years 17 and challenged the addition on merit in all the years 17 and challenged the addition on merit in all the years including AY 2017-18 18. The assessee challenged that in absence of The assessee challenged that in absence of any ‘incriminating material’ belonging or pertaining to the assessee any ‘incriminating material’ belonging or pertaining to the assessee any ‘incriminating material’ belonging or pertaining to the assessee or any information contained therein relating mation contained therein relating to assessee, found or to assessee, found or seized in the search of searched person, no addition could have seized in the search of searched person, no addition could have seized in the search of searched person, no addition could have been made in the de in the hands of assessee, in respect of unabated assessee, in respect of unabated assessment years. The Ld. CIT(A) rejected the contention of the The Ld. CIT(A) rejected the contention of the The Ld. CIT(A) rejected the contention of the assessee challenging the validity of the assessment proceedings u/s assessee challenging the validity of the assessment proceedings u/s assessee challenging the validity of the assessment proceedings u/s 153C of the Act holding f the Act holding that the seizure of the cash and the that the seizure of the cash and the admission by y y Shri Shri Shri Ishwardev Ishwardev Ishwardev Shukla Shukla Shukla that that that such such such cash cash cash is is is unaccounted for, was the starting point of the entire was the starting point of the entire was the starting point of the entire proceedings and and and the the the survey survey survey action action action had had had only only only taken taken taken place place place to to to strengthen/validate/corroborate his finding and there being a strengthen/validate/corroborate his finding and there being a strengthen/validate/corroborate his finding and there being a complete interlinked and nexus between t complete interlinked and nexus between the cash seizure, he cash seizure, admission of undisclosed income admission of undisclosed income and other things and therefore, he and other things and therefore, he justified the 153C proceedings invoked in the case of the assessee. justified the 153C proceedings invoked in the case of the assessee. justified the 153C proceedings invoked in the case of the assessee. He further relied on the judicial decisions cited in the impugned He further relied on the judicial decisions cited in the impugned He further relied on the judicial decisions cited in the impugned order and held that cash order and held that cash which was admitted to be undisclosed which was admitted to be undisclosed income, is fungible in nature and is generated over a is fungible in nature and is generated over a period of time is fungible in nature and is generated over a on regular basis. Therefore, seizure of the said cash . Therefore, seizure of the said cash gives a valid . Therefore, seizure of the said cash jurisdiction u/s 153C of the Act for the year in which it was jurisdiction u/s 153C of the Act for the year in which it was jurisdiction u/s 153C of the Act for the year in which it was generated. The relevant finding of the Ld. CIT(A) is reproduced as ant finding of the Ld. CIT(A) is reproduced as ant finding of the Ld. CIT(A) is reproduced as under:
D G Land Developers Pvt. Ltd. 10 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 “Seen in the above context, it is clear that the unaccounted cash which Seen in the above context, it is clear that the unaccounted cash which Seen in the above context, it is clear that the unaccounted cash which was carried by the Director of the appellant and admitted to have been was carried by the Director of the appellant and admitted to have been was carried by the Director of the appellant and admitted to have been undisclosed income is "incriminating" in nature and undisclosed income is "incriminating" in nature and definitely gives rise definitely gives rise to jurisdiction of the AO for invoking S. 153C of the Act. Cash is fungible to jurisdiction of the AO for invoking S. 153C of the Act. Cash is fungible to jurisdiction of the AO for invoking S. 153C of the Act. Cash is fungible in nature and is generated over a period of time although it may be in nature and is generated over a period of time although it may be in nature and is generated over a period of time although it may be found in the possession of a person at a particular point of time. But found in the possession of a person at a particular point of time. But found in the possession of a person at a particular point of time. But that doesn't mean t that doesn't mean that the cash was generated only on that day or only hat the cash was generated only on that day or only in that year. It is apparent enough that the cash has been generated on in that year. It is apparent enough that the cash has been generated on in that year. It is apparent enough that the cash has been generated on a regular basis giving rise to a valid jurisdiction u/s 153C for the years a regular basis giving rise to a valid jurisdiction u/s 153C for the years a regular basis giving rise to a valid jurisdiction u/s 153C for the years in which it was generated. Hence, the appellant's content in which it was generated. Hence, the appellant's content in which it was generated. Hence, the appellant's contention that the AO does not have S. 153C jurisdiction stands REJECTED. The AO does not have S. 153C jurisdiction stands REJECTED. The AO does not have S. 153C jurisdiction stands REJECTED. The Additional Ground No. 1 & 2 are Additional Ground No. 1 & 2 are DISMISSED.”
Before us, the Ld. counsel for the assessee has challenged the Before us, the Ld. counsel for the assessee has challenged the Before us, the Ld. counsel for the assessee has challenged the assessment proceedings completed u/s 143(2) of the Act in assessment proceedings completed u/s 143(2) of the Act in assessment proceedings completed u/s 143(2) of the Act in assessment year 2017 2017-18 and assessment proceedings u/s 153C of and assessment proceedings u/s 153C of the Act completed for assessment year the Act completed for assessment years 2013-14 to assessment year 14 to assessment year 2016-17. According to the Ld. counsel for the assessee since According to the Ld. counsel for the assessee since According to the Ld. counsel for the assessee since satisfaction for invoking section 153C of the Act was recorded on satisfaction for invoking section 153C of the Act was recorded on satisfaction for invoking section 153C of the Act was recorded on 16.07.2018, therefore, the assessment year corresponding to the efore, the assessment year corresponding to the efore, the assessment year corresponding to the date of recording satisfaction i.e. assessment year 2019-2020 would date of recording satisfaction i.e. assessment year 2019 date of recording satisfaction i.e. assessment year 2019 be the initial year for be the initial year for assumption of jurisdiction u/s 153C of the Act of jurisdiction u/s 153C of the Act and preceding six assessment years would be from assessment year and preceding six assessment years would be from assessment year and preceding six assessment years would be from assessment year 2018-19 to assessment year assessment year 2013-14. The Ld. counsel submitted 14. The Ld. counsel submitted that since, the assessment year 201 that since, the assessment year 2017-18 i.e. present assessment 8 i.e. present assessment year should have been completed u/s 153C of the Act should have been completed u/s 153C of the Act, whereas the should have been completed u/s 153C of the Act Assessing Officer has has completed the said assessment u/s 143(3) of completed the said assessment u/s 143(3) of the Act, therefore, entire assessment proceeding e, entire assessment proceeding for AY 2017 for AY 2017-18, is invalid. The Ld. counsel invalid. The Ld. counsel relied on the Hon’ble Supreme court in the relied on the Hon’ble Supreme court in the case of CIT v. Jasjit Singh (2023) 155 Taxmann.com 155 (SC). CIT v. Jasjit Singh (2023) 155 Taxmann.com 155 (SC). CIT v. Jasjit Singh (2023) 155 Taxmann.com 155 (SC).
D G Land Developers Pvt. Ltd. 11 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024
In respect of assessment year In respect of assessment years 2013-14 to 2016 14 to 2016-17, the Ld. counsel for the assessee relied on the Hon’ble Supreme Court in the counsel for the assessee relied on the Hon’ble Supreme Court in the counsel for the assessee relied on the Hon’ble Supreme Court in the case of CIT v. Sinhgad Technical Education Society (2017) 397 CIT v. Sinhgad Technical Education Society (2017) 397 CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) wherein it is wherein it is held that for invoking section 153C of held that for invoking section 153C of the Act the ‘incriminating material incriminating material’ which was seized in th which was seized in the case of searched person should should pertains to the assessment year in assessment year in question. The Ld. counsel submitted that only cash of Rs.12.26 question. The Ld. counsel submitted that only cash of Rs.12.26 question. The Ld. counsel submitted that only cash of Rs.12.26 lakhs was issued from Shri Ishwardev Shukla and for which no lakhs was issued from Shri Ishwardev Shukla and for which no lakhs was issued from Shri Ishwardev Shukla and for which no addition has been made by the Assessing Officer. addition has been made by the Assessing Officer. In the assessme In the assessment years in question from AY 2013 tion from AY 2013-14 to 2016-17, 17, the On-Money received appearing in the impounded material appearing in the impounded material ( which has been which has been further extrapolated by further extrapolated by AO ) has been made basis for addition AO ) has been made basis for addition and net profit has been estimated on the basis of the presumption net profit has been estimated on the basis of the presumption net profit has been estimated on the basis of the presumption without any evidence on record and therefore, the assessment has without any evidence on record and therefore, the assessment has without any evidence on record and therefore, the assessment has been completed without there being any been completed without there being any ‘incriminating material incriminating material’ seized during the course of the search, seized during the course of the search, qua the assessment y qua the assessment years therefore, entire proceedings u/s 153C of the Act for assessment therefore, entire proceedings u/s 153C of the Act therefore, entire proceedings u/s 153C of the Act years 2013-14 to 2016 14 to 2016-17, is without valid authority of law without valid authority of law, hence, invalid and bad in law and need to be quashed. invalid and bad in law and need to be quashed.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. For assessment year 2017 ant material on record. For assessment year 2017 ant material on record. For assessment year 2017-18, the assessee has challenged the assessment proceedings completed by assessee has challenged the assessment proceedings completed by assessee has challenged the assessment proceedings completed by the Assessing Officer u/s 143(3) of the Act. We find that in the the Assessing Officer u/s 143(3) of the Act. We find that in the the Assessing Officer u/s 143(3) of the Act. We find that in the instant case, the Assessing Officer has invoked section 153C of the instant case, the Assessing Officer has invoked section 153C of the instant case, the Assessing Officer has invoked section 153C of the D G Land Developers Pvt. Ltd. 12 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 Act. Under the provisions of section 153C of the Act if any cash, nder the provisions of section 153C of the Act if any cash, nder the provisions of section 153C of the Act if any cash, , bullion, jewellary or valuable article or valuable article or thing belonging to belonging to other person has been found in the course of the search has been found in the course of the searched ed person or any books of account or document documents pertaining to other person other person is seized in the course of the search in the course of the searched person or any information contained person or any information contained other person, then, firstly, the Assessing Officer thereon related to other person, the Assessing Officer of the searched person shall record a satisfaction that said cash, of the searched person shall record a satisfaction that said cash, of the searched person shall record a satisfaction that said cash, bullion, jewellary or valuable or valuable article or things belongs to belongs to other person or books of account books of account or documents pertains to or documents pertains to other person or any information contained therein relates to or any information contained therein relates to other person other person and he will hand over the said cash, bullion, jewellary or hand over the said cash, bullion, jewellary or valuable article or valuable article or documents to the Assessing Officer of the documents to the Assessing Officer of the other person other person. Thereafter, secondly, the Assessing Officer of the he Assessing Officer of the other person, will record other person, will record satisfaction that cash, bullion, satisfaction that cash, bullion, jewellary. valuable article or things valuable article or things or book of account or documents or book of account or documents etc handed over to him , have a etc handed over to him , have a bearing on the determination of total income of other person for six bearing on the determination of total income of other person bearing on the determination of total income of other person assessment yeas immediately preceding the assessment year in assessment yeas immediately preceding the assessment year in assessment yeas immediately preceding the assessment year in which search is conducted which search is conducted , then he will commence , then he will commence assessment proceedings by way of issue of n proceedings by way of issue of notice u/s 153A of the Act of the Act .
8.1 In view of provisions of section 153C of the Act, the In view of provisions of section 153C of the Act, the In view of provisions of section 153C of the Act, the initial condition for invoking section 153C of the Act invoking section 153C of the Act is that is that cash or bullion or jewellary or valuable articles belonging to the assessee or valuable articles belonging to the assessee should be found in the course should be found in the course of the search action of the searched of the search action of the searched person. In the instant case only cash of Rs.12.26 lakhs has been person. In the instant case only cash of Rs.12.26 lakhs has been person. In the instant case only cash of Rs.12.26 lakhs has been D G Land Developers Pvt. Ltd. 13 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 seized from Shri Ishwardev Shukla from the office of the AIU, seized from Shri Ishwardev Shukla from the office of the AIU, seized from Shri Ishwardev Shukla from the office of the AIU, Airport Mumbai. But in the assessment order Airport Mumbai. But in the assessment orders for the assessment for the assessment year 2017-18 and from 2013 18 and from 2013-14 to 2016-17, the Assessing Officer 17, the Assessing Officer has computed the amount of on amount of on-money on the basis of the diaries on the basis of the diaries impounded in the course of the survey action at the premises of the impounded in the course of the survey action at the premises of the impounded in the course of the survey action at the premises of the assessee and thereafter thereafter, he extrapolated said on- -money amount and applied net profit ra net profit rate on assumption . There is no reference of . There is no reference of any documents in assessment orders, in assessment orders, which are seized from which are seized from Shri Ishwardev Shukla during the course of the search uring the course of the search uring the course of the search action him at premises of “AIU Wing, Airport Mumbai. AIU Wing, Airport Mumbai.
8.2 Regarding the assessment years 2013 Regarding the assessment years 2013-14 to 2016 14 to 2016-17, the Ld. counsel for the assessee has relied on the decision of Hon’ble counsel for the assessee has relied on the decision of Hon’ble counsel for the assessee has relied on the decision of Hon’ble Supreme Court Sinhgad Technical Education Society Sinhgad Technical Education Society Sinhgad Technical Education Society (supra). The Hon’ble Supreme Court held that incriminating material which The Hon’ble Supreme Court held that incriminating material which The Hon’ble Supreme Court held that incriminating material which was seized had to pertain the assessment year in question. The had to pertain the assessment year in question. The had to pertain the assessment year in question. The relevant finding of the Hon’ble Supreme Court is reproduced as relevant finding of the Hon’ble Supreme Court is reproduced as relevant finding of the Hon’ble Supreme Court is reproduced as under:
“14. We have bestowed our due consideration to the respective submissions 14. We have bestowed our due consideration to the respective submissions 14. We have bestowed our due consideration to the respective submissions of the counsel for the parties. of the counsel for the parties.
At the outset, it needs 15. At the outset, it needs to be highlighted that the assessment order to be highlighted that the assessment order passed by the AO on August 7, 2008 covered eight Assessment Years i.e. passed by the AO on August 7, 2008 covered eight Assessment Years i.e. passed by the AO on August 7, 2008 covered eight Assessment Years i.e. Assessment Year 1999 Assessment Year 1999-2000 to Assessment Year 2006-07. As noted above, 07. As noted above, insofar as Assessment Year 1999 insofar as Assessment Year 1999-2000 is concerned, same was covered 2000 is concerned, same was covered under Section 147 of the Act which means in respect of that year, there were der Section 147 of the Act which means in respect of that year, there were der Section 147 of the Act which means in respect of that year, there were re-assessment proceedings. Insofar as Assessment Year 2006 assessment proceedings. Insofar as Assessment Year 2006-07 is assessment proceedings. Insofar as Assessment Year 2006 concerned, it was fresh assessment under Section 143(3) of the Act. Thus, concerned, it was fresh assessment under Section 143(3) of the Act. Thus, concerned, it was fresh assessment under Section 143(3) of the Act. Thus, insofar as assessment under Section 153C r insofar as assessment under Section 153C read with Section 143(3) of the ead with Section 143(3) of the Act is concerned, it was in respect of Assessment Years 2000 Act is concerned, it was in respect of Assessment Years 2000 Act is concerned, it was in respect of Assessment Years 2000-01 to 2005- 06. Out of that, present appeals relate to four Assessment Years, namely, 06. Out of that, present appeals relate to four Assessment Years, namely, 06. Out of that, present appeals relate to four Assessment Years, namely, 2000-01 to 2003 01 to 2003-04 covered by notice under Section 153C of the Act. There 04 covered by notice under Section 153C of the Act. There D G Land Developers Pvt. Ltd. 14 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 is a specific purpose in taking note of this aspect which would be stated by specific purpose in taking note of this aspect which would be stated by specific purpose in taking note of this aspect which would be stated by us in the concluding paragraphs of the judgment. us in the concluding paragraphs of the judgment.
In these appeals, qua the aforesaid four Assessment Years, the 16. In these appeals, qua the aforesaid four Assessment Years, the 16. In these appeals, qua the aforesaid four Assessment Years, the assessment is quashed by the ITAT (which order is upheld by the High assessment is quashed by the ITAT (which order is upheld by the High assessment is quashed by the ITAT (which order is upheld by the High Court) on the sole ground that notice under Section 153C of the Act was Court) on the sole ground that notice under Section 153C of the Act was Court) on the sole ground that notice under Section 153C of the Act was legally unsustainable. The events recorded above further disclose that the legally unsustainable. The events recorded above further disclose that the legally unsustainable. The events recorded above further disclose that the issue pertaining to validity of notice under Section 153C of the Act was issue pertaining to validity of notice under Section 153C of the Act was issue pertaining to validity of notice under Section 153C of the Act was raised for the first time before th raised for the first time before the Tribunal and the Tribunal permitted the e Tribunal and the Tribunal permitted the assessee to raise this additional ground and while dealing with the same on assessee to raise this additional ground and while dealing with the same on assessee to raise this additional ground and while dealing with the same on merits, accepted the contention of the assessee. merits, accepted the contention of the assessee.
First objection of the learned Solicitor General was that it was improper 17. First objection of the learned Solicitor General was that it was improper 17. First objection of the learned Solicitor General was that it was improper on the part of the ITAT to allow this ground to be raised, when the assessee of the ITAT to allow this ground to be raised, when the assessee of the ITAT to allow this ground to be raised, when the assessee had not objected to the jurisdiction under Section 153C of the Act before the had not objected to the jurisdiction under Section 153C of the Act before the had not objected to the jurisdiction under Section 153C of the Act before the AO. Therefore, in the first instance, it needs to be determined as to whether AO. Therefore, in the first instance, it needs to be determined as to whether AO. Therefore, in the first instance, it needs to be determined as to whether ITAT was right in permitting the a ITAT was right in permitting the assessee to raise this ground for the first ssessee to raise this ground for the first time before it, as an additional ground. time before it, as an additional ground.
The ITAT permitted this additional ground by giving a reason that it was 18. The ITAT permitted this additional ground by giving a reason that it was 18. The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record a jurisdictional issue taken up on the basis of facts already on the record a jurisdictional issue taken up on the basis of facts already on the record and, therefore, cou and, therefore, could be raised. In this behalf, it was noted by the ITAT that ld be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material as per the provisions of Section 153C of the Act, incriminating material as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it which was seized had to pertain to the Assessment Years in question and it which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which w is an undisputed fact that the documents which were seized did not ere seized did not establish any co establish any co-relation, document-wise, with these four Assessment wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for Years. Since this requirement under Section 153C of the Act is essential for Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find assessment under that provision, it becomes a jurisdictional fact. We find assessment under that provision, it becomes a jurisdictional fact. We find this reasoning t this reasoning to be logical and valid, having regard to the provisions of o be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was had scanned through the Satisfaction Note and the material which was had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed th disclosed therein was culled out and it showed that the same belongs to at the same belongs to Assessment Year 2004 Assessment Year 2004-05 or thereafter. After taking note of the material in 05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para para 9 of the order, the position that emerges therefrom is discussed in para para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could 10. It was specifically recorded that the counsel for the Department could 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also point out to the contrary. It is for this reason the High Court has also point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, given its imprimatur to the aforesaid approach of the Tribunal. That apart, given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in learned senior counsel appearing for the respondent, argued that notice in learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000 respect of Assessment Years 2000-01 and 2001-02 was even time barred. 02 was even time barred.
We, thus, find that the ITAT rightly permitted this additional ground to 19. We, thus, find that the ITAT rightly permitted this additional ground to 19. We, thus, find that the ITAT rightly permitted this additional ground to be raised and correctly dealt with the same ground on merits as well. Order be raised and correctly dealt with the same ground on merits as well. Order be raised and correctly dealt with the same ground on merits as well. Order of the High Court affirming this view of the Tribunal is, therefo of the High Court affirming this view of the Tribunal is, therefo of the High Court affirming this view of the Tribunal is, therefore, without any blemish. Before us, it was argued by the respondent that notice in any blemish. Before us, it was argued by the respondent that notice in any blemish. Before us, it was argued by the respondent that notice in respect of the Assessment Years 2000 respect of the Assessment Years 2000-01 and 2001-02 was time barred. 02 was time barred. However, in view of our aforementioned findings, it is not necessary to enter However, in view of our aforementioned findings, it is not necessary to enter However, in view of our aforementioned findings, it is not necessary to enter into this controversy. into this controversy.
Insofar as the judgment of the Gujarat High Court relied upon by the Insofar as the judgment of the Gujarat High Court relied upon by the Insofar as the judgment of the Gujarat High Court relied upon by the learned Solicitor General is concerned, we find that the High Court in that learned Solicitor General is concerned, we find that the High Court in that learned Solicitor General is concerned, we find that the High Court in that case has categorically held that it is an essential condition precedent that case has categorically held that it is an essential condition precedent that case has categorically held that it is an essential condition precedent that any money, bullion or jewellery o any money, bullion or jewellery or other valuable articles or thing or books of r other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person accounts or documents seized or requisitioned should belong to a person accounts or documents seized or requisitioned should belong to a person D G Land Developers Pvt. Ltd. 15 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 other than the person referred to in Section 153A of the Act. This proposition other than the person referred to in Section 153A of the Act. This proposition other than the person referred to in Section 153A of the Act. This proposition of law laid down by the High Court is correct, which is st of law laid down by the High Court is correct, which is st of law laid down by the High Court is correct, which is stated by the Bombay High Court in the impugned judgment as well. The judgment of the Bombay High Court in the impugned judgment as well. The judgment of the Bombay High Court in the impugned judgment as well. The judgment of the Gujarat High Court in the said case went in favour of the Revenue when it Gujarat High Court in the said case went in favour of the Revenue when it Gujarat High Court in the said case went in favour of the Revenue when it was found on facts that the documents seized, in fact, pertain to third party, was found on facts that the documents seized, in fact, pertain to third party, was found on facts that the documents seized, in fact, pertain to third party, i.e. the assessee, i.e. the assessee, and, therefore, the said condition precedent for taking and, therefore, the said condition precedent for taking action under Section 153C of the Act had been satisfied. action under Section 153C of the Act had been satisfied.
Likewise, the Delhi High Court also decided the case on altogether 21. Likewise, the Delhi High Court also decided the case on altogether 21. Likewise, the Delhi High Court also decided the case on altogether different facts which will have no bearing once the matter is examined i different facts which will have no bearing once the matter is examined i different facts which will have no bearing once the matter is examined in the aforesaid hue on the facts of this case. The Bombay High Court has rightly aforesaid hue on the facts of this case. The Bombay High Court has rightly aforesaid hue on the facts of this case. The Bombay High Court has rightly distinguished the said judgment as not applicable giving the following distinguished the said judgment as not applicable giving the following distinguished the said judgment as not applicable giving the following reasons: "8. Reliance on the judgment of the Division Bench of the High Court "8. Reliance on the judgment of the Division Bench of the High Court "8. Reliance on the judgment of the Division Bench of the High Court of Delhi reported in case of Delhi reported in case of SSP Aviation Ltd. v. Deputy of SSP Aviation Ltd. v. Deputy Commissioner of Income Tax Commissioner of Income Tax [2012] 346 ITR 177 is misplaced. There, is misplaced. There, search was carried out in the case of "P" group of companies. It was search was carried out in the case of "P" group of companies. It was search was carried out in the case of "P" group of companies. It was found that the assessee before the Hon'ble Delhi High C found that the assessee before the Hon'ble Delhi High C found that the assessee before the Hon'ble Delhi High Court had acquired certain development rights from "P" group of companies. acquired certain development rights from "P" group of companies. acquired certain development rights from "P" group of companies. Based thereon, the satisfaction was recorded by the Assessing Based thereon, the satisfaction was recorded by the Assessing Based thereon, the satisfaction was recorded by the Assessing Officer and he issued notice in terms of Section 153C. Thereupon the Officer and he issued notice in terms of Section 153C. Thereupon the Officer and he issued notice in terms of Section 153C. Thereupon the proceedings were initiated under section 153A and t proceedings were initiated under section 153A and t proceedings were initiated under section 153A and the assessee was directed to file returns for the six assessment years commencing was directed to file returns for the six assessment years commencing was directed to file returns for the six assessment years commencing from 2003 from 2003-04 onwards. The assessees filed returns for those years 04 onwards. The assessees filed returns for those years but disclosed Nil taxable income. These returns were accepted by the but disclosed Nil taxable income. These returns were accepted by the but disclosed Nil taxable income. These returns were accepted by the Assessing Officer, however, in respect o Assessing Officer, however, in respect of the assessment year 2007 f the assessment year 2007- 08 there was a significant difference in the pattern of assessment for 08 there was a significant difference in the pattern of assessment for 08 there was a significant difference in the pattern of assessment for this year also, the return was filed for Nil income but there were this year also, the return was filed for Nil income but there were this year also, the return was filed for Nil income but there were certain documents and which showed that there were transactions certain documents and which showed that there were transactions certain documents and which showed that there were transactions of sale of development righ of sale of development rights and from which profits were generated ts and from which profits were generated and taxable for the assessment year 2007 and taxable for the assessment year 2007-08. Thus, the receipt of 08. Thus, the receipt of Rs.44 crores as deposit in the previous year relevant to the Rs.44 crores as deposit in the previous year relevant to the Rs.44 crores as deposit in the previous year relevant to the assessment year 2008 assessment year 2008-09 and later on became subject matter of the 09 and later on became subject matter of the writ petition before t writ petition before the Delhi High Court. That was challenging the he Delhi High Court. That was challenging the validity of notice under section 153C read with section 153A. In validity of notice under section 153C read with section 153A. In validity of notice under section 153C read with section 153A. In dealing with such situation and the peculiar facts that the Delhi High dealing with such situation and the peculiar facts that the Delhi High dealing with such situation and the peculiar facts that the Delhi High Court upheld the satisfaction and the Delhi High Court found that Court upheld the satisfaction and the Delhi High Court found that Court upheld the satisfaction and the Delhi High Court found that the mach the machinery provided under section 153C read with section 153A inery provided under section 153C read with section 153A equally facilitates inquiry regarding existence of undisclosed income equally facilitates inquiry regarding existence of undisclosed income equally facilitates inquiry regarding existence of undisclosed income in the hands of a person other than searched person. The provisions in the hands of a person other than searched person. The provisions in the hands of a person other than searched person. The provisions have been referred to in details in dealing with a challenge have been referred to in details in dealing with a challenge have been referred to in details in dealing with a challenge to the legality and validity of the seizure and action founded thereon. We legality and validity of the seizure and action founded thereon. We legality and validity of the seizure and action founded thereon. We do not find anything in this judgment which would enable us to hold do not find anything in this judgment which would enable us to hold do not find anything in this judgment which would enable us to hold that the tribunal's understanding of the said legal provision suffers that the tribunal's understanding of the said legal provision suffers that the tribunal's understanding of the said legal provision suffers from any error apparent on the face of the from any error apparent on the face of the record. The Delhi High record. The Delhi High Court judgment, therefore, will not carry the case of the revenue any Court judgment, therefore, will not carry the case of the revenue any Court judgment, therefore, will not carry the case of the revenue any further." further." We, thus, do not find any merit in these appeals.” We, thus, do not find any merit in these appeals.
D G Land Developers Pvt. Ltd. 16 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 8.3 The basis of the addition he basis of the addition by the Assessing Officer by the Assessing Officer for the years under consideration from assessment year under consideration from assessment years 2013-14 to 2016 14 to 2016-17 is only the material impounded during the course of the survey, which only the material impounded during the course of the survey only the material impounded during the course of the survey is evident from para 9 to 9.3 of the Assessing Officer reproduced as is evident from para 9 to 9.3 of the Assessing Officer reproduced as is evident from para 9 to 9.3 of the Assessing Officer reproduced as under :
9. Before going into the facts of the case, it 9. Before going into the facts of the case, it is desirable to know the is desirable to know the nature of evidences impounded by the Department in the assessee nature of evidences impounded by the Department in the assessee nature of evidences impounded by the Department in the assessee case. Some sample scanned copies of these parallel books of case. Some sample scanned copies of these parallel books of case. Some sample scanned copies of these parallel books of accounts impounded in the form of diaries, bills/vouchers, loose accounts impounded in the form of diaries, bills/vouchers, loose accounts impounded in the form of diaries, bills/vouchers, loose paper etc. found and impounded as (Annexur paper etc. found and impounded as (Annexure A-1 to A 1 to A-14) are reproduced as under: reproduced as under:
D G Land Developers Pvt. Ltd. 17 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 D G Land Developers Pvt. Ltd. 18 407, 404, 403 & 402/MUM/2024 ITA Nos. 411, 407, 404, 403 & 402/MUM/2024 It is evident from the above scanned copies of impounded material It is evident from the above scanned copies of impounded material It is evident from the above scanned copies of impounded material that there are cash receipts, cash expenses, transactions of cash that there are cash receipts, cash expenses, transactions of cash that there are cash receipts, cash expenses, transactions of cash taken for safe custody by the key persons of the family and similar taken for safe custody by the key persons of the family and similar taken for safe custody by the key persons of the family and similar transactions. It can be simply described as ns. It can be simply described as "cash book" related to "cash book" related to the various projects done by the different concerns of the group. the various projects done by the different concerns of the group. the various projects done by the different concerns of the group. 9.1 The nature of the transactions recorded in these materials was 9.1 The nature of the transactions recorded in these materials was 9.1 The nature of the transactions recorded in these materials was explained by the key person i.e. Ishwardev D. Shukla, Director of explained by the key person i.e. Ishwardev D. Shukla, Director of explained by the key person i.e. Ishwardev D. Shukla, Director of the assessee vide his statement on oath u/s.131 of the Act on the assessee vide his statement on oath u/s.131 of the Act on the assessee vide his statement on oath u/s.131 of the Act on 17.12.2016, The relevant portion of the statement is reproduced 17.12.2016, The relevant portion of the statement is reproduced 17.12.2016, The relevant portion of the statement is reproduced hereunder: Q16. I am showing you Brown Colour Jagruti Diary having written 16. I am showing you Brown Colour Jagruti Diary having written 16. I am showing you Brown Colour Jagruti Diary having written pages 1 to 350 marked as Annexure A pages 1 to 350 marked as Annexure A-I. Please confirm I. Please confirm that the same is impounded from this premise te. Ist Floor, Sheetal same is impounded from this premise te. Ist Floor, Sheetal same is impounded from this premise te. Ist Floor, Sheetal Kripa Butlding, Beside Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Naikwadi, Aarey Road, Goregaon (E), Mumbai Goregaon (E), Mumbai-400063. A. I have gone through Brown Colour Jagruti Diary having written A. I have gone through Brown Colour Jagruti Diary having written A. I have gone through Brown Colour Jagruti Diary having written pages 1 to 350 marked as pages 1 to 350 marked as Annexure A-I. I confirm that Annexure A I. I confirm that Annexure A-I is impounded from this premise i.e. 1st Floor, Sheetal Kripa is impounded from this premise i.e. 1st Floor, Sheetal Kripa is impounded from this premise i.e. 1st Floor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai 400063. Q17. Kindly explain the contents of the diary ( Brown Colour) Kindly explain the contents of the diary ( Brown Colour) Kindly explain the contents of the diary ( Brown Colour) marked as Annexure A-1? 1? A. Sir, the said diary is having date A. Sir, the said diary is having date-wise entries of cash receipt and wise entries of cash receipt and cash payments for the financial year F.Y.2015 payments for the financial year F.Y.2015-16. Each page of this 16. Each page of this diary is having the details of cash receipts and cash payments with diary is having the details of cash receipts and cash payments with diary is having the details of cash receipts and cash payments with the name of the person and the name of the person and amount of transactions. These amount of transactions. These transactions were not recorded in regular books of account forF. transactions were not recorded in regular books of account forF. transactions were not recorded in regular books of account forF. Y.2015-16. Q18. Kindly provide the source of these cash receipt and their Q18. Kindly provide the source of these cash receipt and their Q18. Kindly provide the source of these cash receipt and their complete details? complete details? A. Sir, these cash deposits are mainly cash receipts from the sale o A. Sir, these cash deposits are mainly cash receipts from the sale o A. Sir, these cash deposits are mainly cash receipts from the sale of flats, cash loans taken etc. I will provide the complete details in due flats, cash loans taken etc. I will provide the complete details in due flats, cash loans taken etc. I will provide the complete details in due course. Q19. I am showing you Red Colour Jagruti Diary having written Q19. I am showing you Red Colour Jagruti Diary having written Q19. I am showing you Red Colour Jagruti Diary having written pages 1 to 175marked as Annexure A pages 1 to 175marked as Annexure A-2. Please confirm that the 2. Please confirm that the same is impounded from thispremise i.e. Ist Floor, same is impounded from thispremise i.e. Ist Floor, Sheetal Kripa Building, Beside Saraswat CO.Op. Bank,Naikwadi, Aarey Road, Building, Beside Saraswat CO.Op. Bank,Naikwadi, Aarey Road, Building, Beside Saraswat CO.Op. Bank,Naikwadi, Aarey Road, Goregaon (E), Mumbai Goregaon (E), Mumbai-400063.
D G Land Developers Pvt. Ltd. 19 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 A. I have gone through Red Colour Jagruti Diary having written A. I have gone through Red Colour Jagruti Diary having written A. I have gone through Red Colour Jagruti Diary having written pages 1 to 175marked as Annexure A pages 1 to 175marked as Annexure A-2. I confirm that Annexure A 2. I confirm that Annexure A- 2 is impounded from thisp 2 is impounded from thispremise ie. 1st Floor, Sheetal Kripa remise ie. 1st Floor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai-400063. Q20. Kindly explain the contents of the diary ( Red Colour) 20. Kindly explain the contents of the diary ( Red Colour) 20. Kindly explain the contents of the diary ( Red Colour) marked as AnnexureA as AnnexureA-2? A. Sir, the said diary is having date A. Sir, the said diary is having date-wise entries of cash receipt and ries of cash receipt and cash payments for the financial year F.Y.2016 payments for the financial year F.Y.2016-17. Each page of this 17. Each page of this diary is having thedetails of cash receipts and cash payments with diary is having thedetails of cash receipts and cash payments with diary is having thedetails of cash receipts and cash payments with the name of the person and amountof transactions.. These the name of the person and amountof transactions.. These the name of the person and amountof transactions.. These transactions were not recorded in regul transactions were not recorded in regular books of accountfor F. ar books of accountfor F. Y.2016-17. Q21. Kindly provide the source of these cash receipt and their Q21. Kindly provide the source of these cash receipt and their Q21. Kindly provide the source of these cash receipt and their complete details? complete details? A. Sir, these cash deposits are mainly cash receipts from the sale of A. Sir, these cash deposits are mainly cash receipts from the sale of A. Sir, these cash deposits are mainly cash receipts from the sale of flats, cashloans taken etc. I will provide the complete details in d flats, cashloans taken etc. I will provide the complete details in d flats, cashloans taken etc. I will provide the complete details in due course. Q22. I am showing you Green and White Colour Diary having 22. I am showing you Green and White Colour Diary having 22. I am showing you Green and White Colour Diary having written pages 1 t072 marked as Annexure A written pages 1 t072 marked as Annexure A-3. Please confirm that 3. Please confirm that the same is impounded fromthis premise i.e. 1st Floor, Sheetal the same is impounded fromthis premise i.e. 1st Floor, Sheetal the same is impounded fromthis premise i.e. 1st Floor, Sheetal Kripa Building, Beside Building, Beside Saraswat Co. Op. Bank, Naikwadi, Aa Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai Road, Goregaon (E), Mumbai-400063. A. I have gone through Green and White Colour Diary having written A. I have gone through Green and White Colour Diary having written A. I have gone through Green and White Colour Diary having written pages 1 to 72marked as Annexure A pages 1 to 72marked as Annexure A-3. I confirm that Annexure A 3. I confirm that Annexure A-3 is impounded from thispremise i.e. 1st Floor, Sheetal Kripa Building, is impounded from thispremise i.e. 1st Floor, Sheetal Kripa Building, is impounded from thispremise i.e. 1st Floor, Sheetal Kripa Building, Beside Saraswat Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai-400063. 400063.
Kindly explain the contents of the Green and White Colour 23. Kindly explain the contents of the Green and White Colour 23. Kindly explain the contents of the Green and White Colour Diary marked as Annexure A as Annexure A-3? A. Sir. I do not know the exact contents of this diary. I will provide A. Sir. I do not know the exact contents of this diary. I will provide A. Sir. I do not know the exact contents of this diary. I will provide the complete details in due details in due course. Q24. I am showing you Pink Colour Diary having written pages 24. I am showing you Pink Colour Diary having written pages 24. I am showing you Pink Colour Diary having written pages 1 to 67 marked as Aye Pire A4. Please confirm that the same is as Aye Pire A4. Please confirm that the same is as Aye Pire A4. Please confirm that the same is impounded this premise this premise i.e. Sheetal Kripa Building, Beside Stras Building, Beside Stras precisep. Bank, Naikwadt,Aarey Road, Goregaon (E), Mumbai precisep. Bank, Naikwadt,Aarey Road, Goregaon (E), Mumbai precisep. Bank, Naikwadt,Aarey Road, Goregaon (E), Mumbai- 400063.
D G Land Developers Pvt. Ltd. 20 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 A. have gone through Pink Colour Diary having written pages 1 to have gone through Pink Colour Diary having written pages 1 to have gone through Pink Colour Diary having written pages 1 to 6" marked as Annexure A 6" marked as Annexure A-4. I confirm that Annexure A 4. I confirm that Annexure A-4 is impounded from this premise i.e. 1stFloor, Sheetal Kripa Building, impounded from this premise i.e. 1stFloor, Sheetal Kripa Building, impounded from this premise i.e. 1stFloor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai-400063. 400063. Q25. Kindly explain Kindly explain the contents of the Pink Colour Diary the contents of the Pink Colour Diary marked as AnnexureA as AnnexureA-4? A. Sir, I do not know the exact contents of this diary. I will provide A. Sir, I do not know the exact contents of this diary. I will provide A. Sir, I do not know the exact contents of this diary. I will provide the completedetails in due course. the completedetails in due course. Q26. I am showing you Green Colour Jagruti Diary having Q26. I am showing you Green Colour Jagruti Diary having Q26. I am showing you Green Colour Jagruti Diary having written pages 1 to 36 marked as Annexure A pages 1 to 36 marked as Annexure A-5. Please confirm that the 5. Please confirm that the same is impounded from thispremise i.e. Ist Floor, Sheetal same is impounded from thispremise i.e. Ist Floor, Sheetal same is impounded from thispremise i.e. Ist Floor, Sheetal Кrіра Building, Beside Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai Goregaon (E), Mumbai-400063. A. I have gone A. I have gone through Green Colour Jagruti Diary having written lour Jagruti Diary having written pages 1 to 36marked as Annexure A pages 1 to 36marked as Annexure A-5. I cenfirm that Annexure A 5. I cenfirm that Annexure A-5 is impounded from thispremise i.e. is impounded from thispremise i.e. 1stFloor, Sheetal Kripa Building, 1stFloor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi,Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi,Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi,Aarey Road, Goregaon (E), Mumbai-400063. 400063. Q27. Kindly explain the contents of the Green Colour Diary marked ly explain the contents of the Green Colour Diary marked ly explain the contents of the Green Colour Diary marked as Annexure A as Annexure A-5? A. Sir, I do not know the exact contents of this diary. I will provide A. Sir, I do not know the exact contents of this diary. I will provide A. Sir, I do not know the exact contents of this diary. I will provide the complete details in due course. details in due course. Q28. I am showing you Grey Colour Diary having written pages 28. I am showing you Grey Colour Diary having written pages 28. I am showing you Grey Colour Diary having written pages 1 to 184 markedas Annexure A das Annexure A-6. Please confirm that the same is 6. Please confirm that the same is impounded from this premisei.e. Ist Floor, Sheetal Kripa Building, impounded from this premisei.e. Ist Floor, Sheetal Kripa Building, impounded from this premisei.e. Ist Floor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi,Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi,Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi,Aarey Road, Goregaon (E), Mumbai-400063. 400063. A. I have gone through Grey Colour Diary having written page A. I have gone through Grey Colour Diary having written page A. I have gone through Grey Colour Diary having written pages 1 to 184 markedas Annexure A 184 markedas Annexure A-6. I confirm that Annexure Annexure A-6 is impounded from this premise i.e. IstFloor, Sheetal Kripa Building, impounded from this premise i.e. IstFloor, Sheetal Kripa Building, impounded from this premise i.e. IstFloor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai-400063. 400063. Q29. Kindly explain the contents of the Grey 29. Kindly explain the contents of the Grey Colour Diary marked Colour Diary marked as AnnexureA as AnnexureA-6? A. Sir, I do not know the exact contents of this diary. I will provide A. Sir, I do not know the exact contents of this diary. I will provide A. Sir, I do not know the exact contents of this diary. I will provide the complete details in due course. details in due course.
D G Land Developers Pvt. Ltd. 21 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 Q30. I am showing you Red Colour Dhanlaxmi Notebook having Q30. I am showing you Red Colour Dhanlaxmi Notebook having Q30. I am showing you Red Colour Dhanlaxmi Notebook having written pages Ito 158 marked as Annexure A written pages Ito 158 marked as Annexure A-7. Please 7. Please confirm that the same is impounded from this premise te. Ist Floor, Sheetal the same is impounded from this premise te. Ist Floor, Sheetal the same is impounded from this premise te. Ist Floor, Sheetal Kripa Building, Beside Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Naikwadi, Aarey Road, Goregaon (E), Mumbai Goregaon (E), Mumbai-400063. A. I have gone through Red Colour Dhanlaxmi Notebook having A. I have gone through Red Colour Dhanlaxmi Notebook having A. I have gone through Red Colour Dhanlaxmi Notebook having written pages 1 to 158 m written pages 1 to 158 marked as Annexure A-7. I confirm that 7. I confirm that Annexure A-7 is impounded from this premise i.e. Ist Flor, Sheetal 7 is impounded from this premise i.e. Ist Flor, Sheetal 7 is impounded from this premise i.e. Ist Flor, Sheetal Kripa Building Kripa Building Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Road, Goregaon (E), Mumbai-400063. Q31. Kindly explain the contents of the Red Colour Dhanl 31. Kindly explain the contents of the Red Colour Dhanl 31. Kindly explain the contents of the Red Colour Dhanlaxmi Notebook marked as Annexure A marked as Annexure A-7? A. Si, I do not know the exuet contents of this diury. I will provide A. Si, I do not know the exuet contents of this diury. I will provide A. Si, I do not know the exuet contents of this diury. I will provide the complete details in due course. the complete details in due course. Q32. I am showing you Yellow Colour Receipt Book having written 32. I am showing you Yellow Colour Receipt Book having written 32. I am showing you Yellow Colour Receipt Book having written pages 1 to 56 marked as Annexure A pages 1 to 56 marked as Annexure A-8. Please con 8. Please confirm that the same is impounded from this premise i.e. Ist Floor, Sheetal same is impounded from this premise i.e. Ist Floor, Sheetal same is impounded from this premise i.e. Ist Floor, Sheetal Kripa Building, gone through Yellow Colour Receipt Book having written gone through Yellow Colour Receipt Book having written gone through Yellow Colour Receipt Book having written Saraswat Co.Op. Bank, Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Naikwadi, Aarey Road, Goregaon (E), Mumbai-400063. 400063. A. I have pages 1 to 56 marked as Anne pages 1 to 56 marked as Annexure A-8. I confirm that 8. I confirm that Annexure A-8 is impounded from this premise i.e. 1st Floor, Sheetal 8 is impounded from this premise i.e. 1st Floor, Sheetal 8 is impounded from this premise i.e. 1st Floor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Road, Goregaon (E), Mumbai-400063. Q33. Kindly explain the contents of the Yellow Colour Receipt Book Q33. Kindly explain the contents of the Yellow Colour Receipt Book Q33. Kindly explain the contents of the Yellow Colour Receipt Book marked as Annexure A marked as Annexure A-8? A. Sir, the entries are related to amount received in cheque and cash A. Sir, the entries are related to amount received in cheque and cash A. Sir, the entries are related to amount received in cheque and cash from the parties. I will provide the complete details in due course. from the parties. I will provide the complete details in due course. from the parties. I will provide the complete details in due course. Q34. I am showing you Pink Colour Receipt Book having written Q34. I am showing you Pink Colour Receipt Book having written Q34. I am showing you Pink Colour Receipt Book having written pages 1 to 54 marked as Annexur pages 1 to 54 marked as Annexure A-9. Please confirm that the 9. Please confirm that the same is impounded from this premise i.e. Ist Floor, Sheetal Kripa same is impounded from this premise i.e. Ist Floor, Sheetal Kripa same is impounded from this premise i.e. Ist Floor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai Goregaon (E), Mumbai-400063. A. I have gone through Pink Colour Receipt Book having written A. I have gone through Pink Colour Receipt Book having written A. I have gone through Pink Colour Receipt Book having written pages 1 to 54 marked as Annexure A 1 to 54 marked as Annexure A-9. I confirm that Annexure A 9. I confirm that Annexure A-9 is impounded from this premise i.e. is impounded from this premise i.e. 1st Floor, Sheetal Kripa 1st Floor, Sheetal Kripa Building, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Beside Saraswat Co.Op. Bank, Naikwadi, Aarey Road, Goregaon (E), Mumbai-400063.
D G Land Developers Pvt. Ltd. 22 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 ------------ ------------ It was revealed It was revealed during the course of search/survey proceedings during the course of search/survey proceedings that the said diaries were maintained and written by Smt. Shefali that the said diaries were maintained and written by Smt. Shefali that the said diaries were maintained and written by Smt. Shefali Sivram Naik whe is working in the group at the post of accountant Sivram Naik whe is working in the group at the post of accountant Sivram Naik whe is working in the group at the post of accountant and her statement was recorded. and her statement was recorded. In her statement on oath recorded statement on oath recorded u/s.131 of the Act on 17.12.2016, Smt. Shefali Shivram Naik had the Act on 17.12.2016, Smt. Shefali Shivram Naik had the Act on 17.12.2016, Smt. Shefali Shivram Naik had been confronted with the impounded materials. The relevant portion been confronted with the impounded materials. The relevant portion been confronted with the impounded materials. The relevant portion of the same is reproduced hereunder: of the same is reproduced hereunder: Q.5 Please state in what capacity are you working, which company .5 Please state in what capacity are you working, which company .5 Please state in what capacity are you working, which company are you working for and how many y are you working for and how many years are you working for the ears are you working for the company. Ans: Sir, I am working in the accounts department for the past 3 Ans: Sir, I am working in the accounts department for the past 3 Ans: Sir, I am working in the accounts department for the past 3 months. Previously I used to work as receptionist for M/s.D.G. Land months. Previously I used to work as receptionist for M/s.D.G. Land months. Previously I used to work as receptionist for M/s.D.G. Land Developers Put Ltd. I am working in M/s.D.G.Land Developers Put Developers Put Ltd. I am working in M/s.D.G.Land Developers Put Developers Put Ltd. I am working in M/s.D.G.Land Developers Put Ltd since 25.05.2012. Ltd since 25.05.2012. Q.6 I am showing you two diaries marked as Annexure A .6 I am showing you two diaries marked as Annexure A .6 I am showing you two diaries marked as Annexure A-1 and 4-2 respectively. Kindly go through the same and confirm? respectively. Kindly go through the same and confirm? respectively. Kindly go through the same and confirm? Ans: I confirm that I have gone through these diaries marked as Ans: I confirm that I have gone through these diaries marked as Ans: I confirm that I have gone through these diaries marked as Annexure A-1 and Annexure A 1 and Annexure A-2 and also confirm that it is written 2 and also confirm that it is written in my handwriting. handwriting. Q.7 Kindly explain the contents of the diaries marked as Annexure .7 Kindly explain the contents of the diaries marked as Annexure .7 Kindly explain the contents of the diaries marked as Annexure A-1 and Annexure A 1 and Annexure A-2? Ans: Sir, these diaries contain the entry of cash. receipts and cash Ans: Sir, these diaries contain the entry of cash. receipts and cash Ans: Sir, these diaries contain the entry of cash. receipts and cash payments from different parties. It has m payments from different parties. It has mentioned date wise entry of entioned date wise entry of cash receipts and payments for the Financial years 2015 payments for the Financial years 2015-16 and F.Y. 2016-17 (till date) for DGS Group. 17 (till date) for DGS Group. 0.8 What are the source of cash receipts mentioned in diaries 0.8 What are the source of cash receipts mentioned in diaries 0.8 What are the source of cash receipts mentioned in diaries marked as Annexure A marked as Annexure A-1 and Annexure-2? Ans: sir, 1 am not aware of the s Ans: sir, 1 am not aware of the source of these cash receipts. I ource of these cash receipts. I am doing entry as and when instructed by shr Ishwardev shukla. He oing entry as and when instructed by shr Ishwardev shukla. He oing entry as and when instructed by shr Ishwardev shukla. He only instructs to enter the entries when cash is received and paid in only instructs to enter the entries when cash is received and paid in only instructs to enter the entries when cash is received and paid in the group concerns." the group concerns." 9.3 It is seen that Shri Ishwardev D. Shukla had admitted that the 9.3 It is seen that Shri Ishwardev D. Shukla had admitted that the 9.3 It is seen that Shri Ishwardev D. Shukla had admitted that the impounded materials in Annexure A impounded materials in Annexure A-1 & A-12 contains unaccounted 12 contains unaccounted entries related to cash receipt and paid by the group companies in entries related to cash receipt and paid by the group companies in entries related to cash receipt and paid by the group companies in various projects related to F.Ys. 2015 various projects related to F.Ys. 2015-16 and 2016-17 respectively. 17 respectively.
D G Land Developers Pvt. Ltd. 23 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 With regard to impounded materials in Annexure A With regard to impounded materials in Annexure A With regard to impounded materials in Annexure A-13, it was stated that the entries related t stated that the entries related to cash receipts on account of flat o cash receipts on account of flat bookings by customers in different projects of D.G. Land Developers bookings by customers in different projects of D.G. Land Developers bookings by customers in different projects of D.G. Land Developers Pvt. Ltd. With regard to Annexure A Pvt. Ltd. With regard to Annexure A-14, it was stated that it 14, it was stated that it includes brokerage file to be paid to brokers or broker firm for the includes brokerage file to be paid to brokers or broker firm for the includes brokerage file to be paid to brokers or broker firm for the flats or property sold flats or property sold by acting as agent on our behalf. Thus, it was by acting as agent on our behalf. Thus, it was specifically submitted by Shri Ishwardev D. Shukla that cash specifically submitted by Shri Ishwardev D. Shukla that cash specifically submitted by Shri Ishwardev D. Shukla that cash entries made in the impounded materials are not reflected in regular entries made in the impounded materials are not reflected in regular entries made in the impounded materials are not reflected in regular books of account of any of the group concerns and these entries / books of account of any of the group concerns and these entries / books of account of any of the group concerns and these entries / receipts are unaccounted in nature. unaccounted in nature.” 8.4 The assessee contended that i The assessee contended that in absence of any incriminating n absence of any incriminating material seized from the premises of Shri Ishwardev Shukla qua, material seized from the premises of Shri Ishwardev Shukla qua material seized from the premises of Shri Ishwardev Shukla qua the assessment year under consideration no addition could have the assessment year under consideration no addition could have the assessment year under consideration no addition could have been made in the hands of the assessee under u/s 153C of the Act. been made in the hands of the assessee under u/s 153C of the Act been made in the hands of the assessee under u/s 153C of the Act The ld CIT(A) has held that cash seized The ld CIT(A) has held that cash seized was incriminating in nature incriminating in nature , which was generated over a period, hence, condition of availability , which was generated over a period, hence, condition of a , which was generated over a period, hence, condition of a of incriminating material stands satisfied of incriminating material stands satisfied for AY 2013 for AY 2013-14 to AY 2016-17. We don’t agree with this proposition of ld CIT(A) for the . We don’t agree with this proposition of ld CIT(A) for the . We don’t agree with this proposition of ld CIT(A) for the reason that AO in his order has no where determined the cash reason that AO in his order has no where determined the cash reason that AO in his order has no where determined the cash found as unexplained. It is sh Inshvardev unexplained. It is sh Inshvardev Shukla, wh Shukla, who stated during search action dated 18/12/2016 during search action dated 18/12/2016 that said cash was that said cash was undisclosed income of assessee undisclosed income of assessee company for AY 2017 company for AY 2017-18 but there is no finding by the AO on this issue. The AO has nowhere is no finding by the AO on this issue. The AO has nowhere is no finding by the AO on this issue. The AO has nowhere mentioned in his order that cash found was of unexplained nature mentioned in his order that cash found was of unexplained nature mentioned in his order that cash found was of unexplained nature and addition was not made because addition for unexplained cash addition was not made because addition for unexplained cash addition was not made because addition for unexplained cash subsumed in addition for on subsumed in addition for on-money. The ld Counsel for the money. The ld Counsel for the assessee raised an another question assessee raised an another question that sh Ishvasrdev shukla sh Ishvasrdev shukla arrived at Mumbai airport on 16/12/2016, then how cash was Mumbai airport on 16/12/2016, then how cash was Mumbai airport on 16/12/2016, then how cash was seized from him from the office of AIU, Mumbai airport from the office of AIU, Mumbai airport from the office of AIU, Mumbai airport on D G Land Developers Pvt. Ltd. 24 407, 404, 403 & 402/MUM/2024 ITA Nos. 411, 407, 404, 403 & 402/MUM/2024 18/12/2016 i.e. after a gap of two days, i.e. after a gap of two days, whereas on 17/12/2016 whereas on 17/12/2016 his statement has been recorded from business premises of the his statement has been recorded from business premises of the his statement has been recorded from business premises of the assessee. The ld Counsel raised doubt on entire search action and assessee. The ld Counsel raised doubt on entire search action and assessee. The ld Counsel raised doubt on entire search action and seizure of quantum of c seizure of quantum of cash form sh Ishwerdev shukla. He ash form sh Ishwerdev shukla. He submitted that cash found was in his personal submitted that cash found was in his personal capacity capacity and only after survey at the premises of assessee company, he was forced to after survey at the premises of assessee company, he was forced to after survey at the premises of assessee company, he was forced to speak that cash belonged to assessee company. Without going into speak that cash belonged to assessee company. Without going into speak that cash belonged to assessee company. Without going into the controversy raising dou raising doubt on search action , we are of the view bt on search action , we are of the view that AO in impugned order has no where that AO in impugned order has no where considered or held the considered or held the cash found as unexplained cash of the assessee and same can’t be cash found as unexplained cash of the assessee and same cash found as unexplained cash of the assessee and same automatically considered as automatically considered as subsumed in the addition in relation to subsumed in the addition in relation to ‘on-money’, without express finding by the ld AO express finding by the ld AO. The AO has made . The AO has made addition in relation to on addition in relation to on-money, on the basis of on the basis of material impounded during the survey and not under search action, impounded during the survey and not under search action, impounded during the survey and not under search action, therefore no addition could have been made by the AO in therefore no addition could have been made by the AO in therefore no addition could have been made by the AO in assessments completed for AY 2013 assessments completed for AY 2013-14 to AY 2016 o AY 2016-17 invoking section 153C/153A of the Act section 153C/153A of the Act. Even for a moment, , it is presumed that cash found was undisclosed income for AY 2017-18 i.e. the that cash found was undisclosed income for AY 2017 that cash found was undisclosed income for AY 2017 year in which cash was found, no addition can be made in AY 2013- year in which cash was found, no addition can be made in AY 2013 year in which cash was found, no addition can be made in AY 2013 14 to AY 2016-17. T Therefore, additions made by the AO for AY by the AO for AYs 2013-14 to AY 2016 14 to AY 2016-17, without there being any incriminating without there being any incriminating material found in search, are deleted. search, are deleted. The legal ground challenging The legal ground challenging validity of assessment made u/s 153C for AY validity of assessment made u/s 153C for AY AYs 2013 AYs 2013-14 to AY 2016-17 are accordingly allowed. 17 are accordingly allowed.
D G Land Developers Pvt. Ltd. 25 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024
9. Now, we take up the additional ground raised in AY 2017 we take up the additional ground raised in AY 2017-18. we take up the additional ground raised in AY 2017 The contention of the assessee The contention of the assessee is that six preceding assessment that six preceding assessment years for invoking section 153C of the Act ha years for invoking section 153C of the Act have been taken by the been taken by the AO from AYs 2016 AO from AYs 2016-17 to AY 2010-11, corresponding to six corresponding to six assessment years, preceding the assessment year in which search rs, preceding the assessment year in which search rs, preceding the assessment year in which search was conducted on search was conducted on searched person. The ld counsel for the assessee person. The ld counsel for the assessee relied on the decision of the Hon’ble Supreme Court in the case of decision of the Hon’ble Supreme Court in the case of decision of the Hon’ble Supreme Court in the case of Jasjit Singh (supra) Jasjit Singh (supra) wherein it is held that application of the first application of the first proviso to section 153C(1) of the Act would not only be viso to section 153C(1) of the Act would not only be viso to section 153C(1) of the Act would not only be confined to question of abatement question of abatement, but also with regard to the date from which but also with regard to the date from which the six years period was to be reckoned in respect of which the period was to be reckoned in respect of which the period was to be reckoned in respect of which the returns were to be filed by the third party and returns were to be filed by the third party and thus, period period for which other person i.e. the other person i.e. the assesses were required to file required to file returns, would reference only from the date reference only from the date when material was forwarded to the material was forwarded to the jurisdictional Assessing Officer jurisdictional Assessing Officer. Thus, the initial year would be Thus, the initial year would be assessed u/s 143(3) of the Act and preceding six assessment years assessed u/s 143(3) of the Act and preceding six assessment years assessed u/s 143(3) of the Act and preceding six assessment years are assessable u/s 153C read with section 153A of the Act. are assessable u/s 153C read with section 153A of the Act. are assessable u/s 153C read with section 153A of the Act. According to the assessee ccording to the assessee, the case of the assessee was centralized with the Assessing Officer onl with the Assessing Officer only on 12/07/2018 and satisfaction has y on 12/07/2018 and satisfaction has been recorded by the AO in the capacity of AO of been recorded by the AO in the capacity of AO of searched person searched person i.e. sh Ishwardev Shukla as well as AO of other person i.e. the i.e. sh Ishwardev Shukla as well as AO of other person i.e. the i.e. sh Ishwardev Shukla as well as AO of other person i.e. the assessee, only on 16/07/2018 , it is presumed that only after this assessee, only on 16/07/2018 , it is presumed that only after this assessee, only on 16/07/2018 , it is presumed that only after this date seized cash could date seized cash could be transferred to the AO of the assessee, be transferred to the AO of the assessee, therefore, the initial assessment year therefore, the initial assessment year would be assessment year would be assessment year 2019-20 and the preceding six assessment years would be from 20 and the preceding six assessment years would be from 20 and the preceding six assessment years would be from D G Land Developers Pvt. Ltd. 26 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 assessment year 2018 assessment year 2018-19 to assessment year 2013 19 to assessment year 2013-14. The ld Counsel submitted that Counsel submitted that the Assessing Officer was essing Officer was required to complete assessment for assessment for the assessment year 2017 the assessment year 2017-18 invoking section 153C of the Act of the Act, being part of six assessment years six assessment years whereas, the Assessing Officer has completed , the Assessing Officer has completed assessment assessment u/s 143(3) of the Act, which which has rendered entire assessment assessment proceeding for AY 2017-18 as invalid as invalid and bad in law. Accordingly, the entire ccordingly, the entire assessment proceedings for assessment year 2017-18 should be assessment proceedings for assessment year 2017 assessment proceedings for assessment year 2017 quashed.
9.1 The ld DR on the other hand submitted that proviso to The ld DR on the other hand submitted that proviso to The ld DR on the other hand submitted that proviso to section 153C(1) refer to the period section 153C(1) refer to the period for which assessment of other assessment of other person shall abate and not to be construed for six assessment years person shall abate and not to be construed for six assessment years person shall abate and not to be construed for six assessment years to be assessed under section 153C read with section 153A of the to be assessed under section 153C read with section 153A of the to be assessed under section 153C read with section 153A of the Act.
9.2 We have heard rival submission of the parties. According to the 9.2 We have heard rival submission of the parties. According to the 9.2 We have heard rival submission of the parties. According to the Revenue, six assessment years to be assessed under section 153C assessment years to be assessed under section 153C assessment years to be assessed under section 153C read with section 153A of the Act are governed by section 153A(1), read with section 153A of the Act are governed by section 153A read with section 153A of the Act are governed by section 153A according to which, six assessment year for assessment u/s 153C six assessment year for assessment u/s 153C would be six assessment year six assessment years preceding the assessment year in preceding the assessment year in which search was carried out on search h was carried out on searched person and not with person and not with reference to proviso to section 153C, which reference to proviso to section 153C, which refers to refers to the period for abatement of assessment. abatement of assessment. For ready reference, section 153A an For ready reference, section 153A and proviso to section 153C are to section 153C are reproduced as under:
D G Land Developers Pvt. Ltd. 27 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 153A (1) Notwithstanding Notwithstanding anything contained in section 139, section 147, anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a section 148, section 149, section 151 and section 153, in the case of a section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, person where a search is initiated under section 132 or books of account, person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section other documents or any assets are requisitioned under section other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 [but on or before the 31st day of March, 2021], the 31st day of May, 2003 [but on or before the 31st day of March, 2021], the 31st day of May, 2003 [but on or before the 31st day of March, 2021], the Assessing Officer shall the Assessing Officer shall— (a)issue notice to such person requiring him to furnish within such period, issue notice to such person requiring him to furnish within such period, issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each specified in the notice, the return of income in respect of each specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year falling within six assessment years and for the relevant assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form assessment year or years referred to in clause (b), in the prescribed form assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and s and verified in the prescribed manner and setting forth such other etting forth such other particulars as may be prescribed and the provisions of this Act shall, so far particulars as may be prescribed and the provisions of this Act shall, so far particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be as may be, apply accordingly as if such return were a return required to be as may be, apply accordingly as if such return were a return required to be furnished under section 139; furnished under section 139; (b)assess or reassess the total income of six assessment years assess or reassess the total income of six assessment years assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the immediately preceding the assessment year relevant to the immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is previous year in which such search is conducted or requisition is previous year in which such search is conducted or requisition is made and for the relevant assessment year or years : made and for the relevant assessment year or years : XXX 153C. Assessment of income of any other person. sessment of income of any other person. (1)Notwithstanding anything contained in section 139, section 147, section Notwithstanding anything contained in section 139, section 147, section Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer 148, section 149, section 151 and section 153, where the Assessing Officer 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that, that,— (a)any money, bullion, jewellery or other valuable article or thing, seized or any money, bullion, jewellery or other valuable article or thing, seized or any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or requisitioned, belongs to; or (b)any books of account or docume any books of account or documents, seized or requisitioned, pertains or nts, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books a person other than the person referred to in section 153A, then, the books 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 of account or documents or assets, seized or requisitioned shall be handed of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person over to the Assessing Officer having jurisdiction over such other person over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall and that Assessing Officer shall proceed against each such other person proceed against each such other person and issue notice and assess or reassess the income of the other person in and issue notice and assess or reassess the income of the other person in 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 accordance with the provisions of section 153A, if, that Assessing Officer is accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seize satisfied that the books of account or documents or assets seize satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of requisitioned have a bearing on the determination of the total income of requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the such other person for six assessment years immediately preceding the such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is assessment year relevant to the previous year in which search is assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year relevant assessment year conducted or requisition is made and or years referred to in sub or years referred to in sub-section (1) of section 153A : section (1) of section 153A : Provided that in case of such other person, the reference to the Provided that in case of such other person, the reference to the Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of date of initiation of the search under section 132 or making of date of initiation of the search under section 132 or making of requisition under section 132A in the secon requisition under section 132A in the second proviso to sub d proviso to sub-section (1) of section 153A shall be construed as reference to the date of (1) of section 153A shall be construed as reference to the date of (1) of section 153A shall be construed as reference to the date of D G Land Developers Pvt. Ltd. 28 407, 404, 403 & 402/MUM/2024 ITA Nos. 411, 407, 404, 403 & 402/MUM/2024 receiving the books of account or documents or assets seized or receiving the books of account or documents or assets seized or receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such requisitioned by the Assessing Officer having jurisdiction over such requisitioned by the Assessing Officer having jurisdiction over such other person : other person : XXX………….” XXX………….” 9.3 But the assessee has relied on decision of Hon’ble Supreme But the assessee has relied on decision of Hon’ble Supreme But the assessee has relied on decision of Hon’ble Supreme Court in the case of CIT vs Jasjit Singh (supra), wherein Hon’ble Court in the case of CIT vs Jasjit Singh (supra), wherein Hon’ble Court in the case of CIT vs Jasjit Singh (supra), wherein Hon’ble Supreme Court has held that six assessment years Court has held that six assessment years in case of other Court has held that six assessment years person i.e. person other than searched person, person i.e. person other than searched person, are to be reckoned are to be reckoned from the assessment year from the assessment year, preceding to assessment year to assessment year in which seized material was handed over to the AO of other person. The seized material was handed over to the AO of other person. The seized material was handed over to the AO of other person. The relevant finding of Hon’ble Supreme Court is reproduced as under: relevant finding of Hon’ble Supreme Court is reproduced as under: relevant finding of Hon’ble Supreme Court is reproduced as under:
“8. In SSP Aviation (supra) the High Court inter alia reasoned In SSP Aviation (supra) the High Court inter alia reasoned as follows:- In SSP Aviation (supra) the High Court inter alia reasoned "14. Now there can be a situation when during the search "14. Now there can be a situation when during the search "14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or conducted on one person under Section 132, some documents or conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other valuable assets or books of account belonging to some other valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. person, in whose case the search is not conducted, may be found. person, in whose case the search is not conducted, may be found. In such case, In such case, the Assessing Officer has to first be satisfied under the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of any Section 153C, which provides for the assessment of income of any Section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the other person, i.e., any other person who is not covered by the other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or search, that the books of account or other valuable article or search, that the books of account or other valuable article or document b document belongs to the other person (person other than the one elongs to the other person (person other than the one searched). He shall hand over the valuable article or books of searched). He shall hand over the valuable article or books of searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction account or document to the Assessing Officer having jurisdiction account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having over the other person. Thereafter, the Assessing Officer having over the other person. Thereafter, the Assessing Officer having jurisdicti jurisdiction over the other person has to proceed against him and on over the other person has to proceed against him and issue notice to that person in order to assess or reassess the issue notice to that person in order to assess or reassess the issue notice to that person in order to assess or reassess the income of such other person in the, manner contemplated by the income of such other person in the, manner contemplated by the income of such other person in the, manner contemplated by the provisions of Section 153A. Now a question may arise as to the provisions of Section 153A. Now a question may arise as to the provisions of Section 153A. Now a question may arise as to the applicabili applicability of the second proviso to Section 153A in the case of ty of the second proviso to Section 153A in the case of the other person, in order to examine the question of pending the other person, in order to examine the question of pending the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched proceedings which have to abate. In the case of the searched proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for person, the date with reference to which the proceedings for person, the date with reference to which the proceedings for assessment or re assessment or reassessment of any assessment year within the assessment of any assessment year within the period of the six assessment years shall abate, is the date of period of the six assessment years shall abate, is the date of period of the six assessment years shall abate, is the date of initiation of the search under Section 132 or the requisition under initiation of the search under Section 132 or the requisition under initiation of the search under Section 132 or the requisition under Section 132A. For instance, in the present case, with reference to Section 132A. For instance, in the present case, with reference to Section 132A. For instance, in the present case, with reference to the Puri Grou the Puri Group of Companies, such date will be 5.1.2009. p of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present However, in the case of the other person, which in the present However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of case is the petitioner herein, such date will be the date of case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or receiving the books of account or documents or assets seized or receiving the books of account or documents or assets seized or requisition by the Asses requisition by the Assessing Officer having jurisdiction over such sing Officer having jurisdiction over such D G Land Developers Pvt. Ltd. 29 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 other person. In the case of the other person, the question of other person. In the case of the other person, the question of other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or pendency and abatement of the proceedings of assessment or pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reassessment to the six assessment years will be examined with reassessment to the six assessment years will be examined with reference to such date." reference to such date."
9. It is evident on a plain interpretation of Section 153C(1) that the It is evident on a plain interpretation of Section 153C(1) that the It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the Parliamentary intent to enact the proviso was to cater not merely to the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six question of abatement but also with regard to the date from which the six question of abatement but also with regard to the date from which the six year period was to be reckoned, in respec year period was to be reckoned, in respect of which the returns were to t of which the returns were to be filed by the third party (whose premises are not searched and in be filed by the third party (whose premises are not searched and in be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153 respect of whom the specific provision under Section 153-C was enacted. C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its The revenue argued that the proviso [to Section 153(c)(1)] is confined in its The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. tion to the question of abatement.
This Court is of the opinion that the revenue's argument is 10. This Court is of the opinion that the revenue's argument is 10. This Court is of the opinion that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind insubstantial and without merit. It is quite plausible that without the kind insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the of interpretation which SSP Aviation adopted, the A.O. seized of the of interpretation which SSP Aviation adopted, the A.O. seized of the materials – of the search party, under section 132 of the search party, under section 132 – would take his own would take his own time to forward the papers and materials belonging to the third party, to time to forward the papers and materials belonging to the third party, to time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually "relate back" the concerned A.O. In that event if the date would virtually "relate back" the concerned A.O. In that event if the date would virtually "relate back" as is sought to be contended by the revenue, ( as is sought to be contended by the revenue, (to the date of the seizure), to the date of the seizure), the prejudice caused to the third party, who would be drawn into the prejudice caused to the third party, who would be drawn into the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern proceedings as it were unwittingly (and in many cases have no concern proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis with it at all), is dis-proportionate. For instance, if the papers are in fact proportionate. For instance, if the papers are in fact assigned under Section 153 r Section 153-C after a period of four years, the third party C after a period of four years, the third party assessee's prejudice is writ large as it would have to virtually preserve assessee's prejudice is writ large as it would have to virtually preserve assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. the records for at latest 10 years which is not the requirement in law. the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of section 153 Parliament. On the other hand, a plain reading of section 153 Parliament. On the other hand, a plain reading of section 153-C supports the interpretation which this Court adopts. the interpretation which this Court adopts.” 9.4 The decision of Hon’ble Supreme The decision of Hon’ble Supreme Court, being binding precedent, respectfully, following the same, we hold that in the case precedent, respectfully, following the same, we hold that in the c precedent, respectfully, following the same, we hold that in the c of assessee, the assessment year 2017 of assessee, the assessment year 2017-18 falls within the six 18 falls within the six assessment years, which should be assessed under section 153C assessment years, which should be assessed under section 153C assessment years, which should be assessed under section 153C read with section 153A of the Act but the Assessing Officer has read with section 153A of the Act but the Assessing Officer has read with section 153A of the Act but the Assessing Officer has wrongly assessed the same under section 143(3) of the Act, which assessed the same under section 143(3) of the Act, which assessed the same under section 143(3) of the Act, which being an invalid action, same is not sustainable in law, hence invalid action, same is not sustainable in law, hence invalid action, same is not sustainable in law, hence quashed. The additional ground of appeal of the assessee is quashed. The additional ground of appeal of the assessee is quashed. The additional ground of appeal of the assessee is allowed.
D G Land Developers Pvt. Ltd. 30 407, 404, 403 & 402/MUM/2024 407, 404, 403 & 402/MUM/2024 9.5 Since, we have already held the assessment order Since, we have already held the assessment order Since, we have already held the assessment order for assessment year 2017 assessment year 2017-18 as is invalid and for assessment years for assessment years 2013-14 to 2016-17, 17, deleted the addition on the legal requirement deleted the addition on the legal requirement therefore, adjudication of the arguments of the assessee for AY therefore, adjudication of the arguments of the assessee therefore, adjudication of the arguments of the assessee 2013-14 to AY 2016 14 to AY 2016-17 on merit are rendered merely academic on merit are rendered merely academic hence, we are not adjudicating upon hence, we are not adjudicating upon and are left open eft open.
In the result, the appeals of the assessee for assessment year In the result, the appeals of the assessee for assessment year In the result, the appeals of the assessee for assessment year 2017-18 and 2013-14 to 2016 14 to 2016-17 are allowed.