ACIT, NEW DELHI vs. MS. SUDHIKSHA SINGH, DELHI

together and are being disposed of by this common order for the sake of convenience, by dealing with (AY 2007-08) in Revenues Appeals and ITA nos. 335/Del/2012 (AY 2007-08) in Assessee Appeals- Sandeep Singh Khinda) and ITA No. 619/Del/2012 (AY 2007-08) (M/S Habitat Royale Projects P Ltd.)

2. The grounds raised in Revenue’s (AY 2007-08) read as under:-

2 On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of RS.1,OO,OO,OOO/- made by the Assessing Officer on protective basis on account of unexplained investment in property by holding that the seized document does not belong to the assessee.

3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that the requirement for initiating proceedings u/s 153C of the Income tax Act, 1961 has not fulfilled in this case.

4 On the facts and in the circumstances of the case, the CIT(A) has not correctly interpreted the provisions of section 153C r.w.s. 153A of the Income tax Act, 1961.

5. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that there is no intimate connection between the seized document and the assessee without appreciating the fact that the property mentioned in the seized document has been sold by the assessee and the payments received through cheques thereto have been reflected in the book of the assessee.

6. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that there is no evidence to the effect that the assessee had received the cash portion recorded in the seized document, without appreciating the settled position of law that the seized document should be read in totality and when cheque payments mentioned in the document have been reflected in the books of the assessee, she cannot deny the cash portion mentioned therein.

7. On the facts and in the circumstances of the case, without prejudice to the ground no.1, the CIT(A) himself has confirmed the above mentioned addition of Rs. 3.50 Crores made on protective basis in the hands of Sh. Sandeep Khinda thus validating the transaction recorded in the seized document and the stand taken by the Assessing Officer.

8. The order of the CIT(A) is erroneous and is not tenable on facts and in law.

9. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before: or during the course of the hearing of the appeal.

3. The grounds raised in Revenue’s (AY 2008-09) read as under:-

1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 17,50,00,000/- made by the Assessing Officer on substantive basis on account of unaccounted income from sale of property by holding that the seized document does not belong to the assessee"

2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. Rs. 5,00,00,000/- made by the Assessing Officer on protective basis on account of unexplained investment in property by holding that the seized document does not belong to the assessee.

3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that the requirement for initiating proceedings u/s 153C of the Income tax Act, 1961 has not fulfilled in this case.

4. On the facts and in the circumstances of the case, the CIT(A) has not correctly

interpreted the provisions of section 153C r.w.s. 153A of the Income tax Act, 1961.

5. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that there is no intimate connection 4

between the seized document and the assessee without appreciating the fact that the property mentioned in the seized document has been sold by the assessee and the payments received through cheques thereto have been reflected in the books of the assessee.

6. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that there is no evidence to the effect that the assessee had received the cash portion recorded in the seized document, without appreciating the settled position of law that the seized document should be read in totality and when cheque payments mentioned in the document have been reflected in the books of the assessee, she cannot deny the cash portion mentioned therein.

7. On the facts and in the circumstances of the case, without prejudice to the ground no.1, CIT(A) himself has confirmed the above mentioned addition of Rs. 17.50 Crores made on protective basis in the hands of Sh. Sandeep Singh Khinda thus validating the transaction recorded in the seized document and the stand taken by the Assessing Officer.

8. The order of the CIT(A) is erroneous and is not tenable on facts and in law.

9. The appellant craves leave to add, alter or amend any/all of the grounds of appeal ore or during the course of the hearing of the appeal.

REVENUE APPEAL (ITA NO. 617/DEL/2012- AY 2007-08)

7.1 On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld. Ld. Counsel of the assessee also filed an Application under Rule 27 of the ITAT Rules, 1963 to support CIT(A) order on the legal ground of recording of specific and explicit satisfaction. In support of his contention relating to invoking of Rule 27 is concerned, he referred the decision of ITAT, Delhi Benches, New Delhi passed in (AY 2011-12) on 2.12.2015 in the case of SIS Live vs. ACIT wherein, the similar issue was dealt with and request of the Department of invoking the Rule 27 was accepted.

“I have given considerable thought to the facts of the case and the arguments made by the appellant as well as the ratio of the case laws relied upon by the appellant. It is a matter of record that the impugned documents have been seized from the residential premises of Sh.

Sanjeev Khinda and his wife Smt. Samta Khinda. Further the assessee is younger sister of Smt. Samta Khinda. However the documents at pages

1 to 6 of A-I have not been seized from the premises or possession or control of Smt. Sudhiksha Singh. Neither there is any evidence to the effect that the seized documents are in the hand writing of the assessee namely Smt. Sudhiksha Singh. It is no doubt true that the property at D-

17, Pushpanjali which has been sold by the assessee to Sh. R.S. Shokeen of Vijeta Properties P. Ltd. and the property at G WG which has been purchased by the assessee from MIs Nimitaya Properties Ltd., a 7 company which is under control of Sh. Sanjeev Mahajan, are legally belonging to the appellant. The fact however remains the there is no absolute or limited ownership of the assessee over the seized documents apart from the fact that the transactions recorded therein pertain to properties owned by the assessee. Now the requirement under the law is not regarding the ownership of the properties mentioned in the seized document but it is regarding the ownership of the document itself. As there is no intimate connection between the contents of the seized document and the appellant and neither there is any other corroborative evidence to the effect that the appellant had received the cash portion recorded in the seized document therefore the requirement under the law of the fact that the seized document should belong to the assessee for initiation of proceeding uls 153C of the IT Act are not fulfilled in the case of the appellant. Accordingly, I am constrained to hold that the addition made for Rs. 3.50 Crores as well as Rs. 1 Crore based on the papers seized from the computer at the residential premises of Sh.

Sandeep Singh Khinda and Smt. Samta Khinda are not in accordance with law and is therefore directed to be deleted.”

Neither there is any evidence to the effect that the seized documents are in the hand writing of the assessee namely Smt. Sudhiksha Singh. As per documents filed by the assessee in the shape of Paper Book the property at D-17, Pushpanjali which has been sold by the assessee to Sh. R.S. Shokeen of Vijeta Properties P. Ltd. and the property at GWG which has been purchased by the assessee from M/s Nimitaya Properties Ltd., a company which is under control of Sh. Sanjeev Mahajan, are legally belonging to the assessee. The fact however remains that the there is no absolute or limited ownership of the assessee over the seized documents apart from the fact that the transactions recorded therein pertain to properties owned by the assessee. Now the requirement under the law is not regarding the ownership of the properties mentioned in the seized document but it is regarding the ownership of the document itself. As there is no intimate connection between the contents of the seized documents and the assessee and neither there is any other corroborative evidence to the effect that the assessee had received the cash portion recorded in the seized document therefore the requirement under the law that the seized document should belongs to the assessee for initiation of proceeding u/s 153C of the IT Act are not fulfilled in the case of the assessee. Therefore, Ld. CIT(A) has rightly held that the addition made for Rs. 3.50 Crores as well as Rs. 1 Crore based on the papers seized from the computer at the residential premises of Sh. Sandeep Singh Khinda and Smt. Samta Khinda are not in accordance with law and was therefore rightly deleted by the Ld. CIT(A). In view of the above, we do not find any infirmity in the order of the Ld. CIT(A) with regard to deletion of addition of Rs. 3.50 Crores and Rs. 1 Crore, hence, we uphold the order of the Ld. CIT(A) on these issues and dismiss the ground No. 1 & 2 raised by the Revenue.

9.1 We also note that Assessee has filed a Petition under Rule 27 ITAT Rules to support the Ld. CIT(A)’s order on legal ground of recording of specific and explicit satisfaction by particular AO of particular raided party. For the sake of clarity we are reproducing the Satisfaction Note for initiation proceedings u/s. 153C of the I.T. Act as well as the contents of the Petition filed u/r 27 of the ITAT Rules as under:-

“Satisfaction note for initiating proceedings u/s 153C of the I.T. Act

1 During the course of search proceedings page no. 1 to 6 of annexure A-1 party G-3 which is a computer printout page was found from residential premises of Shri Sandeep Singh Khinda and Smt. Samta Khinda. The data contained on these pages are also stored in the hard disk annexurised as A-9 of part G-3.

On perusal of seized documents, it is seen that the Farm House at Grand

Westend Greens (GWG) has been sold by M/s Nimitaya Properties Ltd. to Ms. Sudiksha Singh for a total consideration of Rs. 10 Crores out of which amount registered as per the sale deed dated 25.5.2007 is Rs. 4 crores vide pages 97 to 192 of the Annexure A-5 of Party G-3.

As per the chart on page no. 1 of Annexure A-1 party G-3 it is noted that the above mentioned farm house i.e. Grand Westend Greens has been sold by M/s Nimitaya Properties Ltd. to Sudhiksha Singh at Rs. 1000 lacs and out of which Rs. 400 lacs (300 + 100 lacs) has been paid in cheques and remaining amount of Rs. 600 lacs i.e. (100+500) paid in cash

residential premises of Sh. Sandeep Singh Khinda and Smt. Samta Khinda. The date contained on these pages are also stored in the hard disk annexurised as A-9 of party G-3. On perusal of page 1 of annexure A-1 party G-3, it is noted that Property no, D-17, Pushpanjali has been sold by Nimitaya Group to Sudhiksha Singh Bajaj.

The alleged property D-17, Pushpanjali was purchased by M/s Nimitaya Properties Ltd on 15.04.2005 from Shri Chander Prakash Gupta, son of Shri Jugal Kishore. 4/138, Safdarjung Development Area for Rs. 1.5'0 Crores. it was sold by Nimitaya Properties Ltd. to M/s Sudiksha Singh for Rs. 2 Crores. Further, the said property was sold by Ms. Sudiksha Singh to Shri R K Shokeen of Vijeta Properties Pvt Ltd. vide Sale Deed dated 27.02.08 for registered value of Rs. 4,00,00,000/-. But the chart made on page no. 1 of Annexure A-1 party G-3, reveals that, the actual sale consideration was Rs. 25 crores and not Rs. 4 crore. The amount of commission paid is Rs. 25 lakhs which matches as per the normal property dealings in the market. The payment of commission as well as the balance sale consideration of Rs. 21 crores are thus, made in cash on various dates mentioned in the chart.

During the course of post search investigation it was also gathered that Ms. Sudhiksha Singh is a sister in law of Sh. Sandeep Singh Khinda and real sister of Smt. Samita Khinda.

From the above facts and the documents seized, I am satisfied that the documents seized during the course of search u/s. 132 of the I.T. Act at the residential premises of Sh. Sandeep Singh Khinda and Smt. Samta Khinda belongs to the assessee. As this is a case of a person other than the person referred to in Sec. 153A covered u/s. 132 of the I.T. Act, proceedings u/s. 153C read with section 153A of the I.T. Act is being initiated in the case of the assessee.

(B.R. MISHRA) 25.11.2010 Asstt. Commissioner of Income Tax Central Circle-22, New Delhi PETITION UNDER RULE 27 ITAT RULES TO SUPPORT CIT-A ORDER ON LEGAL GROUND OF RECORDING OF SPECIFIC AND EXPLICIT SATISFACTION BY AO OF PARTICULAR RAIDED PARTY. The aforesaid appeals have been filed by revenue challenging order of CIT-A on ground of validity of proceedings u/s 153C qua captioned assessee where Ld CIT-A has given relief on count of document seized does not satisfies the criteria of "belongs to" as per stated provision.

Assessee has also raised before the CIT-A another related issue of recording of valid satisfaction u/s 153C which is jettisoned by him in impugned order. In the interregnum, assessee has already filed two separate no raising the issue of recording of valid satisfaction u/s 153C which are re-enclosed herewith for sake of completeness. The copy of purported satisfaction is also re-enclosed .

To support the aforesaid plea of non recording of valid and requisite satisfaction u/s 153C, this petition is filed as a matter of abundant caution, under rule 27 of ITAT rules, which as per below mentioned decisions is fully maintainable:

9.2 We have heard both the parties and perused the records available with us especially the Rule 27 of the ITAT Rules, 1963 and the impugned order. For the sake of clarity, we can gainfully refer here the provisions of Rule 27 of the ITAT Rules, 1963 which reads as under:-

“The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him.”

9.3 A bare reading of the Rule 27 manifests that the assessee, without having filed any cross appeal or cross objection can support the impugned order on any of the grounds decided against him. Two essential elements of the Rule 27 come to the fore on its bare reading. First is the condition precedent for invoking this Rule and the second is scope of interference. Insofar as the first element is concerned, we find that this Rule has been enshrined with a view to dispense justice to a assessee who is otherwise entitled to assail the correctness of the impugned order by filing appeal or cross objection, whether or not actually filed. This is borne out from the expression `though he may not have appealed’ used in the context of a assessee. This amply indicates the existence of a pre-right of the respondent to appeal, which may have remained un-availed. This Rule cannot help the respondent in a situation where he is otherwise debarred from filing cross appeal or cross objection. If no right to file a cross appeal or cross objection statutorily vests in the respondent, then it cannot be inferred indirectly by taking recourse to Rule 27. We have found out supra that, in the given facts, the Assessee has a right to file cross appeal or cross objection against the adverse direction given by the Ld. CIT(A) as contained in his appellate order. Thus, the first element, namely, the condition precedent for invoking rule 27, stands satisfied. 13 9.4 The next element is the scope of interference by the respondent. This is contained in the later part of the rule, which provides that the respondent `may support the order appealed against on any of the grounds decided against him’. A cursory reading of this part divulges that the respondent can support the impugned order on any of the grounds which were decided against him. This is a situation in which the assessee is supporting the impugned order (that are, the deletion of additions made by AO) under rule 27 on the ground decided against it (that is, upholding of the initiation of reassessment). Crux of the matter is that the order appealed against can be challenged by the Assessee only qua the aspects of the issue decided against him in deciding such overall issue against the appellant, which has been assailed in the appeal. It means that there is an inherent limitation on the power of the Assessee in not challenging the order appealed against under rule 27 de hors the ground decided against the appellant. This shows that if a particular independent issue has been decided against the assessee in the order appealed by the appellant on another independent issue decided against him, then the assessee under rule 27 has no power to challenge the correctness of such independent issue decided against him before the tribunal, while arguing for upholding the order on the issue decided against the appellant. Coming to the facts of the instant case, we find that the ld. Counsel for the assessee has invoked rule 27 by challenging the decision of the Ld. CIT(A) on the legal issue, as aforesaid.

9.5 In view of the above, we are of the considered opinion that the Assessee can invoke Rule 27 of the ITAT Rules which permits the respondent to support the order appealed against on the ground decided against it. We have noticed above that both the essential elements of rule 27, namely, the condition precedent for invoking this rule and the scope of interference stand fulfilled in the facts and circumstances of the instant case. Our aforesaid view is fully supported by the ITAT, I-2, Delhi Benches decision dated 02.12.2015 passed in (AY 2011-12) in the case of SIS Live vs. ACIT, as referred by the Ld. Counsel of the Assessee.

9.6 The lead case pertains to Smt. Sudhiksha Singh (AY 2007-08 and AY 2008- 09) where orders are passed u/s. 153C making substantive additions of Rs. 3.50 crores and Rs. 17.50 crores on strength of subject seized documents and protective additions were made in hands of Sandeep Khinda. It is noted that satisfaction note dated 25.11.2010 being date of issue of notice u/s. 153C, and therefore, the same is invalid on account of following reasons:- i.) That extant satisfaction note is not recorded in capacity of AO of raided party as manifest from facial reading of the same, which is must as held by the Coordinate Bench Delhi ITAT in DSL Properties Ltd. vs. DCIT 60 SOT 89 vide order dated 31.5.2012 (even if AO of both the raided party and other person are same); ii) That on basis of jurisdictional Delhi High Court order in the case of Pepsi Food Pvt. Ltd. vs. ACIT 2014 (8) TMI 425 dated 7.8.2014 it is clear that the instant satisfaction note is based on conjectures and surmises and do not reflect the application of mind by AO on presumptions u/s 292C/132(4A); iii) That in whole satisfaction note AO has not demonstrated that as to how document referred there belongs to assessee (Sudiksha Singh) as explained by jurisdictional Delhi High Court in case of Pepsico Holdings Pvt. Ltd. vs. ACIT (2015)

370 ITR 295 (14/8/2014) para 16; During search, in statements recorded none of the raided party disclaimed the subject documents; iv) That by making protective additions in hands of raided party (Sandeep Khinda) which is turned into substantive addition by Ld CIT-A it is clear that AO from beginning was not clear as to whom the document belongs on which ground itself 153C proceedings needs to be quashed being vitiated.

9.7 We find that the Hon’ble High Court of Delhi in the case of RRJ Securities Ltd. vide order dated 30.10.2015 (2015) 62 Taxmann.com 391 (Delhi) vide para no. 29 has observed as under:-

“29. It was contended on behalf of the Revenue that the hard disk contained data pertaining to the assessee and, therefore, it was rightly held that the hard disc belong to the assessee. Concededly, this contention would not be sustainable in view of the principles laid down by this Court in Pepsico India Holdings Pvt. Ltd. vs. ACIT (2015) 370 ITR 295 with regard to the interpretation of the words “belongs to” in Section 153C of the Act. The hard disk was recovered from the computer belonging to M/s BK Dhingra & Co. which contained soft copies of working papers and balance sheet pertaining to the assessee for its income tax filing. It has been contended that BK Dhingra is a Chartered Accountant and had the data pertaining to the assessee in his professional capacity. Merely because such data pertained to the assessee (who claims to be a client of M/s BK Dhingra and Co.) the hard disk could not be stated to belong to the assessee.

could not be initiated on the basis of the said disk.”

9.8 We find that the Hon’ble High Court of Gujarat in the case of Vijaybhai N Chandrani vs. ACIT 333 ITR 436 (Guj) has held that the fact of a reference to the name of person in the seized document cannot be the basis to come to the conclusion that the document belonged to the said person. Proceedings initiated on the basis of the such assumption u/s. 153C were held to be without jurisdiction and quashed by the Hon’ble Gujarat High Court.

ASSESSEE APPEALS (SANDEEP SINGH KHINDA) (ITA NO. 334/DEL/2012 AY-2007-08) 11. The grounds raised in (AY 2007-08) read as under:-

1) The Learned CIT ( Appeals) has grossly erred in law and on the facts of the case in confirming the addition of Rs 3.50 crores ( Three crores fifty lacs) in the hands of the assessee as unaccounted income or receipt during the year under consideration on sale of Property D-17 Pushpanjali. 17

2) The Learned CIT ( Appeals) has grossly erred in law and on the facts of the case in appreciating the factual matrix of the case while confirming the impugned addition of Rs 3.50 crores (Three crores fifty lacs) as unaccounted income or receipt on sale of property D-17 Pushpanjali in the hands of the assessee even when the appellant is not the owner of the subject sold property.

3) The Learned CIT (Appeals) has grossly erred in law and on the facts of the case in applying Sec 292C of the Income Tax Act merely because some papers were found from the premises of the assessee while ignoring vital facts and contentions of the assessee.

4) The appellant craves leave to add, alter, demand, supplement or raise fresh grounds of appeal, if considered expedient and advisable at the time of hearing of appeal.

It is prayed that the appellant appeal be allowed.

1) The Learned CIT ( Appeals) has grossly erred in law and on the facts of the case in confirming the addition of Rs 17.50 crores ( Seventeene crores fifty lacs) in the hands of the assessee as unaccounted income or receipt during the year under consideration on sale of Property D-17 Pushpanjali.

2) The Learned CIT ( Appeals) has grossly erred in law and on the facts of the case in appreciating the factual matrix of the case while confirming the impugned addition of Rs 17.50 crores (Seventeen crores fifty lacs) as unaccounted income or receipt on sale of property D-17 Pushpanjali in the hands of the assessee even when the appellant is not the owner of the subject sold property. 18

3) The Learned CIT (Appeals) has grossly erred in law and on the facts of the case in applying Sec 292C of the Income Tax Act merely because some papers were found from the premises of the assessee while ignoring vital facts and contentions of the assessee.

4) The appellant craves leave to add, alter, demand, supplement or raise fresh grounds of appeal, if considered expedient and advisable at the time of hearing of appeal.

It is prayed that the appellant appeal be allowed. 13. The brief facts of the case are that the Search and Seizure U/s 132 of the I.T.

Act was carried out at the business and residential premises of Nimitaya and Khinda group during which the residential premises of Sh. Sandeep Singh Khinda and his wife Ms. Samta Khinda were also searched on 6.11.2008 wherein certain documents were found and seized. In view of the same notice u/s. 153A of the Act was issued on 08.7.2009. In response thereto the assessee filed a return on 27.11.2009 declaring an income of Rs. NIL. Thereafter notice u/s. 143(2) of the Act was issued on 24.12.2009 and served upon the assessee. As there was a change in incumbent, notice u/s. 143(2) and 142(1) alongwith detailed questionnaire was issued on 12.8.2010 and served upon the assessee. In response thereto the assessee’s AR attended the proceedings and filed the submissions from time to time. Thereafter, AO assessed the income of the assessee at Rs. 3.50 crores by making the addition vide his order dated 31.12.2010 passed u/s. 153A/143(3) of the I.T. Act, 1961. Aggrieved with the AO’s order, the assessee appealed before the ld. CIT(A) who vide his impugned order dated 28.11.2011 has dismissed the appeal of the Assessee.

16.1 There is thorough lack of corroborative and confirming evidence and thorough lack of enquiry on the part of AO where all cases were with him only. No attempt is made to make reference to DVO by AO or CIT-A. There is no examination of any concerned witness/party to transaction. Only suspicion has weighed to make the colossal addition. There is no hidden bank a/c so as to transact the given money.

There is no bayana agreement or any other adversarial document found during extensive search operation specific to charge made. The charge made against the assessee only resolves around a single piece of Paper which is not handwritten from any of the transacting parties. Even if the document is taken on face value than no gainful premium construction can be taken as neither the seller} nor the buyer is taken on board at the time when this subject paper was found. This paper is out of syllabus for Mr. Sandeep Khinda not being the owner of the property. Section 292C being rebuttable presumption cannot made assessee's burden to be infallable as the same can't be elevated to be proven to the hilt i.e as far as Sudhiksha is concerned, assumption of jurisdiction u/s 153C is concerned to make a document to be belonging to the assessee, presumption u/s 292c can't be resorted i.e belonging to criteria can't be satisfied on the basis of presumption & assumption. As per record Mrs. Sudhiksha Singh another assessee had disclosed this transaction voluntarily in normal course by paying due capital gain u/s 50C read with section 48 i.e there is no sanction & under the present law to tax a seller over & above the given transaction rate which is well considers the applicable rate otherwise sec 50c will become redundant. This can be a fiction in fiction i.e. 292 can't be infused a incorporated in section 50c. In our view, suspicion how grave & strong can't substitute the place of reliable cogent evidence to fasten a tax liability.

16.2 We have also perused the Sale deed dated 27.2.2008 of the property bearing No. D-17, Pushpanjali, New Delhi which was executed by Mrs. Sudiksha Singh in favour of M/s Vijeta Properties (P) Ltd. which establish that no such property bearing no D-17 Pushpanjali ever belonged to the assessee (Sandeep Singh Khinda) and no purchase/sale of aforesaid property has ever been made by the assessee. Therefore, there is no question of any undisclosed income which can be attached to the assessee with respect to above alleged property transactions. Assessee has never received/paid any payment in cash with respect to such property as the above property never belonged to the assessee. The AO has made the addition in the hands of the assessee on protective basis under See 292C of the Income Tax Act as the paper has been seized from the premises of the assessee. As per the provisions of Sec 292C of the Income Tax Act, where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession orcontrol of any person in the course of Search u/s 132 of the Income tax, it may in any proceedings under this act, be presumed- 1) That such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; 2) That the contents of such books of account and other documents are true.

16.3 Considering the language of See 292C of the Income Tax Act, there is a presumption that the contents of the documents are true as document was found from the premises of the assessee. However, nowhere in the Section has been mentioned that the amount represented undisclosed income and be taxed in the hands of the assessee from whose premises the said paper has been seized. The presumption as envisaged in section 292C is limited to the correctness of the documents found at the time of search or survey, but that presumption has not been extended by the statute to be presumed to be the income of the assessee. Taxing statues have to be interpreted strictly. In deeming provision what is prescribed is to be deemed and deeming provision cannot be extended beyond the legislative scope. The presumption under see 292C is a rebuttable presumption and all the facts are to be considered before drawing an inference of undisclosed income on the basis of loose papers. The deeming provision cannot be applied mechanically ignoring the facts of the case and surrounding circumstances. There should be some business connection! or any such connection of the seized document with the assessee that can attach undisclosed income in the hands of the searched person. In the present case, the detail of the property i.e D-17 Pushpanjali, against which it has been alleged by the Ld AO that"

On Money" has been received against the sale of property was never owned by the assessee. However, there is no iota of evidence with the Department to suggest that loose sheet disclose receipts resulting in an undisclosed income on the part of the assessee. Therefore there is no question of assessing any income in the hands of the assessee . To support this view, we are placing reliance on the following judgements/decisions:-

- CIT vs. VP Bansal Order dated 2.8.2010 – The Hon’ble Delhi High Court has held that in the said case, the figures mentioned on the seized paper without there being any corroborator material in support thereof, contents were not capable of describing any transaction. Hence, addition cannot be made. - of 2009 dated 10.8.2010 CIT vs. BM Transport -The

Hon’ble High Court of Gujarat at Ahmedabad has held that unsigned loose paper may be clue for further investigation but cannot be a conclusive evidence to make addition. - Nirmal Fashions (P) Ltd. vs. DCIT 123 TTJ 180 - - it was observed that the presumption under section 292C is rebuttal presumption and the document has to be considered considering the totality of the facts of the case. The deeming provision cannot be applied mechanically ignoring the facts of the case and the surrounding circumstances.

Revenue appeal No. 619/Del/2012 (AY 2007-08)

1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 74,00,000/- made by the Assessing Officer on account of unexplained investment in property.

2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that source of investment of Rs. 74,00,000/- is part of the addition of Rs. 3.50 Crores made in the hands of Sh. Sandeep Singh Khinda in the asstt. year 2007-08, which has been confirmed by him without appreciating the fact that neither Sh. Sandeep Singh Khinda nor the assessee has accepted such position.

4. The order of the CIT(A) is erroneous and is not tenable on facts and in law.

5. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.

19. We find that Ld. CIT(A) has deleted the addition in dispute vide his order dated 29.11.2011 (AY 2007-08)- M/s Habitat Royale Projects P Ltd. by observing as under:-

“A detailed finding regarding the belongingness, correctness as also the contents of the above stated seized documents has been given in the appellate order of Sh. Sandeep Singh Khinda for A Y 2007-08 passed on 28.11.201 in A. No. 242/10-11. Following the reasoning given in the said appellate order, it is noted that it is the unaccounted cash received for Rs. 3.50 Crores by Sh. Sandeep Singh Khinda in FY 2006-07 on 25 account of sale of D-17, Pushpanjali which has been invested in cash for Rs. 74 lacs as part payment for purchase of DLF Properties belonging to the Nimitaya Group on 15.03.07. Since the source of this investment in cash for Rs. 74 lacs is forming part of the cash ofRs. 3.50 Crores which has been held as unaccounted income of Sh. Sandeep Singh Khinda in the above appellate order for A Y 2007-08, therefore the amount of Rs.

74 lacs is a case of application of income already brought to tax on substantive bas is in case of Sh. Sandeep Singh Khinda. Accordingly, the protective addition made by the AO for Rs. 74 lacs in case of the appellant i.e. M/s Habitat Royale Projects P ltd. is directed to be deleted.”

Revenue appeal No. 620/Del/2012 (AY 2008-09)

1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 6,78,00,000/- made by the Assessing Officer on account of unexplained investment in property.

2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that source of investment of Rs. 6,78,00,000/- is part of the addition of Rs. 17.50 Crores made in the hands of Sh. Sandeep Singh Khinda in the asstt. year 2007-08, which has been confirmed by him without appreciating the fact that neither Sh. Sandeep Singh Khinda nor the assessee has accepted such position. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in not appreciating the settled position of law that the seized document should be read in totality and when the payments by cheque mentioned in the document have been reflected in the books of account of the assessee, it cannot deny the cash entries mentioned in the same document and hence, the addition on this account is to be made in the hands of the assessee only. 4. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 5. The appellant craves leave to add, alter or amend any/all of the grounds of appeal

before or during the course of the hearing of the appeal.

22. We find that Ld. CIT(A) has deleted the addition in dispute vide his order dated 29.11.2011 (AY 2008-09)- M/s Habitat Royale Projects P Ltd. by observing as under:-

“A detailed finding regarding the belongingness, correctness as also the contents of the above stated seized documents has been given in the appellate order of Sh. Sandeep Singh Khinda for A Y 2008-09 passed on 28.11.201 in A. No. 240/10-11. Following the reasoning given in the said appellate order, it is noted that it is the unaccounted cash received for Rs. 17.50 Crores by Sh. Sandeep Singh Khinda in FY 2007-08 on account of sale of D-17, Pushpanjali which has been invested in cash for Rs. 678 lacs as balance payment for purchase of DLF properties belonging to the Nimitaya Group between 6.5.07 to 31.5.07. Since the source of this investment in cash for Rs. 678 lacs is forming part of the cash of Rs. 17.50 crores which has been held as unaccounted income of Sh. Sandeep Singh Khinda in the above appellate order for AY 2008- 08, therefore the amount of Rs. 678 lacs is a case of application of income already brought to tax on substantive basis in case of Sh. Sandeep Singh Khinda. Accordingly, the protective addition made by the AO for Rs. 678 lacs in case of the appellant i.e. M/s Habitat Royale Projects P ltd. is directed to be deleted.”

Accordingly, he directed the AO to delete the protective addition of Rs. 678 lacs in the case of assessee i.e. M/s Habitat Royale Projects P Ltd. made by AO. However, as aforesaid, in the case of Sandeep Singh Khinda vide para no. 11 to 17 for the assessment years 2007-08 and 2008-09, we have already deleted the addition of Rs. 3.50 crores and Rs. 17.50 crores respectively, therefore, the question of deletion of addition of Rs. 678 lacs does not arise as the investment in cash for Rs. 678 lacs was forming part of the cash of Rs. 17.50 crores, hence, the present appeal of the Revenue stands dismissed.

Order pronounced in the Open Court on 29/11/2016.