Income Tax Appellate Tribunal - Ahmedabad
The Acit, Central Circle-1(2),, ... vs Shri Narendra N.Thakkar, Ahmedabad on 5 August, 2019
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ ''सी'' अहमदाबाद।
IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
एस) अपील सं./ IT(SS)A No. 441/Ahd/2012
आयकर (एस एस)
नधारण वष/Assessment Year: 2009-10
Assistant Commissioner of Vs. Shri Narendra N. Thakkar,
Income-tax, 43, Alok Bungalows,
Central Circle 1(2), Sun N Step Club Road, Thaltej,
Ahmedabad Ahmedabad
[PAN : ABCPT 9921 E]
एस) अपील सं./ IT(SS)A No. 495/Ahd/2012
आयकर (एस एस)
नधारण वष/Assessment Year: 2009-10
Shri Narendra N. Thakkar, Vs. Assistant Commissioner of
43, Alok Bungalows, Income-tax,
Sun N Step Club Road, Thaltej, Central Circle 1(2),
Ahmedabad Ahmedabad
[PAN : ABCPT 9921 E]
अपीलाथ / (Appellant) यथ / (Respondent)
Revenue by : Shri O P Sharma, CIT-DR
Assessee by : Shri Tushar Hemani, AR
सु न वा ई क" ता र ख/ Date
of Hearing : 18/07/2019
घोषणा क तार ख / Date of Pronouncement: 05/08/2019
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
The Revenue and assessee are in cross-appeals against the order of learned CIT(A)-I, Ahmedabad dated 23.07.2012 passed for assessment year 2009-10.
IT(SS)A Nos. 441 & 495/Ahd/2012 ACIT Vs. Narendra N Thakkar & vice-versa For AY: 2009-10 2
2. The Revenue has taken three grounds of appeal, but its grievance revolves around a single issue namely learned CIT(A) has erred in deleting the addition of Rs. 2,39,55,483/- out of total addition of Rs.2,62,08,519/-.
3. On the other hand, assessee has taken ten grounds of appeal. Assessee's grievances can be summarized under two folds, i.e. (i) the learned CIT(A) has erred in upholding the assessment order passed under Section 153C r.w.s. 153A of the Income-tax Act, whereas the Assessing Officer has no such jurisdiction to pass the assessment order and (ii) the learned CIT(A) has erred in confirming the addition at Rs.22,53,036/- by estimating profit @ 10% in the alleged undisclosed receipt of Rs.2,25,30,368/-.
4. Both the issues are interconnected with each other; therefore, we take them together. The brief facts of the case are that a search operation under Section 132 of the Act was conducted in the Jignesh K Thakkar group of cases on 5th February 2009. M/s. Anand Corporation was having its business premises at 131/3, Kabutar Khana, Chokha Bazar, Kalupur, Ahmedabad. A consequential search was conducted on M/s. Anand Corporation on 6th February 2009. Ultimately, the Assessing Officer has observed that certain loose papers were found at 131/3, Kabutar Khana, Chokha Bazar, Kalupur, Ahmedabad and he assumed that three concerns owned by the assessee were operating from this address. These papers alleged to have been related or belonging to the assessee. He noted the details of those concerns on page no. 2 of the assessment order which reads as under:-
IT(SS)A Nos. 441 & 495/Ahd/2012 ACIT Vs. Narendra N Thakkar & vice-versa For AY: 2009-10 3 Name of the concern Owner Nature of business activity M/s. Shivam Pharma Narendra Naranlal Thakkar Trading in HUF pharmaceuticals M/s. Thakkar Shri Narendra Naranlal Thakkar Sarafi Naranlal Devaram M/s. C.T. Corporation Shri Narendra Naranlal Thakkar Sarafi and Shri Chandubhai Thakkar Commission agent
5. On the basis of such loose papers, he issued notice under Section 153C of the Act on 02.08.2010. The Assessing Officer thereafter took cognizance of the details of pages at sr. nos. 2-8, 15, 16 & 23 of the seized documents Annexure-A1. He found that the Sharafi business (cheque discounting business) appears to have been noticed on these pages, whose total value of the transactions is Rs.2,29,26,071/- as well as cash transactions of Rs.36,28,449/-. He made additions of these transactions by treating them as undisclosed income of the assessee.
6. On appeal, learned CIT(A) has estimated the profit element involved in alleged receipt and confirmed addition to the extent of Rs.22,53,036/- being 10% of Rs.2,25,30,368/-.
7. Before us, at the very outset, learned Counsel for the assessee submitted that for taking cognizance under Section 153C of the Income- tax Act, the Assessing Officer of the searched person ought to have recorded a satisfaction exhibiting the fact that documents belonging to the assessee were found at the premises of the searched person during the course of search. These documents or evidences disclose undisclosed income of other person, i.e. assessee in the present case. The Assessing Officer of the searched person thereafter would transmit those IT(SS)A Nos. 441 & 495/Ahd/2012 ACIT Vs. Narendra N Thakkar & vice-versa For AY: 2009-10 4 documents alongwith his satisfaction to the Assessing Officer of the other person, i.e. assessee in the present case, for taking the assessment proceedings. In the absence of any satisfaction note, no cognizance under Section 153C could be taken by the Assessing Officer. He further contended that identical situation was provided under Section 158BD of the Income-tax Act and Hon'ble Supreme Court has considered this aspect in the case of CIT vs. M/S. Calcutta Knitwears, reported in 362 ITR 673 (SC). He also made reference to the following Tribunal orders:-
i. Zaidun Leeng SDN BHD Artefact Projects Ltd v. Dy. CIT, [2017] 186 TTJ (Nagpur) 91 ii. Asstt. CIT v. Jay Dee Securities & Finance Ltd, [2017] 57 ITR (Trib.) 681 / 188 TTJ 593 (Delhi) iii. Dy CIT vs. KM Nagaraj [2017] 166 ITD 53 / 189 TTJ 598 (Beng.)
8. He further contended that specific plea was raised before the CIT(A) in this regard, but it was not adjudicated. Hence, according to him, the assessment order deserves to be quashed.
9. On the other hand, learned Departmental Representative was unable to controvert the contentions of learned Counsel for the assessee.
10. We have duly considered rival submissions and gone through the records carefully. A perusal of Section 153C would indicate that satisfaction of the Assessing Officer of the searched person is must exhibiting the fact that documents/evidences shown escapement of undisclosed income of a person other than the searched person is available which required to be assessed; thereafter, he would transmit his satisfaction note along with that evidences to the Assessing Officer of such other person having territorial jurisdiction. In case satisfaction by IT(SS)A Nos. 441 & 495/Ahd/2012 ACIT Vs. Narendra N Thakkar & vice-versa For AY: 2009-10 5 the Assessing Officer of the searched person is being not recorded, then no assessment under Section 153C is sustainable. These appeals are lying in the Tribunal since 2012 and the Department has filed paper-book, but failed to place on record the copy of the satisfaction note. Putting reliance on the submissions of the assessee and, in the absence of any details, we are satisfied that the assessment order is not sustainable in view of the decision of the Hon'ble Supreme Court (supra) as well as the orders of the Tribunal (supra) on this point. We, therefore, quash the assessment order. However, in case of re-verification it emerges out that the satisfaction note is available with the Department, then the Revenue will be at liberty to file Miscellaneous Application to recall of this order. The MA be filed within time limit provided in the Act.
11. In the result, the appeal of the Revenue is treated as dismissed, whereas the appeal of the assessee is treated as allowed.
Order pronounced in the open Court on 5th August, 2019 at Ahmedabad.
Sd/- Sd/-
(AMARJIT SINGH) (RAJPAL YADAV)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 05/08/2019
Biju T., Sr.PS
आदे श क" 'त(ल)प अ*े)षत/Copy
of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं धत आयकर आय"
ु त / Concerned CIT
4. आयकर आय"
ु त(अपील) / The CIT(A)
5. %वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार / BY ORDER,
TRUE COPY
उप/सहायक पंजीकार (Dy./Asstt.Registrar)
आयकर अपील य अ धकरण, अहमदाबाद/ ITAT, Ahmedabad