Principal Commissioner Of Income Tax(Central - 4 v. M/S. Harsh Deep Construction

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.202 OF 2017 WITH INCOME TAX APPEAL NO.204 OF 2017 Principal Commissioner of Income Tax(Central - 4) .... Appellant versus M/s. Harsh Deep Construction... Respondent ….... Mr.Tejveer Singh, Advocate for Appellant.Mr.Tejveer Singh, Advocate for Appellant. Mr.Sashi Tulsiyan a/w P.C. Tripathi, Advocate for Respondent.Mr.Sashi Tulsiyan a/w P.C. Tripathi, Advocate for Respondent. CORAM : AKIL KURESHI & SARANG V. KOTWAL, JJ.DATE: 15[th] APRIL, 2019. P.C. : 1. These Appeals are filed by the revenue to challenge the judgment of Income Tax Appellate Tribunal concerning sameassessee. They have been heard together and would be disposedof by this common judgment. 2. The Appeals arise out of search and seizure action 2 / 5 21-ITXA-202-&-204-17.odtinitiated by the revenue against the Association of Persons(‘AOP’ for short) or its members. The Assessing Officer madeadditions in the hands of the Respondent-Assessee, an individualwhich were challenged unsuccessfully before the CIT (Appeals).In further appeals, the tribunal deleted the additions. In one ofthe assessment years covered under these Appeals, the questionsof validity of search authorization against the assessee and thequestion whether the search carried out at the premises of theassessee, which was in relation to such authorization was valid,were addressed by the tribunal. Looking to the searchauthorization, the Panchanama of search and other relevantfactors, the Tribunal came to the conclusion that no actionagainst the assessee under section 153A of the Income Tax Act(for short ‘the Act’) could have been taken. 3. Having stated so, tribunal also proceeded to examinethe additions made by the Assessing Officer for both assessmentyears as confirmed by the CIT (Appeals). The tribunal on meritsheld that the additions were totally impermissible. 3 / 5 21-ITXA-202-&-204-17.odt 4. Having heard learned Counsel for the parties andhaving perused documents on record, we are of the opinion thateven though revenue may have an arguable case in relation tothe tribunal’s first conclusion of invalidity of assessment undersection 153A of the Act, in view of the tribunal's ultimateconclusions, these Appeals are not required to be entertained.The tribunal in the impugned judgment while deleting additionson merits has come to the conclusion that the revenueauthorities did not contradict the submissions of the assesseeregarding impermissibility of reliance on certain documents andthe statements recorded in search. The tribunal also noted thatthe analysis carried out by the Assessing Officer suffered frommultiple infirmities. Assessing Officer had not carried out thequalitative analysis and had carried out on certain arithmeticalcalculations based on loose papers. The tribunal concluded asunder; “24. In the instant case, it is an admitted fact that therevenue has not seized any other valuables, cash orinvestments corroborating the figure of Rs..15.00 crores. 4 / 5 21-ITXA-202-&-204-17.odt “24. In the instant case, it is an admitted fact that therevenue has not seized any other valuables, cash orinvestments corroborating the figure of Rs..15.00 crores. 4 / 5 21-ITXA-202-&-204-17.odt Further the notings made in panchanama shows that thesearch commenced in the residence of Shri HarshadDoshi at 1.30 a.m. (almost midnight) on 17.10.2008and continued upto 1.00 am (again mid night) on18.10.2008. We have noticed earlier that Shri DileshShah was called upon to the residence of Shri HarshadDoshi. The copy of sworn statement furnished in pageno.2 of the paper book shows that the search officials didnot record the time at which the recording of statementwas commenced, even though the sheet contained acolumn for recording the time. Hence there could bemerit in the contentions of the assessee that thestatement was recorded at the fag end of the search andShri Dilesh Shah was exhausted and he was constrainedto admit the additional income. Further, we have noticedthat the noting found in the loose sheet did not tally withthe entries made in the books of account. No othermaterial was brought on record by the AO to corroboratethe noting made in the loose sheet. None of the buyers ofthe flat was examined to ascertain the truth. Under theseset of facts, we are of the view that the loose sheetreferred above cannot be considered to be a documentthat could be relied upon. Further, the facts andcircumstances show that Shri Dilesh Shah was undersome compulsion to admit additional income. The very 5 / 5 21-ITXA-202-&-204-17.odtfact that the assessee did not offer the same in the returnof income shows that the assessee was not in agreementwith the admission so made, as according to it, the samedid not reflect the truth. Even though there is no properexplanation as to why the affidavit prepared within twodays of the search, was filed after expiry of two years, yetthe surrounding circumstances show that the assesseewas under the belief that the admission has been wronglymade. Further, we have also, for the reasons discussedsupra, noticed that the statement taken from Shri DileshShah may not be a statement taken as per the provisionsof sec. 132(4) of the Act. In view of the foregoingdiscussions, we are of the view that the tax authoritiesare not justified in placing reliance on the page no.90 ofthe Annexure I and the sworn statement taken from ShriDilesh Shah.” 5. In the result the entire issue is based on appreciation ofmaterials on record. No question of law arises. 6. Income Tax Appeals are dismissed. (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)