Kamleshbhai Dharamshibhai Patel v. CIT

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The Tax Publishers2013 TaxPub(DT) 1185 (Guj-HC) : (2013) 051 (I) ITCL 0157 : (2013) 263 CTR 0362 : (2013) 214 TAXMAN 0558 : (2013) 095 DTR 0088 INCOME TAX ACT, 1961 --Search and seizure--Assessment under section 153C Satisfaction of Assessing officer--Assessee was an individual and was assessed to tax under the Act. Assessee and other family members had sold three parcels of land situated in city of Ahmedabad to 'S' group, who was engaged in construction business. A search and seizure operation was carried out on ' S's case. Certain documents relating to assessee and his family members were found from business premises of said searched person. A notice under section 153C was issued to assessee on basis of search and seizure action of searched person by ACIT. Documents which belongs to assessee were agreement between tenants and seizable payments were made to them by assessee to obtain vacant possession. *Held:* Notice issued under section 153C could not be held invalid where certain incriminating documents showing agreement with tenants entered into by assessee with tenants were seized from the person searched. It is an altogether a different case that later on the said land was sold. Nature of document or fact that it belongs to assessee would not, in any manner, change the issue. Portion of land which was sold to 'S' in question were occupied by tenants. In order to not only give a clear marketable title to the purchaser but also give the vacant possession of the entire land, the petitioners before executing the Sale Deeds entered into agreements with the tenants under which, the tenants vacated the premises and handed over possession to the petitioners in consideration of seizable amount paid to them. This was done through several agreements executed between the tenants and the petitioners. Later on, the lands were sold to M/s. S by a registered sale deed dated 16-9-2010. [Para 11] Whatever be the position of title of the lands post 16-9-2010, it can hardly be disputed that the documents in question belong to the petitioners. The petitioners required vacant possession of the land to be able to pass on the title and vacant possession. To be able to do so, the petitioners entered into agreements with the tenants. Such documents thus are documents which definitely belong to the petitioners. Simply because on subsequent date, the land was sold, may have a bearing on the title of such land, the same would not in any manner alter the nature of the document concerned. Such documents belong to the petitioners and continue to so belong, irrespective of the transfer of the title of the land. Court does not see how the petitioners can contend that simply because at a subsequent point of time they disposed of the property and transferred the title to the purchasers, the documents since to belong to them. The term 'belong' to has not been defined in the Act. In the Webster's Third New International Dictionary, the word, 'belong' is described as, to have relation or reference to a person or thing. In Advanced Law Lexicon by P. Ramanatha Aiyar [3rd Edition], the term, belong in context of section 400, IPC means, implied something more than the idea of casual association; it is a notion of continuity and indicates a more or less intimate connection with a body of persons extending over a period of time sufficiently long to warrant the inference that the person affected was identified himself with a band, the common purpose of which is the habitual commission of dacoity. [Para 12] Document executed between the erstwhile tenants of the petitioners regarding eviction of the tenants upon acceptance of sizeable payment by the petitioners definitely thus belong to the petitioners. It may be that as an evidence of passing on vacant and peaceful possession of the property, the petitioners handed over such documents to the purchasers to protect the interest of the purchasers against any action that may be initiated by the erstwhile tenants. The nature of the document or the fact that it belongs to the petitioners would not, in any manner, change. [Para 13] Likewise, the documents of sale also can be stated to belong to the petitioners. It is not in dispute that the petitioners were the sellers of the lands. They do not either doubt or dispute the documents of sale, or their respective signatures thereon. Term belong is not defined and does not have legally technical connotation and therefore, court once again falls back on the dictionary meaning of the same. Court needs to ascertain if such document can be stated to have relation or reference to the petitioners. As noted, the petitioners were as sellers of the land, parties to the documents. They had admittedly executed such sale deeds. It cannot be stated that the sale deeds do not belong to them. Likewise, the receipts of payments also are documents belonging to the petitioners. They are alleged to have received various payments in cash from the purchasers. If there are documents evidencing such particulars and if such documents are also signed by the petitioners, it can certainly be stated that such documents do belong to the petitioners. [Para 13] Under the circumstances, the action initiated under section 153C cannot be quashed on the ground on which writ petitions are presented before court. [Para 14] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1185 (Guj-HC) : (2013) 051 (I) ITCL 0157 : (2013) 263 CTR 0362 : (2013) 214 TAXMAN 0558 : (2013) 095 DTR 0088

INCOME TAX ACT, 1961

--Search and seizure--Assessment under section 153C Satisfaction of Assessing officer--Assessee was an individual and was assessed to tax under the Act. Assessee and other family members had sold three parcels of land situated in city of Ahmedabad to 'S' group, who was engaged in construction business. A search and seizure operation was carried out on ' S's case. Certain documents relating to assessee and his family members were found from business premises of said searched person. A notice under section 153C was issued to assessee on basis of search and seizure action of searched person by ACIT. Documents which belongs to assessee were agreement between tenants and seizable payments were made to them by assessee to obtain vacant possession. Held: Notice issued under section 153C could not be held invalid where certain incriminating documents showing agreement with tenants entered into by assessee with tenants were seized from the person searched. It is an altogether a different case that later on the said land was sold. Nature of document or fact that it belongs to assessee would not, in any manner, change the issue.

Portion of land which was sold to 'S' in question were occupied by tenants. In order to not only give a clear marketable title to the purchaser but also give the vacant possession of the entire land, the petitioners before executing the Sale Deeds entered into agreements with the tenants under which, the tenants vacated the premises and handed over possession to the petitioners in consideration of seizable amount paid to them. This was done through several agreements executed between the tenants and the petitioners. Later on, the lands were sold to M/s. S by a registered sale deed dated 16-9-2010. [Para 11] Whatever be the position of title of the lands post 16-9-2010, it can hardly be disputed that the documents in question belong to the petitioners. The petitioners required vacant possession of the land to be able to pass on the title and vacant possession. To be able to do so, the petitioners entered into agreements with the tenants. Such documents thus are documents which definitely belong to the petitioners. Simply because on subsequent date, the land was sold, may have a bearing on the title of such land, the same would not in any manner alter the nature of the document concerned. Such documents belong to the petitioners and continue to so belong, irrespective of the transfer of the title of the land. Court does not see how the petitioners can contend that simply because at a subsequent point of time they disposed of the property and transferred the title to the purchasers, the documents since to belong to them. The term 'belong' to has not been defined in the Act. In the Webster's Third New International Dictionary, the word, 'belong' is described as, to have relation or reference to a person or thing. In Advanced Law Lexicon by P. Ramanatha Aiyar [3rd Edition], the term, belong in context of section 400, IPC means, implied something more than the idea of casual association; it is a notion of continuity and indicates a more or less intimate connection with a body of persons extending over a period of time sufficiently long to warrant the inference that the person affected was identified himself with a band, the common purpose of which is the habitual commission of dacoity. [Para 12] Document executed between the erstwhile tenants of the petitioners regarding eviction of the tenants upon acceptance of sizeable payment by the petitioners definitely thus belong to the petitioners. It may be that as an evidence of passing on vacant and peaceful possession of the property, the petitioners handed over such documents to the purchasers to protect the interest of the purchasers against any action that may be initiated by the erstwhile tenants. The nature of the document or the fact that it belongs to the petitioners would not, in any manner, change. [Para 13] Likewise, the documents of sale also can be stated to belong to the petitioners. It is not in dispute that the petitioners were the sellers of the lands. They do not either doubt or dispute the documents of sale, or their respective signatures thereon. Term belong is not defined and does not have legally technical connotation and therefore, court once again falls back on the dictionary meaning of the same. Court needs to ascertain if such document can be stated to have relation or reference to the petitioners. As noted, the petitioners were as sellers of the land, parties to the documents. They had admittedly executed such sale deeds. It cannot be stated that the sale deeds do not belong to them. Likewise, the receipts of payments also are documents belonging to the petitioners. They are alleged to have received various payments in cash from the purchasers. If there are documents evidencing such particulars and if such documents are also signed by the petitioners, it can certainly be stated that such documents do belong to the petitioners. [Para 13] Under the circumstances, the action initiated under section 153C cannot be quashed on the ground on which writ petitions are presented before court. [Para 14]