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2017 (8) TMI 1125 - AT - Income TaxValidity of assessment u/s 153C - AO jurisdiction - reliance on statement recorded under Sec. 132(4) - Held that - As find ourselves to be in agreement with the ld. A.R that the Statement of Sh. Abhinandan Lodha (supra) recorded under Sec. 132(4) in the course of search and seizure proceedings conducted in the case of Lodha group (supra) cannot be construed as a seized document , therefore, the reliance placed by the A.O on the same to justify the validity of jurisdiction assumed under Sec. 153C in the hands of the assessee company, cannot be accepted. We are further of the considered view that even otherwise as the disclosure of additional income of ₹ 110.25 lacs made by Sh. Abhinandan Lodha (supra) in his statement recorded under Sec. 132(4), in the hands of the assessee company is relatable to A.Y. 2011-12, and does not pertain to any of the years in respect of which jurisdiction had been assumed by the A.O under 153C in the case of the assessee company, therefore, the same on the said count also shall in no way go to confer validity to the assumption of jurisdiction by the A.O under Sec. 153C. We thus of the considered view that the A.O had clearly traversed beyond the scope of his jurisdiction u/s. 153C and therein proceeded with and framed assessment u/s. 153A r.w.s. 153C/143(3) in the hands of the assessee company. We thus finding no infirmity in the order of the CIT(A), therefore, uphold the same and dismiss the appeal of the revenue.
Issues Involved:
1. Validity of the assumption of jurisdiction under Section 153C of the Income-tax Act, 1961. 2. Whether the seized documents pertained to or belonged to the assessee. 3. Relevance of the statement recorded under Section 132(4) during the search proceedings. Detailed Analysis: 1. Validity of the Assumption of Jurisdiction under Section 153C: The primary issue was whether the Assessing Officer (A.O) validly assumed jurisdiction under Section 153C of the Income-tax Act, 1961. The CIT(A) quashed the assessment framed by the A.O under Section 153A read with Section 153C/143(3), holding that the A.O had wrongly assumed jurisdiction. The Tribunal upheld this view, noting that the pre-amended Section 153C required the A.O of the searched person to be satisfied that any seized documents "belonged" to a person other than the one being searched. The Tribunal emphasized that the documents seized during the search on the Lodha Group did not belong to the assessee, thus invalidating the jurisdiction assumed by the A.O. 2. Whether the Seized Documents Pertained to or Belonged to the Assessee: The A.O relied on documents (pages 107-108) seized during the search on the Lodha Group, which allegedly indicated receipt of on-money for the sale of flats/parking spaces. However, the CIT(A) and the Tribunal found that these documents did not refer to any project of the assessee (Lodha Excellencia) and did not indicate any transactions involving the assessee. The Tribunal noted that the documents did not make any reference to the assessee company or its projects, thus failing to meet the requirement for assuming jurisdiction under Section 153C. 3. Relevance of the Statement Recorded under Section 132(4) During the Search Proceedings: The A.O also relied on the statement of Shri Abhinandan Lodha recorded under Section 132(4), where he disclosed additional income related to the sale of parking spaces. The Tribunal, however, held that a statement recorded during search proceedings could not be equated with a seized document for the purpose of Section 153C. Moreover, the disclosed income pertained to A.Y. 2011-12, not the years under consideration (A.Y. 2005-06 to A.Y. 2010-11), further invalidating the A.O's assumption of jurisdiction. Conclusion: The Tribunal dismissed the appeals filed by the revenue for A.Y. 2005-06 to A.Y. 2010-11, upholding the CIT(A)'s decision that the A.O had wrongly assumed jurisdiction under Section 153C. The Tribunal emphasized that the seized documents did not belong to or pertain to the assessee, and the statement recorded under Section 132(4) could not be used to justify the jurisdiction under Section 153C. The appeals were dismissed, confirming that the assessments framed by the A.O were invalid.
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