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TMI Blog2012 (6) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... H.L. KARWA, MEHAR SINGH, JJ. For the Appellant: Shri Tarsem Lal For the Respondent: Shri Padam Behl for the Respondent. ORDER H.L. Karwa, Vice-President This appeal filed by the Revenue is directed against the order of the CIT(A), Amritsar dt. 14th Jan., 2010, relating to the asst. yr. 2006-07. 2. In this appeal, the Revenue has taken the following grounds : 1. On the facts and in the circumstances of the case the learned CIT(A) has erred in admitting the additional grounds of appeal without according an opportunity of being heard to the AO. 2. On the facts and in the circumstances the learned CIT(A) has erred in not appreciating the fact that proceedings in this case were initiated under s. 148 on the basis of the Dy. CIT, CC-22, New Delhi. It is not a case where the Dy. CIT, CC-22, New Delhi, has recorded satisfaction regarding certain seized documents belonging to the assessee Shri Arun Kumar Kapoor and the original seized documents have been handed over to ITO, Ward 1(1), Amritsar, having jurisdiction upon Shri Arun Kumar Kapoor, the assessee to proceed against him by issue of notice under s. 153C. 3. On the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently, the AO received information from Dy. CIT, Central Circle-22, New Delhi, vide letter dt. 19th Feb., 2008 wherein it was reported that a search and seizure action under s. 132 was carried out in the case of M/s. Today Homes Infrastructure (P.) Ltd., 8th Floor, Statesman House, Connaught Place, New Delhi on 28th March, 2006 in which certain incriminating documents relating to the assessee and M/s. P.R. Infrastructure Ltd. were seized. On the basis of evidence seized during the course of search in the case of M/s. Today Home Infrastructure (P.) Ltd. and subsequent assessment proceedings in its case, the cost price of each share of M/s. P.R. Infrastructure Ltd. was determined at ₹ 2,041 as against the transfer price at face value of ₹ 10 by the directors of M/s. P.R. Infrastructure Ltd. In the report of Dy. CIT, Central Circle-22, New Delhi, it was stated that M/s. P.R. Infrastructure Ltd. had transferred the shareholding of the directors along with management of the company to M/s. Today Home Infrastructure (P.) Ltd. for a total consideration of ₹ 12.25 crores. The AO, therefore, recorded the reason and issued notice under s. 148 which was served on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 153C as under : 'The new s. 153C provides that where an AO is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in s. 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO shall proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of s. 153A.' Sec. 153C in fact, corresponds to earlier s. 158BD relating to assets, documents etc. of any other person found during search or requisition as per Chapter-XIVB. In such a case, books, documents etc. have to be handed over to the AO having jurisdiction over such third person who will initiate and issue a notice to such a person under s. 153C of the Act. In the case of Jindal Stainless Ltd. v. Asstt. CIT [2009] 122 TTJ (Del.) 902 : [2009] 19 DTR (Del.)(Trib.) 345, it was held that where the procedure laid down under s. 153C has not been followed, the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiated by the AO in the case of the assessee on the basis of information received by him from the Dy. CIT, Central Circle II, New Delhi and it is highly pertinent to mention here that the AO was not led by the information supplied by the Dy. CIT, Central Circle II, New Delhi but had reached an independent decision, as is clear from para 3.1.4 at p. 2 of the assessment order, which reads as under : I have considered all the material/evidences and have reasons to believe that on account of assessee's failure to furnish complete and correct particulars of income, to the extent of ₹ 1,02,10,000 charged to income-tax has been under-assessed for the asst. yr. 2006-07. 5.1 Shri Tarsem Lal, the learned Departmental Representative pointed out that there is clear application of mind by the AO while initiating proceedings under s. 147 and as such the same is foolproof. He also submitted that this Bench of the Tribunal had confirmed the making of assessments in the cases of Dr. Poonam Sinigh, Dr. Balwinder Singh and Smt. Saroj Rani Gupta, vide its order in IT Appeal Nos. 380, 381 and 382/Asr/2009 dt. 31st Dec., 2009 respectively in which cases assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g., 2005, it was further found that M/s. P.R. Infrastructure Ltd. has received further sum of ₹ 42 lacs from M/s. Today Homes Infrastructure (P.) Ltd. towards the part-payment of sale consideration of ₹ 12.25 crores. Thus, till 14th Aug., 2005, Sh. Arun Kapoor had received ₹ 1 crore in cheque and in cash as part-payment of total sale consideration of land at ₹ 12.25 crores. 3.1.3 Sh. Arun Kapoor had transferred 10,000 shares of M/s. P.R. Infrastructure Ltd. owned by him at face value of ₹ 10 whereas market value of each share was determined at ₹ 2,041. Assessee has not shown any capital gain on account of transfer of shares in his return of income for assessment. As such income to the tune of ₹ 2,02,10,000 (20,41,00,000 sale price-1,00,000 cost price) has thus escaped assessment for the asst. yr. 2006-07. In view of the above, we reject the contention of the learned Departmental Representative that no incriminating documents relating to the assessee were found during the course of search. 7.2. The undisputed facts are that a search was conducted under s. 132 of the Act in the case of M/s. Today Homes Infrastructure (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re illegal and void ab initio. In view of the provisions of s. 153C of the Act, s. 147/148 stands ousted. In the instant case, the procedure laid down under s. 153C has not been followed by the AO and, therefore, assessment has become invalid. We also observe that the CIT(A) was justified in following the ratio laid down by the Hon'ble Supreme Court in the case of Manish Maheshwari v. Asstt. CIT [2007] 289 ITR 341/159 Taxman 258 wherein it has been held that if the procedure laid down in s. 158BD is not followed, block assessment proceedings would be illegal. The CIT(A) has correctly observed that the provisions of s. 153C are exactly similar to the provisions of s. 158BD of the Act in block assessment proceedings. Thus, considering the entire facts and the circumstances of the present case, we hold that the CIT(A) was fully justified in quashing the reassessment order. We also do not find any merit in the submissions of the learned Departmental Representative that during the course of search, it was found at premises of M/s. Today Homes Infrastructure (P.) Ltd. pertaining to M/s. P.R. Infrastructure Ltd. and not the assessee. In this regard, we may point out that the content ..... X X X X Extracts X X X X X X X X Extracts X X X X
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