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TMI Blog2013 (9) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... t can be made in case of any person without following the intent of legislature and true purport of the provisions of section 153C of the IT Act." 3. As can be seen in the aforesaid ground the assessee has challenged the assumption of jurisdiction u/s 153C as there was no incriminating material belonging to the assessee. 4. Briefly the facts as taken from ITA No. 2057/H/11 are, the assessee is a firm engaged in the business of real estate and construction of flats. For the impugned assessment year the assessee filed its return of income on 29/10/2007 declaring total income of Rs. 4,91,130/-. A search and seizure operation u/s 132 was conducted in case of Sri D. Nagarjuna Rao, Sri K. Srinivasa Reddy and others on 29/10/2007. As a consequence of the search and seizure operation a notice u/s 153C r.w.s. 153A of the Act was issued to the assessee on 16/10/2008 calling upon it to submit its return of income. The assessee, in response to the notice issued submitted its return of income on 17/04/2009 declaring total income of Rs. 4,91,130/-. In course of the assessment proceeding that ensued, the AO noted that the assessee and Sri T. Jaipal Reddy have acquired a property at Plot No. 137 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention by observing that the assessee has admitted to having sold the property through the mediator Mr. Venkatesh and as the sale consideration paid by Sri D. Nagarjuna Rao was routed through Mr. Venkatesh his name has been entered in the incriminating material which also shows the sale consideration at Rs. 74,81,250/-. The AO therefore concluded that as Mr. Venkatesh was acting as a mediator he must have paid the same amount to the assessee and Sri T. Jaipal Reddy. Since the assessee has shown the sale consideration of the property at Rs. 18,37,500/-, the AO treated the differential amount of Rs. 56,43,750/- as the unaccounted income of the assessee and Sri T. Jaipal Redy and apportioned it in the same ratio at which they have shown the sale consideration of Rs. 18,37,500/-. As a result an amount of Rs. 33,60,284/- was added at the hands of the assessee and an amount of Rs. 22,83,466/- was added at the hands of Sri T. Jaipal reddy. The assessee challenged the assessment order by preferring an appeal before the CIT(A). The CIT(A) however concurred with the finding of the AO and sustained the addition. 5. The learned AR submitted that the assumption of jurisdiction by the AO u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first time before the Tribunal by way of additional ground. In support of such contention he relied upon the decision of the ITAT, Mumbai Special Bench in case of All Cargo Global Logistics Ltd. Vs. DCIT [137 ITD 26]. 8. We have considered rival submissions and perused the materials on record. We have also carefully examined the decisions placed before us. We will first deal with the objection of the learned DR in entertaining the ground raised by the assessee. It is not in dispute that no ground on the legal issue of validity of initiating proceeding u/s 153C was taken before the CIT(A). Therefore, considered in the light of the decision of the ITAT, Mumbai Special Bench in case of All Cargo Global Logistics Ltd. Vs. DCIT [supra] though this ground cannot be taken as a ground arising out the order of the lower authorities but certainly it can be taken as an additional ground as the Tribunal is only required to consider a question of law arising from the facts which are already on record. Accordingly, we proceed to decide the issue on its own merit. But before that, it is necessary to look into the provisions contained u/s 153C of the Act, which reads as under: "153C.68[(1)]Notw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessment order the AO has also observed that the said D. Nagarjuna Rao had admitted that entries in the seized documents were made by him in his own handwriting. While considering the objection of the assessee, the AO has also admitted the fact that neither the name of the assessees appear in the seized document nor it bears their signature. The notings made in the seized document only shows that an amount of Rs. 74,81,250/- was paid to Mr. Venkatesh towards sale consideration of the property. When the document in question was not seized from the assessee but from a third party, who admittedly has made the entries therein and furthermore when the seized document neither mentions the name of the assessee or bears his signature, then by no stretch of imagination it can be said to be belonging to the assessee. Thus, the precondition for initiating proceeding u/s 153C is not satisfied. Therefore, the initiation of proceeding u/s 153C against the assessee is without jurisdiction. The Hon'ble Gujarat High Court in case of Vijaybhai N. Chandrani Vs. ACIT [supra] while considering identical issue held as under:- "12. On a plain reading of the aforesaid provisions it is apparent that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details are given under different columns against the name of the petitioner along with other members, however, it is nobody's case that the said documents belong to the petitioner. It is not even the case of the revenue that the said three documents are in the handwriting of the petitioner. In the circumstances, when the condition precedent for issuance of notice is not fulfilled any action taken under section 153C of the Act stands vitiated." 13. The ITAT, Bangalore Bench in case of P. Srinivas Naik Vs. ACIT [supra] has held as under: "7. We have heard both the parties. It is an undisputed fact that books of account or document does not belong to the assessee, as these were seized from the premises of Shri Reddy. It is nowhere stated that these books of account or documents showed that all the transactions belonging to the assessee. Such books of account or documents contained the transactions relating to the group concerns of Shri Reddy. No valuable belonging to the assessee has been seized during the course of search. The term belonging, implied something more than the idea of casual association. It involves the notion of continuity and indicates one more or less intimate con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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