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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 ..... in the list under the heading Samutkarsh Members Details and certain 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 - Consequentially the assessment order passed must be declared as without jurisdiction - Following decision of P. Srinivas Naik Vs. ACIT [2007 (11) TMI 443 - ITAT BANGALORE] - Decided in favour of assessee. - ITA Nos. 2056 & 2057/Hyd/2011, ITA No. 2058/Hyd/2011 - - - Dated:- 28-6-2013 - Shri Chandra Poojari And Shri Saktijit Dey,JJ. For the Appellant : Shri A. V. Raghuram For the Respondent : Smt. Amisha S. Gupt ORDER Per Saktijit Dey, J. M. These three appeals preferred by different assessees are directed against separate orders of the CIT(A) for the assessment years 2006-07 2007-08. As identical issues are involved in these appeals, they were clubbed and heard together, therefore, a common order is passed for the sake of convenience. 2. We will first deal with the common legal issue as raised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Rs. 74,81,250/- was paid on various dates through Mr. Venkatesh, a mediator towards purchase of the aforesaid property and the property was registered in the name of Mr. K. Ravindranath and Mr. K. Venkateswara Reddy. D. Nagarjuna Rao, as noted by the AO, further stated that the funds for acquisition of the property was arranged by the firm M/s seetaramanjaneya Constructions and the entries as found in the seized document were made by him in his own handwriting. The AO further noted that Mr. K. Ravindranath and Mr. K. Venkateswara Reddy also confirmed that the property was purchased for Rs. 74,81,250/- and the amount was paid through Venkatesh. The AO also recorded a statement from the mediator S. Venkateswara Rao alias Venkatesh who also deposed that he acted as a mediator for the sale of property in question and received the sale consideration from D. Nagarjuna Rao towards sale of the property and in turn has paid the sale consideration to the seller Sri T. Jayapal Reddy after retaining his commission. The AO had observed in the assessment order that when these evidences were confronted to the assessee and questioned why the sale consideration should not be taken at Rs. 74,81 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. The learned AR submitted that the entire assessment is on the basis of the said seized documents and statement recorded from third parties. It was submitted that as no valuable articles or things, books of account or documents seized belonged to the assessee the proceeding initiated u/s 153C is without jurisdiction. In support of such contention, the learned AR relied upon the decision of the Hon'ble Gujarat High Court in the case of Vijaybhai N. Chandrani Vs. ACIT [333 ITR 436] and of ITAT Bangalore Bench in case of P. Srinivas Naik Vs. ACIT [117 ITD 201]. 6. The learned DR at the outset objected to the admissibility of the ground raising the legal issue on the premise that such ground was not raised by the assessee before the CIT(A) and as such does not arise out of the order passed by the CIT(A). Without prejudice to the aforesaid preliminary objection the learned DR submitted that the sized document mentioned the sale consideration as Rs. 74,81,250/- and also the fact that it was paid through the broker Mr. Venkatesh. The sale consideration mentioned in the seized document was also corroborated in statements recorded from D. Nagarjuna Rao and the purchasers of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kes it clear that two conditions have to be fulfilled for initiating proceeding u/s 153C of the Act, which are:- 1. The AO must be satisfied that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs to a person other than the person referred to in section 153A. 2. After being satisfied that it belongs to a person other than the person from whom it is seized, he shall hand over the seized materials to the AO having jurisdiction over such other person having jurisdiction over such other person and that AO shall proceed against such other person by issuing a notice for assessing reassessing such other income. 10. Thus the condition precedent for assumption of jurisdiction u/s 153C is, the AO must be satisfied that the seized materials belongs to such other person. The word belong has not been defined under the Act. As per the dictionary meaning 'belong to' means be the property of; be the rightful possession of; be due to. Undisputedly seized document on the basis of which proceeding u/s 153C is initiated against the assessee is a loose sheet marked as 'A/DNR/18'. At our request the learned DR has submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 153A he shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person. However, there is a distinction between the two provisions inasmuch as under section 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under section 158BD if the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A, he shall proceed against such other person under section 158BC. 13. Thus a condition precedent for issuing notice under section 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the said requirement is not satisfied, recourse cannot be had to the provisions of section 153C of the Act. 14. Examining the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of search and seized cannot be termed, to be indicating any limited interest of the ownership of the assessee in such books of account or documents. The language used in section 153C is materially different from the language used under section 158BD. As per section 158BD, if any undisclosed income relates to other person, then action against such other person can be taken provided such undisclosed income is referable to the document seized during the course of search. However, section 153C says that if valuable or books of account or documents belonging to other persons are seized then action under section 153C can be taken against that person. In the instant case, we are satisfied that books of account or documents do not belong to the assessee and, therefore, the Assessing Officer was not justified in initiating action under section 153A read with section 153C of the Income-tax Act. The Assessing Officer is free to take proper remedial measure as per law." 14. We, in the preceding paragraphs, have already held that the seized document on the basis of which proceeding u/s 153C was initiated cannot be said to be belonging to the assessee. Therefore, considered in the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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