9911796707
Advanced Search 
TMI Blog2014 (9) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... ch and seizure operation u/s 132 of the Act was conducted in case of Sri D. Nagarjuna Rao, Sri K. Srinivasa Reddy & Others, Miyapur, Hyderabad on 29-10-2007. As a consequence of aforesaid search and seizure operation, a notice u/s 153C read with section 153A of the Act was issued to the assessee calling upon him to file his return of income for the impugned assessment year. In response to such notice, the assessee filed his return of income on 1-12-2009 declaring total income of Rs. 76,250/-. During the assessment proceedings, the Assessing Officer while examining the computation of total income filed by the assessee along with return of income noticed that the assessee has admitted sale consideration of Plot No.22, survey No.230 admeasuring 420 sq. yards situated at Madinaguda at Rs. 14,70,000/-. He further noticed that as per the information available on record, the assessee had purchased the land vide registered document dated 20-9-2006 from Sri D. Nagarjuna Rao and Sri K. Venkateswara Reddy, partners of M/s Sri Sitaramanjayeya Constructions and the recorded consideration in the registered sale deed is Rs. 14,70,000/-. 5. However, as alleged by the Assessing Officer, page No.38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e explanation of the assessee concluded that the assessee has paid the sale consideration of Rs. 81,48,000/- as mentioned in the seized document and accordingly made an addition of Rs. 80,70,000/- as unexplained investment u/s 69 of the Act. Being aggrieved of the assessment order so passed the assessee preferred an appeal before the CIT (A). 7. Before the first appellate authority, the assessee apart from challenging the additions made on merits, he also raised a legal issue pertaining to the validity of the proceedings initiated u/s 153C of the Act on the ground that there is no material whatsoever before the Assessing Officer to assume jurisdiction u/s 153C of the Act. The CIT (A) though refused to admit the additional ground by pointing out some technical deficiency but at the same time dwelling upon the issues raised in the additional ground commented that the proceedings u/s 153C of the Act have been validly initiated as the seized document contained entries pertaining to the transactions in the immovable properties made by the assessee during the previous year and accordingly he dismissed additional ground raised on the issue of initiation of proceedings u/s 153C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of proceedings initiated u/s 153C cannot be challenged by the assessee as the seized material along with the statement recorded from D. Nagarjuna Rao clearly establishes the fact that the assessee has paid on money over and above the sale consideration as mentioned in the registered sale deed. In support of such contention, the learned DR relied upon a decision of Hon'ble AP High Court in case of Ahuja Holdings Vs. CIT (346 ITR 177). 10. We have heard submissions of the parties and perused the material on record as well as the orders of the revenue authorities On a perusal of the assessment order, it is very much evident that the seized material on the basis of which the Assessing Officer has initiated proceedings u/s 153C of the Act is page-38 of annexure A/DNR/18. The learned DR has also produced a copy of seized material before us. 11. The translated version of the aforesaid seized material which also forms part of the statement recorded from Tirumala Rao has been extensively quoted in para-4 of the assessment order. The same reads as under:- "Tirumala Rao account" Date Description Amount (Rs.) 25-08-2006 cash 60,000 02-09-2006 cash 10,00,000 05-09-2006 cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns the name of the assessee nor has any reference towards the property purchased by the assessee. Only thing it mentions is the name of Tirumala Rao and some entries with regard to the cash payment/receipts. Since the seized document has no reference either to the assessee or to the property purchased by the assessee it cannot be said to be belonging to the assessee as envisaged u/s 153C of the Act. Besides, merely because D. Nagarjuna Rao has stated that he has received the amount of Rs. 81,48,000/- from Tirumala Rao towards sale of the property in question it cannot be inferred on that basis alone, that the assessee has paid the said amount towards purchase of the property. More so, both the assessee and Tirumala Rao have denied of making the said payment to B. Nagarjuna Rao. In the aforesaid circumstances, the inference drawn by the Assessing Officer, in our view, is not legally sustainable. 13. It is a fact that D. Nagarjuna Rao is engaged in the business of real estates and Sri Tirumala Rao by his own admission is a broker. In the aforesaid circumstances, the entries made in the seized document in the name of Tirumala Rao if at all can be said to be representing receipts/paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sections 153A, 153B and 153C lay down a scheme for assessment in case of search and requisition. Section 153A deals with procedure for issuance of notice and assessment or reassessment in case of the person where a search is initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A after the 31st day of May, 2003. Section 153B lays down the time limit for completion of assessment under section 153A. Section 153C whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lore 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 connection with the person over a period of time. The books of account or documents seized during the course of search have a close association with the group concern of Shri Reddy. It records the transaction carried out by that group. It does not record the transaction carried out by the assessee. Under Wealth-tax Act, assets belonging to assessee were taxable. The expression belonging to the assessee connotes both the complete ownership and limited ownership of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
