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TMI Blog2014 (9) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ) erred in holding that the consideration paid is Rs. 94,50,000 though it is not demonstrated that the paper seized, a copy of which is actually provided only during appeal before the CIT(A), relate to assessee and though cross examination of the person who deposed is not allowed. 4. The Ld. CIT(A) erred in confirming the addition of Rs. 10,06,083 in a cryptic manner without considering the submissions and the ratio of Supreme Court in the case of P.K. Noorjehan". 1.1. Except the amount in ground No.4 in case of Smt. K. Vijaya Lakshmi which is at Rs. 1,77,000/- rest of the grounds are similar. 2. For the sake of convenience reference was made to facts in Ch.Madhavi case. Brief facts of the case are that a Search and Seizure operation u/s.132 of the Act was conducted In the case of Sri D. Nagarjuna Rao Sri K.Srinivasa Reddy and Others, Miyapur, Hyderabad on 29.10.2007 and certain books and documents were seized. During the assessment proceedings the Assessing Officer on analyzing the documents seized found that 525 sq yards of land at Sy. No. 228, 229/1 bearing Plot No 137 to 139 at Madinaguda was sold by M/s. Seetharamanjaneya Constructions through Sri K. Chakradhar Rao for an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised additional ground stating that invoking the provisions of section 153C are not correct inasmuch as there was no incriminating material to assume jurisdiction under section 153C of the I.T. Act. In raising the above additional ground, assessee submitted before the CIT(A) as under : "The learned CIT(A) provided a copy of the letter of the AO along with copy of seized material which was not provided at the time of assessment. The appellant invite kind attention to the said seized material. The Honourable CIT(A) would find that there is no indication any where in the seized material that it is connected to the appellant. The title of the seized material which is in Telugu if translated in English is "CHAKRADAR RAO A/C 525 yds" even the contents no where refer to the appellant or Mrs. Ch. Madhavi another purchaser. Therefore it is clear that this material could not have been relied upon. The AO states that recipient accepted the consideration to be Rs. 94,50,000. For various reasons they may accept the receipt to be so much. But there should be evidence to that effect. Nowhere in the assessment order such evidence is referred to except the above said material and confirmation by r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be seen from the above, there is no mention of either of the assessees in the said document. Moreover, the said account is in the name of Mr. Chakradhara Rao who has not been questioned at all in this transaction. As seen from the sale deed placed on record, the sale deed is between M/s. Shouri Constructions and Mr. T. Jaipal Reddy represented by AGPA holders Mr. K. Ravindranath and K.V. Reddy. Incidentally, these names do figure in the appeals of M/s. Shouri Constructions and Mr. T. Jaipal Reddy wherein also Mr. D. Nagarjuna Rao stated to have paid amount of Rs. 74,81,250/- and registered property for Rs. 18,37,500/- on 09.10.2006 in favour of Mr. K. Ravindranath and K. Venkateswara Reddy vide registered deed 09.10.2006. These two people are the sellers to the present assessees being vendees. Nowhere in the assessment order, the A.O. has not co-related how Mr. D. Nagarjuna Rao is concerned with the transactions between Mr. K. Ravindranath and K. Venkateswara Reddy who are the sellers to the assessee. It is also not sure from the documents seized above why Mr. Chakradhara Rao has to pay various amounts from 04.10.2006 to 11.03.2007 i.e., beyond the registration of the sale deed da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 40,00,000 20-09-2006 cash 29,50,000 21-09-2006 cash 1,38,000 81,48,000 A perusal of the aforesaid seized document clearly mentions that in the heading it is mentioned as 'Tirumala Rao account' and below that dates and amounts along with the word cash have been mentioned. Nothing has been mentioned whether they are receipts or payments. The aforesaid loose sheet neither mentions the name of the assessee nor it refers to the plot Number, survey number etc., for which the payment was allegedly made. There is nothing in the seized document to suggest that it relates to the sale transaction of plot No.22, Survey No.230 admeasuring 420 sq. yards at Madinaguda. Apart from the aforesaid seized document, the only other evidence on the basis of which the Assessing Officer concluded that the assessee has paid the amount of Rs. 81,48,000/- is the statement recorded from D. Nagarjuna Rao wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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/payments it could very well be relating to some other transaction, but certainly it cannot be treated to be the payments made by the assessee towards purchase of the property in question. It will be pertinent to mention here that on the basis of the said seized material i.e., A/DNR/18 relating to some some other transactions similar assessments u/s 153C of the Act were also made in case of M/s Shouri Constructions and T. Jaipal Reddy. When the issue came up before the Tribunal the co-ordinate bench of the Tribunal in ITA Nos. 2056 and 2057/Hyd/2011 in case of M/s Shouri Constructions and T. Jaipal Reddy dated 28- 6-2013 (supra) while considering the issue of validity of proceedings initiated u/s 153C of the Act accepted the contention of the assessee and held that the proceedings initiated u/s 153C of the Act on the basis of the so called incriminating material is invalid in law. At this point, it will be rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 which is similarly worded to section 158BD of the Act, provides that where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing. or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy. 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 interest. Of course belonging to is capable connoting, interest, which is less than absolute perfect legal title. However, there should be some limited ownership of interest, if it is to be permitted that the assets belongs to the assessee. In the instant case, documents or books of account found during the 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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