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TMI Blog2015 (1) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent : Sh. Vikram Sahai, Sr. DR ORDER Per H. S. Sidhu, JM:- This is an appeal filed by the Assessee against the Order dated 12.3.2013 passed by the Ld. CIT(A)-XXXI, New Delhi pertaining to assessment year 2008-09. 2. The grounds raised in the Assessee s Appeal read as under:- 1. That on the facts and circumstances of the case and in law, the CIT(A) has erred in not holding that the notice issued u/s. 153C and the assessment order passed u/s. 143C/143(3) are illegal, bad in law and without jurisdiction. 2. The order of the CIT(A) is bad in law as the CIT(A) has not considered that the assessment order in this case has not been passed on the basis of any material seized in a search action taken under section 132 of the I.T. Act, 1961. 3. The order of the CIT(A), on the facts and circumstances of the case, the perverse as it does not take into consideration the relevant documents brought on record and submissions of the assessee. 4. The CIT(A) has erred on the facts and in law in confirming the addition of ₹ 43,83,562/- made by the AO in not allowing capitalization of interest. 5. The CIT(A) has erred on the facts and in law in not consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal of the assessee accordingly. 6. Against the impugned Order dated 12.3.2013 of the Ld. CIT(A), Assessee filed an appeal before us. 7. At the time of hearing, Ld. Counsel of the assessee, assailed the impugned order and brought to our notice the Satisfaction Note recorded in the case of the assessee for the assessment year 2008-09 which reads as under:- M/s Global Heritage Ventrues Pvt. Ltd. Satisfaction note for proceedings u/s. 153C of the Income Tax Act, 1961. A Search operation was conducted on Raj Darbar Group of Cases on 31.7.2008. During the course of Search operations at the premises of 1. Party A-7 (Office of M/s Global Realty Ventrues Pvt. Ltd., Narsi Value Creations Pvt. Ltd., Galaxy Nirmaan Pvt., True Zone Buildwell Pvt. Ltd., 11, Ring Road, Lajpat Nagar-IV, New Delhi). 2. Party A-15 (Locker) (Restraint at Locker No. 347, Key No. 431, Central Bank of India, Kamla Nagar, Agra UP in the name of Smt. Anita Aggarwal) Various paper were found and seized belonging to M/s Global Heritage Ventures Pvt. Ltd. The annexure are marked as : 1. Party NO. A-7 Ann. A-5 pages 84-83, Ann.A-17, Ann. A-22, Ann. A-30 pages 1-130, Ann. A-31 pages 1-135, Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entity in whose case the document / asset has been seized to the effect that the relevant document / asset belong to the other person in whose case action under section 153C is contemplated; it is essential to establish that the document belongs to the person in whose case action u/s. 153C is contemplated; and the AO of the entity before initiating process under section 153C has to record a separate satisfaction that the document / asset belong to the person in whose case action under section 153C is required to be initiated and also he has to record satisfaction that the document / asset have significance on the assessment of income of the person in whose case action u/s. 153C is required to the initiated, as a result of search notice issued u/s 153C of the Act was illegal, invalid and unsustainable and so bad in law being without jurisdiction. 8.1 In support of his contention Ld. AR filed 02 Paper Books one containing pages 1 to 68 having the copy of written submission filed before the CIT(A) dated 25.2.2013 and 11.3.20-13; Copy of Annual Report for the year ending 31.3.2008; Copy of certified Satisfaction Note and Copy of MOA. The Second one is the Paper Book containing p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , before a notice under Section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step is - after such satisfaction is arrived at - that the document is handed over to the Assessing Officer of the person to whom the said document belongs . In the present cases it as been urged on behalf of the petitioner that the first step itself has not been fulfilled. For this purpose it would be necessary to examine the provisions of presumptions as indicated above. Section 132( 4A)(i) clearly stipulates that when inter alia any document is found in the possession or control of any person in the course of a search it may be presumed that such document belongs to such person. It is similarly provided in Section 292C (1)(i). In other words, whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or satisfaction that the document in fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Group of cases on 31.7.2008. During the course of search operations at the premises of: (i) Party A-7, Global Reality Ventures P. Ltd.: various papers were found and seized belonging to M/ s VK Fiscal Services P. Ltd. The annexure are marked as under: Party A-7: Annexure A-45 : Hard disc containing books of accounts of M/ s VK Fiscal Services P. Ltd. Thus the proceedings u/ s 153 C read with section 153A of the Income Tax Act, 1961 are being initiated in the above case. Sd/- Deputy Commissioner of Income Tax Central Circle 12, New Delhi. 11.1. A perusal of the Satisfaction Note demonstrates that in the hard disk of one of the computers some accounts of the assessee company were found. A print out of these books have been furnished to us by the Ld. CIT,D.R. A perusal of the print out show that page 1 is a confirmation of accounts given by the assessee company M/s V.K. Fiscal Services P. Ltd. to Global Reality Ventures Ltd., for the period is 1st April, 2008 to 31st March, 2009. As an attachment to this confirmation of account , V.K. Fiscal Services P. Ltd. Has given a copy of ABN Amro Bank (626643) books, copy of trial balance, copy of profit and loss a/c, cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petitions also. As regards the decision of the Allahabad High Court in Classic Enterprises (supra), this Court had indicated that it could not agree with the conclusions and observations of the Allahabad High Court inasmuch as the decision of the Allahabad High Court was premised on a consideration of the provisions of Section 158BD of the said Act which are entirely different from the provisions of Section 153C of the said Act. Furthermore, with regard to the decision in SSP Aviation Ltd. (supra), this court had noted that the said decision does not militate against the view taken in Pepsi Foods (P.) Ltd. (supra). 6. The learned counsel for the Revenue has cited an additional decision before us today and that is the case of Sarvesh Kumar Agarwal v. Union of India [2013] 353 ITR 26/216 Taxman 109 (Mag.)/35 taxmann.com 85 (AIl). This decision also, in our view, does not advance the case of the Revenue. This would be evident from the observations of the Allahabad High Court in paragraphs 19 to 21 of the said decision, which read as under: 19. In Manish Maheshwari s case (Supra) the Supreme Court observed that taxing statute must be constructed strictly. The Court, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as having been satisfied that the bullion which was seized from the searched person did not belong to the searched person but to some other person (in that case M/s. Sarvesh Jewellers, Bareilly). 8. From the foregoing discussion it is evident that in order that the Assessing Officer of the searched person comes to the satisfaction that documents or materials found during the search belong to a person other than the searched person, it is necessary that he arrives at the satisfaction that the said documents or materials do not belong to the searched person. We may point out that in the course of the arguments we had asked the learned counsel for the Revenue as to whether the documents in question had been disclaimed by the Jaipuria Group. The learned counsel for the Revenue, on instructions, states that this was not the case. In other words, it follows that the Jaipuria Group did not say that the documents did not belong to them. 12. The Hon ble Delhi High Court further held as under:- 13. Having set out the position in law in the decision of this Court in the case of Pepsi Foods Pvt. Ltd. (supra), it must be seen as to whether the Assessing Officer of the searched pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vendor. In this example if the purchasers premises are searched and the registered sale deed is seized, it cannot be said that it belongs to the vendor just because his name is mentioned in the document. In the converse case if the vendor s premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy belongs to the purchaser just because it refers to him and he (the purchaser) holds the original sale deed. In this light, it is obvious that none of the three sets of documents - copies of preference shares, unsigned leaves of cheque books and the copy of the supply and loan agreement - can be said to belong to the petitioner. 17. In view of the foregoing discussion, we do not find that the ingredients of Section 153C of the said Act have been satisfied in this case. Consequently the notices dated 02.08.2013 issued under Section 153C of the said Act are quashed. Accordingly all proceedings pursuant thereto stand quashed. 18. The writ petitions are allowed as above. There shall be no orders as to costs. 13. Keeping in view of the aforesaid discussions with support of the case law on the issue in dispute alongwith the provisions of la ..... 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