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TMI Blog2015 (1) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... 013 563/Hyd/2013 564/Hyd/2013 565/Hyd/2013 659/Hyd/2013 - - - Dated:- 21-1-2015 - Shri D. Manmohan And Shri B. Ramakotaiah,JJ. For the Petitioner : Shri Rajat Mitra, DR For the Respondent : Shri A.Srinivas, AR ORDER Per Bench : These appeals are filed by Revenue and Assessee for Assessment Years (AYs) 2004-05, 2008-09, 2009-10 2010-11 and for AY 2005-06 in one case. Since common issues are involved in these appeals, we heard these together and decided in this common order. Appeals in the case of Smt. Anne Vijaya: 2. Briefly stated, assessee is an individual having sources of income from other sources and agriculture. Consequent to search and seizure proceedings in the case of Bhavya Group, on the reason that certain incriminating documents have been found in search pertaining to assessee, proceedings u/s.153C of the Income Tax Act (Act) were initiated. In the assessment made consequently, in the AY.2004-05, the Assessing Officer examined the investment made in the purchase of flat and considered the entire amount of ₹ 4,52,000/- invested by assessee as un-explained. The Ld.CIT(A) after considering the additional evidence filed and remandin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. During the course of proceedings, Ld.DR was asked to furnish the relevant documents if any, connected to assessee seized during the search so as to examine the issue of proceedings u/s.153C. Ld.DR could only place a copy of appraisal report wherein it was simply stated that assessee is one of the investors in M/s.Bhavya Constructions P. Ltd., and she is land owner who has given her land on development to M/s.Sree Constructions. Documents related to her transaction were seized during the course of search proceedings vide page Nos. 247 to 252 of Annexure A/BCPL/25. Except this copy of appraisal report page 14, no other documents were placed on record to counter the findings of the Ld.CIT(A). 5. Having considered the rival contentions and perusing the orders of Ld.CIT(A), we do not see any reason to interfere with the findings of Ld.CIT(A) on assuming jurisdiction u/s 153C. In fact her findings in para 5 are very elaborate and ultimate conclusion in para 5.6, 5.7 and 5.8 in AY.2008-09 are extracted as under for the sake of record: 5.6 It is a common feature of searches conducted u/s 132 of the I.T.Act that they contain details of unaccounted transactions of the persons search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, they were presumed to be belonging to them. There was no disclaimer from the Bhavya group that these documents did not belong to it. Thus, any objective ground for reaching the satisfaction that the documents belonged to a person other than searched party did not exist. This being so, it is clear that the requirement of the provisions of section 153C of the I.T.Act was not met. The appropriate course in such situation was to initiate proceedings u/s 147 of the I.T.Act and make assessment accordingly. If the documents seized in the course of search in the case of A contain information relating to additional tax liability of B and the documents are not found to be belonging to B, such information forms a valid reason to believe that income in the case of B has escaped assessment and such reason is a valid genesis for initiating proceeding u/s 147 of the I.T.Act against B. 5.8 In view of the foregoing discussion, it is held that proceeding initiated u/s 153C of the I.T.Act in this case was invalid and, consequently, the assessment made in pursuance of the same was also invalid. The appropriate course of action for the AO in the given facts and circumstances of the case was to tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r it necessary to initiate proceedings u/s.147, then only the issues can be examined afresh. Therefore, to that extent assessee's objections on orders of Ld.CIT(A) on merits are to be upheld. To that extent, we set aside the findings of CIT(A) on the merits of the issue. Assessee's grounds are considered allowed for statistical purposes. 9. We make it clear that these orders should not be considered as direction for initiating fresh proceedings against assessee and in case Assessing Officer already initiated the proceedings, assessee is free to raise the necessary objections if any, on merits. With these observations, we allow the assessee's cross-appeals. G C Subbanaidu ITA No.659/Hyd/2013 (AY.2005-06): 10. This appeal is filed by Revenue against the order of CIT(A) dt.08- 02-2013. Herein also assessee is an individual and doctor by profession running hospital in the name of 'People's Hospital' at Patancheru, Hyderabad. The issue in this appeal is also with reference to computation of capital gain on the properties sold at Jubilee Hills, Hyderabad on 10-11-2004. In this case, the proceedings of 153C were initiated on the reason that certain docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other person though there was a reference to such other person therein, the issue of notice u/s 153C to him was invalid. 4.6 The satisfaction envisaged in section 153C has to be genuine and has to be reached objectively on the basis of the facts and circumstances of the case. In this case, the documents pertained to Bhavya Group of cases. They were found in the possession/control of their premises at Bhramaramba Theatre. Thus, they were presumed to be belonging to it. There was no disclaimer from the Bhavya group that these documents did not belong to it. Thus, any objective ground for reaching the satisfaction that the documents belonged to a person other than searched party did not exist. This being so, it is clear that the requirement of the provisions of section 153C of the I.T.Act was not met. The appropriate course in such situation was to initiate proceedings u/s 147 of the I.T.Act and make assessment accordingly. If the documents seized in the course of search in the case of A contain information relating to additional tax liability of B and the documents are not found to be belonging to B, such information forms a valid reason to believe that income in the case of B has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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