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TMI Blog2016 (1) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A)-XIX/ACIT. Cir-32/Kol/10-11 dated 26/07/2011 for the Asst Year 2002-03 Appeal No.161/CIT(A)- XIX/ACIT, Cir-32/Kol/10-11 dated 27/07/2011 for the Asst Year 2005-06 in the hands of Smt.Jyotsna Desai; and in Appeal No.157/CIT(A)-XIX/ACIT, Cir-32/Kol/10-11 dated 28/07/2011 for the Asst Year 2003-04, Appeal No.156/CIT(A)-XIX/ACIT, Cir-32/Kol/10-11 dated 28/07/2011 for the Asst Year 2004-05, Appeal No. 155/CIT(A)-XIX/ACIT, Cir-32/Kol/10-11 dated 28/07/2011 for the Asst Year 2005-06 Appeal No. 152/CIT(A)-XIX/ACIT, Cir-32/Kol/10-11 dated 28/07/2011 for the Asst Year 2008-09 in the hands of Sri Chandravadan Desai passed against the order of assessment framed by the Learned AO u/s 143(3) read with section 153C of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). 2. Shri.D.S.Damle, FCA, the Learned AR argued on behalf of the assessee and Shri.Debashish Banerjee, JCIT, the Learned DR argued on behalf of the revenue. 3. The issues involved all these appeals are identical in nature and hence they are taken up together and disposed off by a common order for the sake of convenience and brevity. 4. The assesses have also raised additional grounds of appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia, a diary was seized. The said diary admittedly contained systematic records related to actual sale transactions in Legend Project promoted by Layer Exports Pvt Ltd (one of the group company of Bharat Shah Group) situated in Walkeshwar, Malabar Hill, Mumbai - 400006, containing details of flat numbers, flat size (total sold area), rate per sq.ft, total consideration bifurcated in cash and cheques, cash to be paid , cheques to be paid, details of renegotiation, details of actual cash payment, details of actual cheque payments, etc. In the entries in the said records, 'sh' was found to represent cash portion, i.e on money or out of books portion and 'q' and 'chq' were found to represent cheque payments. In this regard, on page no. 8 of the seized document of Layer Exports Pvt Ltd, there is recording of transaction related to sale of flats by Layer Exports Pvt Ltd to Sri Chandravadan Desai and Smt.Jyotsna Desai (the assesses herein). According to the Assessing Officer of Layer Exports Pvt Ltd Sri Chandravadan Desai and Smt.Jyotsna Desai (the assesses herein) had paid on money of ₹ 8,01,39,192/- to the seller of the property. Accordingly he proceede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 151 and section 153, 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, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate per sq. ft, total consideration, bifurcated in cash and cheques, cash to be paid, cheques to be paid, details of renegotiation, details of actual cash payment, details of actual cheques payment etc. In these loose papers sh represent cash portion i.e on money or out of books portion and q and chq represents cheques portion i.e which is accounted in the books. In this regard, on page no. 8, there is recording of transaction related to sales of flats by layer Exports Pvt. to Chandravadan Desai (PAN-AFQPD8487F) AND Jyotna Desai (PAN-AGPPD5544F), out of which Jyotna Desai is assessed in your charge. As per the said record, your assessee has paid cash money i.e. out of books money of ₹ 80139192 to my assessee. You are hereby requested to take necessary action in this regard as per provisions of IT act, 1961. Yours faithfully, Sd/- (PRASOON KABRA) Asstt. CIT, Central Circle-24 26 Mumbai Encl: Pgs 1 to 19 Copy to: 1. CCIT 2. The CIT-11 3. The Addl.CIT Range-32 4. The Addl. CIT Central Range 5, Mumbai ACIT CC 24 25 9.2. It is further observed that page 21 of the paper book contains the letter dated 4.5.2010 addressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted as genuine by the Assessing officer of section 153A person itself and only the cash transactions were subjected to be verified in the hands of the assesses herein, for which purpose a letter dated 21.12.2009 together with the copy of the relevant seized document loose sheets were handed over to the Learned AO herein. On verification of the entire seized document loose sheets which is in page 9 of the paper book, we find that there is no mention about cash payments at all much less cash payments of ₹ 8,01,39,192/- as alleged by the Assessing Officer of section 153A person and hence there could not be any satisfaction that could be reached by him in terms of section 153C of the Act and hence we agree with the arguments of the Learned AR that the initiation of proceedings u/s 153C of the Act on the assesses herein in these facts and circumstances are not warranted and deserves to be quashed. Admittedly, the said seized loose sheets belong to the Bharat Shah Group (i.e the party searched u/s 132 of the act) and not to the assesses herein. We also hold that on perusal of the said contents of the seized loose sheets, no conclusion in accordance with law could be reached that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered during the search proceedings in question, namely the three loose papers may be that there is a reference to the petitioner in as much as his name is reflected in the list under the heading ' Samakarsh 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 revenue that the said three documents are in the handwriting of the petitioner. In the circumstances, when the condition precedent for issuance of notice is not fulfilled any action taken under s.153C of the Act stands vitiated. 4. We humbly bow before the views expressed by a higher forum in judicial hierarchy. Undoubtedly, at the first sight, this legal position is simply incongruous inasmuch as even when document indicating unaccounted income of third party in a search proceedings but since this document did not belong to that third person, provisions of section 153C cannot be invoked. However, when clear words of this statute fail an income being brought to tax, it is not for us to supply any unintended omission even if it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t belong to the searched person. [Para 8] In the instant case, it is nobody's case that the Jaipuria Group had disclaimed those documents as belonging to them. Unless and until it is established that the documents do not belong to the searched person, the provisions of section 153C do not get attracted because the very expression used in section 153C is 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 'In view of this phrase, it is necessary that before the provisions of section 153C can be invoked, the Assessing Officer of the searched person must be satisfied that the seized material (which includes documents) does not belong to the person referred to in section 153A, i.e the searched person. In the satisfaction note, which is the subjectmatter of these writ petitions, there is nothing therein to indicate that the seized documents do not belong to the Jaipuria Group. This is even apart from the fact that there is no disclaimer on the part of the Jaipuria Group i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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