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TMI Blog2014 (11) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... . Brief facts of the case is that a search and seizure operation u/s 132 of the Income Tax Act, 1961(herein after 'the Act') was carried out in Rajdarbar Group of cases on 31.07.2008. During search operation certain documents were seized which belonged to the assessee company. The case of the assessee company was centralized with Central Circle-5, New Delhi under section 127 of the Act by orders dated 25.03.2010. 3. Notice u/s 153C of Act dated 23.07.2010 was issued to the assessee company, requiring it to file the return for the Assessment Year 2005-06 which remained uncomplied with. Fresh notice u/s 153C of Act dated 09.08.2010 was issued to the assessee company, at the new address which was supplied by A.R. of the assessee company, requiring it to file the return for the Assessment Year 2005-06. Return of income for the Assessment Year 2005-06 was filed by the assessee on 25.08.2010 declaring income of ₹ 350/-. The return filed by the assessee company was the same as that of filed under section 139 of the Act on 24/10/2005. 4. Notices u/s 143(2) and 142(1) along with questionnaire were issued to the assessee by the AO on 09/09/2010, fixing the case for hearing and to fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 68 of the Act. 9. In the present case the assessee could not filed any confirmation from the above mentioned persons. The assessee could not even furnish the complete addresses of these persons in-spite of providing many opportunities. It was also seen from the accounts of the assessee from the subsequent years that the above amount are shown as outstanding even on 31.03.2009, and in between the period there had not been any transaction with these persons. All these facts clearly suggest that the assessee had failed to discharge the onus as required u/s 68 of the Act. Therefore, this amount of ₹ 75 lakh was added to the income of the assessee as per the provisions of section 68 of the Act. 10. For Assessment Year 2006-07 an amount of ₹ 35 lakh was added to the income of the assessee as per the provision of Section 68 of the Act. 11. For Assessment Year 2007-08 an amount of ₹ 2,41,00,000/- was added to the income of the assessee as per the provision of Section 68 of the Act. 12. For Assessment Year 2008-09 an amount of ₹ 7 lakh was added to the income of the assessee as per the provision of Section 68 of the Act. 13. Aggrieved with these assessment, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng unsecured loans raised by the appellant company and brought to tax as unexplained cash credit u/s 68 of the Act. 3.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the addition made was not supported by any material found as a result of search and as such addition made and sustained is perse without jurisdiction and hence unsustainable. 3.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the unsecured loans raised by the appellant company were by account payee cheques from parties duly assessed to tax and therefore in absence of any evidence to the contrary and without making any independent enquiries, the addition made is not tenable as has been held in the Apex Court in the case of CIT vs Orissa Corporation P. Ltd. reported in 159 ITR 78. 4 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levy of interest under section 234B of the Act which is not leviable on the facts and circumstances of the case of the appellant company. It is therefore prayed that, that the order made by the learned Commissioner of Income Tax (Appeals) may kindly be set- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 in which identical 'satisfaction note' prepared by the same AO has been quashed therefore, it was prayed that the impugned order emanating from the the erroneous satisfaction note need to be quashed. 21. We find force in the contention of the ld AR that the same AO, on the strength of identical satisfaction note, that too on the same date on which he recorded the satisfaction to proceed u/s 153C against the assessee had recorded another identical satisfaction note was recorded, which stands quashed in M/s. V.K. Fiscal Services Pvt. Ltd (supra). In the said case also the same AO on the same date on which the satisfaction note u/s 153C has been recorded against the assessee in the instant case before us i.e. on 23.07.2010 made a 'ditto' copy except change in the name of the assessee, the satisfaction note which is also reproduced in Page 8 of the said order, which reads as under: (and the finding of the co-ordinate bench in respect to the same document on which reliance was placed by the AO to initiate 153C proceedings). ""23.07.2010 M/ s V.K. Fiscal Services P. Ltd. (A. Y. 2008-09) Satisfaction note for proceedings u/ s 153C of the Income Tax Act. 1961 A search ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed belong to the assessee, warranting issual of notice u/s 153'C'. 11.2. Hence we uphold the contention of the assessee that the issual of notice u/s 153'C', under the facts and circumstances, is bad in law." 22. We also take note of the recent judgement of the Hon'ble jurisdictional High Court in a similar case in Pepsico India Holiday (P) Ltd Vs. ACIT (2014) 50 Taxmann. Com 299 (Delhi), after considering the decisions cited by the Revenue held in para 5 as follows:- "5. While coming to the aforesaid conclusions the court had also examined the decisions which had been cited on behalf of the Revenue and which are, once again, being reiterated by the learned counsel for the Revenue before us. Those decisions are Kamleshbhai Dharamshibhai Patel v. CIT [2013] 214 Taxman 558/31 taxmann.com 50 (Guj.); ClT v. Classic Enterprises [2013] 358 ITR 465/219 Taxman 237/35 taxmann.com 244 (All.) and a decision of a Division Bench of this Court in SSP Aviation Ltd. v. Dy. CIT [2012] 346 ITR 177/207 Taxman 260/20 taxmann.com 214. This Court had indicated in its judgement in Pepsi Foods (P.) Ltd. (supra) that the case of Kamleshbhai Dharamshibhai Patel (supra) was distinguishable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e LT. Act. 21. After the assessment of the person in respect of whom search action was carried out is completed, the officer under Section 153C, where he find that seized articles belong to some other person, has to forward a satisfaction note to the Assessing Officer on such person. The satisfaction in such case is in respect of the material and disclosures of the person with which the articles or assets are found and not in respect of the person who whom they belong."(Underlining Added) 7. The above extract makes it clear that a taxing statute must be construed strictly and in the case of a doubt or dispute the construction in favour of the assessee has to be adopted. Apart from this, the material observation of the Allahabad High Court in the case of Savesh Kumar Agarwal (supra) is to be found in paragraph 20 thereof where it has been observed that the assessee established that the seized silver belongs to M/s. Sarvesh Jewellers, Bareilly - the petitioner. In other words, the person from whom the bullion was seized was able to establish that it did not belong to him but to Sarvesh Jewellers. It is in that context that the provisions of Section 153C of the Act were invoked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject matter 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, as we have noted above, there is no disclaimer on the part of the Jaipuria Group insofar as these documents are concerned. 15. Secondly, we may also observe that the finding of photocopies in the possession of a searched person does not necessarily mean and imply that they "belong" to the person who holds the originals. Possession of documents and possession of photocopies of documents are two separate things. While the Jaipuria Group may be the owner of the photocopies of the documents it is quite possible that the originals may be owned by some other person. Unless it is established that the documents in question, whether they be photocopies or originals, do not belong to the searched person, the question of invoking Section 153C of the said Act does not arise. 16. Thirdly, we would also like to make it clear that the assessing officers should not confuse the expression "belongs to" with the expressions "relates to" or "refers to". A registered sale deed, for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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