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TMI Blog2016 (8) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the ld. CIT(A)-6, Hyderabad for the A.Y. 2003- 04 to 2008-09. The Common grounds taken by the revenue as well as the assessee in appeals are as under:- Grounds in Revenue s appeals. 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the additions by following the ratio laid down in the case of All Cargo Global Logistics 137 ITD 287 without going into the merits of the issues. 2. The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. Grounds in Assessee s appeals. 1. The CIT(A)-VI, Hyderabad erred while passing the order for the A.Y. 2003-04, wherein the grounds filed for the following different grounds made towards the additions made had not been adjudicated which is not correct and not justified and bad in law. 2. The CIT(A)-VI, Hyderabad passed the appellate order only on technical grounds and the following grounds has not been considered which is not correct and bad in law. 3. The CIT(A)-VI, Hyderabad ought to have adjudicated all the grounds which are on merits against the order passed U/s 143(3) r.w.s. 153C of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on pertaining to the payments made to the parties and also submitted income tax particulars of the above persons. Hence, the disallowance cannot sustain on merits. 13. The CIT(A) -VI, Hyderabad erred while passing the order wherein the A.O. erred in charging interest U/s 234A of ₹ 8,05,390/- U/s 234B of ₹ 29,03,491/- and ₹ 2,89,346/- U/s 234C has not been adjudicated. 14. The CIT(A) -VI, Hyderabad erred while passing the order wherein the A.O. has erred while initiating penalty proceedings U/s 271(1)(c) of the I.T. Act, 1961 on the contention that the assessee company has concealed income which is not correct and not justified. 15. The CIT(A) -VI, Hyderabad erred while passing the order wherein the assessee company has not concealed any income or furnished inaccurate particulars of information. Hence, penalty proceedings U/s 271(1)(c) is not correct and not justified. 16. The CIT(A) -VI, Hyderabad erred while passing the order wherein only the additional grounds regarding no incriminating seized materials found has been considered and other above stated grounds have not been considered which is not correct and not justified and bad in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/2010. 2.1 The revenue has conducted a search and seizure operation in the case of M/s Midwest Granites Pvt. Ltd. group on 24/07/2008. It is alleged that during the search, some material/documents were recovered connected with the assessee. The ld A.O. based on the said documents, issued notice U/s 153C of the Act on 27/08/2010 requiring the appellant to file return of income for the A.Ys. 2003-04 to 2008-09. In response to the said notice, the appellant filed its return of income for the A.Y. 2003-04 and other assessment years on 26/10/2010. For the A.Y. 2003-04, a total income of ₹ 1,24,72,846/- was filed consequent to return filed U/s 153C of the Act. The ld A.O. issued notice U/s 143(2) and 142(1) of the Act alongwith questionnaire. It is the case of the assessee during the search contended in the premises of M/s Midwest Granites Pvt. Ltd., no incriminating material was found or connected material with the assessee. The assessee has submitted that the assessee has furnished all the details to the ldA.O.. The ld A.O. referred the matter for the special audit U/s 142(2A) of the Act for the year under consideration (2003-04) with a view to safeguard the interest of reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions or disallowances, and prompt the assessing officer to reagitate the issues which were otherwise settled in the unabated assessment. Thus, considering the legal additional ground raised by the appellant, it is reasonable to hold that the various additions made by the assessing officer in the assessment orders for the asstt. tear 2003-04 is not justified and are directed to be deleted. Since, the additional ground raised on legal issue has been decided in favour of the appellant, it is reasonable to hold that it is not necessary to adjudicate on the various additions made in assessment order, on merit. 4. Now the revenue as well as the assessee are in appeal before us. In fact during the course of argument, basic ground which has been taken by the ld AR for the assessee was that: The ld A.O. was erred in invoking the provisions of Section 153C of the Act without there being any satisfaction recorded by him as well as by the ld. A.O. having jurisdiction over the company searched, in view of the judgment of the Hon ble A.P. High Court in the case of CIT Vs M/s Shettys Pharmaceuticals Biologicals Ltd. in ITA No. 662 of 2014 dated 26/11/2014. 4.1 The ld DR vide or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with the provisions of Section 153A. Therefore, 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 has 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT [2014] 47 taxmann.com 85 (Hyderabad - Trib.) (V) Commissioner of Income-tax, III, Hyderabad Vs. Shettys Pharmaceuticals BiologicalsLtd.[2015] 57 taxmann.com 282 (Andhra Pradesh) has held as under:- 6. It is therefore clear that firstly satisfaction has to be recorded by the Assessing Officer who conducted search, 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 of the Act. Thereafter, the Assessing Officer having jurisdiction over third party on receipt of the seized material or books of accounts or document being handed over to him shall record his own satisfaction after examining the same independently without being influenced by the satisfaction of the Seizing Officer. In other words it is not an automatic action. We find satisfaction of two officers is missing. In this connection we set out the text of the order of the Assessing Officer which is as follows: A search and seizure operation u/s. 132 was carried out in the group case of Dr. T. YadhaiahGoud and others on 25.3.2010. During the course of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of the abated and unabated proceedings and also the material on the basis of which the assessment and reassessment can be made by the A.O. in pursuance to Section 153A of the Act. He also submitted that in the order itself, the ld A.O. has disclosed the material seized during the course of search, which is connected with the assessee. 7. We have heard the rival contentions of both the parties and perused the material available on the record and the law cited before us. The Hon ble Jurisdictional High Court in the case of SHETTY PHARMACEUTICALS BIOLOGICAL LTD. (supra) has clearly held that the recording of satisfaction by the A.O. is precondition for invoking the provisions and is not a mere formality because the recording of satisfaction postulate the application of mind, consciously as to the documents seized must be belonging to any other persons other than the persons referred to in Section 153A of the Act. Similarly, the Hon ble Delhi High Court in the case of Pepsi Foods P. Ltd. Vs. ACIT (supra) has held that as per law, once the documents are seized from the premises of a person then the presumption is that the documents/materials belong to the persons searched, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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