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TMI Blog2017 (9) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income Tax (Appeals) - 4, Chennai [CIT(A)] erred in confirming the assessment order u/s 143(3) r.w.s. 153C of the IT. Act passed by the AO without appreciating that the order passed by AO is illegal, bad in law and without jurisdiction in so far as no satisfaction as contemplated u/s 153C of the Act was recorded by the AO before issue of the notice to the Appellant u/s 153C of the Act. The Appellant submit that recording of satisfaction by the Assessing Officer of searched person is a prerequisite for issuance of notice u/s 153C of the Act and failing of which renders the proceeding u/s 153C of the Act illegal and bad in law. (b) The CIT(A) erred in confirming the action of AO in passing order u/s 143(3) r.w.s 153C of the Act and failed to appreciate that since no money, bullion, jewellery or other valuable article or thing or books of accounts or documents 'belonging to the appellant' were seized as a result of search and hence notice issued u/s 153C of the Act was illegal, invalid and unsustainable. (c) On the facts and circumstances of the case and law, the order u/s 143(3) r.w.s. 153C of the IT Act passed by the AO is contrary to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was not accounted for and shown by the assessee. The assessee challenged the order of the AO before the First Appellate Authority, who also dismissed the appeal of the assessee after considering the contention and submissions of the assessee filed in the appellate proceedings and came to the conclusion that the order passed by the AO u/s 153C r.w.s.143(3) of the Act was a valid order as the notice under section 153C of the Act was issued on the basis of information which came to the notice of the search party during search proceedings u/s 132 of the Act on Bharat Shah Group in which it was found that a flat was purchased from Laya Export Pvt Ltd for a total consideration of ₹ 3,97,07,251/- out of which ₹ 2,03,15,200/- was paid by account payee cheque and balance of ₹ 1,93,57,051/- was paid in cash by observing as under : 25. The above seized material is also an evidence to prove that the assessee has actually purchased Flat No.14 from M/s. Layer Exports P. Ltd. for a consideration of ₹ 3,97,07,251/- Out of the sale consideration, ₹ 2,03,50.2001- was paid by cheque and the balance of ₹ 1,93,57,051/- was paid by cash. The assessee has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises on 13.3.2008 in which it was found that M/s Layer Exports Pvt Ltd has sold flat to the assessee for a total consideration of ₹ 3,87,14,102/- out of which ₹ 2,03,15,200/- was paid by account payee cheque and balance of ₹ 1,93,57,051/- was paid in cash and was not accounted by the assessee and therefore, the notice issued by the AO u/s 153C was validly issued and proceedings were initiated accordingly. The ld. DR finally prayed that the ground taken by the assessee for issuing notice u/s 153C of the Act should be dismissed. 7. We have carefully considered the rival contentions and perused the material placed before us including the impugned orders and case law. In the present case before us a search was conducted at Bharat Shah Group on 13.3.2008 and the information thereof was received by the AO from the ACIT Central Circle vide letter dated 21.12.2009 that the M/s Layer Exports Pvt Ltd has received on-money of ₹ 3,87,14,102/- out of which ₹ 1,93,57,051/- was received in cash and the notice was issued u/s 153 of the Act accordingly on on the basis of said letter. Now, the issue before us is whether the notice u/s 153C of the Act issued to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 it belongs to the person other than the person searched u/s 132 of the Act. In this regard, the following decisions supports the view of the assessee :- 9.4. In view of the aforesaid facts and circumstances and respectfully following the aforesaid decisions , we hold that no satisfaction in terms of section 153C of the Act were recorded by the Assessing Officer of the searched person u/s 132 of the Act to reach to a conclusion that the contents in the seized documents belongs to the assesses ( i.e a person other than the searched person) and accordingly, we hold that the search assessments framed u/s 153C read with IT(SS) A Nos. 114,115/Kol//2011- A Smt. Jyotsna Desai IT(SS) A Nos.116 -119/Kol//2011-A- Sh. Chandravadan 13 Desai -A- AM section 143(3) of the Act on the assesses herein are declared illegal and void abinitio. Since the appeals of the assessee are allowed on assumption of jurisdiction , we refrain to give our findings on the merits of the issue. 10. In the result, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring the aggregate amount noted in the loose sheet with the stamp duty valuation. However, as pointed out by the assessee, the alleged cash payment together with the purchase value declared by the assessee far exceeds the stamp duty valuation and hence such kind of corroboration is not acceptable. Even otherwise, the stamp duty valuation stated to be adopted by sec 50C is only a legal fiction applicable to a seller of property and it does not automatically support the conclusion that the difference between the stamp duty valuation and the actual sale consideration as passed hands. Though the AO has interpreted that the cheque payment made by the assessee was ₹ 2.85 crores, the said interpretation has been proved to be wrong by the co-owners, since they have actually paid a sum of ₹ 3.85 crores by way of cheque. Further, the assessee has stated that the payments have been made in 2004, 2010 and 2011, which fact also does not support the interpretation given by the assessing officer. Under these set of facts, we are of the view that the Ld CIT(A) was justified in observing that the assessing officer has made the impugned addition on surmises and conjectures. The decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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