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TMI Blog2018 (5) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... r AYs 2005- 06 to 2008-09. In all these appeals, the assessee is contesting mainly on the validity of assessments made u/s 153C of the Incometax Act, 1961 (in short the Act ) by raising the following grounds of appeal: 1. The learned Commissioner of Incometax (Appeals) is not justified in: ( a) dismissing the appellant's contention that, in the facts and circumstances of the case, the provisions of section 153C are not applicable in the appellant's case and the assessment made u/s 153C is not valid; and ( b) holding that the CBDT circular No.24/2015 has no relevance in the appellant's case since the assessment was completed on 31-12-2010, which was before the issue of the circular. Without prejudice to the above: 2. The learned Commissioner of Incometax (Appeals) is not justified, in the facts and circumstances of the case, in confirming the addition u/s 68, of ₹ 33,00,000/-representing alleged investment. 3. The appellant reserves his right to add, alter, or substitute any ground or grounds during the course of hearing. 2. With regard to the above grounds of appeal, the relevant facts are, a search and seizure operation u/s 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... race the relevant records pertaining to proceedings under search of assessee from the Central Circle. Further, he was also unable to bring any evidence in the assessment order or in the questionnaire which leads to any direct evidence, which was found in the possession of M/s B. Ramadas Goud, which relates to assessee or any satisfaction note in the file of the assessment records. In the absence of above relevant information, he submitted that he is relying on the orders of revenue authorities. He also relied on the following case law: 1. Kamleshbhai Dharamshibi, 214 Taxman 558 2. Raja Mohammed Amir Ahmed Khan Vs. Municipal Board of Sitapur, AIR [1965] SC 1923 8. Considered the rival submissions and perused the material on record as well as the case law submitted by both the parties. 8.1 In the case of Pr. CIT Vs. Vinita Chaurasia (supra), it was held that for the purpose of initiating proceedings u/s 153C of the Act, the seized documents had to be shown to be belonging to the other person and not merely pertaining to such other person. The change brought about in this regard in section 153C of the Act by way of amendment has been given prospective effect from June 1, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri OSS Prasad. As per Sec. 153C of the IT Act, A.O of the person searched has to record a f inding that the income relating to the documents found during the course of search, relates to any other person and thereaf ter has to handover the documents to the A.O of such other person. On such reference, the A.O of such other person has to record a satisfaction before issuing the notice u/s 153C of the Act. Admittedly in the case before us, there is no satisfaction recorded by the A.O of the person searched nor is the satisfaction recorded by the A.O of the assessee for issuance of notice u/s 153C of the act, is available on record. Therefore it is presumed that the satisfaction in the necessary form is not recorded before issuance of the notice u/s 153C of the Act. The Hon ble jurisdictional High Court in the case of CIT Vs Shetty Pharmaceuticals and Biological Ltd., reported in 57 taxmann.com 282 (A.P) has conf irmed the order of the ITAT in ITA Nos. 930 931/Hyd/2013 dated 28.05.2014 wherein it was held as under: 30. From a plain reading of these sections, we f ind that section 153A is procedural section which deals with the mode of assessment. A notice u/s. 153A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a person other than the searched person is necessary for initiation of action under Section 153C of the Act. The bare reading of the provision of section 153C indicates that the satisfaction note could be prepared by the assessing off icer either at the time of initiating proceedings for completion of assessment of a searched person under Section 153A of the Act or during the stage of the assessment proceedings. It does not mean that af ter completion of the assessment, the assessing off icer who has passed the assessment order u/s. 153A in the case of searched person cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132or requisition of books of accounts were made under Section 132A of the Act. In other words, the person who has passed the order in the case of the searched person u/s. 153A of the Act is required to record the satisfaction note before completion of assessment u/s. 153A of the Act. In the present case the Bench categorically asked the DR to produce the satisfaction notes recorded in this case so as to issue notice u/s. 153C to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 10542 of 2011 dated 12th March, 2014. Further it was also held by the Supreme Court in the case of Manish Maheswari vs. JCIT (289 ITR 341) as under: Held, Sec. 158BD provides for taking recourse to a block assessment in terms of s. 158BCin respect of any other person, the conditions precedent wherefor are : (i) satisfaction must be recorded by the AO that any undisclosed income belongs to any person, other than the person with respect to whom search was made under s. 132; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the AO having jurisdiction over such other person; and ( iii) the AO has proceeded under s. 158BC against such other person. The conditions precedent for invoking the provisions of s. 158BD, thus, are required to be satisf ied before the provisions of Chapter XIV-B are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under s. 132A. The impugned notice does not record any satisfaction on the part of the AO. Documents and other assets recovered during search had not been handed over to the AO having ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Tribunal in the case of Smt Sarnala Jayalaxmi Vs. ACIT in ITA No. 1329 of 2014 dated 10.08.2016. The relevant paras are as under: 8. Similar view is also taken by the Hon'ble Delhi High Court in the case of Pepsico India Holdings (P.) Ltd., [50 Taxmann.com 299] (Delhi) wherein on the following facts, it was held as under: A search and seizure operation under section 132(1) was conducted on the Jaipuria Group during which certain documents 'belonging' to the petitioner were found. Consequently, the Assessing Off icer of the Jaipuria Group prepared a satisfaction note to the effect that the documents mentioned therein belonged to the petitioner. Three kinds of documents were mentioned in satisfaction note. First were the photocopies of Cumulative Redeemable Preference Shares purchased by the petitioner from TDL and SMV. The second set of documents were unsigned cheques found in the cheque books of the Jaipuria Group companies, which had been written in favour of the petitioner. The third document was a photocopy of a supply and loan agreement made between PDL and petitioner. Thereaf ter, the Assessing Off icer issued notices to the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 does not arise. Thirdly, the Assessing Off icers should not confuse the expression 'belongs to' with the expressions 'relates to' or 'refers to'. A registered sale deed, for example, 'belongs to' the purchaser of the property although it obviously 'relates to' or 'refers to' the vendor. In this example if the purchaser's, premises are searched and the registered sale deed is seized, it cannot be said that it 'belongs to' the vendor just because his name is mentioned in the document. In the converse case if the vendor's premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy 'belongs to' the purchaser just because it refers to him and he (the purchaser) holds the original sale deed. In this light, it is obvious that none of the three sets of documents - copies of preference shares, unsigned leaves of cheque books and the copy of the supply and loan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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