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TMI Blog2019 (7) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... 585 - DELHI HIGH COURT] the proceedings u/s 153C are not in accordance with law. Income offered in the income tax return - Another objection of the assess is that the income from capital gain from sale of 3 acres of land to Fortune Soumya Housing was already offered in the income tax return for the assessment year 2012-13, hence, the document cannot even be treated as incriminating. This fact is not controverted by the revenue, hence we find force in to the contention of the assessee. Thus, this document seized at the premises of the third party cannot be treated as incriminating. Hence, looking to the totality of the facts, hold that the proceedings initiated u/s 153C and assessment order passed are not in conformity of law and the same is hereby quashed. Unexplained investment - HELD THAT:- We find from the reply furnished to the A.O. enclosed at paper book pages 16 to 19 that assessee had purchased properties in the years 2002 2006 even prior to the purchase of the properties in question at a higher consideration. A.O. has not disbelieved this investments and source of investment by the assessee. It is also fact that the assessee also purchased properties subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the A.O. observed that the assessee had purchased some land on 4.6.2009 from 3 persons for a total consideration of ₹ 4,08,131/-. The A.O. not finding the explanation of the assessee acceptable, made addition of ₹ 4,08,121/- as unexplained investment u/s 69 of the Act. Aggreived against this, assessee preferred an appeal before Ld. CIT(A), who after considering the submissions sustained the addition. Against this, the assessee is in present appeal before this Tribunal. The present appeal is barred by 7 days. The assessee has filed an application along with an affidavit seeking condonation of the delay. It is stated that due to illness of the assessee, the appeal could not be filed in time. The assessee has also filed a certificate by Dr. Ajay Thete. 3. Ld. D.R. opposed the application. However, looking to the submissions made in the application and medical certificate so furnished, we are of the view that the assessee was having a reasonable cause for filing appeal belatedly. The delay of 7 days is condoned. Appeal is admitted for adjudication. 4. Ground No.1 is against legality of notice u/s 153C of the Act. Ld. Counsel for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party and another by the assessing officer of the assessee. In support of this contention, reliance is made on the judgement of jurisdictional High Court rendered in the case of CIT Vs. Machmen (2015) 60 Taxman.com 484 (MP). Lastly, it is stated that transaction was duly recorded and accounted. It is stated that the capital gain arising out of sale of 3 acres of land to Future Soumya Housing was already offered for tax in the assessment year 2012-13. It is argued that no reliance can be made on the document executed for transfer of land in the year under appeal. It is vehemently argued on behalf of the assessee that the impugned assessment order be quashed being illegal and contrary to the settled law. I find that before the Ld. CIT also the assessee had challenged the validity of the notice issued u/s 153C of the Act and the proceedings concluded. The Ld. CIT(A) has decided this issue related to validity of notice u/s 153C of the Act as under: 7. Ground No.1 is against issue of notice u/s 153C. It is an undisputed fact that certain documents were seized during the course of search u/s 132 at the premises of M/s. Fortune Soumya Housing, Bhopal. The appellant in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person 97[for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) 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 : Provided further that the Central Government may by rules98 made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction whilst sending notice to such other person (other than the person referred to in Section 153A), must apply proprio vigore. The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). The question as to whether that may influence the opinion of the Assessing Officer having jurisdiction over such other person, also cannot be the basis to take any other view. As a matter of fact, the other Assessing Officer to whom the items are handed over, before issuing notice must himself be satisfied after due verification of the items received and the disclosures made by the other person in the returns for the relevant period already filed by the other person before him. For the same reason, we mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgement of Hon'ble Delhi High Court rendered in the case of Pr. CIT (Central)-2 Vs. Index Securities (P) Ltd. (2017) 86 Taxmann.com 84 (Delhi), wherein the Hon'ble High Court has held as under: 31. As regards the second jurisdictional requirement viz., that the seized documents must be incriminating and must relate to the Assessment years whose assessments are sought to be reopened, the decision of the Supreme Court in Sinhgad Technical Education Society (supra) settles the issue and holds this to be an essential requirement. The decisions of this Court in RRJ Securities and ARN Infrastructure India Ltd. Vs. Asst. CIT (2017) 394 ITR 569/8 taxmann.com 260 (Delhi) also hold that in order to justify the assumption of jurisdiction under Section 153C of the Act the documents seized must be incriminating and must relate to each of the Assessment years whose assessments are sought to be reopened. Since the satisfaction note forms the basis for initiating the proceedings under Section 153C of the Act, it is futile for Mr. Manchanda to contend that this requirement need not be met for initiation of the proceedings but only during the subsequent assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee reiterated the submissions as made in the written submissions. Ld. Counsel for the assessee submitted that cash flow statement as well as balance sheet was submitted before the Ld. CIT(A). In support of this, he drew my attention to paper book page Nos.11 to 13 to buttress the contention that the source of investment is duly explained. He submitted that as per the cash book, the opening balance was ₹ 4,36,261/- as on 1.4.2009. The Ld. Counsel for the assessee has also taken me through computation of total income pertaining to the assessment year 2010-11, wherein the assessee has disclosed income from house property, income from business or profession, capital gain and other sources. 14. Ld. D.R. opposed these submissions and supported the orders of the authorities below. 15. I have heard the rival contentions. We find from the reply furnished to the A.O. enclosed at paper book pages 16 to 19 that assessee had purchased properties in the years 2002 2006 even prior to the purchase of the properties in question at a higher consideration. The A.O. has not disbelieved this investments and source of investment by the assessee. It is ..... 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