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TMI Blog2018 (6) TMI 1677X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material nor it pertains to the year under assessment, qua amount received by virtue of the Agreement to Sell dated 05.05.2006, the addition on the basis of which can only be made in the relevant assessment year and not in the year under assessment. - Decided against revenue - ITA No. 6246/Del./2014 - - - Dated:- 22-6-2018 - Shri N.K. Saini, Accountant Member And Shri Kuldip Singh, Judicial Member Assessee By : Shri S.K. Tulsian, Advocate Revenue By : Ms. Shefali Swaroop, CIT DR ORDER Per Kuldip Singh, Judicial Member The appellant, Income-tax Officer, Ward 13 (1), New Delhi (hereinafter referred to as the Revenue ) by filing the present appeal, sought to set aside the impugned order dated 01.08.2014 passed by Ld. CIT (Appeals)-XII, New Delhi qua the assessment year 2006-07 on the grounds inter alia that :- 1. On the facts and under the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made u/s 68 of the Act on account of unexplained cash credit amounting to ₹ 4,66,00,000/- by ignoring the fact that the assessee has been attempting to pass off these transactions as genuine. It is quite possible that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Act ). Assessing Officer after recording satisfaction initiated proceedings by way of issuance of notice u/s 153A and 153C directed the assessee to file the return within 15 days from the service of notice which was duly served. Assessee opted to get the original return of income filed on 31.05.2006 declaring loss of ₹ 4,11,906/- as reply to the notice. The notices u/s 143(2) and 142 (1) were issued along with detailed questionnaire. AO found credited an amount of ₹ 4,66,00,000/- in the books of account of the assessee with immediate source of this amount from M/s. BJ Buildwell Pvt. Ltd.. But, thereafter, same has been shown to be sourced from different entity, M/s. Jain Brothers. Assessee has admitted to pass all these transactions as genuine. AO declining the contentions raised by the assessee proceeded to lift the corporate veil to unmask the real from the apparent by going behind the transactions and concluded that the assessee has failed to prove the genuineness of the transactions of ₹ 4,66,00,000/- within the meaning of section 68 of the Act and made addition thereof to the total income of the assessee. 3. Assessee carried the matter by way of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Road New Delhi. In view of above, it is established beyond doubt that many books of accounts or documents seized during the course of search and seizure action on Today group of cases belong to M/s Nahid Finlease Pvt. Ltd. i.e. the assessee company and hence prerequisite condition to initiate proceedings u/s 153C of the Income Tax Act, 1961 are issued for AY 2004-05 to 2009-10 in the case of M/s. Nahid Finlease Pvt. Ltd. i.e. the assessee company. 8. Ld. DR for the Revenue challenging the impugned order relied upon the assessment order and contended that the assessee has failed to prove the genuineness of the amount received form M/s. BJ Buildwell Pvt. Ltd.. 9. On the other hand, ld. AR for the assessee supporting the impugned order passed by the ld. CIT (A) contended inter alia that the satisfaction note, available at page 55 of the paper book, apparently shows that no incriminating document belonging to assessee was found during the search operation except the Agreement to Sell dated 05.05.2006 for a consideration of ₹ 5,01,51,000/- between UTI Limited and the assessee company for office space no.A-1601 and B-1601 at 16th Floor of State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete identity with PAN, confirmation, bank statements, memorandum of article and audited financials of BJ Buildwell Pvt. Ltd. to substantiate the genuineness of the transactions, the AO cannot make addition on the basis of surmises that funds received by the assessee from BJ Buildwell Pvt. Ltd. were in fact has been received from Jain Brothers. 15. In any case, the AO was not satisfied with the transactions explained by the assessee, the said amount is required to be assessed in the hands of BJ Buildwell Pvt. Ltd.. Even otherwise, for arguments sake, even if it is assumed that addition is to be made on the basis of satisfaction note, which is not recorded on the basis of any incriminating material nor it pertains to the year under assessment, qua amount received by virtue of the Agreement to Sell dated 05.05.2006, the addition on the basis of which can only be made in the relevant assessment year and not in the year under assessment. 16. Hon ble Apex Court in CIT vs. Sinhgad Technical Education Society (supra) while deciding the identical issue pertaining to section 153C held as under :- Search and Seizure Assessment of third person Satisfaction note Incriminating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO mentioned in the assessment order that books of accounts or documents belong to the assessee were found and seized during search. When the property was purchased by the assessee through agreement to sale dated 05.05.2006 has already been disclosed in the regular books of account, therefore, the same could not be treated as undisclosed income of the assessee or incriminating material in nature against the assessee. The AO in the assessment order did not question the aforesaid seized document i.e agreement to sale for the purpose of making any addition against the assessee. It was clear that the reasons assigned by the AO in the satisfaction note were silent about any incriminating information or unaccounted or undisclosed hidden, income, seized by the Revenue from the assessee. The reasons recorded by the AO in the satisfaction note are factually incorrect or without sustenance because the property in question purchased on 05.05.2006 was already disclosed in the regular books of accounts for AY 2007-08. Therefore, there is no question of AO being satisfied with conditions of section 153C of the Act so as to initiate proceedings u/s 153C of the Act against the assessee. The satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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