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TMI Blog2022 (4) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... tities including the assessee, appearing on seized documents were in the nature of accommodation entries only for routing the undisclosed income of Tirupati Sunworld Group companies and hence such documents constituted "incriminating material' for the purpose of the issue of notice u/s 153C in the context of assessee. 2. Whether on facts and circumstances of the case and in law, the Ld. CU(A) erred in law while holding that the seized balance sheet of Tirupati Sunworld Group companies did not constitute "incriminating material" on grounds that the balance sheet was part of regular books, without appreciating that since all the searched entities of the Tirupati Sunworld Group were found to be engaged in routing the unaccounted funds by layering through various entities including assessee, controlled by them as mentioned in the satisfaction note, therefore, the mere fact that the entries were recorded in regular balance sheet of the beneficiary could not by itself allow the treatment of such seized documents as non-incriminating in the context of entities providing accommodation entries i.e. assessee as the expression used in 153C is "in relation to' person other than the searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent company. A search and seizure operation under section 132 of the Act was conducted in case of Tirupati - Sunworld Group of Companies on 11.11.2014. Consequent to search and seizure operation, proceedings under section 153C of the Act were initiated against the assessee. In response to notices issued under section 153C of the Act, the assessee filed its return of income offering the same income as were declared in the original return of income. In course of assessment proceeding, the Assessing Office noticed that during the years under consideration, the assessee had availed unsecured loans from certain entities. Therefore, he called upon the assessee to furnish the necessary details of the loans availed alongwith supporting evidence. As alleged by the Assessing Officer, the assessee furnished confirmation of account and balance-sheet but did not furnish the bank statement. On verifying the balance-sheet, he found that the income shown by the lenders are meager. Therefore, holding that the lenders did not have the creditworthiness, he treated the unsecured loans as unexplained cash credit under section 68 of the Act and added back to the income of the assessee the in the respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.97-98-99 are the part of regular books of account of New Track Dresses Private Ltd. maintained in the regular course of business. P.97-98 reflects the account of Balaji BPL in the books of account of New Track Dresses Pvt. Ltd. for the period 1.4.2007 to 31.3.2008, which is barred by time. P. 100 is balance sheet print of Balaji BPL, Tally print for 31.3.2008 which is time barred. P. 102 is cash book for the period 1.4,2007 to 31.3.2008 which is also time barred. P.112 to 139 are print out of regular books of account maintained by assessee company M/S. BBPL for the period 1J4.2007 to 31.3.2008 and there is nothing incriminating at all. P. 112 to 138 are ledger account from Alphabet-A to the end, i.e. Z alphabet and page-139 is Journal Register. v) TW-11, 117, seized from Hans Bhawan, 1-BSZ Marg, New Delhi. LP16 p.41, 82 to 91 and P.121: P.41 is a print out of BBPL for the period 1.4.12 to 31.3.2014 in the books of Smartest Corporate Services Pvt. Ltd. It is part of regular books and there is nothing incriminating. Page 82 is print out of ledger account of Interest accrued and due for N-21, Sector- 18 in the books of BBPL. P.83 to 89 are ledger accounts. P.83 ledger account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or" any information contained therein, relates to, " a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] '°[and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the 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 for the relevant assessment year of years referred to in sub-section (1) of section 153AJ:]" A plain reading of provision u/s 153C makes it abundantly clear that the some imperative condition need to be satisfied by the Assessing Officer, prior to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document- wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the appellant. 5.15 Though, addition made by Assessing Officer was not justified in terms of provisions u/s 153C of the Act. However, it is open for Assessing Officer to take remedial action in accordance with the provisions of income tax Act,* to assess/reassess the income escaping assessment, if any." 5. As could be seen from the aforesaid observations of learned Commissioner (Appeals), on detailed analysis of the seized documents, he has recorded a categorical finding that not a single piece of seized document found in course of search and seizure operation pertain to assessment years 2009-10, 2010-11 and 2011-12. In other words, neither any seized material, nor any incriminating material relating to assessment years 2009-10, 2010-11 and 2011-12 were found during the search and seizure operation to enable the Assessing Officer to make the additions. On a thorough and careful reading of the assessment order, we are unable to locate any observation of the Assessing Officer to demonstrate that the disputed additions were made with reference to any seized/incriminating materials found as a result of search and seizure operation. In fact, in course of hearing of these appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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