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TMI Blog2023 (11) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had categorically denied in his reply that these transactions were not at all related to him and he has nothing to do with the same. This goes clearly to prove that assessee had categorically disowned seized document as not belonging to him or pertaining to him or relating to him. Admittedly these seized documents were seized from the premises of Sh. Rakesh Yadav and Sh. Rajbir Kumar Goyat during the course of their search and hence the presumption in terms of section 292C of the Act would be that the said document belongs/pertains/relates to the searched person. It is not in dispute that the seized documents were in the handwriting of searched person. However, the aforesaid presumption could be rebutted by the AO of the searched person with cogent material by recording a satisfaction note that the said material does not belong/pertain/relate to the searched person but instead belongs/pertains/relates to some other person (a 3rd party). The only material available with the Revenue is the surname Mehta used in the said seized document which is assumed by the Revenue to be Jethmal Mehta i.e., the assessee herein. He had categorically denied right from the inception tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 06/09/2019 against the order passed by the Deputy Commissioner of Income Tax, Central Circle-I, Gurugaon, (hereinafter referred to as the Ld. AO ) u/s 153A(1) (b) of the Income Tax Act (hereinafter referred to as the Act ) on 28/03/2016 for the Assessment Years 2012-13, 2013-14 2014-15 respectively. Whereas, the assessee also filed Cross Objections in all these appeals. 2. The common grounds raised by the Revenue in these three appeals i.e. ITA Nos. 8985, 8986, 8987/Del/2019 for AYs 2012-13 to 2014-15 respectively. i) The AO has recorded his satisfaction note that incriminating documents seized possession of Sh. Rakesh Yadav and Sh. Rajbir Goyat reveals that Sh. Jethmal Mehta had entered into various cash transactions with them. Further, during the course of assessment proceedings AO has established that the said documents belong to Sh. Jethmal Mehta and accordingly add was made in the hands of the assessee. ii) Section 153C has been amended by the Finance Act, 2015 w.e.f. 01.06.2015. Being procedural provisions, these will apply to all the proceedings u/s 153C initiated after 01.06.2015. Also satisfaction note in the instant case was recorded on 18.02.2016. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lead case and the decision rendered thereon shall apply with equal force for AYs 2013-14 and 2014-14 except with variance in figures. 5. The Revenue has raised the revised grounds of appeal for AY 2012-13 which are as under: i. Whether on facts and circumstances of the case and in lave, the Lad CIT(A) while allowing the appeal on grounds that the conditions for issue of notice u/s 153C were not satisfied in absence of seized documents belonging to the assessee erred and misread the relevant facts and circumstances as well as legal provisions of section 15CC. ii. Whether on facts and circumstances of the case, the Lat CIT(A) erred in holding that the seized material did not belong to the assessee but Sh. Rakesh Yadav and Sh. Rajbir Goyat. iii. Whether on facts and circumstances of the case the L CIT(A) failed to appreciate that section 153C has been amended by the Finance Act, 2013 w.e.f 01.06.2015 and as per amended section 153C, proceedings u/s 153C can be initiated on the basis of satisfaction of the AO that any books of account or documents, seized or requisitioned, pertains or pertain to, or any Information contained therein relates to a person other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 7,40,02,205/-. 7. Before the Ld. CIT(A), the assessee submitted that a perusal of the satisfaction note reveals that the seized documents were found from the possession as well as from the premises of Sh. Rakesh Yadav and Sh. Rajbir Goyat and the same did not belong to the assessee. The satisfaction note merely mentions that some pages in the seized materials indicate various cash transactions carried out by Sh. Rakesh Yadav ; that some documents are incriminating in nature and that those transactions were carried out by the assessee with Sh. Rakesh Yadav and accordingly proceedings u/s 153 C of the Act ought to be initiated in the hands of the assessee. It was argued that the presumption in terms of section 132(4A) r.w.s. 292C of the Act would be that seized documents seized from the premises of the person should be presumed to be belonging to that searched person, unless it is rebutted and otherwise by the AO with cogent materials. It was specifically submitted as under: * The seized materials on the basis of which the Ld AO has recorded satisfaction and made addition were found from the premises of Rakesh Yadav and Rajbir Goyat. * The assessee is not the owner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date of search as time limit for issuance of notice u/s 143(2) had expired and that the said assessment becomes concluded assessment as on date of search. Since, no incriminating material pertaining to the assessee qua the additions made by the Ld. AO were found during the course of search of Sh. Rakesh Yadav and Sh. Rajbir Singh Goyat, no additions ought to have been made in the hands of the assessee while framing the assessment u/s 153C of the Act. 8. The Ld. CIT(A) summarized the entire contentions of the assessee and sought for remand report from the Ld. AO. The Ld. AO submitted the remand report vide letter dated 29/05/2019 before the Ld. CIT(A) through proper channel. The Ld. CIT(A) reproduced the satisfaction note recorded by the Ld. AO for initiating proceedings u/s 153C of the Act on the assessee which reads as under: Captioned assessee's main source of income is salary as he happens to be the direct company of the Antriksh group of companies. By virtue of the authorization of the Director of Income Tax (Investigation, Chandigarh, a search seizure operation u/s 132(1) of the A carried out on 05.02.2014 at the residential/business premises of the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person. Therefore, unless there is satisfaction recorded with valid reasons it cannot be simply presumed that the seized material does not belong to the searched person, but in fact belonged to the other person. Therefore, satisfaction of the assessing officer of the searched person is mandatory requirement to transfer the records and to hold that the incriminating material found in the premises of the searched person in fact belonged to such other person. (iii) The AO in the satisfaction note has not listed the documents which were to be handed over to the AO of the person (appellant in this case) to whom the said document belongs as per provisions of section 153C of the Act. (iv) Unless and until, it is established that the documents do not belong to the searched person, the provisions of section 153C of the Act do not get attracted as the satisfaction note itself must display the reasons or basis for the conclusion that the AO of the searched person is satisfied that the seized documents belong to a person other than the searched person. These conditions have not been established in the satisfaction note of the appellant recorded by the AO for the years under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Addition of Rs. 6,75,17,615/- on account of unaccounted transactions has not been made on the basis of any document belonging to the appellant. It has been done on the basis of documents found during search at the premises of Sh. Rakesh Yadav Sh. Rajbir Goyat, wherein cash transactions with appellant were recorded. It has further been mentioned in the satisfaction note that these documents are in their hand writing and bearing their signatures, which they have admitted during the course of investigation. AY 2013-14 (i) Addition of Rs. 7,98,000/- u/s 69A of the Act on account of unexplained investment in jewellery is not based on any incriminating material found during the search. (ii) Addition of Rs. 2,50,00,000/- on account of unaccounted transactions has not be made on the basis of any document belonging to the appellant. It has been done the basis of documents found during search at the premises of Sh. Rakesh Yada Sh. Rajbir Goyat, wherein cash transactions with appellant were recorded. It further been mentioned in the satisfaction note that these documents are in the hand writing and bearing their signatures, which they have admitted during course of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized document which is assumed by the Revenue to be Jethmal Mehta i.e., the assessee herein. He had categorically denied right from the inception that his name is not at all mentioned in the seized document. No cogent evidence has been brought on the record by the Revenue to prove that the surname mentioned in the seized document in fact refers to Jethmal Mehta i.e., the assessee herein. The entire seized documents that is the subject matter of the addition were placed on record by the Ld. AR before us. On perusal of the same, we find that nowhere the name of Jethmal Mehta is mentioned and only the surname Mehta is mentioned. We find that the Revenue was not able to collaborate the seized document with any other transactions belonging/pertaining/ relating to the assessee to give weightage to these seized documents. Hence, the said seized document becomes merely dumb documents in the hands of the assessee. In our considered opinion, the assessee cannot be held to be having control over what the third person records in his regular books of accounts or in the parallel books of account. Here the seized documents are merely loose sheets not forming part of the books of account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard (supra) that assessee had categorically denied the contents of the seized materials when they were confronted to him. The assessee cannot be expected to prove the negative. On the contrary, the Ld. AO is supposed to bring on record with cogent evidences while recording the satisfaction note that a particular seized document which was seized from the premises of Rakesh Yadav does not belong to/pertain/relate to them and that the said documents belongs/pertains/relates to the assessee herein by duly mentioning the nature of transactions carried thereon and duly bringing on record with other cogent/collaborative evidences implicating the assessee thereof. This has not been done by the Revenue in the instant case. This conclusion of ours is further fortified from the fact that neither Sh. Rakesh Yadav nor Sh. Rajbit Goyat during the course of statement recorded from them u/s 132(4) of the Act had mentioned even the name of the assessee anywhere. The copy of the statements recorded from them are enclosed pages 1 to 40 of the Paper Book filed by the Department before us. Hence, no proceedings per se could be initiated on the assessee u/s 153C of the Act based on the seized document ..... X X X X Extracts X X X X X X X X Extracts X X X X
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