9911796707
TMI Blog2025 (1) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... d 12.01.2023 for the Assessment Year 2018-19. 2. Brief facts of the case are, assessee filed its original return of income on 30.08.2018 declaring income of Rs. 19,46,090/- and the same was processed under section 143 (1) of the Income-tax Act, 1961 (for short the Act ) at returned income. A search and seizure operation u/s 132 of the Act was carried out in Seven Seas Hospitality Pvt. Ltd. group of cases on 03.05.2018. During the course of search, various documents/books of account were found and seized. The case of the assessee was centralized with Ward 58 (3), Delhi. The Assessing Officer observed that while examining the seized documents of the group, certain documents pertaining to Shri Anil Kumar Gupta, the assessee were found. The Assessing Officer of the searched person recorded his satisfaction on 05.02.2021 that these documents did not belong to the searched person and belongs to the assessee, the person other than searched person. The Assessing Officer of the assessee also recorded his satisfaction on 05.02.2024 that action u/s 153C is attracted. Subsequently, the case was transferred to Central Circle 30. Accordingly, notice u/s 153C r.w.s. 153A was issued on 05.02.2021. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the assessee has denied the same. 6. After considering the submissions of the assessee, the Assessing Officer found it not acceptable and observed that Seven Seas Hospitality Pvt. Ltd. has confirmed that they received advance of Rs. 20,00,000/- from the assessee and he stated that the findings are not on statement as mentioned by the assessee and the assessee made a submission that it only paid Rs. 12,15,000/- which is not acceptable considering the fact that the payment of the assessee through RTGS/Cheque were verified from the bank account of Seven Seas Hospitality Pvt. Ltd.. Therefore, the seized document cannot be partly genuine. Therefore, the amount of cash mentioned in the seized document is also true. Accordingly, he proceeded to make the addition of Rs. 31,85,000/- i.e. the difference of amount mentioned in the said slip less the payment made by cheque (Rs.46,15,000/- - Tax Cheque payment). 7. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT(A)-30, New Delhi and filed detailed submissions before the ld. CIT (A). After considering the submissions of the assessee, ld. CIT (A) dismissed the grounds challenging the proceedings u/s 153C of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are that the impugned assessment was necessitated due to search on the premises of Seven Seas Hospitality Pvt Ltd Seven Seas Hotel on 03.05.2018. Copies of the undated satisfaction notes, framed by the AO both in the capacity as the Ld AO of the searched person and as that of the other person i.e. the appellant, are placed in the paper book at pages 9-12. The first objection regarding the satisfaction notes is that the both the satisfaction notes are undated which fact does not support the case of the department that the before issue of notice u/s 153C that, as per the requirement of section 153C(1) of the Act, necessary satisfaction has been recorded. The Ld CIT(A) has on the basis of the enquiry conducted with the AO held that both the satisfaction notes were framed on 05.02.2021 and this factual finding is based on the records submitted by the Ld AO during appeal proceedings. It is not in dispute that satisfaction notes provided to the Ld AO during assessment proceedings are the same which were provided through email by the Ld AO to the counsel on email id [email protected] 27.02.2021 and none of the documents had any date mentioned thereon. On the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated reassessment proceedings u/s 153C of the Act for all the six years. Hon'ble Supreme Court in the case of PCIT-3, Pune Vs Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) has held that the nexus between issue of notice u/s 153C and the incriminating material found as a result of search must exist. Hon'ble Supreme Court in para 13 of the order has observed that one of the jurisdictional conditions precedent to the issue of a notice u/s 153C of the Act is that money, bullion, jewellery or other valuable article or thing or any books of account or document must be seized or requisitioned for the relevant assessment year for issue of notice u/s 153C of the Act. Further, Hon'ble Delhi High Court in para 31 has held in the case of Index Security Pvt. Ltd 86 taxmann.com 84 (Del) as follows:, As regards the section jurisdictional requirement viz., that the seized documents must be incriminating and must relate to the A.Ys. whose assessments are sought to be reopened, the decision of the Supreme Court in Commissioner of Income Tax-III, Pune Vs. Sinhgad Technical Education Society (supra) settles the issue and holds this to be an essential requirement. The decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as that of the other person that the documents/ assets pertaining such other person found in the course of search. The Hon ble Karnataka High Court in Dy CIT vs Sunil Kumar Sharma vide decision dated 22.01.2024 in WP Nos 830-834 of 2022 quashed the assessment order framed in pursuance of 153C of the Act on the ground of the assessment proceedings initiated through a combined satisfaction note. The Hon ble Apex Court has dismissed the SLP of the Department in SLP (Civil)Diary Nos 21526/2024 vide order dated 20.08.2024. The appellant therefore prays that the assessment order u/s 153C impugned in the present appeal need be quashed in view of the acceptance of the order of Karnataka High Court in Dy CIT vs Sunil Kumar Sharma(supra). The validity of the satisfaction note can also be judged on the basis of the fact incorporated therein. The perusal of the satisfaction note will show that significantly important date which is the sole premise on which the satisfaction has been framed is the date of function. As per the satisfaction note, the marriage function on behalf of the appellant was on 30.06.2017 and there was detail of the actual expenditure in the hard disk pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough cash. The above addition is based on the presumption that the above estimate on marriage on 30.06.2017 also holds good for the marriage solemnized on 19.06.2017. The fact that the marriage of the appellant s daughter took place on 19.06.2017 and not on 30.06.2017 gets supported by the retail invoice No.6141 (PB 28) where the date of function mentioned to be 19.06.2017. The Event Managers Bill (PB 27) also shows function of the daughter of appellant on 19.06.2017 only. It is therefore a case of misapplication of facts. This fact that the marriage took place on 19.06.2017 has been reiterated and taken note of by Ld CIT(A) on page 14 in para (v), page 17 in para (iv) and page 24 in para 1therein. Without prejudice to above, the two amounts of Rs. 10,00,000/- each have been stated to have been paid by the appellant on 02.04.2016 and 25.05.2016 which is the part of the amount of Rs. 34,00,000/- added in hands of the appellant. If that is the case, the year of taxation of above payments should have been AY 2017-18 and not AY 2018-19. Kindly refer para 8 at page 4 of AO order and the same have been taken note of Ld CIT(A) in para 15 at page 29. In addition to above, the appellant se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs. 12,15,000/- and balance by settlement of cash payment. From the sheet found during the search which was reproduced in assessment order, it shows that initial estimated expenses were Rs. 46,15,000/- and the same was finalized at Rs. 32,15,000/- and the break-up of settlement was clearly written for Rs. 32,15,000/-. As per the above sheet, it shows that settlement of Rs. 12,15,000/- by cheque and balance of Rs. 20,00,000/- by cash. However, we noticed that in the satisfaction note, the Assessing Officer has proceeded to make the addition of Rs. 32,15,000/- considering the total estimated cost of Rs. 44,15,000/-. We observed that the satisfaction recorded by the Assessing Officer has got two flaws one is date of marriage and the second is the finalized amount of marriage function hall. The initial estimate provided by Seven Seas Hospitality Pvt. Ltd. was Rs. 44,15,000/- and the actual settlement was made at Rs. 32,15,000/-. There is no reason for the Assessing Officer to record the satisfaction for Rs. 44,15,000. The whole assessment was framed only on the abovesaid flawed recording of satisfaction. Further we observed that the emerging fact on record is that the basis of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
