TaxTMI 
TaxTMI 
2015 (12) TMI 304
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....e separate orders passed by the Commissioner of Income Tax (Appeals) [CIT(A)] - all dated 22nd February, 2012 - disposing of the respective appeals preferred by the Assessee against the assessment orders dated 31st December, 2010 passed in respect of the aforementioned AYs. 2. The Revenue has projected the following questions of law in each of the aforesaid appeals:- "(i) Whether in the facts and circumstances of the case, ITAT could have held that there was no valid search since the impugned additions have been made under section 153C/143(3) of the Act without reference to any material found as a result of search? (ii) Whether in the facts and circumstances of the case, ITAT could have held that additions made in non-abated assessments, are invalid? (iii) Whether on the facts and circumstances of the case, findings of the ITAT are perverse?" 3. Since the issues involved and the questions of law projected by the Revenue are common, these appeals were heard together. 4. The above proceedings emanate from the search and seizure operations under Section 132 of the Act, which commenced on 14th October, 2008 in respect of "SVP Group of companies". 5. According to the Revenu....
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....Section 142(1) of the Act was also issued for AY 2009-10. On 23rd September, 2010, another notice under Section 153C of the Act was issued by the ACIT, Meerut. On 8th November, 2010, yet another notice under Section 153C of the Act alongwith a notice under Section 142(1) of the Act was issued by the Assistant Commissioner of Income Tax, Central Circle, Ghaziabad (hereafter the 'AO'). In response to the aforesaid notices, the Assessee filed its returns of income for the respective five AYs in question. Subsequently, on 15th November, 2010, a letter was issued by the AO in respect of AYs 2003-04 to 2009-10, which referred to the notice dated 8th November, 2010 issued under Section 142(1) of the Act. 8. Thereafter, various notices were issued by the AO. According to the AO, the said notices were not fully complied with. However, this is disputed by the Assessee and the paper book filed by the Assessee in these proceedings indicates that the notices were responded to. On 31st December, 2010, the AO passed assessment orders in respect of each of the AYs in question assessing the amounts credited in the books of the Assessee as income under Section 68 of the Act. The AO observed in the ....
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....der:- "A search operation u/s 132(1) of the Income Tax Act, 1961 was conducted in the case of SVP Group of cases and concerned persons at various offices and residences by issuing warrants of authorization u/s 132(1) of the Income Tax Act, 1961 on 14-10-08 and various documents, books of account, other valuable articles and other things were found and seized from various premises. On verification of various documents and books of accounts found and seized from some documents including following documents belong- to M/s SVP Builders India Ltd. 17, Kiran Enclave, G.T. Road, Ghaziabad, I am satisfied that some documents including following documents belongs to Ms Nikki Drugs & Chemicals P. Ltd., L-119, Shastri Nagar, Delhi-110052. 1. Annexure A-84 (Bunch No. 31) which are various documents like share application form, balance sheet and minutes of meeting of directors in respect of share application money in the shares of M/s SVP Builders India Ltd. 2. Annexure A-5. (Page 118-128) which are various documents like resolution, affidavit, share application form, acknowledgement receipt of return and P&L A/c / balance sheet in respect of investment for purchase of shares of Ws SVP ....
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....eness of a functional company". The CIT(A) further held that the Assessee was carrying on business only on paper and its sole purpose was to benefit others. It was also noticed that the shares of SVP Group were purchased by the Assessee at a higher price and the same were subsequently sold to individuals/concerns of SVP Group at a throwaway price, which was a fraction of the purchase price. According to the CIT(A), the same evidenced that the transaction was done only for the purposes of benefiting SVP Group. The CIT(A) concluded that the Assessee was only a conduit for transferring money to SVP Group and based on the aforesaid conclusion, directed deletion of the addition made by the AO alongwith a direction to add the same in the hands of the beneficiaries. In addition to the above, the CIT(A) gave further directions, inter alia, for proceeding under Section 269SS of the Act and to impose penalty under Section 271D of the Act on account of sums received by the Assessee in cash from various persons. 13. The Assessee as well as the Revenue preferred appeals against the orders passed by the CIT(A). Whilst the Assessee was mainly aggrieved by the decision of the CIT(A) in rejecting ....
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....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 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 subsection (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 rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other pers....
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....e total income of the Assessee and if he is so satisfied that the same have a bearing on the determination of the income of the assessee, he has to issue notice and assess or reassess the income of the assessee in accordance with the provisions of Section 153A of the Act. Section 153A of the Act requires that a notice be issued to the person sought to be assessed, calling upon the said assessee to file his return of income in respect of each year falling within the specified six AYs. It is further specified that the provisions of the Act shall, so far as may be, applied as if such returns were returns required to be furnished under Section 139 of the Act. Thus, the assessing officer has to, thereafter, proceed with the assessment/reassessment in accordance with the provisions of the Act; that is, accept the return with or without such adjustments as permissible under Section 143(1) of the Act or if the claims made by the assessee are considered as inadmissible and/or it is considered necessary and expedient to subject the returns to further scrutiny, issue the requisite notice under Section 143(2) of the Act and frame the assessment in accordance with the Act. 17. In the present c....
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....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 must reject the argument of the Department that the discretion of the Assessing Officer having jurisdiction will be impaired in any manner, if he were to hold a different view. Similarly, as there is no provision either express or implied (in the Act) to dispense with the requirement of satisfaction, if the Assessing Officer happens to be the same, as in this case, the argument of the Department must be negatived. 19. After receipt of the materials, the Assessing Officer having jurisdiction is expected to conduct enquiry and due verification of the relevant facts; before forming his prima facie satisfaction. The Assessing Officer having jurisdiction will be well within his rights to form an independent view before issuing notice to the other person (person other than the person referred to in Section 153A) under his jurisdiction on the basis of his own enquiry. In our opinion, the view formed by the Assessing Officer after his own enquiry does not ent....
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....ents did not belong to the Assessee. Insofar as the counter foils of the share certificates are concerned, it cannot be disputed that the said documents never belonged to the Assessee but were a part of the records of the company issuing certificates, i.e, SVP Builders India Ltd. As far as the share certificates of the SVP Builders India Ltd. is concerned, it was submitted that the same pertains to the shares that had already been sold and the endorsement made on the rear of the share certificates clearly indicated that the Assessee was no longer the holder of the said shares and the same stood registered in the name of one Satpal on 26th March, 2004. 21. The ITAT considered the above contentions and following the decision of this Court in Pepsico India Holdings Pvt. Ltd. v. Assistant Commissioner of Income Tax: (2015) 370 ITR 295 (Delhi) held that the documents in question could not be said to belonging to the Assessee. In Pepsico India Holdings Pvt. Ltd. (supra), this Court has explained that the expression 'belongs to' must not be confused with the expression 'relates to'. As an illustration, this Court has referred to a registered sale deed which, although, registered by the v....