TaxTMI 
TaxTMI 
2016 (5) TMI 278
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....nal return had also been filed on 21.9.2009 declaring an income of Rs. 4,64,619/-. Notices u/s 153C of the Act were issued for both the years on 14.12.2012 and for both the years, the assessee had responded that the original return filed u/s 139 of the Act may be treated as return filed u/s 153C. It is seen that during the search and seizure operation in the Amrapali group of cases, documents were seized from the premises of Shri Shiv Priya, Director of M/s Ultra Home Construction Pvt. Ltd. (UHCPL) in which agreements entered by the assessee company with M/s UHCPL were seized as per the following details pertaining to Assessment Year 2009- 10:- Documents seized from the premises of Sh. Shiv Priya, Sector-62, Noida on 09.09.2010, as per Annexure A-2, Party AB-1 "Page. 74-81 This is copy of MOU dated 26.08.2009 entered between M/s Ultra Home Construction Pvt Ltd. (Builder) & M/s Moon Buildtech l*vt. Ltd., C-119 Preet Vihar Delhi-92 (Investor) - for investment in two flats at Amrapali Platinum, Tower, 1495 sqft. For Rs. 42,00,000/- which has been paid by investor as per following details. Cheque No. Date Amount in Rupees Tower NoJ Flat No./Size Receipt....
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....Do- 606942 13.06.2008 Rs. 25,00,000/- Tower-D/902/1775 Sq. Ft. 658 dated 13.06.2008 606943 13.06.2008 Rs. 25,00,000/- Tower-D/904/1775 Sq. Ft. - Do- 606944 13.06.2008 Rs. 25,00,000/- Tower-D/1001/1775 Sq. Ft. - Do- TOTAL 2,25,00,000/-- All the cheques are drawn on Indian Bank, Preet Vihar, New Delhi-110092 - With the condition to continue to hold or take refund after expiry of one year - for which builder has issued post dated cheque of Rs. 2,25,00,000/- dated 13.07.2010 drawn on Syndicate Bank, Raj Nagar Ghaziabad. - Along With assured return of Rs. 5,62,500/- per month for 12 months starting from 13.09.2009 totaling to Rs. 67,50,000/- and 12 cheques have also issued. - In case of delay/bouncing of cheque on the part of builder penalty of 4% per month." 4. For Assessment Year 2009-10, the assessment was completed at a taxable income of Rs. 39,90,631/- after making additions as under:- (i) Rs. 22,55,000/- u/s 68 of the Act on account of undisclosed investment in cash as per seized documents. (ii) Rs. 8,82,000/- on account of assured ret....
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....ected. Similarly, if there is a mistake as to name or there is a misdescription of the name, the proceeding will be liable to be challenged and corrected by giving notice to the assessee subject to such just exceptions as an assessee can take under law." It has further held in Isha Beevi v. TRO [1975] 101 ITR 449 that "Where the power to proceed is actually there, the mere reference to a wrong section for authority to act will not vitiate the action taken. It is not enough if a wrong section or provision of law is cited in a notice or order if the power to proceed is actually there under another provision." 3.5 In the present case a MOU dated 26.08.2009 between the appellant and M/s Ultra Home Construction Pvt. Ltd. (UHC) was found at the premises of Sh. Shiv Priya, Director of UHC. Since the appellant was signatory to the MOU, the said document belonged to the appellant. Further, the same seized document indicated that the appellant had paid cash to UHC which was prima-facie unaccounted. Therefore, a reasonable presumption of unaccounted money / income in the hands of the appellant also arose. The AO of the appellant is also the AO of UHC and Sh. Shiv Priya. In both these....
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....provisions of section 153C, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to a person other than the person referred to in section 153A, then the books of account or documents or assets requisitioned shall be handed over to the Assessing Officer who shall proceed against such other person and issue such person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. The Ld. AR submitted that in the present case in the alleged satisfaction note nowhere it has been recorded that the seized documents in the shape of MOU belong to the third party i.e. M/s Moon Buildtech Pvt. Ltd. which is the basic condition as observed from the language of the section 153C. The Ld. AR further submitted that the Hon'ble Delhi High Court has held in the case of Pepsi Foods Pvt. Ltd. vs. AC1T 270 CTR 459 that before initiating proceedings u/s 153C, the AO of the searched party has to be satisfied that the documents seized belong to person other than the searched person. It is only then that the AO of the searched person can ha....
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....ument did not belong to him. The Ld. DR relied heavily on the order of the Ld. CIT (A) and submitted that the same should be upheld. 13. We have heard the rival submissions and carefully perused the relevant material on record. It is seen that the extract of satisfaction note recorded for initiation of proceedings u/s 153C of the Income Tax Act, 1961 on the basis of documents seized allegedly belonging to the assessee was provided to the assessee through a communication dated 17.1.2013 and is placed at pages 9 and 10 of the paper book. It has also been reproduced in this order elsewhere. The point urged by the Ld. AR with reference to the satisfaction note is that the basic ingredient of section 153C of the Act has not been satisfied and, therefore, the notices were without jurisdiction and, hence, ought to be quashed. A perusal of section 153C reveals that section 153C permits the issuance of a notice by the Assessing Officer of a person who has not been searched on the basis of satisfaction note prepared by the Assessing Officer of a searched person indicating that during the search, certain documents belonging to the other person (the person not searched) were found. However,....
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....ound from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion of "satisfaction" that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of 'satisfaction'. 14. A perusal of the satisfaction note in the present appeals would show that nowhere has it been recorded that the seized documents in the form of MOU belong to the third party i.e. M/s Moon Buildtech Pvt. Ltd. or the assessee which is the basic condition envisaged in section 153C. Further, the perusal of the satisfaction note also leads us to the conclusion that it has been recorded as the Assessing Officer of the third party i.e. the assessee and there is no satisfaction note of the Assessing Officer of the searched party. The Ld. DR has vehemently contended that since the Assessing Officer of the person searched and the assessee is the same, it does not ....
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....on searched. The mere fact that the AO of the person searched and the assessee is the same person, does not, in any manner, obliterate the requirement of law necessitating the recording of satisfaction in the case of the person searched that money, bullion, jewellery, etc., found from the person searched belongs to the 'other person.' What is crucial to note is the capacity of the AO and not his identity. In view of the fact that when the statutory stipulation is for recording the satisfaction by the AO of the person searched, then, it cannot be substituted with the satisfaction of the AO of the 'other person.' This contention also fails. 16. Hence, on the facts and circumstances of the case, it is our considered opinion that the Assessing Officer of the searched person has failed to record his satisfaction that the seized documents belonged to the assessee i.e. other than the searched person. The recording of such a satisfaction is sine qua non for commencing any proceedings u/s 153C of the Act. Hence, no action could have been initiated against the assessee in absence of recording of satisfaction by the Assessing Officer of the searched person. Sans such satisfaction, the Asse....