TaxTMI 
TaxTMI 
2016 (6) TMI 282
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.... year 2008-09 against the order of CIT(A)-I, dated 05-04-2013 in case no. CIT(A)- I/CC.1(1)/268/2011-12. 3. The Revenue has preferred appeal IT(SS)A 256/Ahd/2013 in case of third asssessee Shri Narendra R. Patel in assessment year 2008-09 followed by his CO No. 213/Ahd/2013 against the CIT(A)-I order dated 05-04-2013 passed in case no. CIT(A)- I/CC.1(1)/279/2011-12. Relevant proceedings in assessment years 2007-08 and 2008- 09 hereinabove are u/s. 153C r.w.s 143(3) of the Income Tax Act, 1961; in short "the Act". Last assessment year 2010-11 involves proceedings u/s. 143(3) of the Act. 4. We come to respective pleadings first. First assessee Shri Anil R. Darji pleads two substantive grounds in assessment year 2007-08. The first one challenges validity of section 153C proceedings. Latter ground on merits assails correctness of unexplained investment addition u/s. 69 of Rs. 56,61,200/- made by the Assessing Officer and affirmed in the lower appellate order. This assessee in assessment year 2008-09 raises identical no. of grounds inter alia testing validity of section 153C proceedings as well as unaccounted short term capital gain enhancement of Rs. 1,61,21,622/-; respecti....
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.... 97,61,200/- (l/4th share as upheld by Ld. CIT(A)) for the assessment year under consideration as land had been purchased and the payment was made for this land as land was not sold to Suresh Patel & Vishnu Patel, therefore, ground No. 2 of the departmental appeal deserves to be dismissed/rejected." 6. This leaves us with the third Shri Narendra R. Patel. The Revenue has preferred IT(SS)A 256/Ahd/2013 against the CIT(A)'s order deleting unaccounted capital gains addition on sale of lands of Rs. 53,70,646/- and Rs. 32,53,733/- made on substantive and protective basis respectively by the Assessing Officer on the basis of various seized documents. The assessee's CO therein is stated to be identical to those extracted in preceding paragraphs. 7. We come to relevant facts first in assessment years 2007-08 and 2008-09. These three assessees are assessed as individuals. Shri Anil Darji deals mainly in petroleum products. Latter two assessees derive income from partnership firms, capital gains and other sources. The department conducted a search in case of M/s. Umiya Group and one of its partner Shri Vikas R. Patel. It came across an MOU(memorandum of understanding) dated 07-04-2007 ....
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....essee for the purpose of initiating section 153C proceedings. Shri Divetia takes us to the relevant satisfaction note reading as under:- "A search operation u/s 132 was conducted on Umiya Group by issuing warrants of authorization u/s 132 of the IT Act on 04.03.2010 and various documents/books of account/other valuable articles/other things were found and seized from the various premises covered u/s 132 of the IT Act. On verification of various documents found and seized from the residential premises of Shri Vikas R Patel situated at 23, Uma Bungalows, R.C. Technical Road, Ghatlodia, Ahmedabad, it is noticed that the page no 1-6 of annexure A-1 are 'Memorandum of Understanding' dated 07/04/2007 pertaining to the land at Final Plot No.32, TP No. 29 of Survey No.217/1 and 217/2 at Chandlodia admeasuring 2472 sq.mt. (2956 sq.yd). This memorandum of understanding is between Shri Brijesh S. Patel and Shri Mahendra D. Patel (First Party) and Shri Anilkumar G. Darji, Shri Amitkumar K Patel and Shri Narendra R Patel (Second Party). This memorandum of understanding has signature of all the above persons. Thus, I am satisfied that the page no 1-6 of Annexure A-1 bel....
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....e impugned incriminating material belonged to the assessee as specified u/s. 153C followed by a similar action being adopted in this assessee's case. His case is that the revenue authorities have not placed on record any satisfaction to have recorded in searched parties' cases. Case law of hon'ble jurisdiction high court (2014) 222 Taxman 96 (Guj) DCIT vs. Lalitkumar M. Patel upholding tribunal's order in IT(SS)A No. 61/Ahd/2007 is also quoted. Shri Divetia submits that the impugned assessment framed u/s. 153C of the Act is liable to be quashed on this ground alone. 11. Next comes Shri Darji's argument that the impugned satisfaction for initiating section 153C proceedings does not comply with hon'ble apex court decision in Calcutta Knitwears case Civil Appeal no. 3958/2014 decided on 12-03-2014 that the same has to be recorded inter alia at the time or along with the initiation of proceedings against the searched persons u/s. 158BC or in course of the said proceedings or immediately after conclusion of the said assessment being framed. Our attention is invited to Board's circular No. 24/2015 date 31-12-2015 in pursuance to the above stated decision requiring an Assessing Officer....
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....es to the MOU/Sale deeds in question. Shri Darji's signature appears on revenue stamp receipt. The Revenue takes us to para 4.3 page 10 of the CIT(A)'s order holding that this seized material belonged to the assessee. Case law of hon'ble jurisdictional high court in Kamleshbhai Dharamshibhai Patel vs. CIT Special Civil No. 13635/2012 decided on 24-12-2012 is quoted in support holding that the term ' belongs to' can be stated to be having relation or reference to Shri Jagdish invites our attention to facts narrated in this judgemnt treating vendors payment receipt containing their signatures held as to be belonging to them. Another case law (2014) 162 TTJ 171(AHD) Pravinbhai Keshavbhai Patel vs. DCIT treating an MOU to be belonging to parties therein is quoted in support. Shri Jagdish accordingly seeks to defend the impugned assessments by stating that the same confirms to all the legal requirements necessary for initiating section 153C proceedings. 15. Shri Anil Kshtriya represents the remaining two assessees Shri Amit K. Patel and Shri Narendra R. Patel. He files voluminous written submissions after putting a lot of effort for supporting the above extracted cross objections. He....
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....hree having acted as vendors of the land in question. The registered sale deed quoted price is Rs. 20 lacs. Shri Vikas R. Patel got recorded his search statement deposing that these three assessees had received unaccounted cash money of Rs. 2.5 crores. The Assessing Officer is admittedly common in all these cases. He initiated section 153A proceedings against Shri Vikas R. Patel on 18-02-2011. This followed three separate satisfaction under challenge. The Assessing Officer recorded section 153C satisfaction in case of Shri Darji on 14- 07-2011 as followed by remaining two dated 19-07-2011 in cases of S/sh Amit K. Patel and Narendra R. Patel. We have already extracted hereinabove satisfaction note in case of Shri Anil R. Darji. We find that remaining two satisfactions dated 19-07-2011 are repetition thereof in extempore except namesake difference. We put up a specific query to Shri Jagish appearing at Revenue behest as to whether or not the Assessing Officer recorded satisfaction in case of Shri Vikas R. Patel's. His reply is in negative. He reiterates his submission already made that the impugned satisfaction has to be taken as a common one in case of the searched party as well as ....
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....rder dated 29.12.2009. 6. The assessee preferred appeal. He inter alia raised two substantive grounds. First one assailed legality of the impugned section 153C proceedings. Latter ground on merits challenged correctness of the above stated addition. We reiterate that the instant adjudication is confined to legal aspect only. The assessee argued in the course of lower appellate proceedings that none of the seized material belonged to him as contemplated under section 153C of the Act. The CIT(A) concurs with the Assessing officer to hold that above stated incriminating material annexure-55, 64 to 65 belongs to assessee only thereby rejecting assessee's legal plea. 7. This leaves the assessee aggrieved. 8. Learned authorised representative opens up assessee's arguments. We are taken to the satisfaction note relevant for initiation of the impugned section 153C proceedings reading as under :- "Satisfaction note to initiate proceeding u/s. 153C r.w.s.153A of the IT Act in the case of Mr. Shailesh R. Daxini A search u/s 132 of the IT. Act 1961 was conducted in the case of Kunwaji Commodities & Brokers Pvt. Ltd. and other persons of Kunwarji Gro....
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....reinabove belonged to the assessee. It is further stated that the assessee filed RTI application as well seeking to confirm as to whether the Assessing Officer had recorded any satisfaction in case of the above stated searched assessee under section 153C. We are informed that the department has furnished the above extracted satisfaction only to have been entered for the purpose of initiating the impugned proceedings. The assessee accordingly contends that this course of action adopted by the Assessing Officer is not sustainable as per the case law of hon'ble jurisdictional high court (2014) 222 Taxman 96 (Guj) DCIT vs. Lalitkumar M. Patel upholding tribunal's order in IT(SS)A No.61/Ahd/2007 propounding this two tier exercise of satisfaction first in case of the searched party followed the one in case of the other assessee as under :- "7. Copy of the reasons recorded for issue of notice under Section 158BC is at page no.25 of the Revenue's paper book which reads as under: "REASONS FOR ISSUE OF NOTICE U/S.158BD OF THE ACT. Assessee : Shri Upendra N. Patel, Shri Lalit M. Patel & Shri Champak M. Patel "A search and seizure action in the Jayraj Group ....
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....ction 158BD. In support of his contention, he relied upon the decision of the Hon'ble Apex Court in the case of Manish Maheshwari Vs. ACIT, 289 ITR 341 and Special Bench of the ITAT in the case of Manoj Agarwal Vs. DCIT, 113 ITD 377. The learned DR, on the other hand, relied upon the orders of the authorities below and stated that the satisfaction recorded by the AO under Section 158BC is a valid satisfaction because the persons who recorded the satisfaction was the AO for Jayaraj Group of cases as well as the assessee. He also submitted that notice under Section 158BD was duly issued before the completion of the assessment under Section 158BC read with section 263, in the Jayraj Group of cases. 9. We have heard both the parties and perused the material placed before us. The provisions of section 158BD has been considered by the Hon'ble Apex court in the case of Manish Maheshwari (supra). At Page No.348 of the report, Their Lordships held as under: "The condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. The said provision would apply in the ca....
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.... belongs to the other person, then he shall hand over the seized material so as to enable the second Assessing Officer to make a block assessment in a similar manner and that is not possible if the satisfaction is not recorded. And this can be recorded only and only in the course of the section 158BC proceeding and nowhere else. It is the Assessing Officer assessing the person searched who goes, through the seized material and comes to a decision as to whether there is any undisclosed income unearthed as a result of search, if so its nature and to whom it belongs. If the said undisclosed income belongs to the person searched that is the end of the matter. If, on the other hand, the material examined shows that the undisclosed income pertains to some other person he has to give a finding to this effect and thereupon transmit the related seized material to the Assessing Officer having jurisdiction over the other person. All these findings have to be recorded after an honest appreciation of the seized material with an objective mind and there has to be a record reflecting such findings on the basis of which alone the other Assessing Officer can assume jurisdiction to proceed against t....
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....ch of the ITAT has further held that such satisfaction by the AO of the person searched has to be recorded in the course of proceedings under Section 158BC and not thereafter. Meaning thereby, the satisfaction must be recorded before the completion of the assessment of the person searched. Now in the case of the assessee we have reproduced the satisfaction note in para-7 above. 12. From the satisfaction note, it seems that it is recorded by the AO of the assessee and not the AO of Jayraj Group of cases. This inference of ours is on the following basis: i) Heading of the note is "Reasons for issue of Notice u/s.158BD of the Act". Thus, it is the reasons recorded by the AO before the issue of notice under Section 158BD. Obviously, the reason is recorded by the AO who issued the notice under Section 158BD. It seems that the AO considered the provision of section 158BD similar to Section 148 and therefore before the issue of notice, he recorded the reasons for issuing of such notice. ii) The name of the assessee mentioned in the satisfaction note is Shri Upendra N. Patel, Shri Lalit M. Patel & Shri Champak M. Patel. Thus, the reason is recorded in the case of....
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....ention with regard to undisclosed income, if any belonged to Shri Lalit M. Patel. 14. In view of the totality of the above facts, we are of the opinion that the reasons recorded for issue of notice under Section 158BD by the AO of the assessee cannot be said to be valid satisfaction for issue of notice under Section 158BD, we therefore respectfully following the decision of the Hon'ble Apex Court in the case of Manish Maheshwari (supra) and the decision of the Special Bench of the ITAT in the case of Manoj Aggarwal (supra), hold that the issue of notice under Section 158BD in the case of the assessee was not valid. We quash the same. Once the notice under Section 158BD itself is quashed, the assessment order passed under Section 158BC in pursuance to the notice issued under section 158BD is also quashed. " Learned authorised representative accordingly submits that the Assessing Officer has erred in taking recourse to above stated satisfaction note as the triggering point for initiation of section 153C proceedings under challenge. 10. We afforded ample opportunity to the learned departmental representative for defending legality of the impugned proceedings....
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.... end of ld. counsel for the assessee is that there should be a straight jacket system, whereby the satisfaction recorded even by the same AO then, that should be placed in the file of searched person and if it is placed in some other cupboard in his room by the AO then, there cannot be any satisfaction, we fail to appreciate that technical approach at the end of assessee. The law does not require the manner and the procedure of keeping the files. The section only requires that a satisfaction be recorded and it should be during the period propounded by Hon'ble S.C. in Calcutta Knitwears, that has been recorded in the present case. It is available on page 74 of the Paper Book. The second scenario can also happen that seized material of KPC group might be kept in a common bundle, wrapped in a cloth where all the files are emanating from search and survey are being placed. If the above satisfaction note was found to be tagged with other file would it be held that no satisfaction was recorded. In our understanding the reply will be that satisfaction was recorded." Learned departmental representative thereafter takes us to the co-ordinate bench conclusion of the Assessing Office....
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....any money, bullion, jewellery or other valuable articles etc. belongs to some other persons and not the searched assessee. This has to be followed by another exercise in case of such other assessee that the same is caused escapement of any income. It is at this stage that both parties have cropped up the instant issue. The assessee's case is that there is no satisfaction at first level in case of the searched entity opposed by the Revenue by saying that the Assessing Officer is the same who has expressed satisfaction in assessee's case. The law about entering of such a satisfaction is very well settled now. Hon'ble apex court in the case of Manish Maheshwari vs. ACIT (2007) 289 ITR 341 (SC) holds that such a satisfaction is indeed mandatory. We deem it appropriate to observe that this case dealt with block assessment scheme under section 158BD of the Act as it existed in the erstwhile avatar under Chapter XIV-B of the Act. The same stands repealed by newly inserted sections 153A to 153C by the Finance Act 2003. It comes to our notice that the Central Board of Direct Taxes has issued its Circular No.24 of 2015 already accepting that rigor of section 153C vis-a-vis 158BD is substanti....
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....mpugned satisfaction does not adhere to above stated settled law. The Revenue on the other hand makes out a case that the Assessing Officer's satisfaction has come only after careful examination of the above stated incriminating material being examined together in the cases of M/s. Kunvarji as well as the assessee. We find no reason to agree with this contention. As observed by the learned co-ordinate bench in Lalit Kumar M. Patel's case, the Assessing Officer in the impugned satisfaction mentions only assessee's name on top of the satisfaction note and not that of the searched entity. There is no material placed on record before us that the Assessing Officer had kept the case files of the searched party and that of the assessee together before drawing the impugned satisfaction note. It is made clear that the Revenue's contention based on Kolkata bench decision of the tribunal puts a heavy onus on the department to positively prove that the same Assessing Officer in case of searched assessee as well as the third party had collectively examined the case files before recording a satisfaction note contemplated under section 153C of the Act. Needless to say, this burden stands un-disch....
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....ng the addition of Rs. 1,50,91,800 in the hands of the appellant on substantive basis as unaccounted business income in respect of land bearing S. No. 206 at Chandlodiya, that too without giving any notice of enhancement to the appellant. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have upheld the addition of Rs. 1,50,91,800 as unaccounted business income instead of short term capital gain on substantive basis in the hands of the appellant in respect of land deal bearing survey No.206 at Chandlodiya. The enhancement made by CIT(A) was illegal unlawful and without jurisdiction apart from against the principles of natural justice. 3.1 The Ld. CIT(A) has grievously erred in law and or on facts in holding that the entire sales consideration in cash from Shri Vikas Patel was received by the appellant alone and had not paid over a part of their share to Shri Amit Patel and Narendra Patel. The observations made and conclusion reached by CIT(A) to hold that the entire consideration paid in cash as belonging to the appellant and had not passed on their share to the remaining co-purchasers are not admitted by the appell....
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....s made to Shri Darji and others. 22. The assessee filed his return on 28-03-2011 declaring total income of Rs. 37,16,870/- followed by a revised one on 08-11-2011 increasing income to Rs. 44,36,870/-. The Assessing Officer issued section 143(2) notice dated 19-09-2011alleging that the above stated sale deed and agreements involved the impugned cash sum of Rs. 1.5 crores on 8 occasions from 03-05-2008 to 07-08-2008 against registered sale deed price of Rs. 73.58 lacs. He referred to assessee's statement u/s. 131 dated 16-06-2010 recorded before the ADIT(Investigation) confirming cash receipt of Rs. 36 lacs. The Assessing Officer sought to add further sum of Rs. 3,14,84000/- in the nature of undisclosed income. 23. The assessee filed reply on 10-11-2011 inter alia stating that there were five partners in the above stated land transaction (supra). He pleaded for equal addition in all these cases. Shri Darji highlighted that he had received Rs. 36 lacs only in cash and Rs. 73.58 lacs by cheques. Latter sum was clarified to have been obtained on behalf of all other partners. The Assessing Officer thereafter issued notices to the remaining two assessees. S/sh Amit K. Patel and Nare....
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.... (or 3997.275 Sq Yard) was executed at Rs. 73,58,000 between Shri Anilkumar G. Darji, Shri Chandu Patel & Shri Bhagyesh Patel (Sellers) and Shri Bhagwan Ajara & Shri Dipak Prajapati (Buyers). The details of payment of Rs. 150 lakhs have been found on page 128, 129 & 132 of the Annexure A-3 seized from the residential premises of Shri Vikas R Patel. Shri Anil G Darji has also placed his signatures against the entries evidencing payment on these pages. From the details of these payments, it is established that the said MoU was duly executed and unaccounted payment of Rs. 150 lakhs was made on this land transaction (in accordance with statement of Shri Vikas R Patel recorded u/s 132(4) of the IT Act on 05/03/10 and submission of Shri Bhagwan K Ajara dated 12/12/11). In view of this, total short-term capital gain on sale of land at 206, Chandlodiya is computed at Rs. 2,19,33,000 (ie Rs. 1,50,00,000 (cash) + Rs. 73,58,000 (cheque) -Rs 4,25,000). It is considered that the cash payment of Rs. 150 lakhs was distributed equally among the five persons (viz Shri Amitkumar K Patel, Anilkumar G. Darji, Narendra Patel, Chandu Patel & Shri Bhagyesh Patel as the land was original....
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....Anil G Darji to Shri Amit Patel & Shri Narendra Patel, each, for transfer of rights in land at Survey No 206, Chandlodiya. In view of this, the assessee vide notice u/s 142(1) of the IT Act dated 20/12/11 was asked to explain the source of above payment. However, no explanation could be filed by the assessee. In view of this, Rs. 2,00,000 is added to the total income of the assesssee u/s 69 of the IT Act. Penalty proceedings u/s 271AAA of the IT Act are initiated on undisclosed investment of Rs. 2,00,000." 25. The assessee preferred an appeal. Other parties/assessees S/sh. Amit K. Patel and Narendra Patel preferred their separate appeals. The CIT(A) inter alia holds that the latter two assessees do not have any stake in the seized material documents dated 03-05- 2008 and 13-05-2008 thereby waiving off all their rights and interests in the revenue record on 25-04-2008, Shri Darji had entered into an adventure in real estate business thereby deciding the issue against him as follows:- "5. I have gone through the assessment order and submission of the A.R. of the appellant and also submissions of Shri Narendra R. Patel and Shri Amit K. Patel in their appeals in appeal No.C....
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.... same are correct and flow naturally from the records seized during the search and seizure operation at the premises of Shri Vikas R. Patel. 5.3 As far as the protective addition in the hands of Shri Amit K. Patel and Shri Narendra R. Patel is concerned, it is seen that Shri Amit K. Patel and Shri Narendra R. Patel had transferred their rights in favour of Shri Anil G. Darji and the corresponding entries made in revenue record on 25/4/2008. The banakhat executed on 13.05.2008 between Shri Brijesh Patel and Shri Deepak Prajapati on one hand and Shri Amit K. Patel, Shri Anil G. Darji, Shri Narendra R. Patel, Shri Chandu Patel and Shri Bhagyesh Pate! (the selling party) for the sale of land has been signed by Shri Brijesh Patel, Shri Deepak Prajapati and Shri Anil G. Darji only. This finding has been recorded by the Assessing Officer on page No. 14 of the assessment order. 5.4 Further, the sale deed for this land (at Survey No.206 at Chandlodia) was executed by Shri Anil G. Darji, Shri Chandu Patel, Shri Bhagyesh Patel as sellers and Shri Brijesh Patel and Shri Deepak Prajapati as buyers for sum of Rs. 73,58,000/-. This deed was not signed by Shri Narendra R. Patel o....
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....w of the above facts, it become clear that the entire cash of Rs. 1,50,00,000/- in this case was received by Shri Anil G. Darji alone for the following reasons: (i) Shri Amit K. Patel and Shri Narendra R. Patel had already surrendered their interest in this land in favour of Shri Anil G. Darji vide banakhat dated 02.04.2008 as consequence of this banakhat the names were removed from revenue records on 25.04.2008. Thus, these two persons could not have been a party to the banakhat executed on 13.05.2008. (ii) Shri Bhagyesh Patel and Shri Chandubhai Patel have not signed the banakhat which was made between Shri Brijesh Patel and Shri Deepak Prajapati (purchasers) and Shri Anil G. Darji (seller) for a sum of Rs. 73,58,000/- by cheque of Rs. 1,50,00,000/- by cash. This deed has been signed by Shri Brijesh Patel and Shri Deepak Prajapati on behalf of the purchasers. However, on behalf of sellers, only Shri Anil G. Darji has put his signatures. (iii) However, the sale deed has been executed at 73,58,000/- by cheque where all the three persons i.e. Shri Anil G. Darji, Bhagyesh Patel and Shri Chandubhai Patel have signed as sellers. Thus, it is clear that Shri Bh....
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.... question of law have all relevant facts on record in order to ascertain the correct tax liability. 27. Shri Divetia thereafter states that the impugned search is dated 04-03-2010. The Assessing Officer in assessee's case; a person not searched, entered into section 153C satisfaction on 14-07-2011 on the basis of seized material that the same belonged to him. Learned counsel takes us to section 153C(1) 1st proviso stipulating reference to the date of the search u/s. 132 or requisition u/s. 132A to 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 third person. He emphasizes that this section 153C satisfaction date 14-07-2011 is the relevant date for taking into account preceding six assessment years before the assessment year relevant to the previous year of the search. His contention is that the impugned assessment year 2010-11 comes within block of six assessment years preceding the date of search to be constructed as 14-07-2011 on the basis of first proviso to section 153C(1). It strongly argues that the relevant six assessment years would accordingly be....
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....MOU/agreements dated 03-05-2008 and 13/05/2008 pertaining to the land in question whose sale deed was executed on 17-11-2009 in previous year relevant to the impugned assessment year. Shri Vikas R. Patel (searched party) deposed before the search authorities that this land transaction involved cash payment of Rs. 1.5 crore over and above registered sale price of Rs. 73.58 lacs. The assessee filed his return on 28-03-2011. His Assessing Officer (common in all cases) received the relevant record pertaining to the search in question on 14-07-2011. This followed section 143(2) notice being served on 19- 09-2011. He thereafter framed the impugned regular assessment u/s. 143(3) of the Act making the impugned additions in assessee's hands as confirmed/modified in the lower appellate order. The first issue between the parties is about validity of this regular assessment. The assessee's case is that the impugned assessment year 2010-11 comes within six preceding assessment years from date of section 153C satisfaction/receipt of record by his Assessing Officer on 14-07- 2011 and therefore, he ought not to have been proceeded u/s. 143(3) of the Act. The Revenue seeks to reject this legal plea....
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.... return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under subsection (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the book of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.]" 33. A perusal of the above extracted section makes it clear that the same applies in case it is found that any money, bullion or jewellery or other material stated therein belongs to any other person, the Assessing Offi....
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....f section 153C of the Act. They contemplate three eventualities for an Assessing Officer to deal with before proceedings u/s. section 153C. The first clause (a) is that the third party assessee has not furnished his return and no notice u/s. 142(1) of the Act has been issued. This is not the case here since the assessee already filed return dated 28-03-2011 well before record being received by his Assessing Officer on 14-07-2011. Then comes clause (b) applicable in case the third person concerned furnished return but no notice u/s. 143(2) of the Act has been served and its limitation has expired. He furnished his return on 28-03-2011. The Assessing Officer served him section 143(2) notice dated 19/09/2011 i.e. well within the statutory limit of six months from the end of the financial year of filing of return. This section 143(2) proviso limitation expires on 30-09- 2011. The legislature envisages in section 153C(2) clause (b) that this limitation for issuing section 143(2) has to expire so as to result in initiation of section 153C proceedings. This admittedly is not the case here. We apply reverse implication rule that the legislature in its full wisdom does not include a case wh....
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....before us as to whether those cases satisfied all the relevant conditions for exigibilty of section 153C or not i.e. they furnished their returns and no notice u/s. 143(2) had been served on them or its limitation had expired. This argument therefore does not rescue the assessee. We reject his legal ground challenging validity of section 143(3) assessment by concluding facts of the instant case as narrated in preceding paragraphs do not satisfy all necessary conditions u/s. 153C(2) of the Act for issuing corresponding notices. 38. We come to the merits of the impugned addition of Rs. 1.5 crores cash component. The assessee's plea is that the same has to be equally divided in case of all the five partners. He does not dispute the correctness of having received cash amount in principle since he has already declared Rs. 36 lacs in the return turning out to be more than his share of Rs. 30 lacs. This itself is sufficient to decline his apportionment plea. It further transpires that his two partners S/sh Amit K. Patel and Narendra R. Patel had already waived off their interests in revenue record on 25-04-2008 in Shri Darji's favour. The same precedes the impugned seized material date....