TaxTMI 
TaxTMI 
2016 (9) TMI 811
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....ch in the case of M/s. All Cargo Global Logistics Ltd., vs. DCIT, Central Circle 44, Mumbai and allowed the appeal of the assessee. 5. The Ld. CIT (A)-III, Hyderabad erred in sustaining the addition towards undisclosed profit for Rs. 5,27,500/- ignoring the expenditure incurred by the Appellant towards development of land. 6. The Ld. CIT (A)-III, Hyderabad ought to have deleted the addition of Rs. 5,27,500/- properly appreciating the evidence furnished by the Appellant in the paper book in the form of confirmation letters from various parties and the copy of the bank statement through which the payment is made. 7. The Ld. CIT (A)-III, Hyderabad ought to have directed the AO to drop penalty proceedings u/s. 271(1)( c) of the Act appreciating the fact that the appellant company has neither concealed any income nor furnished any inaccurate particulars of income. 8. The appellant herein may add, alter or modify or substitute any other point to the Grounds of appeal at any time before or at the time of hearing of the appeal". 2. In addition to questioning the proceedings u/s. 153C of the Income Tax Act [Act], assessee has raised additional grounds as under: ADDITIONAL GRO....
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.... the mode of assessment. A notice u/s. 153A can only be issued to such person where a search is initiated u/s.132 or books of account or other documents or any assets are requisitioned u/s. 132A after 31st day of May, 2003, requiring him to furnish within such period as may be specified in the notice, return of income in respect of each assessment year following within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisitioned is made. Thereafter assessment would be framed as per the provisions of section 143. Section 153C deals with the situation where the AO is satisfied that any money, bullion, jewellery or other valuable articles or things or books of account or documents seized or requisitions belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that the AO shall proceed against each of such other person and issue such other person notice and assess or re-assess income of such other person in accordance with the prov....
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....initiating proceedings for completion of assessment u/s. 153A cannot be proceeded u/s.153C in the case of such other person not searched. 6.4. The main difference in the language is that in section 158BD the scope of jurisdiction of AO is only with respect to the undisclosed income found during the course of search, whereas in section 153C the scope of jurisdiction of the AO is with respect to any money, bullion, jewellery, other valuable articles or things or books of account or documents with respect to which the AO is satisfied that it belongs to such other person. But so far as the reference to word 'satisfaction' is made, it is same as available in section 158BD. Therefore, the ratio laid down in various cases in respect to the point of satisfaction will apply for initiation of action u/s.153C. In view of this, initiation of proceedings u/s.153C is not proper as there is no satisfaction recorded by the AO having jurisdiction over the person searched or requisitioned u/s.132A during the course of assessment proceedings of searched party or later before issue of notice u/s.153C. Accordingly, the assessment framed u/s.153C in the assessment year has to be quashed. 7. Similar fa....
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....action. We find satisfaction of two officers is missing. In this connection we set out the text of the order of the Assessing Officer which is as follows. A search and seizure operation u/s. 132 was carried out in the group case of Dr. T. Yadhaiah Goud and others on 25.3.2010. During the course of search operation documents belonging to SHETTY PHARMACEUTICALS & BIOLOGICAL LTD., has been seized. Hence it is considered to initiate proceeding u/s. 153C of the I.T.Act. The aforesaid Section mandates recording of satisfaction of the Assessing Officer(s) is a pre-condition for invoking jurisdiction and it is not a mere formality because recording of satisfaction postulates application of mind consciously as the documents seized must be belonging to the any other person other than the person referred to in Section 153-A of the Act. It is contended that the same Assessing Officer is involved in the matter. This fact does not dispense with above requirement. It is settled position of law that when a thing is to be done in one particular manner under law this has to be done in that manner alone and not other way (see Nazir Ahmed V. Kind Emperor). We think the learned Tr....
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....on referred to in section 153A .... ' In view of this phrase, it is necessary that before the provisions of section 153C can be invoked, the Assessing Officer of the searched person must be satisfied that the seized material (which includes documents) does not belong to the person referred to in section 153A, i.e., the searched person. In the satisfaction note, which is the subjectmatter of these writ petitions, there is nothing therein to indicate that the seized documents do not belong to the Jaipuria Group. This is even apart from the fact that there is no disclaimer on the part of the Jaipuria Group insofar as these documents are concerned. * Secondly, the finding of photocopies in the possession of a searched person does not necessarily mean and imply that they 'belong' to the person who holds the originals. Possession of documents, and possession of photocopies of documents are two separate things.While the Jaipuria Group may be the owner of the photocopies of the documents, it is quite possible that the originals may be owned by some other person. Unless it is established that the documents in question, whether they be photocopies or originals, do not belong to the searche....