TaxTMI 
TaxTMI 
2017 (2) TMI 165
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....icer be restored." 2. First, we may take up the appeal of the Revenue because the Ground raised by the Revenue goes to the root of the matter. In brief, the relevant facts are that the assessee is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of diamond trading. It transpires that assessee company had entered into certain agreements dated 29/05/2004 with one M/s. Layer Exports Pvt. Ltd. for purchase of flats in the proposed building, namely 'Sea View'. A search action under section 132(1) of the Act was conducted at the residential/business premises of one Bharat Shah Group on 15/03/2008, wherein certain loose papers marked as Annexure -A, consisting of 19 pages were seized. In such loose papers, the Assessing Officer of M/s. Layer Exports Pvt. Ltd., an entity of Bharat Shah Group, noted the recording of transactions relating to the sale of flats by M/s. Layer Exports Pvt. Ltd., to the assessee company. According to the Assessing Officer of M/s.Layer Exports Pvt. Ltd., assessee company had paid cash of Rs. 2, 06,32,051/- to M/s. Layer Exports Pvt. Ltd. and, therefore, he informed the Assessing Officer of the as....
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....that assessee had paid a sum of Rs. 2,06,32,051/- to M/s. Layer Exports Pvt. Ltd. as cash money i.e. out of the account books. It was pointed out that on this basis the Assessing Officer recorded his satisfaction for issuance of notice under section 153C of the Act and, therefore, there is no justification for the CIT(A) to say that the requisite conditions for issuance of notice under section 153C of the Act have not been fulfilled. 6. On the other hand, the Ld. Representative for the assessee has defended the order of the CIT(A) by pointing out the following discussion:- " 8. Having regard to the facts and circumstances of the case there is no dispute on the facts that the appellant was not searched and the search and seizure proceedings were conducted in the case of Bharat Shah and his group of companies. Therefore, as per the provisions of sec. 153A and 153 of the Act, proceedings can only be initiated by the LAO of the present appellant only after the Assessing Officer of Bharat Shah group of companies records a satisfaction that the seized material pertains to other persons i.e. the present appellant and consequently, he hands over such money, bullion, jewellery o....
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....ent reassessment or assessment under section 153C of the Act stands nullified. Strong reliance is placed on the following decisions:- (i) Vijaybhai N. Chandrani vs. Assistant Commissioner of Income Tax, (2013) 333 ITR 436 (Guj) . (ii) Manish Maheshwari vs. Assistant Commissioner of Income Tax & Anr. (2007) 289 ITR 341(SC) (iii) DCIT vs. Unitd Spirits Ltd., (ITA Nos. 1375 to1378/Bang/2010) (Ays) 2002- 03 to 2005-06 dated 13/1/2012 (iv) P. Srinivas Naik vs. Assistant Commissioner of Income Tax (2009) 117 ITD 201(Bom) (v) Meghmani Organics Ltd., vs. Deputy Commissioner of Income Tax, (2010) 6 ITR 360, ITAT, Ahmedabad. (vi. Sneh Enterprises vs. Commr. Of Customs (2006) 7 SCC 714. (vii) Satyanarayana v/s. ACIT, Chennai, 50 SOT 168 (Chennai)/ 20 Taxman.com. 56, Chennai. (viii)SSP Aviation Ltd. vs. DCIT, 20 Taxman.com 214 (Delhi) High Court. (ix) CIT v/s. Late J Chandrasekar (HUF)( 2011) 338 ITR 61 (Mad) (x) Apex time Pvt. Ltd. v/s. DCT i ITSS(A) No.34/Mu/2008 dated 30/03/2011 (ITAT Ä"Bench Mumbai). (xi) Ingram Micro (India) exports Pvt. Ltd. vs. DDIT(IT). Mumbai (ITA No. 8133/M/2010) d....
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....herewith. These loose papers are systematic records related to actual sales transactions in Legend project promoted by Layer Exports Pvt. Ltd. situated in Walkeshwar, Malabar Hill, Mumbai 400 006. Most of the said papers contains details of flat numbers, flat size(total sold area), rate per sq. ft. Total consideration bifurcated in cash and cheques, cash to be paid cheques to be paid, details of renegotiation, details of actual cash payment, details of actual cheques payment etc. In these loose papers "sh" represent cash portion i.e. on money or out of books portion and "q" and "chq" represents cheque portion i.w. which is accounted in the books. In this regard, on page no.11, there is recording of transactions related to sales of flats by Layer Exports Pvt. Ltd. to Kranti Impex Pvt. Ltd. (PAN AACCK3044P), who is assessed in your charge. As per the said record, your assessee has paid cash money i.e. out of books money of Rs. 2,06,32,051/- to my assessee. You are hereby requested to take necessary action in this regard as per provisions of IT Act, 1961." Ostensibly, such information reflects that certain loose papers were found in the course of search in the premises of Bharat Sh....
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....satisfied that the documents seized relates to the assessee and that the purchase consideration of the properties involves cash elements, and that these are out of the books of the assessee and therefore such portion of income is to be brought to tax. Therefore, the undersigned is satisfied that this is a fit case for invoking the provisions of section 153C of the Income-tax Act and accordingly notice is being issued." On the basis of the aforesaid, it is pointed out that the Assessing Officer has recorded the requisite satisfaction contemplated under section 153C of the Act prior to issuance of notice on 09/09/2010. 7.1 In this background, the aspect which is required to be examined is as to whether the CIT(A) is correct in holding that the conditions precedent for issuance of notice under section 153C of the Act have not been fulfilled. At the time of hearing, the Ld. Representative for the assessee had relied upon the judgment of the Hon'ble Delhi High Court in the case of CIT v. Pepsico India Holdings (P.) Ltd., 370 ITR 295(Del). In order to appreciate the legal position enunciated by the Hon'ble Delhi High Court in the case of Pepsico India Holdings (P.) Ltd.(sup....