TaxTMI 
TaxTMI 
2017 (6) TMI 169
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....e as such the order passed is illegal and therefore, is liable to be quashed. 2. The Ld. CIT(A) erred in law and facts by confirmed the addition of Rs. 97,10,000/- as unexplained cash credit u/s.68 of the I.T. Act, 1961. 3. The Ld. CIT(A) erred in not considering the additional evidence filed. 4. The assessee craves leave for addition, notification, deletion, any of grounds of appeal either before the hearing of appeal or at the time of appeal. 3. The grounds raised in ITA No. 6802/Del/2013 (AY 2004-05) read as under:- 1. That the impugned order is bad in law, in nature as assessment has not been framed on the seized pursuant to an action taken under section 132 of the Act but the reassessment and change of opinion has been made as such the order passed is illegal and therefore, is liable to be quashed. 2. The Ld. CIT(A) erred in law and facts by confirmed the addition of Rs. 89,50,000/- as unexplained cash credit u/s.68 of the I.T. Act, 1961. 3. The Ld. CIT(A) erred in not considering the additional evidence filed. 4. The assessee craves leave for addition, notification, deletion, any of grounds of appeal either before the hearing of appeal or at the time of appeal. 4. Th....
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....ce sheet for the year, it has been gathered that reserve and surplus has been increased by Rs. 77,68,000/- on account of share premium. The assessee has also not furnished any detail in this regard. Moreover, it has not filed the name and addresses of the parties to whom these shares have been issued. During the assessment proceedings, the assessee's counsel was asked to furnish the details of the above amounts with supporting documents in order to prove the genuineness of the transaction and identity and creditworthiness of the parties. However, nothing has been brought on record by the Assessee. The AO observed that the assessee is a group company of "Rajdarbar Group" and in some other companies of the group that during the AYrs. 2003-04 and 2004-05, unexplained money was introduced by way of share capital through Kolkata based companies and in the case of certain Kolkata based companies enquiries were done by the Investigation Wing, Kolkata and some of those were found to be paper companies. AO further observed that in the present case the name of the particular company cannot be pointed out as the list of shareholders have not been supplied by the assessee and the time period i....
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....ITA No. 1245/Del/2014 (AY 2005-06) & Others in the case of Global Realty Creations Ltd. Vs. DCIT & Ors. It was argued that admission of a ground under Rule 27 is absolutely discretionary and looking at the identical facts and circumstances of the matter the Hon'ble Tribunal not only admitted the legal ground under Rule 27 but also decided in favor of the assessee. 8.1 Ld. AR further argued that the AO has to tax the income of the assessee as per provisions of law. It was submitted that Tribunal in the umpteen numbers of cases almost without exceptions have admitted the question of law raised so as to deliver substantive justice to the appellants. Reliance was placed on CBDT's Circular No. 14(XL-35) dated 11-4-1955. In the said circular, the CBDT observed as under:- "3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. Th....
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....filed the Written Submissions with regard to his contention on the incorrect assumption of jurisdiction u/s. 153C of the I.T. Act, 1961 and on additional legal grounds, which reads as under:- "INCORRECT ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE INCOME TAX ACT, 1961. Ld. AO has provided copy of the satisfaction note before issuing notice under Section 153C of the Act. Copy of the satisfaction note is enclosed herewith for reference and records at Pg number of Paper Book-01. The satisfaction note reads as below:- "Satisfaction note for proceedings u/s 153C of the Income Tax Act, 1961 A search operation was conducted on Rajdarbar Group of cases on 31.07.2008. During the course of search operation at the premises of Party A-7 Global Reality Ventures Pvt. Ltd. Various papers were found and seized belonging to M/s Global Reality Creations Ltd. The annexure are marked as under: Party A-7 Annexure A-45, Hard Disc containing Books of Accounts of M/s Global Reality Creations Ltd. Thus the proceedings u/s 153C r.w.s. 153A of the Income Tax Act, 1961 are being initiated in the above case. The perusal of the satisfaction note clearly indicates that the action under Sec....
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....ll 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 sub-section (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 person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the ....
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....ncept of satisfaction as used in Section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of the searched person is satisfied that the seized documents belong to a person other than the searched person. We are afraid, that going through the contents of the satisfaction note, we are unable to discern any "satisfaction" of the kind required under Section 153C of the said Act. (Emphasis Supplied) 12. This being the position the very first step prior to the issuance of a notice under Section153C of the said Act has not been fulfilled. Inasmuch as this condition precedent has not been met, the notices under Section 153C are liable to be quashed. It is ordered accordingly. The writ petitions are allowed as above. There shall be no order as to costs." In PepsiCo India Holdings (P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi)-Hon'ble Court was pleased to lay down the following proposition of law "13. Having set out the position in law in the decision of this Court in the case of Pepsi Foods Pvt. Ltd. (supra), it must be seen as to whether the Assessing Officer of the searched person (the Jaipuria Group....
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....the purchasers premises are searched and the registered sale deed is seized, it cannot be said that it "belongs to" the vendor just because his name is mentioned in the document. In the converse case if the vendor"s premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy "belongs to" the purchaser just because it refers to him and he (the purchaser) holds the original sale deed. In this light, it is obvious that none of the three sets of documents - copies of preference shares, unsigned leaves of cheque books and the copy of the supply and loan agreement - can be said to "belong to" the petitioner. 17. In view of the foregoing discussion, we do not find that the ingredients of Section 153C of the said Act have been satisfied in this case. Consequently the notices dated 02.08.2013 issued under Section 153C of the said Act are quashed. Accordingly all proceedings pursuant thereto stand quashed." * emphasis supplied Subsequent to the aforesaid rulings, Hon'ble Delhi High Court has reaffirmed the aforesaid proposition of law in a number of cases. There are various other rulings addressing the requirements to be fulfilled before initiati....
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....nts referred to in section 153C which is found during the search u/s. 132, which are seized or requisitioned belongs to a person other than the person searched; and there should be a clear finding to that effect based on which only satisfaction as envisaged u/s. 153C can be inferred. Such a finding by the AO is required for attaining the said satisfaction and then it should be recorded in the file of the assessee which is a 'sine-qua-non' to trigger the jurisdiction for the AO to proceed against such other person. In this case this exercise of recording the satisfaction during the assessment proceedings of the person searched has not been carried out and the satisfaction does not satisfy the requirement of Section 153C and in this case as seen from the satisfaction note itself that it has been done in a mechanical manner, without application of mind. On the same date i.e. 23.7.2010, similar satisfaction note, only with the change in the name of the assessee's has been issued arbitrarily which does not in any manner satisfy the requirement of section 153C of the I.T. Act. We could not find any mention of any valuable articles or things or any books of account or documents have been ....
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....t of this court. 4. Learned Counsel for the Revenue submitted that the ITAT has also relied on the decision of its coordinate Bench in V.K. Fiscal Services Pvt. Ltd. vs. DCIT (ITA Nos. 5460-5465/Del/2012) which in turn relied on an earlier order of the ITAT in DSL Properties Pvt. Ltd. vs. DCIT (ITA No. 11349/Del/2012). He states that the decision of the ITAT in DSL Properties Pvt. Ltd. (supra) is the subject matter of a separate appeal in this court being ITA No. 585/2013 which is pending consideration. He accordingly prays that these appeals be taken up with ITA No. 585/2013. 5. The court is of the view that the essential principle of law that has been settled by this court in Pepsico in regard to the interpretation of the words "belongs to" in section 153C of the Income Tax Act, 1961 would apply on all fours to the facts of the present case irrespective of whether the document recovered (viz., the accounts) is in the form of hard copy or a hard disk. Consequently, the court does not find any error in the impugned order of the ITAT which gives rise to a substantial question of law." Hon'ble High Court held as below in the group entity Global Heritage Venture Limited's's ca....
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.... assets or documents seized belong to the Assessee (being a person other than the searched person). The AO of the Assessee, on receiving the documents and the assets seized, would have jurisdiction to commence proceedings under Section 153C of the Act. The AO of the searched person is not required to examine whether the assets or documents seized reflect undisclosed income. All that is required for him is to satisfy himself that the assets or documents do not belong to the searched person but to another person. Thereafter, the AO has to transfer the seized assets/documents to the AO having jurisdiction of the Assessee to whom such assets/documents belong. Section 153C(1) of the Act clearly postulates that once the AO of a person, other than the one searched, has received the assets or the documents, he is to issue a notice to assess/re-assess the income of such person - that is, the Assessee other than the person searched - in accordance with provisions of Section 153A of the Act ..... The CIT(A) sought to distinguish the present case by observing that in the facts of the present case, the AO of the searched person who has to handover the documents and the AO of the Assessee wa....
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....arding the recording of satisfaction by the AO even in respect of the searched person was not fulfilled. Consequently, the fact that it was the same AO both for the searched person and the Assessee makes no difference to the consequence of non compliance with the legal requirement regarding the recording of satisfaction. The Court also agrees with the ITAT that even if the AO were the same, satisfaction would have to be recorded separately qua the searched person and the Assessee." Copy of this ruling is also placed in the paper book at Pg number 52-60. Further, it is relevant here to point to the amendments introduced to Section 153C (1) of the Act by Finance (No.2) Act, 2014 w.e.f. 01.10.2014. We may notice the changes brought in to the Section 153C (1). The section before and after the amendment reads as below: After Amendment Before Amendment "153C.(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, 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 belongs or belong to a person other t....
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....e in NJRS at 2014-LL-0312-51) has laid down that for the purpose of section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The Hon'ble Court held that "the satisfaction note could be prepared at any of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; or (b) in the course of the assessment proceedings under section 158BC of the Act; or (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. " 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari-materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'bleSC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by CBDT. 4. The guidelines of the Hon'ble Supreme Court as referred to in para 2....
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....he aforesaid propositions of law and the assessment, therefore, deserves to be quashed. LIMITED SCOPE OF ASSESSMENT UNDER SECTION 153C/ 153A Additional ground of appeal number -2 raised by the appellant is as below:- Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in confirming the additions which were not based on the incriminating material found and seized during the course of search. Perusal of Section 153C as quoted earlier in this submission, clearly indicates that the assessments where proceedings are initiated u/s 153C are required to be completed in accordance with the substantive provisions for assessment as laid down under section 153A of the Act.Hon'ble jurisdictional High Court has reaffirmed the aforesaid proposition of law. What is the scope of assessment and what are the restrictions of assessment u/s 153A has been a matter of long controversy. In recent times there is near judicial unanimity on the limited scope of assessment u/s 153A/153C. Now in the years where assessments have abated the scope of assessments is restricted to the incriminating documents found during the course of search. Perusal of the asses....
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....ele Paper Mills (P) Ltd (Delhi) ITA No. 369/2015 xxiii. DCIT vs. Kurele Paper Mills (P) Ltd, ITA No. 3761/Del/2011 (ITAT Delhi) As the perusal of the assessment order undisputedly indicates that no reference whatsoever has been made to any material found/ seized during the course of search. The assessments are, therefore, clearly outside the scope of assessments u/s 153C which are required to be passed in accordance with the methodology laid down in section 153A of the Act. The appellant, therefore, deserves relief on this ground as well. In the Kabul Chawla case, (Copy of the order attached at Paper Book Pg 91-116)Hon'ble jurisdictional High Court has laid down following propositions of law.. 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. ....
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....o the assessee group to argue that identical action of assumption of jurisdiction based on the identical material was quashed by the Hon'ble Tribunal and the aforesaid orders quashing the assessments were accepted by the Hon'ble Delhi High Court. Relevant detailed specific details have been given in written submission filed during the course of proceedings. It was emphasized that there was absolutely no difference between the facts of those matters and the facts of the present appeals. Ld. Counsel of the assessee further relied upon the recent decision of the Tribunal dated 07.04.2017 in the case of Global Realty Creations Ltd. & Ors. passed in ITA No. 1245/Del/2014 (AY 2005-06) & Ors. wherein on identical facts and circumstances of the case the addition in dispute was deleted. 8.6 The Ld AR has submitted that the Hon'ble jurisdictional High Court has given very substantive and detailed findings on various propositions of law concerning assessments under section 153C and 153A. 9. On the contrary, Ld. CIT(DR) strongly opposed the admission of additional grounds (legal) raised by the assessee. In support of his contention, he filed the WS on behalf of the Revenue (on admission of A....
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....man.com 98 (Delhi HC) dated 07.08.2012(Para 19, 20, 21 & 22) 2. Filatex India Ltd. ITA No. 269/2014(Delhi HC) dated 14.07.2014(Para 2, 3 & 4) 3. M/s. Canara Housing Development Company 49 Taxmann.com 98, ITA No. 38/2014 (Karnataka HC) dated 25.07.2014(Para 11) 4. Sri Raj Kumar Arora ITA No. 56/11 (Allahabad HC) dated 1.07.2014 5. Gopal Das Bhadruka 27 Taxmann.com 167 (Andhra Pradesh HC) (Para 5) 6. Mukundray K,. Shah 290 ITR 433 (SC) where the Supreme court held that a print out of audited books of account seized in the course of search can be used for assessment and tax accumulated profit u/s 2(22)(e). Decisions in favour of Revenue of ITAT 1. Apoorva Extrusion Pvt. Ltd. - ITA No. 3308/De1/2010(Delhi A-Bench) dated 09.10.2014 (Para 8) 2. Nandini Delux (Banglore C-Bench) [2015] 54 Taxmann.com 162 (Para 6.3.9) 3. Heavy Hearts Hospitals Ltd. vs. Asstt. CIT [2010] 130 TT J 700 (Chennai Bench) (Para 2.12) 4. Assessment can be made u/s 153C for all the six assessment years irrespective of the fact that the documents for a particular year is found in the course of search. Decisions in favour of Revenue of ITAT 1. Apoorva Extrusion Pvt. Ltd. - ITA No. 3308/Del/201 ....
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....nt proceedings of 6 years initiated as valid counting from the previous year of date of search i.e. 05.01.2009 and not from the date of recording of satisfaction i.e. 03.11.2010 as was held in the case of DSL Properties. If the DSL Properties interpretation of 153C section is correct, Hon'ble High Court would have held the proceedings of AY. 2003-04 & 2004-05 as time barred in the case of SSP Aviation also. In all the orders of Hon'ble ITAT Delhi Benches relied heavily by Assessee, jurisdictional High Court decision of SSP aviation has not been considered where in Para 14 & 15 it is held by Hon'ble High Court that proviso of Section 153C (1) is for the purpose of abatement of proceedings in respect of second proviso of 153A and not for assessment of proceedings which is also the correct position of law. Revenue wants to place reliance on the case of Hon'ble Supreme Court in CIT vs. Manick Sons 74 ITR 1 where Hon'ble Supreme Court has held that the Hon'ble Tribunal cannot assume powers which are inconsistent with the express provisions of the Act. The Hon'ble Supreme Court has also held in the case of Orissa State warehousing corporation vs. CIT (Su....
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....ion of the Supreme Court relied upon by the assessee having been found not applicable to the facts of this case. "ln the case of DSL properties and other cases ITAT has not considered this judgment which is of prior date and is binding to be followed being the only known case of any High Court on this issue. Hence, the decision of DSL Properties is per incuriam and is not binding. In fact, the case of Piyush Infrastructure of ITAT Delhi is prior to the case of DSL Properties of ITAT Delhi which says that handing over and taking over of seized documents are not required to be made where the AO of the searched person and the person to be assessed u/s 153C is the same and also held that Assessment u/s 153A & 153C will be of the same year and the year of search will be assessed u/s 143(3) (Para 2.3 & 2.6 of the case of Piyush) and by not following this decision ITAT in the case of DSL properties has not followed judicial proprietary. 7. Kabul Chawla case. After discussing all these judgment of Hon'ble Delhi High Court as well as other High Courts summary of the legal position was discussed by Hon'ble Delhi High Court in para 37 which is as under- On a conspectus of Sectio....
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....g the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 143(1)(a) intimation is not an assessment The observation of Hon'ble High Court in para 37 (vii) supra clearly reveals that Hon'ble High Court has considered the case of "completed assessments" which are made u/s 143(3) and 147 of the act but not the cases where assessments have not been made and only processing u/s 143(1 )(a) is made. This has already been held by Hon'ble Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers (P.) Ltd. 161 Taxman 316 and Hon'ble Delhi High Court in the case of CIT vs. Punjab National Bank 116 Taxman 310 that intimation u/s 143(1)(a) cannot be treated an order of assessment. The relevant portion of the decision of Hon'ble Supreme Court is mentioned as below- "As a result of insertion of the Explanation to section 143 by the Finance (No.2) Act of 1991 with effect from 1-10-1991 and, subsequently, with effect from 1-6-1994, by the Finance Act, 1994, and ultimately omitted with effect from 1-6-199....
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....f Explanation to section 143 with effect from 1-10-1991 and subsequently with effect from 1-6-1994 and ultimately omitted with effect from 1-6-1999 by Explanation as introduced by the Finance (No.2) Act, 1999, an intimation sent to the assessee under section 143(1)(a) was deemed to be an order for the purposes of section 246 between 1-6-1994 to 31-3- 1995, and under section 264 between 1-10-1991 and 31-5-1999. The expressions 'intimation' and 'assessment order' have been used at different places. Contextual difference between the two expressions has to be understood in the context the expressions are used. The assessment is used as meaning sometimes 'the computation of income', sometimes 'the determination of the amount of tax payable' and sometimes 'the whole procedure laid down in the Act for imposing liability upon the taxpayer'. In the scheme of things, the intimation under section 143(1)(a) cannot be treated to be an order of assessment, The distinction is also well-brought out by the statutory provisions as they stood at different points of time. Under section 143(1) (a), as it stood prior to 1-4-1989, the Assessing Officer had to pass ....
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....#39;should be repeated'. This does not mean that jurisdiction of AO u/s 153A is bad in law. Judgment of Hon'ble Delhi High Court in the case of Anil Bhatia (supra) and Filatex (supra) has not been over ruled. 8. Jurisdiction issue cannot be challenged after the completion of the assessment. The assessee has not challenged the notice u/s 153C issued by the assessing officer rather the return of income was filed in response to the said notice and assessee complied with the notices and questionnaires issued during assessment proceedings. No objection on the jurisdiction was ever raised by the assessee before the assessing officer. Hon'ble Delhi High Court in the case of CIT vs. Kapil Jain 50 DTR 342 vide order dated 05.08.2010 held that " We are in quite agreement with the aforesaid submissions made by the learned counsel for the Revenue. Subs. (3) of s. 124 of the Act puts a specific embargo on the assessee from raising objection about the jurisdiction of an AO after the expiry of one month from the date on which he was served with notice under sub-s. (1) of s. 142 of the Act or after completion of assessment whichever is earlier. It is not in doubt that the plea o....
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....eed of recording two satisfaction notes i.e. one by the AO of the searched person and other by the AO of the other person. Other point emphasized by the Ld DR was that in these judgements it has been held that the term 'belonged to' must not be too literally interpreted rather the meaning of 'belonged to' should be seen akin to related to. It was also stated that these rulings held that one should not be hyper technical with regard to satisfaction note. 9.2 Ld. DR reiterated the written submissions as mentioned above and further relied upon the orders of the authorities below and stated that the provision of section 153 of the Act has rightly been applied in the case of the assessee on the material available with them and further stated that the case of the assessee is covered against the assessee by the decision dated 22.11.2016 of the Hon'ble High Court of Delhi in the case of Pr. CIT vs. M/s Super Malls Pvt. Ltd. passed in ITA No. 449/16 & Ors. Reported in 2016-TIOL-2953-HC-DEL-IT and decision dated 3.2.2017 passed in the case of Pr. CIT vs. M/s Nau Nidh Overseas Pvt. Ltd. reported in 2017-TIOL-389-HCV-DEL-IT. 9.3 However, Ld. Counsel of the assessee in his counter arguments h....
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....PepsiCo India Holdings (P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi) & Pepsi Foods Pvt. Ltd v ACIT [W.P. (C) 415/2014 & CM 823/2014, RRJ Securities, CIT V/s Kabul Chawla 380 ITR 573. Law laid down by the aforesaid detailed rulings of the Hon'ble Court can be summed up as under; 1. It is necessary that the satisfaction is recorded by the assessing officer of the entity in whose case the document/ asset has been seized to the effect that the relevant document/ asset belong to the other person in whose case action under section 153C is contemplated. 2. It is essential to establish that the document belongs to the person in whose case action u/s 153C is contemplated. 3. Mere photocopies or the data copy doesn't lead to inference that the data copy/photo copy belonged to the person two whom original belonged to. 4. Entries in a dairy do not necessarily mean that the diary belonged to everyone whose name is mentioned in that diary. 5. The assessing officer of the entity before initiating process under section 153C has to record a separate satisfaction that the document/ asset belong to the person in whose case action under section 153C is required to be initiated and also he has....
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....ation of law as detailed above are as under; 1. Rajeev Behl ( ITA- 84 to 86/2017) Date of order: 06/02/2017 2. Gurnam Arora ( ITA- 669/2016) Date of order: 10/02/2017 3. Baba Global Ltd ( ITA 938/2016) Date of order 23/12/2016 4. DMA Investments Pvt Ltd ( ITA-767-768/2016) Date of order 04/11/2016 5. Marichika Properties Pvt Ltd ( ITA 633/634/2016) date of order 19/10/2016 11. We have heard both the parties and perused the records and the case laws relied upon by both the parties, we are of the considered view that the additional grounds are on the assumption of jurisdiction u/s 153C of the Act besides the scope of assessment u/s 153A/153C of the Income Tax Act, 1961. In our opinion, the additional grounds of appeal are in the nature of legal and it is well settled law that the additional grounds of appeal which are legal in nature or which raises question of law or which involve interpretation of circular/notification etc can be taken up first time at any level of adjudication. Even those additional grounds which are based on fresh evidences are also normally admitted if the additional evidences are found admissible in accordance with Rule 29 of the ITAT Rules. This view is ....
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....nces of the case circumstances of the case, we are of the view that the additional grounds raised by the assessee are purely legal grounds and do not require fresh facts which is to be investigated and goes to the root of the matter. In the interest of justice, we admit the following two common additional grounds raised by the assessee. 1. "The Ld. CIT(A) has erred on facts and in law in confirming the assessment of the appellant passed without satisfying the substantive and procedural requirements under section 153C of the Income Tax Act. 2. Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in confirming the additions which were not based on the incriminating material found and seized during the course of search." 11.2 Keeping in view of the facts and circumstances of the case, in the interest of justice and for the sake of convenience, we proceed to adjudicate upon the common legal additional ground no. 2 only. 11.3 Ld. CIT(DR) has brought to our notice two recent cases decided by Hon'ble Delhi High Court. One is ITA number 58 of 2017 in the case of Nau Nidh Overseas Pvt Ltd by Order dated Feb 03, 2017. Through this the Ld DR has....
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....153C proceedings. Also, there was no dispute in these two cases (either from the searched party or the other party) as to whom the documents/assets belonged to. On account of these compelling and exceptional circumstances, it appears; the Hon'ble Court held that the law should not be interpreted too literally. 11.7 After perusing the assessment order as well as appellate order, we find that in the present case the AO has completed the assessment u/s. 153C of the I.T. Act, 1961 and made the addition in dispute without any incriminating material found during the search and seizure operation and the addition in this case was purely based on the material already available on record, which is not sustainable in the eyes of law, hence, needs to be deleted. Also on the perusal of the assessment order undisputedly indicates that no reference whatsoever has been made to any material found/ seized during the course of search. We further note that on identical facts and circumstances of the case, the issue in dispute is also squarely covered by the Coordinate Bench decision dated 7.4.2017 passed in the case of Global Realty Creations Ltd. & Ors. In ITA No. 1245/Del/2014 (AY 2005-06) & Ors. w....