TaxTMI 
TaxTMI 
2017 (6) TMI 290
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.... Kolhapur. 4. The learned CIT(A) erred in confirming the addition by placing reliance on seized paper No. 18 found in the course of search on Shri Vijay Rajaram Shah without appreciating that no addition could be made in the hands of the assessee on the basis of evidence found with third party. 5. The learned CIT(A) failed to appreciate that the presumption u/s 132(4A) was appreciable to the person searched and not to the third party and hence, no addition was warranted in the hands of the assessee on the basis of seized paper No. 18 found with Shri Vijay Shah. 6. The learned CIT(A) further erred in not appreciating that the paper seized in the course of search on Shri Vijay Shah was not belonging to the assessee nor the name of the assessee was mentioned on the seized paper and hence, the addition made was not justified in law. 7. The learned CIT(A) ought to have appreciated that the assessee had not made any unaccounted investment of Rs. 34,12,230/- for purchase of the said land and hence, the addition made may kindly be deleted. 8. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal. 3. The ....
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....rs at serial No. 18 and 21 of the bundle No.2 seized from the residence of Shri Vijay Rajaram Shah who is the Director of Laxmi Civil Engineering Services Pvt Ltd and it depicted the details of purchase of agricultural lands situated at Rankala, Kolhapur and at Wadipur, Kolhapur. The cost of land as well as expenditure has been coded. As per the noting on page No. 18, the total cost of acquisition of agricultural land was Rs. 86,74,487/- and that of page No. 21 was Rs. 1,62,60,100/-. The said value was less then cost shown in the relevant Sale Deeds. Shri Vijay Rajaram Shah did not furnish details in this regard. Hence, inquiries were made by DDIT (Inv) and it transpired that the firm M/s India Global Agro & Realty and Vijay Rajaram Shah were main persons behind the transactions and have financed the money in cash over and above amounts mentioned in the sale deeds. The Assessing Officer further observed that difference in amounts mentioned in the two loose papers and the sale deeds were required to be taxed in the hands of the firm M/s India Global Agro & Realty and its partners on substantive basis. The Assessing Officer thereafter, recorded reasons for reopening the assessment of....
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....ew of pre-amended provisions of section 153C of the Act, where the word was used "belonging" and where the transaction recorded on seized document related between the firm and Mr. Vijay Rajaram Shah and where the Assessing Officer also says that the document belongs to Mr. Vijay Shah, then no proceedings under section 153C of the Act could be initiated against the assessee, who is not related to the firm or Mr. Vijay Shah. 10. The Hon'ble High Court of Delhi in Pr. CIT & Ors. Vs. Nikki Drugs & Chemicals Pvt. Ltd. & Ors. (2016) 129 DTR 393 (Del) while interpreting the provisions of section 153C of the Act observed that in case any loose documents were found during the course of search, which belong to a person other than the searched person, then the first step for initiation of proceedings under section 153C of the Act was for the Assessing Officer of the searched person to be satisfied that the assets or documents seized did not belong to the searched person, but to the assessee sought to be assessed under section 153C of the Act. Once the Assessing Officer of the searched person was so satisfied, he was required to transfer the assets or documents, which he believes belongs to....
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.... Act; that is, accept the return with or without such adjustments as permissible under Section 143(1) of the Act or if the claims made by the assessee are considered as inadmissible and/or it is considered necessary and expedient to subject the returns to further scrutiny, issue the requisite notice under Section 143(2) of the Act and frame the assessment in accordance with the Act. 17. In the present case, the ITAT specifically recorded that, admittedly, a satisfaction note had not been recorded by the assessing officer of the searched person. It was contended by the Revenue before the ITAT that the assessing officer of the searched i.e. SVP Group was not required to record such satisfaction as both the Assessee and the SVP Group were being assessed by the same officer. This contention was rejected by the ITAT by following the decision of this Court in Pepsi Foods (P.) Ltd v. Asstt CIT [2014] 367 ITR 112/52 taxmann.com 220/[2015] 231 Taxman 58. The Allahabad High Court in the case of CIT v. Gopi Apartments [2014] 365 ITR 411/46 taxmann.com 280 has also held that even in cases where the assessing officer of the person searched and the assessee who is sought to be assessed ....
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....the expression 'relates to'. As an illustration, this Court has referred to a registered sale deed which, although, registered by the vendor would belong to the purchaser of the property and could not be considered to be belonging to the vendor only because the vendor's name was mentioned in the documents. In the present case, although the photocopies of the documents handed over to SVP Builders India Ltd. may be copies of the original documents that belong to the assessee, the said photocopies would belong to SVP Builders India Ltd. as the same were handed over to it in connection with the investment made by the Assessee. Similarly, a certified copy of the Assessee's resolution signed by its Directors, would also belong to the SVP Builders India Ltd. even though the minutes of the Board meeting form a part of the record of the Assessee. We find no infirmity with the view taken by the ITAT in this regard. Thus, notwithstanding the controversy whether the assessing officer of the searched persons had recorded his satisfaction that the specified seized documents belonged to the Assessee, the initiation of proceedings under section 153C of the Act, in respect of the As....
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....tatement recorded of the assessee is reproduced at pages 11 to 13 of the assessment order. The assessee during the course of assessment proceedings vehemently stated that the total investment in the said land was only Rs. 6 lakhs. The Assessing Officer collected information from various departments and applied the same and held that as per seized papers, the value of transaction was shown as Rs. 1.62 crores, which was decoded from the fact that the value of stamp paper was Rs. 1,75,000/-, which was noted as 1750=00 in the said seized paper. The Assessing Officer thus, added on-money of Rs. 34,12,230/- in the hands of assessee. 13. The limited issue which has been raised before us is that in proceedings under section 153C of the Act, the addition if any, in the hands of person other than searched person can be made on the basis of document found and seized during the course of search, which belongs to such person i.e. the person other than person searched, as referred to in section 153A of the Act. 14. The Hon'ble Bombay High Court in CIT Vs. M/s. Arpit Land Pvt. Ltd. in Income Tax Appeal No.83 of 2014 and 150 of 2014, judgment dated 07.02.2017 took note of position of law und....
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....e Act cannot be ignored at the alter of suspicion. The Revenue has to strictly comply with Section 153C of the Act. We are of the view that non satisfaction of the condition precedent viz. the seized document must belong to the respondent - assessee is a jurisdictional issue and non satisfaction thereof would make the entire proceedings taken thereunder null and void. The issue of Section 69C of the Act can only arise for consideration if the proceedings under Section 153C of the Act are upheld. Therefore, in the present facts, the issue of Section 69C of the Act is academic." 15. In order to invoke the provisions of section 153C of the Act in respect of position of law prior to 01.06.2015, the said proceedings under section 153C of the Act could only be initiated / proceeded against a person, other than the person searched, if the document seized during the course of proceedings, belonged to such person concerned. The assessee has filed on record the copy of seized document which is placed at pages 5 and 6 of the Paper Book, under which the document at page 5 is in Marathi in the handwriting of the searched person with typed copy in Marathi which is placed at page 6. The Englis....