TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1125
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....tified in dismissing the assessment orders made under section 153C of the I.T. Act on the grounds that no seized documents pertain to the assessee, even though the Assessing Officer had recorded his satisfaction in the orders sheet dated 2410912012 with regard to incriminating material on record found during search. The appellant prays that the order of CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and/or add a new ground which may be necessary". BRIEF BACKGROUND OF THE ASSESSEE COMPANY:- 2. The assessee is a listed public limited company which was earlier engaged in the business of manufacturing of tyre moulds, bead wire and allied items. The assessee company was initially promoted by the Duncan group as National Standard Duncan Limited with facilities to manufacture tyre bead wires and tyre moulds, tyre drums and bead wire making machinery at Thane (Maharashtra), Dodaballapur and Hoskote (Karnataka) and Baddi (Himachal Pradesh). That as the assessee company turned sick, therefore, pursuant to a reference filed with the Board for Industrial and Financial Reconstruction (BIFR) in....
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.... of Rs. 110.25 lacs in respect of sale of parking space in the hands of the assessee company in A.Y. 2011-12. Thereafter, the entities of the Lodha Group (supra) filed an application before the Settlement Commission, Mumbai, wherein admission was made in respect of the unaccounted income, which interalia included the amount of on-money claimed to have been received in respect of sale of flats and parking space. It may however be relevant and pertinent to point out that the assessee company had however not approached the Settlement Commission. 4. That pursuant to the search and seizure action assessment proceedings were initiated under Sec. 153C of the 'Act' in the hands of the assessee company. The A.O vide his order dated 31.03.2013 passed under Sec. 153A r.w.s. 153C/143(3), after deliberating on certain issues, assessed the loss in the hands of the assessee company at (Rs. 6,40,575), as against the latters returned loss of (Rs. 3,62,51,460). The assessee assailing the validity of the jurisdiction assumed by the A.O in its case under Sec. 153C, as well as challenging the additions/disallowances made by the A.O in its hands on merits, carried the matter in appeal before the CIT(A)....
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.... reference to the earlier assessment years for which the present appeals are before me and the additions made therein in these assessment years are not based on any similar issue covered in the admission made in the statement recorded of Shri Abhinandan Lodha. I am aware that there is an amendment proposed in the f inance bill 2015 to section 153C wherein jurisdiction u/s 153C would be available to the assessing officer even where the seized documents pertain to or the information contained therein relates to a person other than a person referred to u/s 153A. Thus it will not be restricted to cases where such document belongs to such other person. This will have an effect of making some of the case laws cited by appellant inapplicable, which emphasize the requirement that such seized, documents must belong to a person other than a person referred to u/s 153A. However, this is not a retrospective amendment and will be effective from 1-6-2015. In the present case, the assessing officer has failed to indicate any seized document that pertains to the appellant, much less belongs to the appellant to assume jurisdiction u/s 153C. Information gathered in survey conducted in the present ca....
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....e the satisfaction of the preconditions contemplated under the said statutory provision, viz. Sec.153C therein relied on the judgments of the Hon'ble High Court of Delhi in the case of Principal CIT-8, Vs. Super Malls (P) Ltd. (2016) 76 taxmann.com 267 (Del) and SSP Aviation Ltd., Vs. DCIT (2012) 20 taxmann.com 214 (Del). The ld. D.R. in order to support the validity of the assumption of jurisdiction by the A.O under Sec. 153C, also relied on the statement of Shri Abhinandan Lodha recorded u/s. 132(4), wherein the latter had made a voluntary disclosure of Rs. 110.25 lacs (on account of unaccounted cash received in respect of sale of parking) in the hands of the assessee company for A.Y. 2011- 12. 7. Per contra, the ld. Authorized Representative (for short A.R) for the assessee submitted that as neither any money, bullion, jewellery or other valuable article or thing or books of account or documents 'belonging' to the assessee was seized during the course of the search proceedings conducted on Lodha Group (supra), therefore, the A.O had clearly traversed beyond the scope of jurisdiction as stood contemplated u/s. 153C and wrongly framed assessment under Sec. 153A r.w.s. 153C/143(3)....
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....108, or the contents thereof, as alleged by him, were related or pertained to the assessee company. The ld. A.R therein taking us through the copy of the aforesaid seized documents, viz. Page No. 107-108 which were placed at Page No. 6-8 of APB, therein submitted that neither any part of the said seized documents contained any reference to the assessee company, nor the same were in any way found to be related or pertaining to the latter. It was further submitted before us that the A.O by referring to the very same seized documents, viz. Page No. 107- 108 (supra), had at Para 5 of his 'Show cause' notice issued to one M/s Simtools Pvt. Ltd., had referred to and therein related the said documents with the said latter concern. The ld. A.R taking us through the letter dated 22.03.2013 filed by the assessee company to the 'Show cause' notice issued by the A.O (Page 9-10 of APB), therein averred that though the assessee had clearly submitted before the A.O that the aforesaid impugned seized documents, viz. Page 107-108 (supra) were in no way related to it, and had called upon the A.O to prove to the contrary, but however, the A.O had failed to rebut the said claim of the assessee. It was....
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....ith a 'seized document', therefore, the reliance placed by the A.O on the statement of Shri Abhinandan Lodha (supra) in his attempt to justify the validity of assumption of jurisdiction under Sec. 153C in the case of the assessee company, was highly misplaced. The ld. A.R in order to drive home his aforesaid contention therein took support of the judgment of the Hon'ble High Court of Delhi in the case of CIT Vs. Rajpal Bhatia (2011) 10 taxamann.com 191 (Del), wherein the Hon'ble High Court by referring to the pari materia provisions contained in Section 158BD, had therein observed that the statement of a person subjected to search proceedings under Sec. 132 could not be construed as a 'document' seized during the course of the search proceedings. The ld. A.R further in support of his aforesaid contention relied on the order of the ITAT, Jodhpur Bench, in the case of Chitra Devi Vs. ACIT (2002) 77 TTJ 640 (Jodh). Alternatively, it was submitted by the ld. A.R that as the disclosure of additional income of Rs. 110.25 lacs made in the hands of the assessee company by Sh. Abhinandan Lodha (supra) in his statement recorded under Sec. 132(4) during the course of search and seizure procee....
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....he requirement as per the mandate of law for the purpose of assumption of jurisdiction u/s. 153C was that the A.O of the person searched should be satisfied that money, bullion, jewellery or other valuable article or thing or books of accounts or documents seized 'belonged' to a person other than the person referred to Section 153A. We find that the scope of the aforesaid statutory provision in light of the conscious, purposive and intentional usage of the term 'belongs' or 'belong to' in respect of a 'documents', therein excluded from its scope and gamut such seized documents, which though were found to pertain or relatable to such 'Other person', but however not found to be 'belonging' to the latter. The legislature therein realizing the fact that the usage of the aforesaid terms seriously jeopardised the assumption of jurisdiction by the A.O in a case where any 'books of accounts' or 'documents' which though pertained to or any information contained therein related to such other person, but were not found to be 'belonging' to him, thus, vide an amendment made available on the statute by the Finance Act, 2015, had with effect from 01.06.2015 dispensed with the terms 'belongs' or ....
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....ngs of another person belonged to the party - assessee concerned. The impugned order records a finding of fact that the seized document which formed the basis of initiation of proceedings against the respondent assesse's do not belong to it. This finding of fact has not been shown to us to be incorrect. Further, the impugned order placed reliance upon a decision of Gujarat High Court in Vjaybhai N. Chandrani Vs. Asstt. CIT [2011] 333 ITR 436 which records that the condition precedent for issuing notice under Section 153C of the Act is that the document found during search proceedings should belong to assessee to whom notice is issued under Section 153C of the Act. It was fairly pointed out to us by Mr. Mistry, the learned Senior Counsel for the respondentassessee that the above decision was reversed by the Supreme Court in CIT Vs. Vijaybhai N. Chandrani [20131 357 ITR 713/217 Taxman 138/35 taxmann.com 580. However, we find that the Apex Court reversed the view of Gujarat High Court on the ground that efficacious alternative remedy was available to the petitioner to raise its objections before the authorities under the Act. Therefore, the Gujarat High Court should not have exercised....
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....cuments, viz. Page No. 107-108, nor any reference of the assessee company is found therein, therefore, it could safely be concluded that the requisite conditions for assumption of jurisdiction under Sec. 153C had not been satisfied. 11. We further find that the reliance placed by the ld. D.R on the judgments of the Hon'ble High Court Delhi in the case of Principal CIT-8 Vs. Super Malls (P) Ltd. (2016) 76 taxmann.com 267 (Del), and SSP Aviation Ltd. Vs. DCIT (2012) 20 taxamann.com 214 (Del), are found to be distinguishable on facts. We find that while for in the case of M/s. Super Malls (P) Ltd.(supra) it had emerged that the contents of the documents seized during the course of the search proceedings conducted on the 'director' of the assessee company were in context of the cash receipts pertaining to the sale of shops and offices of the assessee, in the backdrop of which factual position the Hon'ble High Court had concluded that the Tribunal by adopting a hyper technical approach had erred in dislodging the duly substantiated satisfaction of the A.O that the seized documents in view of what was contained or brought out on a fair reading of their contents, belonged to the assessee....