AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 1076
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....lding that without any material being found in search, it was not permissible to assess or re-assess total income u/s 153A as there is nothing in that section which contemplates any such condition. 3. Without prejudice to the above grounds of appeal, the CIT(A) grossly erred in holding that there was no reference in the assessment order to any material found during the course of search, relating to the issue on which addition is made, without appreciating the fact that the AO had specifically discussed in para 2.5.(iii) of the assessment order that during the course of search the entire property belonging to the assessee was found to be occupied by Today Hotels Pvt. Ltd. and hence the annual letting value was to be assessed or re-assessed u/s 153A r.w.s. 153C as a result of factual material found during search. 4. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 5. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 2. Briefly, the facts of the case in AY 2007-08 are that a search and seizure operation was carried out at the various premises of M/s Today Home....
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....ime location in Connaught Place, New Delhi has been left vacant. It is also noted that the assessee filed return of income giving address of registered office at 10, Todarmal Lane, Bengali Market, New Delhi. The whole of the floor has been used by M/s Today Hotels Pvt. Ltd. and others. No books of accounts of the assessee company were found in the premises. M/s Today Hotels Pvt.Ltd. has paid the maintenance and electricity bills of the entire space of the property in question. The Assessing Officer in view of fact that since entire property has been used by M/s Today Hotels Pvt. Ltd. and others, therefore, annual rental value to be determined as per section 22 & 23 of the Act which was calculated at Rs. 68,31,000/-. The Assessing Officer after giving deduction u/s 24 of the Act, computed the income from house property. The findings of the Assessing Officer are same in the remaining AYs 2008-09 & 2009-10. The assessee challenged the initiation of proceedings u/s 153C of the Act before Ld.CIT(A) as well as additions on merits. The submissions of the assessee in detail are reproduced in the impugned order in which the assessee briefly explained that initiation of the proceedings u/s 1....
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....said document has been duly disclosed in the regular books of accounts and none of these documents would be treated as incriminating document/material found during the course of search in M/s Today Group of cases. Therefore, on such documents, AO cannot initiate proceedings u/s 153C of the Act. There could not be any satisfaction to prove that the assessee has earned any undisclosed income on the basis of the aforesaid document referred to in satisfaction note. The AO cannot initiate proceedings u/s 153C on the basis of the entities already recorded in the books of accounts prior to the search. Therefore, satisfaction is invalid and bad in law. The assessee relied upon the decision of the Hon'ble Supreme Court in the case of Manish Maheshwari vs ACIT 289 ITR 340 (SC). The conditions of section 153C of the Act have not been complied and satisfied by the AO before initiating the proceedings u/s 153C of the Act. Therefore, entire proceedings u/s 153C of the Act shall be without jurisdiction, illegal and void ab initio. The assessee relied upon other decisions as well as submitted that since the satisfaction note makes it patently clear that nothing incriminating material against the ....
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....he issues already examined by the AO in such completed assessment would be difficult for re-examining in assessments u/s 153A unless some material is found in accordance of search action. Ld.CIT(A) considering this legal positions held that the addition has been made without reference to any material having been found during the course of search and, therefore, clearly outside the scope of proceedings u/s 153C of the Act. The appeal was accordingly allowed. The findings of the Ld.CIT(A) in remaining years are same. 5. We have heard the Ld. representatives of both the parties. Ld. DR sought adjournment on the ground that similar issue in AY 2006- 07 in Department appeal is fixed before "E" Bench of the Tribunal and request is made for consolidation and to prepare a Paper Book. The request for adjournment was opposed by the Ld. Counsel for the assessee on the ground that the issue is covered in favour of the assessee by the judgements of Hon'ble Supreme Court in the case of CIT vs Sinhgad Technical Education Society 397 ITR 344 (SC) and also submitted that the assessee filed complete details in the Paper Book including satisfaction note, therefore, there is no need for filing of the....
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....ety [2015] 378 ITR 84 (Bom.) held as under:- "In terms of section 153C of the Income-tax Act, 1961, the Assessing Officer should be satisfied that any money, bullion, jewellery or other valuable articles or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A of the Act and he can hand over the seized documents to the Assessing Officer having jurisdiction over that person. The assessee was an educational institution since the assessment year 1994-95. A search and seizure operation was carried out and certain loose papers were seized from the president of the assessee. Simultaneously a survey action was conducted on the assessee. On the basis of loose papers found with and seized from the president the Assessing Officer issued a notice under section 153C on the assessee and assessed the income. The Tribunal set aside the assessments. On appeals to the High Court: Held, dismissing the appeals, that the reasons assigned by the Assessing Officer in the satisfaction note were silent about the assessment year in which specific incriminating information or unaccounted or undisclosed hidden info....
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....is assessment order regarding the activities of the trust not being genuine and not carried out in accordance with the trust deed or cancellation of registration, denial of benefits of sections 11 and 12 would not be affected by this judgment." 10. Hon'ble Gujarat High Court in the case of Vijaybhai N. Chandrani vs ACIT [2011] 333 ITR 436 (Guj.) held as under:- "Sections 153A, 153B and 153C of the Income-tax Act, 1961, lay down a scheme for assessment in case of search and requisition. Section 153C which is similarly worded to section 158BD of the Act, provides that 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 than the person referred to in section 153A he shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person. However, there is a distinction between the two provisions inasmuch as under section 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisition....
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.... in addition, which was evidenced by loose documents in the form of cash receipts, were found during search and seizure proceedings. The assessee was called upon to explain and show cause why these amounts should not be treated as unexplained expenditure under section 69C of the Act, since the assessee did not provide any explanation with regard to the documents seized under section 132 of the Act for the assessment years from 2003 to 2009 and 2009-10. The assessment order was passed and the additions were made. The unexplained expenditure was apportioned to all the land companies floated by the JC- group. The Tribunal held that an entry in the hooks of account maintained in the regular course of business is relevant for the purpose of considering the nature and impact of a transaction, but notings on slips of paper or loose sheets of paper were required to be supported or corroborated by other evidence. There was a distinction between loose papers found from the possession of the assessee and similar documents found from a third person. The documents were not found from the possession of the assessee but from the possession of a third person i.e., D. Mere mention of the names ....
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....gs to or belong to a person other than the person referred to in section 153A. * No material is produced before to show if any satisfaction was recorded by the Assessing Officer in that case that the material belongs to any person other than the person with respect to whom search was made under section 132. Department did not produce any material to show if any such satisfaction as required under section 153C was recorded by the Assessing Officer in the case of person searched. No material is produced In reference to above requirement. * No material is also produced before to show that books of account or documents or assets seized had been handed over to the Assessing Officer having jurisdiction over such other person. In the absence of any adequate material produced by the department contention of the assessee was justified that in this case, the Assessing Officer had not recorded any satisfaction that any seized document or material belongs to any person other person searched. * Since the revenue is in appeal, therefore, burden was upon them to prove that necessary ingredients of section 153C have been complied with in this case before invoking jurisdiction under section....
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....en purchased by the assessee from M/s UTI Ltd. on 05.05.2006 in AY 2007-08. The AO did not make any addition on account of purchase of the property treating undisclosed income. The AO mentioned in the assessment order that books of accounts or documents belong to the assessee were found and seized during search. When the property was purchased by the assessee through agreement to sale dated 05.05.2006 has already been disclosed in the regular books of account, therefore, the same could not be treated as undisclosed income of the assessee or incriminating material in nature against the assessee. The AO in the assessment order did not question the aforesaid seized document i.e agreement to sale for the purpose of making any addition against the assessee. It was clear that the reasons assigned by the AO in the satisfaction note were silent about any incriminating information or unaccounted or undisclosed hidden, income, seized by the Revenue from the assessee. The reasons recorded by the AO in the satisfaction note are factually incorrect or without sustenance because the property in question purchased on 05.05.2006 was already disclosed in the regular books of accounts for AY 2007-08....