TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 434
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....0 19,69,519 The assessee has also raised the common grounds in all its cross-objections, challenging the orders of the ld. CIT(A) both on legal grounds as well as on merits of the additions. 2. Since the common questions of law and facts were involved all these appeals and cross-objections, the same were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity. We take up the facts involved in appeal of the Revenue and cross objection of assessee for the assessment year 2003-04 first, the decision on which shall equally apply to the appeals and cross objections for the remaining assessment years. 3. The brief facts of the case are that search and seizure operations u/s. 132 of the IT Act were carried out in the cases of Sh. B.K. Dhingra, Smt. Poon Dhingra & M/s. Madhusudan Buildcon Pvt. Ltd. on 20.10.2008 and during the course of search at their residential premises at F-6/5, Vasant Vihar, New Delhi, certain documents belonging to the assessee company were seized. Accordingly, notice u/s. 153C was issued on 08.09.2010, in response to which the assessee filed return of income declaring income at NIL. Subsequently, notices u/s. 1....
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....that no evidence of stock was found from any other premises of Thapar Homes Group. On being asked, the assessee in the assessment proceedings claimed that it had a godown at Khasra No. 34/7, Village Dera Mandi, Tehsil Mehrauli, New Delhi, which was not given favour to, being not verifiable due to lapse of so many years and that no such declaration was made either in the course of search or post search enquiries. On the basis of these statements, the Assessing Officer was of the view that the assessee company was a capital formation company only and made the additions concluding as under : 8. In the case of present assessee all the purchases & sales are in cash. The items purchased & sold are textile & fabrics. The name and style of the textiles & fabrics are "Denim, Fabrics K-III Super Fine (N), Fabric (PS), Fabric (PS) Embroidery, Fabric (PS) Excel, Fabrics, Kashmiri Fabrics-I, Kashmiri Fabrics- I(D)" etc. From these items it can be seen that the assessee is not dealing in branded items. There is no name of any company in these products. Shawls are purchased and sold in pieces and rest other items are sold in meters. It is further seen that the purchases & sales are within M/s T....
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....g common grounds : Effective Grounds raised in Revenue's appeal : 1. The Commissioner of Income Tax (Appeals) erred in law and on facts in deleting the addition of Rs. 32,91,900/- on account of unexplained purchase u/s. 69C of the Act. 2. The Commissioner of Income Tax (Appeals) erred in law and on facts in deleting the addition of Rs. 4,11,229/- on account of disallowance of expenditure." Grounds raised in assessee's cross objections: 1. That on the facts and circumstances of the case and the provisions of law, the CIT(A) has failed to appreciate that notice issued u/s. 153C and assessment order passed by the AO u/s. 153C/143(3) is illegal, time barred, bad in law and without jurisdiction. The additions made are unjust, unlawful and arbitrary and are made against the principles of natural justice. 2. That on the facts and circumstances of the case and the provisions of law, the CIT (A) has failed to appreciate that the AO was not justified to ignore the submission of the assessee company that the assessment proceedings for the year under appeal was not pending on the date of the recording of satisfaction u/s. 153C and since the same didn't abate, the proceedings....
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....and vitiated in the law. 10. That the CIT (A) has erred in ignoring the fact that the AO has erred both on facts and in law, in using statement of various persons without giving a copy of the same and opportunity to cross examine. 11. That the CIT (A) has erred in ignoring the explanation given, evidences and material placed and available on record. The same has not been properly considered and judicially interpreted and the same do not justify the additions/disallowances made. The additions have been sustained with preset mind of the CIT (A) and her order is based on surmises, conjectures and suspicion. 12. That on the facts and circumstances of the case the interest charged u/s. 234A and 234B has been wrongly and illegally charged and in any case is highly excessive. 7. We deem it appropriate first to deal with the legal issues raised by the assessee in its cross objections on initiation of proceedings u/s. 153C of the IT Act. 8. The first challenge to the validity of proceedings made by the ld. AR is based on the arguments that in the instant case no satisfaction has been recorded by the Assessing Officer in the status of Assessing Officer of searched person that the....
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....place u/s. 132 on 20.10.2008.The undersigned is the jurisdictional A.O. of these cases. During the course of search & seizure documents/papers at pages 182 to 188 of Annexure A-30, pages 119 to 168 of Annexure A-25, page 16 to 19 and pages 30 to 35 of Annexure A-3, pages 27 to 30 of Annexure A-6, Annexures 17, 36 and 40, seized by party R-2, and page 15 to 55 of Annexure AA-1 and page 1 to 75 of Annexure AA-2 are found to belong to M/s. D. Base Consultant Pvt. Ltd., B-340, Hari Nagar, New Delhi. I have examined the above mentioned documents/papers and provision of section 153C is invokeable in this case. As the undersigned is also the jurisdictional A.O. of M/s. D. Base Consultant Pvt. Ltd., B-340, Hari Nagar, New Delhi, this satisfaction note is placed in the file before issuing notice u/s. 153C. 11. It is significant to note that the ITAT Delhi Benches in different other cases of the Group, no doubt, has treated the same text of satisfaction note to have been recorded in the case of other than searched persons and not in the case of person searched. It is, however, also a fact on record that the Hon'ble Jurisdictional High Court in other case of the assessee group, i.e., Pr. CI....
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....ment years 2005-06 to 2010-11. It was, therefore, submitted that A. Yrs. 2003-04 and 2004-05 were outside the purview of section 153C. The assessee has, inter alia, relied on the decision in one of the group cases, i.e., CIT vs. RRJ Securities Ltd., 380 ITR 612(Delhi), rendered by Hon'ble jurisdictional High Court. 13. On the other hand, the ld. DR, reiterated the findings reached by the ld. CIT(A) on this count in the impugned order and relied on some decisions, which are placed on record. 14. Having considered the rival submissions and gone through the entire material available on record, we find that this issue involved in cross objections of assessee for A.Yrs. 2003-04 and 2004-05 is covered in favour of the assessee and against the Revenue by the decision of Hon'ble jurisdictional High Court rendered in one of the assessee's group cases, RRJ Securities Ltd. (supra), wherein after considering the provisos to sections 153A and 153C of the Act, the Hon'ble jurisdictional High Court has observed as under : "As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to ....
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....er the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003- 04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year". Therefore, respectfully following the principle of law laid down by Hon'ble jurisdictional High court in the above decision, we have no hesitation to conclude that the assessments made by the Assessing Officer u/s. 153C of the Act for A.Yrs. 2003-04 and 2004-05 are beyond the scope of section 153C and the same being void ab initio deserve to be quashed. Accordingly, the cross objections of the assessee for A.Yrs. 2003-04 and 2004-05 deserve to be allowed on this legal issue only and since the assessments for these years are held as void, the appeals of the Revenue for these years deserve to fail. 15. Adverting to the merits ....
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.... Act, 1961. Accordingly, Ld. Counsel of the assessee requested that the issues involve in the assessee's cross objections and in the Revenue's appeals may be set aside to the Assessing Officer to verify whether the seized documents mentioned in the Satisfaction Note dated 5.7.2010 relating to the assessee on which notice u/s. 153C has been issued to the assessee and if these documents namely the cheques have already been accounted for in the books of accounts of the assessee and are not relating to the period i.e. asstt. year 2003-04 to 2008-09, then the proceedings u/s. 153C may be cancelled, otherwise, the Assessing Officer may take action, as per law. 8. On the other hand, Ld. Department Representative relied upon the order of the Assessing Officer and she oppose the request of the assessee's counsel. 9. We have heard both the counsel and perused the records. We have also gone through the orders of the lower authorities, Paper Book filed by the assessee and the case law relied upon by the assessee. We find that Ld. Counsel of the assessee filed a Paper Book having pages 1 to 27 containing the assessment records etc. and he drawn our attention towards the Page No. 1 of the ....
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....een accounted for in the case of the appropriate person. It is aimed at ensuring that income does not escape assessment in the hands of any other person merely because he has not been searched under section 132 of the Act. It is only a first step to the enquiry, which is to follow. The Assessing Officer who has searched the satisfaction that the document relates to a person other than the searched person can do nothing except to forward the document to the Assessing Officer having jurisdiction over the other person and thereafter it is for the Assessing Officer having jurisdiction over the other person to follow the procedure prescribed by section 153A in an attempt to ensure that the income reflected by the document has been accounted for by such other person. If he is so satisfied after obtaining the returns from such other person for the six assessment years, the proceedings will have to be closed. If the returns filed by the other person for the period of six years does not show that the income reflected in the document has been accounted for, additions will be accordingly made after following the procedure prescribed by law and after giving adequate opportunity of being heard ....