AI Drafter 
TaxTMI 
TaxTMI 
2018 (5) TMI 1006
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....No.24/2015 has no relevance in the appellant's case since the assessment was completed on 31-12-2010, which was before the issue of the circular. Without prejudice to the above: 2. The learned Commissioner of Incometax (Appeals) is not justified, in the facts and circumstances of the case, in confirming the addition u/s 68, of Rs. 33,00,000/-representing alleged investment. 3. The appellant reserves his right to add, alter, or substitute any ground or grounds during the course of hearing." 2. With regard to the above grounds of appeal, the relevant facts are, a search and seizure operation u/s 132 was conducted in the case of M/s B. Ramdas Goud and Desagoni Raghupathi Goud Group on 15/09/2008. In consequent to search and seizure operation, notice u/s 153C of the Act was issued to the assessee on 04/10/2010 calling for the returns of income for the AYs 2003-04 to 2008-09. In response to the above notice, assessee filed returns of income for the AYs 2005-06, 2006-07, 2007-08 and 2008-09 on 14/12/2010. The relevant assessments were completed u/s 143(3) r.w.s. 153C of the Act, dated 31/12/2010. While doing so, AO has made additions towards unexplained investmen....
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.... 1. Kamleshbhai Dharamshibi, 214 Taxman 558 2. Raja Mohammed Amir Ahmed Khan Vs. Municipal Board of Sitapur, AIR [1965] SC 1923 8. Considered the rival submissions and perused the material on record as well as the case law submitted by both the parties. 8.1 In the case of Pr. CIT Vs. Vinita Chaurasia (supra), it was held that for the purpose of initiating proceedings u/s 153C of the Act, the seized documents had to be shown to be belonging to the other person and not merely pertaining to such other person. The change brought about in this regard in section 153C of the Act by way of amendment has been given prospective effect from June 1, 2015. The amended provision therefore has no application to the cases on hand. 8.2 In the case of CIT Vs. Sinhgad Technical Education Society [2017] (supra), the Hon'ble Supreme Court held that a document seized should belong to a person other than the person referred to in section 153A of the Act. 8.3 In the case of Canyon Financial Services Ltd. Vs. ITO (supra), the Court held that at the stage of initiation of proceedings u/s 153C of the Act, it is sufficient if the seized document pertained to the other person and it is n....
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....ction recorded by the A.O of the assessee for issuance of notice u/s 153C of the act, is available on record. Therefore it is presumed that the satisfaction in the necessary form is not recorded before issuance of the notice u/s 153C of the Act. The Hon'ble jurisdictional High Court in the case of CIT Vs Shetty Pharmaceuticals and Biological Ltd., reported in 57 taxmann.com 282 (A.P) has conf irmed the order of the ITAT in ITA Nos. 930 & 931/Hyd/2013 dated 28.05.2014 wherein it was held as under: "30. From a plain reading of these sections, we f ind that section 153A is procedural section which deals with the mode of assessment. A notice u/s. 153A of the Act can only be issued to such person where a search is initiated u/s. 132 of the Act or books of account or other documents or any assets are requisitioned u/s. 132A of the Act af ter 31st day of May, 2003, requiring him to furnish within such period as may be specif ied in the notice, return of income in respect of each assessment year following within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisitioned is made. Thereaf ter assessment ....
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....rder u/s. 153A in the case of searched person cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132or requisition of books of accounts were made under Section 132A of the Act. In other words, the person who has passed the order in the case of the searched person u/s. 153A of the Act is required to record the satisfaction note before completion of assessment u/s. 153A of the Act. In the present case the Bench categorically asked the DR to produce the satisfaction notes recorded in this case so as to issue notice u/s. 153C to the present assessee. To the query of the Bench the DR produced the order sheet entries for both the assessment years as mentioned in para 26 (supra). 31. The order sheet entries are said to have been recorded by the AO who has passed the order u/s. 153C of the Act in the case of the assessee and it is also satisfaction note to that effect that there exists income-tax belonging to any person other than the searched person in respect of whom search was made u/s. 132 of the Act or requisition of books of account were made....
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....ther documents or assets seized or requisitioned had been handed over to the AO having jurisdiction over such other person; and ( iii) the AO has proceeded under s. 158BC against such other person. The conditions precedent for invoking the provisions of s. 158BD, thus, are required to be satisf ied before the provisions of Chapter XIV-B are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under s. 132A. The impugned notice does not record any satisfaction on the part of the AO. Documents and other assets recovered during search had not been handed over to the AO having jurisdiction in the matter. No proceeding under s. 158BC had been initiated. There is, thus, a patent nonapplication of mind. A prescribed form had been util ized. Even the status of the assessee had not been specif ied. It had only been mentioned that the search was conducted in the month of November, 1995. No other information had been furnished. The provisions contained in Chapter XIV-B are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, it would bear repetition to state....
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....oner were found. Consequently, the Assessing Off icer of the Jaipuria Group prepared a satisfaction note to the effect that the documents mentioned therein belonged to the petitioner. Three kinds of documents were mentioned in satisfaction note. First were the photocopies of Cumulative Redeemable Preference Shares purchased by the petitioner from TDL and SMV. The second set of documents were unsigned cheques found in the cheque books of the Jaipuria Group companies, which had been written in favour of the petitioner. The third document was a photocopy of a supply and loan agreement made between PDL and petitioner. Thereaf ter, the Assessing Off icer issued notices to the petitioner under section 153C seeking to reopen the assessments of the petitioner for the assessment years 2006-07 to 2011-12 and to follow the procedure prescribed under section 153A. In response to the said notices, the petitioner submitted its objections which were rejected by the Assessing Off icer and the petitioner was directed to comply with the assessment proceedings under section 153C. On writ: HELD In order that the Assessing Off icer of the searched person com....
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....rty although it obviously 'relates to' or 'refers to' the vendor. In this example if the purchaser's, 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. In view of the foregoing discussion, the ingredients of section 153C have not been satisf ied in this case. Consequently, the notices issued under section 153C are quashed. Accordingly, all proceedings pursuant thereto stand quashed". 9. As can be seen from the satisfaction recorded by the AO while initiating proceedings u/s. 153C, there is neither any linking up of the documents nor any f inding....