AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1447
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....d. 3] The learned CIT(A) erred in confirming the addition of Rs. 57,25,000/- on the basis of the seized paper found with Shri Mohan Patel without appreciating that no such addition was warranted on the facts of the case. 4] The learned CIT(A) failed to appreciate that the noting was a dumb noting and it did not indicate that the assessee had received extra consideration on account of sale of fixed assets and hence the addition made on the basis of the dumb noting was not justified at all and the same should be deleted. 5] Without prejudice to the above grounds, assuming without admitting that the assessee had received Rs. 57,25,000/- on sale of fixed assets the assessee had accounted for Rs. 31,40,000/- in its books of accounts and therefore, the addition if at all to be made should be restricted to the difference between the said amounts i.e. Rs. 25,85,000/-. 3. The issue raised in the present appeal is against proceedings initiated under section 153C of the Act on the basis of seized papers found from one Shri Mohan Patel. 4. Briefly, in the facts of the case, the assessee was a private limited company and had furnished return of income declaring total income of Rs. 21,69....
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....r entries on the said document also, which were taxed in the hands of Vilson Particle Board Industries Pvt. Ltd. The learned Authorized Representative for the assessee pointed out that the issue stands covered by the ratio laid down by Pune Bench of Tribunal in Rajendra Motmal Shah Vs. ACIT in ITA No.1877/PUN/2013, relating to assessment year 2009-10, order dated 31.05.2017. 7. The learned Departmental Representative for the Revenue on the other hand, placed reliance on the order of CIT(A). 8. We have heard the rival contentions and perused the record. The issue which arises in the present appeal is in relation to the entries found in seized documents / note books found from the possession of person searched i.e. Shri Mohan Patel. Various documents were found including note books and in the statement recorded under section 132(4) of the Act, Shri Mohan Patel stated that these relate to the two entities i.e. Vilson Particle Board Industries Pvt. Ltd. and Pragati Plywood Industries Ltd. and also admitted that there were both accounted and unaccounted entries relating to the said concerns. One of the seized documents, copy of which is placed at page 3 of Paper Book also shows the en....
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.... transfer the assets or documents, which he believes belongs to the assessee to the Assessing Officer having jurisdiction over that assessee, who in turn, would commence the proceedings under section 153C of the Act. In the facts of the case before the Hon‟ble High Court of Delhi, the Assessing Officer of the searched person had not recorded satisfaction note on the ground that the Assessing Officer of the searched person and the assessee to be assessed under section 153C of the Act were being assessed by the same officer. The Hon‟ble High Court in such circumstances had held that the Assessing Officer having jurisdiction would form an independent view before issuing notice to the other person under his jurisdiction on the basis of his own enquiry. The Hon‟ble High Court held as under:- "16. It is apparent from the above that the first step for initiation of proceedings under Section 153C of the Act is for the assessing officer of the searched person to be satisfied that the assets or documents seized do 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 is ....
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.... the person searched and the assessee who is sought to be assessed under Section 153C is the same, the assessing officer is required to record his satisfaction that the assets/ documents seized belong to a person (the assessee) other than the searched person. In CIT v. Mechmen 11-C [2015] 60 taxmann.com 484 (MP) a Division Bench of the Madhya Pradesh High Court had expressed the above view in the following manner" 11. Another aspect which was noted by the Hon‟ble High Court was the difference between expression „belongs to‟ and „relates to‟ and it was observed as under:- "20. The Assessee disputed that the said documents could be stated to be belonging to the Assessee. Insofar as the resolutions, affidavits, counter foils of the income tax returns, copies of the incorporation certificate, Memorandum of Association, resolutions, affidavits, and share application forms are concerned, the Assessee explained that these documents were handed over to the SVP Builders India Ltd. in connection with the investment made by the Assessee. Although these documents pertains to and emanate from the Assessee, these documents could not be stated to belong to the As....
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.... the initiation of proceedings under section 153C of the Act, in respect of the Assessee would be without jurisdiction." 12. In the facts of the present case, search at the residence of Mr. Vijay Shah was conducted on 15.06.2010 and loose paper at serial Nos.18 and 21 of the bundle No.II were seized. The scanned copy of both the documents are placed at pages 6 and 7 of the assessment order. On perusal of the details received from Investigation Wing, the Assessing Officer noted that (1) Mr. Bharatkumar Kundanlal Jain, (2) Mr. Bharat Chandrakant Mehata and (3) Mr. Rajendra Motmal Shah, partner of M/s. India Global Agro & Realty, Kolhapur had also purchased another agricultural land situated at Kasba Karveer Rankala, Kolhapur on 10.11.2008, admeasuring 38.5 guntas from Shri Shivaji Pandurang Mane for sale consideration of Rs. 35 lakhs. Shri Vijay Shah was confronted with the seized paper No.18, who in reply mentioned that there is mention of said land; similarly on paper No.21 i.e. land situated at Rankala, Kolhapur. However, no other details were given and also denied having given any amount in cash. The Assessing Officer obtained the copies of sale deed from the Sub-Registrar̶....
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....l No.83 of 2014 and 150 of 2014, judgment dated 07.02.2017 took note of position of law under section 153C of the Act w.e.f. 01.06.2015 and observed as under:- "6. We note that in terms of Section 153C of the Act at the relevant time i.e. prior to 1st June, 2015 the proceedings under Section 153C of the Act could only be initiated/proceeded against a party - assessee if the document seized during the search and seizure proceedings of another person belonged to the party - assessee concerned. The impugned order records a finding of fact that the seized documents which formed the basis of initiation of proceedings against the respondent assessees 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 Vijaybhai Chandrani vs. ACIT 333 ITR Page 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 respondent - assessee ....
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....ched person with typed copy in Marathi which is placed at page 6. The English translation of the said document is placed at page 7 of the Paper Book. 16. Now, we shall take note of the notings on document seized during the course of search. As per the Assessing Officer, the document which relates to the assessee is page 21 of bundle No.II seized from Shri Rahul Mane, the searched person of 38.5 Guntas. The land in question was at Rankala and the seller was Shri Rahul Mane. The total landholding was 38.5 guntas. Undoubtedly, the next noting on the said seized document is 15.5 guntas purchased for firm. The total cost of 38.5 guntas including the cost of stamp paper, registration is mentioned in coded form and other expenses and the total is mentioned as 162601-00, which the Assessing Officer interprets as the total cost of sale of land at Rs. 1,62,60,100/-. Thereafter, the consideration in respect of 15.5 guntas and the share of Mr. Vijay Shah @ 4.44% is mentioned and the details of cash receipt have been worked out. The said document was seized from Mr. Vijay Shah who is in between person and the said seized paper belongs to Mr. Vijay Shah. The Assessing Officer also admits that ....