TaxTMI 
TaxTMI 
2019 (8) TMI 364
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....endment by Finance Act, 2015?" 3. It appears from the materials on record that a search and seizure operation under Section 132 of the Act was undertaken at the business premises of M/s. Sheela Foam Private Limited on 28/11/2011. Few documents were recovered during the search operation and those were seized. The case of the assessee was centralized vide order under Section 127 of the Act dated 16/11/2012 passed by the CIT, Ahmedabad. The notice under Section 153C of the Act was issued on 29/08/2013. The return declaring income of Rs. 13,86,47,670/was filed by the assessee on 06/01/2014. 4. The notice under Section 143(2) was issued on 24/12/2013. The details/information furnished by the assessee during the course of the assessment proceedings, were examined by the Assessing Officer. The Assessing Officer recorded the following satisfaction:- During course of search operation u/s.132 of the IT Act carried on 28/11/2011 at business premises of M/s. Sheela Foam Private Limited it was observed that the shares held by Pradhuman Patel group (P P Group) and other Patel Group in M/s. Sheela Foam Private Limited were acquired by company M/s. Serta India Private Limited (Rahul Gautam ....
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....gain on the transfer of shares. 6. The assessee being aggrieved with the addition preferred an appeal before the CIT, Ahmedabad. 7. The CIT, Ahmedabad while allowing the appeal preferred by the assessee, held as under:- (M/s. SHEELA FOAM PRIVATE LIMITED) During the course of search and seizure operation conduced on 28.11.2011 at Premises No.37/2, SiteIV, Sahibabad Industrial Area, Ghaziabad, U.P., of Sheela Foam Private Limited, documents marked as Annexure A1 to A13 were found and seized. It is seen that the above seized material contains following documents belong to Sh. Praduman Patel:Page 1. Annexure A1, P41, photocopies of paper relating to the settlement statement for the transfer of shares from the Pradhuman Patel Group to Rahum Gautam Group. P75 & 81 contains photocopies of paper relating to the settlement statement for the transfer of shares from the Pradhuman Patel Group To Rahul Gautam Group. 2. Annexure A2, Page 15 to 19 contains receipt dated 20/12/2009 of Rs. 52476363/issued to Rahul Gautam by Praduman Patel for sale 1052400 shares of M/s. Sheela Foam Pvt. Ltd. Page19 receipt dated 20/12/2009 of Rs. 55156365/issued to Rahul Gautam by Pradhuman....
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....nourable Delhi High Court has also considered the decision of the Gujarat High Court and Honourable Delhi High Court relied upon by the learned CIT DR. The above decision has reiterated the same position that unless the document belongs to the assessee is shown by the learned AO in the satisfaction note itselt with a reason and the basis. 24. Even the Honourable Delhi High Court in case of Ganpati Fincap Private limited Vs. CIT [2017] 82 taxmann.com 408 (Delhi)/ [2017] 395 ITR 692 (Delhi)/ [2017] 298 CTR 174 (Delhi) in para number 41(ii) has held that Where proceedings are proposed to be initiated under Section 153C of the Act against the 'other person', it has to be preceded by a satisfaction note by the AO of the searched person. He will record in this satisfaction note that the seized document belongs to the other person. Depending on the nature and contents of the document he may be required to give some reasons for such conclusion. Therefore, it is apparent that if the satisfaction note, does not have any reasons for such conclusion, it is not in accordance with the law. For invoking jurisdiction under section 153C of the Income Tax Act. Such is the case before us, ....
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.... rate of transfer of shares, payment received through cheque, payment received in cash, balance payable in cash and cheques, receipts of payments for transfer of shares by the assessee and copy of cheques for payment received which clearly belonged to the assessee. The seized documents also bear the signature of the assessee. The assessee has accepted all the payments/ receipts through cheque mentioned in the seized documents at the same time has denied the cash component, though reflected in the seized document. 14. She further submitted that the assessee had accepted the part details mentioned in the seized document and denied the payments made through cash. Thus, considering the above facts, it is clearly established that the seized material found from the search premises belong to the assessee. 15. Before proceeding any further it would be necessary to set out the relevant provisions of the said Act as applicable to the assessment years under consideration:- "153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other v....
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....bsp; xxxx xxxx xxxx (4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) That such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; xxxx xxxx &n....
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....icer to rebut that presumption and come to a conclusion or "satisfaction" that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of "satisfaction". [See: Pepsi Foods (P.) Ltd. Vs. Assistant Commissioner of Income Tax; [2014] 52 taxmann.com 220 (Delhi)]. 17. We may refer to a decision of the Delhi High Court in the case of Principal Commissioner of Income Tax (Central)2 Vs. Index Securities (P.) Ltd. reported in [2017] 86 taxmann.com 84 (Delhi), wherein, the Court observed as under:- 28.4 The Supreme Court also agreed with the decision of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) to the extent it held that "it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in Section 153A of the Act." The Supreme Court observed: "This proposition of law lai....