TaxTMI 
TaxTMI 
2019 (6) TMI 1393
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....income of the Appellant by way of disallowing depreciation on certain fixed assets on the plea that the purchase of these fixed assets is not genuine. b) The Id. CIT(A) failed to appreciate that:- i) purchase of these fixed assets is genuine and supported by admissible evidences and materials; ii) the depreciation is claimed on the assets owned by the Appellant and used for the purposes of the business carried on by the Appellant; and iii) these fixed assets have been physically verified and valued by the Chartered Engineer. c) In reaching to the conclusion and confirming such addition, the Id. CIT(A) omitted to consider relevant factors, considerations, principles and evidences while he was overwhelmed, influenced and prejudiced by irrelevant considerations and factors. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) failed to appreciate that the proceedings initiated against the Appellant u/s. 153C are invalid and contrary to the provisions of law. 3. The Id. CIT(A) erred in holding that the Ground No.7 raised against initiation of penalty proceedings u/s.271(l)(c) is premature. The App....
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.... the Act, on 17/12/2008 determining total loss of Rs. 1,39,77,160/- by making additions/disallowances towards depreciation claimed on inflated value of plant and machinery and also disallowance of share issue expenses. 5. Aggrieved by the assessment order, the assessee preferred appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee has challenged validity of assessment order passed u/s 143(3) r.w.s. 153C of the Act, on the ground that notice issued u/s 153C dated 11/08/2008 is bad in law and void ab-initio, because the AO of the searched person did not record satisfaction as required u/s 153C of the Act, that any undisclosed income belonging to third person, that is the person other than the person who was searched or whose documents, account books or assets were requisitioned, therefore, all proceedings including assessment order passed u/s 153C of the Act, is bad in law and liable to be quashed. The assessee has also contested additions made by the AO towards disallowance of depreciation on plant and machinery and disallowance of share issue expenses. The Ld. CIT(A) for the detailed reasons recorded in its order dated 02/06/2009 confirmed the additions made by the ....
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....to the AO to strictly follow the decision in the case of CIT vs M/s Calcutta Knitwears (supra) for recording satisfaction and has stated that even if the AO of the searched person and the 'other person' is one and the same, then also he is required to record his satisfaction as has been upheld by the Courts before handing over books of accounts and other materials belonging to the person other than searched person. The CBDT further clarified that any pending litigation with regard to recording of satisfaction note u/s 158BD /153C should be withdrawn/not pressed, if it does not meet the guidelines laid down by the Apex Court. The Ld. AR further submitted that in this case, it is very clear from the record that the AO of the searched person or the person whom proceedings u/s 132 has been initiated has not recorded satisfaction as required u/s 153C of the Act, having regard to books of account and other assets that such books of accounts are belong to a person other than searched person. Although, the Ld. DR has furnished a copy of satisfaction note recorded dated 11/08/2018, but on perusal of such satisfaction note, it is very clear that the said note has been prepared by the AO of t....
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....Since, the AO has recorded satisfaction before issue of notice u/s 153C of the Act, which is sufficient as per provisions of law and hence, there is no merit in the contentions of the assessee and accordingly, the legal plea raised by the Ld. AR for the assessee should be rejected. 10. We have heard both parties, perused the material available on record and gone through the orders of authorities below. The sole dispute is with regard to nonrecording of satisfaction by the AO having jurisdiction over the searched person before handing over the books of accounts or assets requisitioned during the course of search but belonged to other person. Otherwise, there is no dispute with regard to the fact that the AO of the assessee has recorded satisfaction as required u/s 153C of the Act, before issue of notice u/s 153C dated 11/08/2008. In fact, the Ld. DR furnished copy of satisfaction note recorded by the AO on 11/08/2008, as per which it is an order sheet entry in the case of the assessee M/s Karnataka Strips Ltd. and the heading of the order sheet entry states that reasons recorded prior to issue of notice u/s 153C of the Act. It is also not in dispute that the AO of the searched pe....
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....ourts including the Hon'ble Supreme Court in the case of CIT vs M/s Calcutta Knitwears (supra), where, the Hon'ble Supreme Court in the context of provisions of section 153BD has laid down certain guidelines to the AO for issue of notice 158BD of the Act, as per the which, the AO of the searched person must record satisfaction to the effect that any money, bullion, jewellery or other valuable article or thing or any books of account or documents, seized or requisitioned, pertains to, or relates to a person other than the person referred to in section 158BC of the Act. Therefore, it is very clear from the observations of the Hon'ble Supreme Court that before handing over books of accounts or assets seized or requisitioned, if the AO is satisfied that such money, bullion or jewellery or books of account belongs to, relates to person other than the person refer to in section 153A, then he shall record satisfaction to that effect. Similarly, as per the said provision, it is very clear that if the AO is satisfied that the books of accounts or documents, are seized or requisitioned have bearing on the determination of total income of such other person, then he shall proceed to assess or ....
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....Strips Ltd. and the heading states that reasons recorded prior to issue of notices u/s 153C of the Act. The said satisfaction note was recorded by the AO having jurisdiction over other person i.e. in this case, the assessee, before issue of notice u/s 153C of the Act. Therefore, we are of the considered view that satisfaction as required u/s 153C of the Act, before transmitting books of accounts or other assets belongs to or relates to other than the searched person was not recorded by the AO of searched person as required u/s 153C of the Act, consequently, the whole proceedings including assessment order passed u/s 143(3) r.w.s. 153C of the Act, is bad in law and liable to be quashed. Hence, we quashed the assessment order passed by the AO u/s 143(3) r.w.s. 153C of the Act for AY 2003-04 to 2006-07. 11. Coming to the assessment year 2007-08. The AO has completed assessment for AY 2007-08 u/s 143(3) of the Act. We find that the as per the proviso of section 153C of the Act, an assessment for AY 2007-08 (the year in which search was conducted) was also need to be completed u/s 153C of the Act. Therefore, as per the provisions of section 153A r.w.s 153C of the Act, AY 2007-08, oug....