TaxTMI 
TaxTMI 
2021 (8) TMI 1022
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.... on substantive basis and Rs. 77,85,000/- on protective basis. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in directing the A.O. to delete the addition of Rs. 11,41,050/- as unexplained expenditure on account of brokerage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would only mean undisclosed income discovered from seized / incriminating material. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in adopting a restrictive and pedantic interpretation of the scope of assessment u/s 153C/153A of the Act. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the concl....
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....l are without prejudice to each other. 8. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal." ITA No. 4048/D/2017 - AY 2011-12 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in directing the A.O. to delete the addition made u/s 68 of the I.T. Act on account of unexplained cash credits of Rs. 25,59,91,700/- on protective basis. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in directing the A.O. to delete the addition of Rs. 12,79,959/- as unexplained expenditure on account of brokerage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would on....
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....opies of the satisfaction noteswhich were recorded before issuance of notice under section 153C of the Act. Copies of satisfaction notes dated 22.12.2014 drawn by Assessing Officerof PIL and by the Assessing Officer of the appellant were supplied to the appellant. The appellant filed detailed objections against the satisfaction recorded by the Assessing Officer which was disposed of by the Assessing Officer. 5. The appellant challenged the satisfaction notes and contended inter-alia that the documents found from the premises of PIL relating to the appellant was those that were duly recorded in the regular books of account of the appellant and were in no manner incriminating in nature. Hence, the appellant contended that since they are not incriminating in nature, no assessment can be made on the basis of these documents because no undisclosed income is discernable out of theseseized documents and the years under consideration are completed assessments. In this regard, the ratio of the judgement of the famous case of the Hon'ble Delhi High Court in the case of Kabul Chawla 61 taxmann.com 412 is squarely applicable. 6. The appellant made detailed submission and contended that a....
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....Pal Bhatia. 11. Before us the ld. counsel in his written submission has submitted that it is a settled legal position that prior to 01.06.2015 where documents found with the person searched may contain information about "other person", but documents do not belong to him, proceedings u/s 153C will not be valid. Only w.e.f 01-06-2015, if the documents/ books seized from the premises of person searched, pertain to, or any information contained therein, relates to such "other person", proceedings u/s 153C against such "other person" will be valid. In the case of the assessee the search was conducted on M/s Prakash Industries Ltd. on 30.10.2012 which is before 01.06.2015. Since the search took place before 01.06.2015, the notice u/s 153C can be issued only if the documents seized from the premises of M/s Prakash Industries Ltd. are found to be belonging to the assessee company. For initiating valid proceedings u/s 153C of the Act, recording of clear and positive satisfaction that money, bullion, jewellery or other valuable article or thing or documents or books of account etc. seized belong to/belongs to person other than searched person, is a sine qua non requirement. The above requir....
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....l, depends upon the subjective satisfaction of the Assessing Officer, but definitely it is subject to scrutiny whether the satisfaction has a rational nexus or a relevant bearing to the formation of satisfaction and is not extraneous or irrelevant. The satisfaction must reflect rational connection with or relevant bearing between the material available and undisclosed income of the third person. The rational connection postulates and requires satisfaction of the Assessing Officer that a third person has 'undisclosed income' on the basis of evidence or material before him. The material itself should not be vague, indefinite, distinct or remote. If there is no rational or intangible nexus between the material and the satisfaction that a third person has 'undisclosed income', the conclusion would not deserve acceptance. Then the satisfaction is vitiated. It is to this limited extent that the satisfaction can be gone into and examined. The satisfaction, though subjective, must meet the aforesaid criteria. [Para 21]" 12. From the above discussion, following requirements emerge out to initiate valid action u/s 153C: a. First, Assessing Officer of the person searched is....
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.... is the same, there can be one satisfaction note prepared by the Assessing Officer, as he himself is the Assessing Officer of the searched person and also the Assessing Officer of the other person. However, as observed hereinabove, he must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. 2. The assessee also relies upon the decision of Hon'ble High Court of Delhi in the case of Pepsi Foods Pvt. Ltd. Vs. ACIT (52 taxmann.com 220) which is also discussed and approved by the Hon'ble Supreme Court in the case of Super Malls(supra) wherein it has been held that: It is evident from the above satisfaction note that apart from saying that the documents belonged to the petitioner and that the Assessing Officer is satisfied that it is a fit case for issuance of a notice under Section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere use or mention of the word "satisfaction" or the words "I am satisfied" in the order or the note would not meet the requirement of the concept of satisfaction as used in....
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....s explanation Whether the document can be said to be belonging to the assessee Whether pertains to the assessment year in question Whether the seized documents are incriminating or suggest any escapement of income A 2 47 1. This is the trial balance of the assessee company for the period 01.04.2012 to 08.10.2012. 2. Documents already recorded in the books of the assessee. However the copy of trial balance cannot be said to be incriminating. 3. It pertains to the A.Y. 2013-14 and does not pertain to the assessment year in question and has no co-relation with the addition made by the Ld. AO and cannot be said to be incriminating material. NO Copy of trial balance cannot be said to belonging to the assessee. NO This document pertains to A.Y. 2013-14 Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO The transactions in the seized document have already been recorded in the books of the assessee company. The Ld. AO failed to link these seized documents with the additions. High Court of Delhi - Sunny Infraprojects Ltd: seized material must have some nexus or relevance to the ....
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....nts with the additions. High Court of Delhi - Sunny Infraprojects Ltd: seized material must have some nexus or relevance to the additions sought to be made A 12 28, 58-64, 81-88 1. Certified copy of board resolution, statement of holding and pledge master report YES NO A.Y. 2012-13 Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO The transactions in the documents have been duly recorded in the books of the assessee. These documents are not incriminating in nature. Even otherwise the Ld. AO did not take any cognizance of the documents while making additions. High Court of Delhi - Sunny Infraprojects Ltd: seized material must have some nexus or relevance to the additions sought to be made A 21 51-97 1.This is the Undated unsigned blank cheque book of assessee company. 2. This cannot be relate to any A.Y. and hence cannot be used for initiating assessment for any A.Y. YES NO NOT PERTAINING TO ANY YEAR Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO Undated, unsigned cheque books....
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....cer of the assessee on receipt of such asset or document seized would have jurisdiction to commence proceedings under Section 153C of the Act. The assessing officer has, thereafter, to apply his mind as to whether the assets and documents received have a bearing on the determination of the total income of the Assessee and if he is so satisfied that the same have a bearing on the determination of the income of the assessee, he has to issue notice and assess or reassess the income of the assessee in accordance with the provisions of Section 153A of the Act. Section 153A of the Act requires that a notice be issued to the person sought to be assessed, calling upon the said assessee to file his return of income in respect of each year falling within the specified six AYs. .....in the present case, although the photocopies of the documents handed over to SVP Builders India Ltd. may be copies of the original documents that belong to the assessee, the said photocopies would belong to SVP Builders India Ltd. as the same were handed over to it in connection with the investment made by the Assessee. Similarly, a certified copy of the Assessee's resolution signed by its Directors, would ....
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.... documents, the jurisdictional requirement under Section 153 C (1) of the Act, of the AO of the searched person having to be satisfied that the said documents do not belong to searched person but to the Assessee, has not been fulfilled." III. Seized document must pertain to the assessment year for which the Ld. AO had initiated the proceedings under section 153C of the Act. 1. Your Honours, Hon'ble Supreme Court in the case of CIT Vs. Singhad Technical Education Society (84 taxmann.com 290)has settled the issue that the seized documents must be incriminating and must relate to the AYs whose assessments are sought to be reopened. The relevant portion of the judgement of Apex Court is as under: The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with th....
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....s other decisions of Hon'ble jurisdictional High Court and other High Court that the seized material must relate to the assessment year in question. a. Hon'ble High Court of Delhi in the case of RRJ Securities (380 ITR 612) wherein a record slip of cheque book was seized which formed part of the cheque book containing entries relating to A.Y. 2009-10 has held that: Insofar as the documents referred to as pages 126 to 179 of Annexure A-34 is concerned, admittedly, the same only consisted of a single page of the record slip of a cheque book and other pages were blank. The record slip only contained three entries reflecting issue of three cheques on 11th August, 2008, 27th August, 2008 and 10th December, 2008 respectively. Thus, it is apparent that the said document had no relevance for the assessment years in question i.e. AYs 2003-04 to 2008-09. In the circumstances, the issue to be addressed is whether proceedings under Section 153C of the Act could be initiated on the basis of this document. The record slip belongs to the Assessee and, therefore, the action of the AO of the searched persons recording that the same belongs to the Assessee cannot be faulted. However, the quest....
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....oes not make a difference sine the operation of the said decision has not been stayed. c. Hon'ble High Court of Delhi in the case of Refam Management Services Pvt. Ltd. (80 taxmann.com 281) has held that: It is apparent from the above that the only document seized during the search in question was a cheque book pertaining to the Assessee which reflected issue of cheques during the period August 2008 to October 2008, relevant to the AY 2009-10. The facts and the questions of law that arise in these appeals are similar to the facts and the controversy involved in RRJ Securities Ltd. (supra). Thus, for the reasons stated in RRJ Securities Ltd. (supra), the third question framed, whether the proceedings under Section 153C of the Act could be initiated against the Assessee, is answered in favour of the Assessee and against the Revenue. IV. Where the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years, the AO has no jurisdiction to make reassessment of that year under section 153C of the Act in absence of any incriminating document 1. Documents found and seized from the premises of M/s Prakash Industries pertaining to the....
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....eceding the search, was seized from the possession of the searched persons. As indicated above, in the present case, the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years and could not possibly reflect any undisclosed income. This being the undisputed position, no investigation was necessary. Thus, the provisions of section 153C, which are to enable an investigation in respect of the seized asset, could not be resorted to; the AO had no jurisdiction to make the reassessment under Section 153C of the Act. 7. As per proviso to section 153C of the Act Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: 8. By virtue of second proviso to Section 153A, the assessment/reassessment pending on the date of initiation of search abate. In the context of proceedings under Sect....
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....nts and available in public domain and are already available with the department. None of such document seized from the premises of Prakash industries is of nature which is already not available with the income tax department. 15. Furthermore, the Ld. AO while making additions not relied upon the material referred into the satisfaction note. The additions were made solely on the basis of the statements of the searched persons which were later-on retracted. a. Hon'ble High Court of Delhi in the case of Sunny Infraprojects Ltd. - ITA No. 502 of 2016 on the similar facts has held that: In that view of the matter, the Court is not answering the other aspects concerning the validity of the initiation of the proceedings under Section 153C of the Act and, in particular, whether the material which may be relevant to the year of the search could justify the re-opening of the assessment for the assessments of the earlier years as was done in the present case. The copy of the Satisfaction Note prepared by the AO of the Assessee refers to the "incriminating‟ documents/papers which were seized during the search and seizure action in the case of the Minda Group. These documents are....
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....the documents/assets seized could possibly reflect any undisclosed income has to be considered by the AO after examining the seized assets/documents handed over to him. It is only in cases where the seized documents/assets could possibly reflect any undisclosed income of the Assessee for the relevant assessment years, that further enquiry would be warranted in respect of those years. Whilst, it is not necessary for the AO to be satisfied that the assets/documents seized during search of another person reflect undisclosed income of an Assessee before commencing an enquiry under Section 153C of the Act, it would be impermissible for him to commence such enquiry if it is apparent that the documents/assets in question have no bearing on the income of the Assessee for the relevant assessment years. c. Hon'ble High Court of Delhi in the case of RRJ Securities Ltd. 62 taxmann.com 391 has held that: the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years and could not possibly reflect any undisclosed income. This being the undisputed position, no investigation was necessary. Thus, the provisions of section 153C, which are to enab....
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....reasons, the court is of the opinion that the Income-tax Appellate Tribunal's reasons are sound on the question of applicability of Kabul Chawla (supra) and the additions made in these circumstances could not have been sustained. g. Hon'ble High Court of Delhi in the case of PCIT Vs. DreamcityBuildwellPvt. Ltd. (417 ITR 617) has held that: In the present case, the Revenue is seeking to rely on three documents to justify the assumption of jurisdiction under Section 153 C of the Act against the Assessee. Two of them, viz., the licence issued to the Assessee by the DTCP and the letter issued by the DTCP permitting it to transfer such licence, have no relevance for the purposes of determining escapement of income of the Assessee for the AYs in question. Consequently, even if those two documents can be said to 'belong' to the Assessee they are not documents on the basis of which jurisdiction can be assumed by the AO under Section 153C of the Act. 15. Thus, ld. counsel submitted that the additions made in the impugned assessment orders are not based on incriminating seized material and therefore the ld. CIT(A) has rightly deleted the said addition. 16. On the other ha....
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....d to issue notices calling upon the searched person to furnish returns for the six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted or requisition was made. The other difference is that there is no broken period from the first day of April of the financial year in which the search took place or the requisition was made and ending with the date of search/requisition. Under Section 153A and the new scheme provided for, the AO is required to exercise the normal assessment powers in respect of the previous year in which the search took place." (Para 18) * Assessing Officer is bound to issue notices to the assessee to furnish returns for 6 Assessment years. Assessing Officer is empowered to assess or re-assess the total income including undisclosed income of the assessee "Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another signif....
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....ps having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be."(Para 20) * The Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the 'Total Income' of the assessee in whose case a search or requisition has been initiated "NOW THERE CAN BE CASES WHERE AT THE TIME WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB SECTION (1) OF SECTION 153A SAYS THAT SUCH PROCEEDINGS "SHALL ABATE". THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN ....
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....ENT ORDERS WHEN THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE."(PARA 21) "In the light of our discussion, we find it difficult to uphold the view of the Tribunal expressed in Para 9.6 of its order that since the returns of income filed by the assessee for all the six years under consideration before the search took place were processed under Section 143(1)(a) of the Act, the provisions of Section 153A cannot be invoked. The Assessing Officer has the power under Section 153A to make assessment for all the six years and compute the total income of the assessee, including the undisclosed income, notwithstanding that the assessee filed returns before the date of search which stood processed under Section 143(1) (a)."(Para 22) Highlights of the case of Filatex India Ltd., ITA No. 269/2014 and CM No. 10077/2014 dated 14.07.2014 of Hon'ble Delhi High Court (page 19 to 29 of paper book no. 1) The decision of Hon'ble Delhi High Court in the case of Anil Kumar Bhatia has been followed recently in another case of Filatex India Ltd. (269/2014 and CM No. 10077/2014) by Hon'ble Delhi High Court vide order dated 14-07-2014. The Question of law referred before Hon'ble Delhi High Cou....
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....ly made on the basis of evidence found during the course of the search or other post search material or information available with the Assessing Officer, related to the evidence found. Subsequent observation to the effect that the assessment under Section 153A should not be arbitrary or made without any relevance or nexus with the seized material, is basically clarificatory that the assessment under section 153A emanates and starts on the foundation of the search, which is the jurisdictional precondition." After that Hon'ble Delhi High Court has discussed the case of Anil Kumar Bhatia decided by Hon'ble Delhi High Court earlier and quoted from para 18 & 22 of this order (mentioned supra) and finely decided in para 4 of this order that after examination of section 153A the submission/contention of the appellant has no merit. Highlights of the case of Raj Kumar Arora, ITA No. 56/2011 dated 11.07.2014 of Hon'ble Allahabad High Court (Page No. 1 to 7 of Paper Book No. 2) The decision of Hon'ble Delhi High Court in the case of Anil Kumar Bhatia has been followed recently in another case of Raj Kumar Arora, ITA No. 56/2011 by Hon'ble Allahabad High Court vide order dated 11-07-2014....
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....sue and had not considered the matter on merits. For the reasons stated aforesaid, the Tribunal has committed an error in dismissing the appeal of the Revenue. We, accordingly, set aside the order of the Tribunal and remit the matter back to the Tribunal to reconsider the appeal of the Department afresh on merit. The question of law is answered accordingly." Highlights of the case of Canara Housing Development Company, ITA No. 38/2014 dated 25.07.2014 of Hon'ble Karnataka High Court(page 1 to 18 of paper book no. 1) - ii) The decision of Hon'ble Delhi High Court in the case of Anil Kumar Bhatia has been followed recently in another case of Canara Housing Development Company, ITA No. 38/2014 by Hon'ble Karnataka High Court vide order dated 25-07-2014. In this case the Hon'ble Court has also observed that the decision of Hon'ble special bench in the case of All Cargo Global Logistic Ltd. dated 06/07/2012 is not correct. The Question of law referred before Hon'ble Karnataka High Court in this case is as under:- "When once the proceedings under Section 153A of the Act is initiated, whether the Commissioner of Income Tax can invoke the power under Section 263 of the Act to rev....
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....ver to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person in accordance with the provisions of section 153A..............." 6. A bare perusal of the above provision indicates that where the AO is satisfied that any " books of account or document " apart from money, bullion or jewellery etc., seized from the person searched belong to a person other than the person searched u/s 153A, then such books of account or documents etc. shall be handed over to the AO having jurisdiction over such other person and the AO of such other person shall proceed to " assess or reassess income of such other person in accordance with the provisions of section 153A. thus, the effect of subsection (1) of section 153C is that where all the necessary ingredients of this sub-section are satisfied, the matter of making assessment or re-assessment goes back to section 153A. Since the assessment or reassessment of such other person has to be done in accordance with the provisions of section 153A, let us examine the prescription of the relevant parts of section 153A(1), which is as under :- "Not....
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....ing of the provisions of section 153A in section 153C of the Act for this purpose. Since section 153A specially provides for assessment or re-assessment of six-assessment years preceding the year of search, and in view of section 153C adopting the provisions of section 153A, there can be no question of restricting the jurisdiction of the AO to any lesser number of years for which the incriminating material is found. When we read section 153C in a holistic manner, it becomes evident that the triggering point for assuming jurisdiction on the person other than the person searched u/s 153C is the finding of any money, bullion, jewellery or books of account or document from the person searched. Once any money, bullion, jewllery or books of account or document seized or requisitioned from the person searched are found to be belonging to the other person, then, the assessment or reassessment of such other person is to be necessarily completed in terms of section 153A, which in no uncertain terms refers to six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Further, the use of the word 'shall....
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....s of account or other documents are found and for no other years. This was countered by the ld. DR. 10. To appreciate this contention raised on behalf of the assessee, it would be apt to note the prescription of sub-section (2) of section 153C, which runs as under:- "(2) where books of account or documents or assets seized or requisitioned as referred to in sub-section: (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) No return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) A return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub0section (2) section 143 has expired, or (c) Assessment or re-assessment, if any, has been made, Before the date of receiving the books of account or documents....
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....e foregoing discussion, we are of the considered opinion that the Ld. CIT (A) was not justified in annulling the proceedings due to the absence of any books of account or documents for the current year found from the persons searched, belonging to the assessee for the assessment year under consideration. The Revenue succeeds." Recently same view is also expressed by Hon'ble ITAT Banglore Bench in the case of NandiniDelux vs ACIT, 54 Taxmann.com 162 vide order dated 05.12.2014. The relevant portion of para 6.3.9 of the order is mentioned as below:- "Respectfully following the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing Development Co. (supra), we hold that once the assessment is reopened, the Assessing Officer can take note of the income disclosed in the earlier return, any undisclosed income found during the course of search and also any other income which is not disclosed in the earlier return of income OR which is not unearthed in the course of search under section 132 of the Act, in order to find out and determine what is the 'total income' of each year and then pass the order of assessment. The grounds of appeal raised by the as....
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....ns, cheque books and certified copy of resolutions pertaitig to the assessce. of certain companies, and, * No incriminating documents were found during the course of search action u's 132 of the Act, carried out at the premises of the appellant. From the above facts, it is clear that the addition made in assessment order u/s. 153C/153A of the Act dated 31.3.2015, are not based on any incriminating document. As such, facts of the appellant are- squarely covered by the ratio laid down by Hon'blc Jurisdictional High Court of Delhi, in the case of C1T Vs. Kabul Chawla (supra). Similarly, the statement recorded u/s 132(4) of the Act, is not a document, as has been held by the Hon'ble Jurisdictional High Court of Delhi in the case oi C.IT Vs. Raj Pal Bhatia [2011], 333 ITR 315 (Delhi). In view of the above, I agree with the arguments of the appellant and therefore, no addition can be made, in absence of any incriminating document. Accordingly, ground No. 3, is hereby allowed. As, I have already field (supra), while deciding in ground No. 3 that in absence of any incriminating documents found during search action u/s 132 and also assessment was not abated at the time of ....
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....or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub-section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person :] [Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Asses....
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....nt should belong to the other person who is found from the possession of the person searched. Once Assessing Officer with the searched person is satisfied that document belongs to the other person, then he has to passed the assessment order in accordance with the provision of Section 153A, i.e., for six assessment years from the date of handing over the documents or recording of the satisfaction. The satisfaction and the documents belonging to the assessee must have bearing under the determination of the total income of the appellant for six assessment years. The documents must be indicative of escapement of income of the total income declared by the assessee in its return of income must necessarily be affect from the findings in the seized documents. Now it is a well settled law in view of the various judgments cited above that the documents seized must be indicative of undisclosed income and must also pertains to the relevant assessment year. This principle has been upheld by the Hon'ble Supreme Court in the case of CIT vs. Singhad Technical Education Society, 84 taxman.com 90, wherein it was observed and held as under: "The Tribunal permitted this additional ground by giving a....