TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 909
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....stated, the facts of the case are that search and seizure operation was carried out at the premises of Shri Shiv Kumar Garg, Shri Jai Bhagwan Garg and Reliable Realtech Pvt Ltd. At this stage, it is made clear that no search was conducted at the 4th appellant i.e. Decent Realtech Pvt Ltd having registered office at BN-57, East Shalimar Bagh, New Delhi-110088. 5. Pursuant to search, notices u/s 153A of the Income-tax Act, 1961 [the Act, for short] was issued and served upon the assessee, in response to which, the assessees filed their return of income as under: Dated Declared income Decent Realtech Pvt Ltd 12.09.2009 Rs. 7,681/- Reliable Realtech Pvt Ltd 29.09.2009 NIL Shri Shiv Kumar Garg 08.05.2009 Rs. 9,27,787/- Jai Bhagwan Garg 28.07.2009 Rs. 4,90,756/- 6. Assessment of Decent Realtech Pvt Ltd was framed on 30.03.2016 wherein addition of Rs. 33 crores was made on account of sale of shares. Assessment of Reliable Realtech Pvt Ltd was completed on 30.03.2016 wherein addition of Rs. 20,08,77,853/- was made on account of sale of shares. Shri Shiv Kumar Garg was assessed on 29.03.2016 wherein addition of Rs. 13.20 crores was made on account of transfer of 2000....
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....ing the impugned assessment order null and void. 13. In furtherance of the appreciation of underlying facts, it would be pertinent to refer to the following observations of the ld. CIT(A): "6.1 A search and seizure action u/s 132 of the Act was carried out in the cases of the above appellants on 05.02.2014. M/s Decent Realtech Pvt Ltd (hereafter referred as M/s Decent) and M/s Reliable Realtech Pvt Ltd (here after referred as M/s Reliable), group concerns having common directors, have purchased land measuring 25.3 acres (13.425 acre belonging to M/s Decent and 9.67 acres belonging to M/s Reliable) entered into a collaboration and got license as per letter of Intent dated 26.03.2008 from the Director, Town and Country Planning, Government of Haryana to develop a residential housing project (Antriksh Heights) in sector -84, Gurgaon jointly. Shri Jai Bhagwan Garg and Shri Shiv Kumar Garg were the directors/ share holders of M/s Decent and M/s Reliable. Shri Rajbir Singh Goyat and Shri Rakesh Yadav, directors of M/s Sanman Infrastructure Pvt Ltd (hereafter referred as M/s Sanman) and partners of M/s Antriksh Engineers Corporation (hereafter referred as M/s Antriksh) were also covere....
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....OU. Thus there were total cash receipts of Rs. 5.75 crore in case of M/s Reliable. Further from the perusal of page no. 69-71 of Annexure A-5 (supra), it was found that M/s Sanman has made payment of Rs. 38.50 crore (including cash payments of Rs. 2.86 crore) to M/s Decent during the year under consideration. Similarly from the perusal of page no. 69-71 of Annexure A-5 (supra), it was found that M/s Antriksh has made payment of Rs. 26 crore (including cash payments of Rs. 6.25 crore) to M/s Reliable during the year under consideration. Thus it was found that 50% of development rights in Antriksh Heights Project were transferred by M/s Decent and M/s Reliable to M/s Sanman and M/s Antriksh through the above MOUs. Various terms and condition of the said MOU have been complied with as discussed above. Thus the said MOUs have been acted upon by both the parties to effect sale of development rights in the said project. 6.5. However these amounts have been reflected on the liability side of balance sheets of M/s Decent and M/s Reliable under the head current liabilities (advances). Further it has been discussed by the AO in the assessment order that a separate bank account was opened i....
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....from the perusal of books of accounts of M/s Reliable, it was noted that the entire project was being shown in the books of M/s Reliable in-spite of the fact that sale of 50% of project rights in favour of M/s Sanman and M/s Antriksh, thus M/s Decent and M/s Reliable have not recognized any profit from the sale of 50% of the project [development rights] in their books of account by adopting colorable device." 14. The alleged incriminating material which is the very basis/foundation of the assessments under consideration was found from the premises of Shri Rajbir Singh Goyat which has been categorically accepted by the lower authorities which means that these incriminating material were not found from the premises of Reliable Realtech Pvt Ltd, Shiv Kumar Garg and Jai Bhagwan Garg, whose premises were extensively searched. 15. The Hon'ble Supreme Court in the case of Abhisar Buildwell [supra] has set at rest the entire quarrel revolving around the assessments devoid of incriminating material. The relevant findings read as under: "In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under ....
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....l income even in case of completed/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was available at the time of original assessment does not require any interference. Under the circumstances, the aforesaid appeals preferred by the assessee - M/s Kesarwani Zarda Bhandar, Sahson, Allahabad deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, no costs." 16. Even if, for the sake of arguments, it is accepted that the documents found from the premises of Shri Rajbir Singh Goyat were incriminating material pertaining to/belonging to Reliable Realtech Pvt Ltd, Shri Shiv Kumar Garg and Jai Bhagwan Garg, even then, could not have triggered the additions u/s 153A of the Act in the hands of the three assessees and, at the most, provisions of section 153C of the Act would have been applied, as done in the case of Decent Realtech Pvt Ltd. 17. But by any stretch of imagination, the impugned/alleged incrim....
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....ssing Officer/s. The contents of said satisfaction note are the only item/material to be looked at in t regard and respondent cannot seek to augment, supplement or add materials recorded to support the claim that incriminating material H been found. Further respondent cannot refer to any other documents material to establish such a claim. We find support in (i) Ananta Landmarks Pvt. Ltd. (Supra) and (ii) Jainam Investments (Supra), where the Count have held that the question of the Assessing Officer's jurisdiction undertake proceedings has to be tested/examined only on the basis reasons recorded at the time of issuing a notice under Section 148 of the Act seeking to reopen an assessment. These reasons cannot be improve upon and/or supplemented much less substituted by affidavit and/or or submission;" 24. Similarly, the Hon'ble High Court of Bombay in the case of Ananta Landmark Pvt Ltd 323 CTR 138 has, inter alia, considered the following: "As regards ground No. (ii) that it is subsequent to the assessment proceedings it was noticed that the assessee had wrongly claimed the deduction under section 57 of the Act and that it went unnoticed by the Assessing Officer during t....
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....annot be held that the documents do not belong to the searched person and once it could not be held so, then the provisions of section 153C of the Act cannot be invoked as the Assessing Officer of the searched person must be satisfied that the seized material does not belong to the person referred to in section 153A of the Act i.e. searched person. 28. The Hon'ble Delhi High Court in the case of PCIT Vs. N.S. Software 403 ITR 259 has held as under: "23. This court concurs with the impugned order. In the present case, the Ld. AO has not explained steps taken by him to determine that the seized material belonged to the Assessee Firm. The satisfaction note has been prepared in a standard mechanical format and it does not provide any details about the books of accounts which allegedly belong to the Assessee Firm. Most importantly, a satisfaction note was not recorded by the AO of Sh. Narendra Kumar from whose premises the documents were seized. In light of the decision in Nikki Drugs and Chemicals Pvt. Ltd. it is now a settled proposition of law that even if the Assessing Officer for the person from whose premises the documents are seized is the same as the Assessing Officer for....