AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 259
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....m the persons searched. 10. For that the Learned Commissioner of Income Tax (Appeals) ought to have cancelled the assessment u/s 153C of the Act that was made for an Assessment Year beyond the stipulated period of six assessment years as laid down under the applicable provisions of Section 153A/153C of the Act by appreciating that the date of recording satisfaction note in the case of the 'other person' by the Assessing Officer of the 'searched person' must be construed as the date of handing over of documents relating to the other person even where the Assessing Officer is one and the same for both the 'searched person' and the 'other person'. 11. For that the assessment made under section 143(3) r.w.s 153C of the Act is bad in law as the Learned Assessing Officer did not comply with the relevant provisions r. the fourth proviso to section 153A(1) of the Act applicable to the appellant for the relevant assessment year and has failed to record his satisfaction to the effect that the income represented in the form of asset has escaped assessment for the subject AY 2012-13 which is falling beyond the six Assessment Years and forming p....
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....ncome- tax assessments u/s 153C/143(3) of the Act by orders dated 31.03.2022 after making addition/s on account of unexplained investment u/s 69 of the Act. 5. It is noted that the reasoning given by the AO for making the addition/s by way of unexplained investments were similar across both the AYs. Both the parties have also argued these appeals together. Hence, for the sake of convenience, and to avoid repetition of facts; we deem it fit to adjudicate each of the common issues across both AYs before us together. 6. The facts as noted by us are that, certain loose sheets were found and seized from the office premises of Jain Metal Group which was ID marked Annexure ANN/MS/JMG/LS/S-1. The AO is noted to have observed that these loose sheets contained the regular books & documents relating to the assessee. On the basis of these documents, the AO is noted to have drawn up Satisfaction Note dated 31-12-2021 wherein he observed that, he was satisfied that, the books and documents in his possession showed that Rs.63,25,34,760/- had escaped assessment in AY 2010-11 and that the same was represented in the form of 'asset' in AY 2010-11. The AO accordingly, issued notices u/s....
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....ccording to the AO therefore, under the first proviso to Section 153C of the Act, in the present case, the date of satisfaction note i.e. 31-12-2021 was to be deemed to be the date of search for computing both the period of six (6) assessment years and the extended ten (10) year block period. Explaining to us, the manner of identification of `relevant assessment year' for computing the ten (10) year block, the Ld. AR took us through Explanation (1) to Section 153A of the Act and the decisions of the Hon'ble Delhi High Court in the case of PCIT vs Ojjus Medicare (P) Ltd. (supra) and the Hon'ble Madras High Court in the case of A.R. Safiullah (WP(MD) No. 4327 of 2021) and, urged that, having regard to the deemed year of search [date of satisfaction note i.e. 31-12-2021 i.e. AY 2022-23], the block period of 10 AYs would be AYs 2022-23 to 2013-14. The Ld. AR accordingly contended that AY 2012-13 fell outside the net of `relevant assessment year' and thus the notice issued u/s 153C of the Act as well as the consequent order passed for AY 2012-13 deserves to be quashed. 9. The second challenge raised by the Ld. AR was to the usurpation of jurisdiction u/s 153C of the A....
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.... Supreme Court in the case of CIT vs Sinhgad Technical Education Society (397 ITR 344) and Hon'ble Delhi High Court in the case of CIT vs Kabul Chawla (380 ITR 573), which has since been affirmed by the Hon'ble Supreme Court in the case of PCIT vs Abhisar Buildwell Pvt. Ltd. (149 taxmann.com 399), urged that the additions made u/s 69 of the Act in relation to unexplained bank credits in the unabated AYs 2012-13 & 2013-14, in absence of incriminating material found in the course of search, deserves to be deleted. 12. Per contra, the Ld. CIT, DR, appearing for the Revenue, supported the action of the lower authorities. The Ld. CIT, DR relied upon Paras 7.10 & 7.11 of the order of the Ld. CIT(A) to counter the contention of the appellant that, the notice u/s 153C of the Act for AY 2012-13 was falling within the 10-year block period. He also contended that the AO had validly recorded his satisfaction note stating that income represented in form of asset had escaped assessment and therefore the notices issued u/s 153C of the Act for 'relevant assessment year' was in compliance with the condition precedent set out in fourth proviso to Section 153A of the Act. According....
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.... On verification of the balance sheets of M/s KSJ Infrastructure (P) Ltd., maintained in Tally for F.Y.2010-11 and F.Y.2011-12, the print outs of the same are seized vide Annexure-ANN/RR/JMG/LS/S-4, dated 25/02/2020, wherein an amount of Rs.63,25,34,760/- was found received as Share premium and the same was utilised for the purchase of shares during the F.Y 2009-10 . On verification of the seized material seized vide Annexure ANN/MS/JMG/LS/S1 from the Corporate Office of Jain Metal Group, it is found that the company has no operation during the FY 2009-10. However, has issued the 648934 shares and raised a share premium of Rs.63,25,34,760 without any substantial activity. Further on verification of the seized material seized vide Annexure ANN/MS/JMG/LS/S1 from the Corporate Office of Jain Metal Group it is seen that during the FY 2010-11, FY 11-12 ad FY 12-13 the assessee company has sold the unquoted equity shares. However, the assessee has not shown any income from the sale of the unquoted equity shares in the Profit and Loss Account of the respective Assessment Years. As on 31/03/2012, M/s Chin Purni Traders Private Limited had issued 648724 shares to M/s. Jack....
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....evant assessment year'. The Ld. CIT(A) however has observed that, by virtue of amendment made to Section 153C of the Act by Finance Act, 2017, it is the original date of search i.e. 25-02-2020 which is the relevant date for ascertaining the six assessment years and also the 'relevant assessment year' which could have been reopened by the AO. It is noted that, the coordinate Bench at Chennai in the case of Shri Bondalapati Shivaji Rao Vs DCIT in ITA No.1044/Chny/2023 has examined this particular issue in detail and, following the decision of Hon'ble Delhi High Court in the case of Pr.CIT Vs Ojjus Medicare (P) Ltd (supra), which was rendered after considering the amendment by Finance Act, 2017, this Tribunal held that, the first proviso to Section 153C of the Act shifts the relevant date from date of initiation of search, to the date of hand-over of books of seized material to the AO of the non-searched person (or in its absence to the date of satisfaction note) and the said date shall be commencement point for reckoning the six AYs'. The relevant findings are noted to be as follows :- 12. Reading of the main provision of Section 153C (as it stood during ....
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....much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of Section 153C(1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Sect....
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....to such date," 9. It is evident on a plain interpretation of section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party(whose premises are not searched and in respect of whom the specific provision under section 153-C was enacted. The revenue argued that the proviso [to section 153(c)(1)] is confined in its application to the question of abatement. 10. This Court is of the opinion that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials - of the search party, under section 132 - would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually "relate back" as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in ....
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....d block periods would have to be reckoned with reference to the date of search thus can neither be countenanced nor possibly accepted. That submission is clearly addressed contrary to a long and consistent line of precedents which have held to the contrary and which unequivocally accepted the point of commencement for the purposes of identifying the six or the "relevant assessment year" to be etched from the date of handover of documents, assets or things to the AO of the non-searched party. 16. Before us, the Revenue has urged that, subsequent to the amendment by Finance Act, 2017, the first proviso to Section 153C(1) is only relevant for the purposes of abatement of pending assessment or reassessment proceedings, which is mentioned in Section 153A(1) of the Act and that it cannot be viewed as the reference point from which the block of six AYs is to be computed. According to Ld. CIT DR therefore, the decisions cited by the assessee were of no relevance, post this amendment. We however are unable to countenance this argument of the Revenue as there is no such indication contained in Section 153C of the Act that, the first proviso is only concerned with abatement or non-ab....
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....but also to regulate the date from which the six-year period or the "relevant assessment year" insofar as the non-searched entity is concerned, is to be reckoned. This position has been consistently followed not just by this Court but also by the Supreme Court in Commissioner of Income Tax 14 v. Jasjit Singh [2023] SCC Online SC 1265. The relevant paragraphs of the said decision are reproduced hereinbelow: - "8. In SSP Aviation (supra) the High Court inter alia reasoned as follows: - "14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction....
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....(to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third party assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153-C supports the interpretation which this Court adopts." 18. Insofar as the present appeal is concerned, on facts we find that while it is true that AO of the searched person as well as that of the respondent assessee was the same, undisputedly while in the case of the former, satisfaction was recorded on 29 March 2019, the AO in the case of the respondent assessee drew up a Satisfaction Note on 15 May 2019. 19. In order to appreciate the essential legislative objective underlying the handover of material and formation of opinion by the AO of the non-searched entity, we would have t....
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.... construed as the date when the satisfaction is formed by the said AO with respect to such other person. In our considered view, even though there may not have been an actual exchange of material unearthed in the course of the search between two separate authorities, it would be the date when the AO records its satisfaction with respect to the non-searched entity which would be of seminal importance and constitute the bedrock for commencement of action under Section 153C. 17. As far as the reliance placed by Revenue on the decision rendered by Single Judge Bench of Hon'ble Madras High Court in the case of R.K.M.Powergen (P) Ltd (supra) is concerned, it is noted that the Hon'ble Single Judge while disagreeing with the view taken in Sarwar Agency (supra) as well as RRJ Securities (supra) didn't take cognizance of the fact that the aforesaid decisions were rendered following the decision in the case of SSP Aviation (supra) which has since been affirmed by the Hon'ble Supreme Court in Jasjit Singh (supra) by holding as under :- "9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater....
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....on (for no fault of his) and unlike the searched person, whose assessment shall be completed in a time bound manner, the non-searched person would be required to preserve the records virtually for eternity. According to us, such disastrous and harsh consequence cannot be the intent of the Legislature and in that view of the matter the line of argument taken by the Revenue is rejected. 19. Moreover, we note that, the Hon'ble Delhi High Court in the case of Pr.CIT Vs Ojjus Medicare (P) Ltd (supra) at Paras 51 to 84 has in detail analyzed the entire statutory framework of Section 153C of the Act from its introduction to the amendment by Finance Act, 2017 and its grandfathering by the Finance Act, 2021 and the relevant decisions on this subject including the decisions of Sarwar Agency Pvt. Ltd. (supra) & RKM Powergen (P) Ltd. (supra) relied upon by the Revenue. The Hon'ble High Court is noted to have accordingly concluded that, even post the amendment by Finance Act, 2017, the first proviso to section 153C shifts the relevant date from the date of initiation of search or a requisition made, to the date of hand-over of books of account or documents and assets seized to ....
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....spective sides had addressed submissions based on the assumption that it would be the date of issuance of the Satisfaction Note by the AO of the non-searched person and in the case of nonavailability of such a note, the date of issuance of the section 153C notices which would be pertinent for the purposes of the First Proviso to section 153C. 87. Assuming, therefore, that the handover of material gathered in the course of the search and pertaining to the non-searched person occurred between 01 April 2021 to 31 March 2022, the same would essentially constitute FY 2021-22 as being the previous year of search for the purposes of the non-searched entity. As a necessary corollary, the relevant AY would become AY 2022-23. AY 2022-23 would thus constitute the starting point for the purposes of identifying the six years which are spoken of in section 153C. The six AYs' are envisaged to be those which immediately precede the AY so identified with reference to the previous year of search. It would thus lead us to conclude that it would be the six AYs' immediately preceding AY 2022-23 which could have formed the basis for initiation of action under section 153C. Consequently,....
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....y the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under section 153A." 21. Following the decisions (supra), we hold that the date of receiving the books of account/documents/assets from the AO of the assessee was to be construed as the date of search, in terms of the first proviso to Section 153C of the Act. 16. Following the above, we therefore hold that, in the given facts before us, the date of hand-over of seized material to the AO of the assessee was to be construed as the deemed date of search for ascertaining the six/ten year period which could be reopened u/s 153C of the Act. In the present case, it has been agreed that, the date of satisfaction note may be regarded as the date of receipt of books of accounts/ documents/ assets which is 31-12-2021 (AY 2022-23). Accordingly, ordinarily six AYs 2016-17 to 2021-22 could have been reopened by the AO u/s 153C of the Act. However, the question before us is to identify the 'relevant assessment year' for the purposes of computing the ten year block. It is note....
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....tute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department. 10. In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013- 14. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year. In other words, search assessment year has to be including in the latter case. I....
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....essment years. In order to adjudicate this legal issue, let us have a look at the law relevant to this issue. It is noted that, the fourth proviso of Section 153A of the Act which was inserted by the Finance Act, 2017 with effect from 01.04.2017, enabled an AO of a searched person to issue notices u/s 153A of the Act for "relevant assessment year or years" in terms of Explanation 1 of the fourth proviso to Section 153A of the Act i.e. assessment years beyond the six (6) assessment years till tenth (10) assessment year preceding the searched assessment year (i.e. 7th to 10th AY's preceding the searched AY), provided the AO satisfies the essential conditions specified therein. The relevant portion of Section 153A of the Act i.e., fourth proviso to Section 153A of the Act, which has a bearing on the controversy in hand, is being reproduced below :- "Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which ha....
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.... of notices u/s. 153C for AYs 2012-13 & 2013-14 i.e., existence/possession of undisclosed/unaccounted 'assets' valued at Rs. 50 lakhs or more, as defined in Explanation 2 to fourth proviso of Section 153A qua the assessee qua the 7th to 10th AY un-earthed from search, without which the AO cannot issue notice u/s 153C of the Act for these extended AYs. 22. Before we proceed to examine the existence of the `jurisdictional fact' in this specific case, we gainfully refer to the decision of this Tribunal at Guwahati in the case of ACIT Vs Fortune Vanijya Pvt Ltd (ITA No. 21/Gau/2021) dated 10.12.2021 wherein the facts involved are noted to be similar to the present case. In the decided case, [Fortune Vanijya Pvt Ltd supra] the AO had seized regular books and ledgers of the assessee from the premises of third person (searched person) and referring to these ledgers, the AO recorded his satisfaction note that, it had a bearing on the determination of total income of the assessee for the 7th AY (relevant assessment year) and therefore reopened the same u/s 153C read with fourth proviso to Section 153A of the Act. The AO completed the assessment u/s 153C/143(3) wherein the ban....
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....ct in issue' or 'adjudicatory fact'. On the other hand if the AO did not have in his possession the jurisdictional fact, then he is debarred from invoking/issuance of notice u/s 153C/153A of the Act for the 7th- 10th AY preceding the search. 19. Having held so, let us examine the next argument of Shri Dudhwewala that, the Parliament by specifying the jurisdictional fact as 'undisclosed asset' valued Rs. 50 Lakhs or more, has impliedly excluded other items of income viz., liabilities/credit, unexplained expenditure etc. A reading of the fourth proviso to section 153A of the Act and Explanation (2) to fourth proviso to section 153A of the Act which defines 'Asset' for the purpose of fourth proviso to section 153A of the Act, clarify the intention of the Parliament to permit the AO to enlarge the assessment u/s. 153A after search u/s. 132 of the Act beyond six assessment years to ten assessment years preceding the searched assessment year, provided the AO has in his possession the essential jurisdictional fact i.e. "undisclosed/unaccounted asset" valued Rs 50 lakhs or more of the assessee discovered during search pertaining to 7th to 10th Assessmen....
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....iv) Deposit in bank. Hence, where search action u/s 132 of the Act reveals that, (i) the assessee owns an undisclosed immovable property, or (ii) information has been gathered which shows that the assessee had given loans or advances outside the regular books or (iii) search has revealed unaccounted investments held by assessee in shares & securities, which do not form part of regular books of accounts or (iv) if undisclosed bank accounts having deposits, have been found in the course of search, pertaining to the 7th-10th AY preceding the search; then having in his possession this jurisdictional fact, the AO may assume jurisdiction under the fourth proviso to Section 153A of the Act for the relevant seventh to tenth assessment year preceding the searched assessment year. Hence, the most important aspect is that, these 'assets' must have been found to be undisclosed or unaccounted, in the regular books of account maintained by the assessee, and discovered during the course of search, which otherwise would not have seen the light of the day but for the search, resulting in escapement of income. 22. It is to be kept in mind that, the term 'investment held in share....
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....mentioned therein formed part of regular books of accounts. We find ourselves in agreement with him, that the contents of these seized material were neither incriminating in nature nor did it in any manner reveal income represented in form of 'asset' which had escaped assessment. 28. It is also not the AO's case that these investments in shares found mentioned in the seized material, were unaccounted or their source of acquisition was unexplained so as to constitute 'asset' escaping assessment. Rather the AO stated that these documents have a bearing on the total 'income' of the assessee for assuming jurisdiction u/s 153C of the Act, which clearly does not meet the essential condition precedent in the fourth proviso to Section 153A of the Act. From this assertion/averment/admission, it is clear that AO did not have in his possession the jurisdictional fact [on or prior 05.12.2019] to invoke and issue notice u/s. 153C of the Act. The extended jurisdiction to invoke/assess 7 th - 10th AY is conferred on the AO by authority of law and the AO cannot confer to himself the jurisdiction in a casual manner by stating/substituting the specific jurisdicti....
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....closed/unaccounted assets valued as Rs. 50 lacs and more, qua the assessee qua the assessment year (7th to 10th year) preceding the searched assessment year, and thereby state clearly as to how the case of assessee was being brought under the 4th proviso of section 153A read with explanation 2. Only upon valid assumption of jurisdiction, the AO could have proceeded against the assessee for assessment of escaped/undisclosed assets. 19. As a consequence, we have no hesitation in holding that the AO did not have in his charge, any "Jurisdictional fact "(on or prior to 5-12- 2019) to invoke and issue notice u/s 153C of the Act to the respondent assessee. The extended jurisdiction to invoke/assess 7th to 10th AY is conferred on the AO by authority of law and the AO cannot confer to himself the jurisdiction in a casual manner by stating/substituting the specific jurisdictional fact. It is imperative that before issuance of notice u/s 153C (for the extended period) the AO sets out his objective satisfaction from the seized material, the details of the specified/undisclosed assets in possession qua the assessee for AY 2011-12 valued at Rs. 50 lacs or more. If this essential requir....
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....s the relevant material or evidence unearthed in the course of search basis which the AO stated that the income represented in the form of asset had escaped assessment. 25. It is also noted that, the AO did not refer to any incriminating seized material found in the course of search, basis which he recorded his concluding satisfaction that income represented in the form of asset escaped assessment. Instead, we find that, the AO had simply made a sweeping remark that, these regular books of accounts in his possession revealed that income represented in the form of asset escaped assessment in AY 2010-11. This remark so recorded is ex-facie noted to be arbitrary and without any basis. Also going by AO's own averment, he specifically had recorded his satisfaction that income represented in the form of 'asset' had escaped assessment only in AY 2010-11. Clearly therefore, the AO has nowhere expressed his satisfaction that any income represented in the form of 'asset' had escaped assessment qua AYs 2012- 13 & 2013-14 as well. 26. Having regard to the foregoing and following the decision (supra), we accordingly hold that, the seized material ANN/MS/JMG/LS/S-1 in q....
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....t but the assessment is pending. For determining the abated/unabated assessment, the date of search, is significant since as per second proviso to Section 153A of the Act, any assessment year falling within the period of six assessment years of an assessee who has been subjected to search are pending before the AO on the date of search, then the assessment for those years need to be treated as abated and the AO is at liberty to frame assessment or reassessment. In other words, it is open to the AO to complete the assessment for the abated AYs by verifying the contents of the original return as well as the income unearthed out of the incriminating material/documents seized from search conducted on the assessee. However, on the date of search, assessment years which are not pending before the AO [i.e. in case where the searched assessee's assessments are completed u/s. 143(3) or 148 or 153A/153C of the Act or if the mandatory scrutiny assessment notices u/s. 143(2) of the Act has become time barred], then those assessment years to be treated as unabated assessments and by virtue of the second proviso to section 153A(1) of the Act, assessment u/s. 153A/153C has to be essentially b....
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....rt, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred. 19. We, thus, find that the ITAT rightly permitted this additional ground to be raised and correctly dealt with the same ground on merits as well. Order of the High Court affirming this view of the Tribunal is, therefore, without any blemish. Before us, it was argued by the respondent that notice in respect of the Assessment Years 2000-01 and 2001-02 was time barred. However, in view of our aforementioned findings, it is not necessary to enter into this controversy." 30. We also gainfully refer to the decision of the Hon'ble Supreme Court in the case of Pr. CIT v. Abhisar Buildwell (P.) Ltd. (supra) wherein it was held as under:- "In case where no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessment, no addition can be made by the AO in absence of any incriminating material found during the course of search u/s 132 or requis....
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....s impugned in this appeal was based on or made with reference to any incriminating document found in the course of search which would justify the additions made u/s 69 of the Act. 33. On perusal of the assessment orders impugned before us, it is noted that the document marked as ANN/MS/JMG/LS/S-1 were the regular books of accounts of the assessee. This fact has also been acknowledged by the AO in his assessment order. These documents are noted to contain day book/ ledger taken from the books of accounts of the assessee. The Ld. AR showed us that, since the assessee had raised capital in FY 2009-10, appropriate entries in its books were routed through journal day book which was part of the assessee's regular books of account. Likewise, in relation to the investments which were sold at cost, appropriate entries were passed in its books of account maintained in the course of regular business and the bank ledger reflected the payments received through banking channel upon sale of investments, which were subsequently deployed by way of loans & advances. Having examined the same, we find these documents were print-outs of the day books from the regular books maintained electronica....
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....s. 153C read with Section 153A of the Act and that whether the income which the AO assessed in the order impugned in this appeal was based on or made with reference to any incriminating document found in the course of search and therefore would justify the addition made u/s 68 of the Act. 46. It was pointed out by the Ld. AR, Shri Dudhwewala that the documents referred at Pages 61 to 69 of the SST-01 were the journal ledger and bank ledger of the assessee forming part of the assessee's regular books for the FY 2010-11. This fact has also been acknowledged by the AO in his satisfaction note. The Ld. AR submitted that since the assessee had sold its investments; appropriate entries in its books were routed through journal day book which was part of the assessee's books of account maintained in the course of regular business and the bank ledger reflected the payments received through banking channel upon sale of investments. Having examined the same, we also find it to be print-outs of the day books from the regular books maintained electronically by the assessee. On examination of the entries in the document, it is noted that the journal ledger inter alia contains jo....
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....o. Some common forms of incriminating material for instance are, where the search action u/s 132 of the Act reveals information that the assets found from the possession of the assessee in the form of land, building, jewellery, deposits or other valuable assets etc. do not corroborate with his returned income and/or there is a material difference in the actual valuation of such assets and the value declared in the books of accounts. Further, incriminating evidence may also constitute of information, tangible or intangible, which suggests or leads to an inference that the assessee is carrying out certain activities outside books of accounts which is not disclosed to the Department. Incriminating material also comprises of document or evidence found in the course of search which demonstrates or proves that what is apparent is not real or what is real is not apparent. In other words, if an assessee has recorded transactions in his books or other documents maintained in the ordinary course then in order to hold the material or evidence found in the course of search to be incriminating in nature, the seized document should lead to the conclusion that the entries made in the books of the....
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....llowed." 35. We note that the above findings has since been affirmed by the Hon'ble Gauhati High Court (supra), by observing as under: "18. In this case at hand, the ITAT has observed that the satisfaction note reveals that, the AO had referred to the pages 61 to 69 of seized material bearing identification mark SST-01 for assuming jurisdiction u/s 153C read with the fourth proviso to section 153A of the Act. The ITAT has also observed that the satisfaction note of the AO does not reveal any 'asset' which had escaped assessment. On the other hand, the AO himself had observed that these pages, 61 to 69, comprise journal ledger and bank ledger, which clearly indicates that the assessee had liquidated his investments in shares and the proceeds thereof were received in bank. These ledgers were in form of printouts from regular books of accounts of the assessee maintained in computerized system and all the entries mentioned therein forms part of regular books of accounts. The AO was not satisfied with the explanation of one of the Directors of Sagar Group whose statement was recorded u/s 132(4) of the Act. As the satisfaction note scrutinized by the CITA as well ....
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....4) involving similar facts and circumstances as involved in the present case. In the decided case, search was conducted u/s 132 of the Act upon Jagat Group wherein documents comprising of trial balance and balance sheet of the assessee company was found & seized by the Revenue. According to AO, since these documents pertained to the assessee, he proceeded to reopen the assessments of the assessee u/s 153C of the Act and added the share application monies received by the assessee u/s 68 of the Act. On appeal, the assessee challenged the validity of jurisdiction exercised by the AO u/s 153C of the Act on several grounds inter alia including that these seized documents cannot be said to be incriminating to justify additions made u/s 68 of the Act in the unabated assessments of the assessee. The Hon'ble High Court found merit in this plea of the assessee and accordingly upheld the orders of the lower authorities deleting the impugned additions by observing as under: "32. In the present case, the two seized documents referred to in the Satisfaction Note in the case of each Assessee are the trial balance and balance sheet for a period of five months in 2010. In the first pla....