TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1746
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....2, (in short CIT(A)) vide order u/s 250 dt.04.02.2025, is contrary to the facts of the case and the provisions of law. 2. The Ld.CIT(A) erred in holding that the satisfaction note dt. 06.09.2018 was recorded in the capacity of the AO of the searched person, despite the fact that the AO had already recorded a satisfaction note on dt. 03.09.2018 in the capacity of the AO of the other person. Any subsequent satisfaction note would also be in the same capacity, failing to meet the statutory requirements u/s 153C and vitiating the assessment. 3. The Ld.CIT(A) failed to appreciate that the satisfaction note dt. 06.09.2018 was not recorded in the capacity of the AO of the searched person, as the assessee's case had already been centralized u/s 127 of IT Act on dt. 25.06.2018 as by this date the AO had assumed jurisdiction over the assessee. This procedural lapse violates the mandatory requirements of section 153C rendering the assessment null and void ab initio. 4. The Ld.CIT(A) failed to take note and consider that a portion of the on-money received was utilized towards unrecorded expenditure, which is evident from the records. By confirming the entire on-money as liable for tax, t....
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....ssessment proceedings, the Assessing Officer ("the AO"), by taking note of relevant statement recorded from the assessee and other incriminating material found during the course of search, including MOU between the parties, made addition of Rs. 9,59,96,700/- and Rs. 1,62,91,000/- for A.Y.2016-17 and 2017-18 respectively towards on-money received for sale of flats and admitted by the assessee in the statement recorded during the course of search. 4. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has challenged the notice issued by the AO u/s 153C of the Act and consequent assessment order passed by the AO for the A.Y.2016-17 and 2017-18 and argued that the notice issued by the AO for both the assessment years on the basis of satisfaction note recorded on 03.09.2018 and 06.09.2018 is bad in law and liable to be quashed, because, there is no valid satisfaction recorded as required u/s 153A of the Act by the AO of the searched person before transmission of relevant documents belongs to the assessee to the AO of the other person. The assessee had also challenged the additions made by the AO towards purp....
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....nd therefore, there is no question of regular overhead expenses like any other business activity and the arguments of the assessee, that on- money is not income and only profit to be estimated is devoid of merit and thus, rejected. 6. Aggrieved by the order of the Ld.CIT(A), the assessee is now in appeal before the Tribunal. 7. The main plank of the argument of the Ld.AR is that, in this matter, satisfaction in the case of other person (assessee) was recorded on 03.09.2018, whereas, according to the remand report submitted by the AO in the first appellate proceedings, satisfaction in the case of the searched person was recorded on 06.09.2018. Based on the decision of Hon'ble Apex Court in the case of Super Malls (P.) Ltd. Vs. Principal Commissioner of Income Tax [2020] 115 taxmann.com 105 (SC) and Hon'ble Delhi High Court in the case of Ganpati Fincap Services Pvt. Ltd. & Ors. Vs. Commissioner of Income Tax & Ors., the view taken by coordinate Bench of Delhi Tribunal in the case of M/s Ambawatta Buildwell P.Ltd. Vs. DCIT, he argued that, where the Assessing Officer of the searched person is different from the Assessing Officer of the other person, satisfaction must be recorded by....
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....Officer of the searched person, satisfaction recorded on 06.09.2018 satisfies the legal requirement, that the material / document recovered during the search do not belong to the searched person and it belongs to the other person (assessee). Stating so, he urged the Bench to ignore satisfaction dated 03.09.2018 and in as much as satisfaction recorded on 06.09.2018 satisfies the legal requirement. It may be taken into consideration, in which event the argument of the Ld.AR falls to ground. 10. The Ld.DR further submitted that there is no merit in the arguments of the assessee for estimation of profit on on-money received for sale of flats, because, the assessee himself has admitted total income of Rs. 11,22,10,700/- towards on-money received for sale of property in the statement recorded during the course of search. Further, going by the MOU between the parties, the developer has incurred all expenses for development of the property and the assessee has received only developed flats. Therefore, the assessee incurring various expenditure against sale receipts is devoid of merit and cannot be accepted. The Ld.CIT(A), after considering relevant facts has rightly rejected the claim of ....
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....in S.No.4 belongs to the person referred in in S.No.5 has been received and placed on record, no such document is to be found and such a document has never seen the light of the day in as much as the satisfaction recorded on 03.09.2018 was attributed to the Assessing Officer of the other person (assessee). As we have already noted above, nowhere, in the satisfaction recorded on 06.09.2018, the Assessing Officer, recorded the reasons as to how he reached a conclusion that the document / loose sheets recovered in the search do not belong to the searched person. Unless this satisfaction is reached by the Assessing Officer, neither the question of transmitting the documents to the Assessing Officer of the other person(assessee) nor the Assessing Officer of the other person recording a satisfaction that such documents are attributable to the other person (assessee) to proceed u/s 153C of the Act. 14. On perusal of the judicial view referred to above make the things very clear. In case of the Assessing Officer of the searched person is different from the Assessing Officer of the other person, then satisfaction of the Assessing Officer of the searched person that the recovered documents ....
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....ction recorded on 06.09.2018 inspires confidence in our mind to believe that it is consequence of the satisfaction recorded on 03.09.2018, but it does not assume the status of satisfaction recorded by the Assessing Officer of the searched person, because, nowhere, it is recorded that the documents do not belong to the searched person and on the other hand, it says that the satisfaction of the Assessing Officer of the searched person was already received and placed on record. This clearly shows that the satisfaction of the searched person is something foreign to this satisfaction recorded on 06.09.2018, it forms part of record, but, had never seen the light of the day. 16. On this factual finding, we conclude that there is no legal and valid satisfaction recorded by the Assessing Officer of the searched persons, without which, the satisfaction recorded on 03.09.2018 has no jurisdictional foundation and therefore, the entire edifies of the Revenue gets collapsed. We, therefore, accept the contention of the assessee and hold that for want of jurisdiction invested in the Assessing Officer in his capacity as Assessing Officer of the other person (assessee), the satisfaction dated 03.09....