TaxTMI 
TaxTMI 
2025 (7) TMI 302
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.... 2. First we take up IT(SS)A No.36/PUN/2022 filed by the assessee and IT(SS)A No.51/PUN/2022 filed by the Revenue as the lead case. Facts of the case, in brief, are that the assessee is a private limited company engaged in the business of management of project for building of networks and turnkey solutions in telecom, allied project including HR support. It filed its original return of income u/s 139 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') on 24.09.2008 declaring total income of Rs. 26,80,587/-. A search and seizure action u/s 132 of the Act was conducted in the Ashoka Group of cases on 20.04.2010 during which the case of the assessee was covered u/s 133A of the Act. A notice u/s 153C of the Act was issued to the assessee on 17.09.2012 which was served on the assessee by speed post. The assessee vide letter dated 29.09.2012 requested for extension by one month to submit the return. However, the Assessing Officer granted the extension up to 23.10.2012. Despite such extension, no return of income was filed by the assessee. Subsequently, the Assessing Officer issued notice u/s 142(1) of the Act dated 27.11.2012 which was served on the assessee by speed post....
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....ed that during the course of survey in the case of the assessee it was found that M/s. Ashoka Buildcon Ltd. has debited expenses for execution of sub-contracts awarded to M/s. Four Pillar Communication Pvt. Ltd, the details of which are as under: F.Y. 2008-09 - Rs. 7.45 Crores F.Y. 2009-10 - Rs. 2.27 Crores Total - Rs. 9.72 Crores 5. The Assessing Officer further noted that an unconnected search had been conducted in case of M/s. Sunil Hi-tech Engineering Ltd., Nagpur by issuing commission to DDI(Inv.), Mumbai. In the said operation it was found that M/s. Sunil Hi-tech Engineering Ltd. had awarded contracts to M/s. Four Pillars Communication Pvt. Ltd. During the course of survey carried out in the case of the assessee on 22.12.2009 a statement was recorded u/s 133A of the Act by ADIT (Inv.), Unit-IX, Mumbai wherein the Managing Director Mr. Kailash Sharma in reply to question No.2 of the statement recorded stated as under: "The payment was made by Sunil Hi Tech Engg Ltd Nagpur to the companies Four Pillar Communication P Ltd and M.s Indi Infra and Elements P Ltd with an intention to get cash in return for the payment made. The cash was partly ....
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....di Infra & Elements P Ltd by providing it with cash amounting to Rs. 36,14,557/-. As per the discussion above and assessee's own admission, the assessee is held to have received cheques for Rs. 36,14,557/-, for which it has generated equivalent cash by debiting its books with bogus expenditure on account of labour job / job work. The amount of Rs. 36,14,557/- is therefore treated as Unexplained expenditure and held as income under section 69C of the I.T. Act 1961. Penalty proceedings u/s 271(1)(c) of the I.T. Act 1961 is initiated." 8. The Assessing Officer similarly in absence of any supporting evidence, disallowed an amount of Rs. 124,47,580/- under the head 'Transportation charges' and made addition of Rs. 45,30,000/- u/s 68 of the Act on account of share application money received for which the assessee could not substantiate the identity and capacity of the share applicants / creditors and genuineness of the transaction. The Assessing Officer accordingly determined the total income of the assessee at Rs. 2,32,72,724/-. 9. Before the Ld. CIT(A) the assessee apart from challenging the addition on merit, challenged the validity of assessment on the ground that the notic....
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....provisions of section 153C of the Act and thereafter, the AO of the third party shall proceed against such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, after recording the satisfaction in this regard. Therefore, the AO gets the jurisdiction u/s 153C but thereafter, the notice as well as the assessment is to be done in accordance with the provisions of section 153A of the Act However, to distinguish the same, in such cases, generally AO makes reference of both sections in the notice. In this regard, it is relevant to mention here that the Hon'ble ITAT, Bangalore Bench has observed that in the case of Rajesh Kumar. v. ACIT (2019) 175 ITD 734 (Bang) (Trib.) that in such cases, the notice has to be issued by Assessing Officer to other person u/s 153A of the Act although such Assessing Officer gets jurisdiction u/s 153C of the Act. Thus in my considered view, the typographical omission made by the AO in the notice by not mentioning the 153C section does not invalidate the assessment proceedings initiated u/s 153C r.w.s. 153A of the Act. Further, all the aspects were followed by the AO by record....
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....accommodation entry. In view of the above background, it was incorrect to the part of the appellant to claim that work orders issued to such entry provider cannot be impounded and the appellant is trying to make an issue where none is there." 12. So far as the argument of the assessee that the seized materials does not belong to the assessee is concerned, he also rejected the ground raised by the assessee by observing as under: "4.4.2 The appellant contended on this issue that seized paper, on the basis of which the assessment was initiated u/s 153C of the Act, does not belong to it within the provisions of section 153C of the Act. The appellant contended that the documents seized from the premise of Ashoka Buildcon Ltd. in the form of work orders was maintained by Ashoka Buildcon Limited for its own purposes and neither Ashoka Buildcon nor the appellant had claimed that these seized papers belong to the appellant. The appellant contended that at most these papers can be said to be related to the appellant, which is not enough for initiating proceedings u/s 153C of the Act. the appellant in support of its cause relied on the judgment of Hon'ble ITAT Ahmedabad in the....
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....to the appellant. This issue is thus decided against the appellant. 4.5.2 The appellant contended that under the provision of section 153C of the Act, satisfaction of the AO of the searched person was required to be recorded before handing over of the seized material. The appellant argued that the order-sheet noting which contained the satisfaction of the AO was part of the record of the appellant's case and no such satisfaction was recorded in the case of Ashoka Buildcon which is the person searched. The appellant also argued that in the satisfaction recorded finding of an unrelated search was used, which has no connection with Ashoka Buildcon Ltd. The appellant relied on the decision of Hon'ble Supreme Court in the case of M/s Super Malls Pvt Lts (C.A. No. 2006- 2007 of 2020 decided on 05.03.2020) and Hon'ble Delhi High Court decision in the case of Pepsi Food Pvt Ltd (W.P.(C) 415,568,570,571, 575 & 576/2014 decided on 07.08.2014) in support of the same. The appellant supplied emphasis on recording of satisfaction of the AO of the searched person that seized document belonged to person other than the searched person. The appellant claimed that in absence of f....
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....or the same year at the same time. Therefore, in my considered opinion, the AO was correct to record the finding of another search/survey proceeding in the satisfaction note to take care of the incriminating material / information received in respect of transactions related with M/s Sunil Hi-tech Engineering Pvt. Ltd. without initiating a parallel proceeding for same years and for the same assessee. Also, it can never be the intention of the legislature to let go of any wrong doing, causing a loss to the exchequer only because the information was not unearthed during that search but stems from some other source or any other search, or to create multiple parallel proceedings for the same period involved. It was never an intention of the law makers to ignore any new information and compel the AO to turn a blind eye to it. The information in this case, was not received from any third party, but it was received from the MD of the appellant itself. Therefore, considering all these facts, I find the contentions raised by the appellant to be incorrect and hereby rejected." 13. So far as the argument of the assessee that no incriminating material was found and the assessment year is una....
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....ot u/s 153C of the Act and therefore, in absence of mandatory notice u/s 143(2) of the Act, the assessment completed u/s 144 was invalid. The contention raised by the appellant was not correct. In para 4.2.2 of this order, it was held that the proceeding was initiated and completed u/s 153C of the Act. The mandatory approval u/s 153D was also obtained from the Range-head, before passing the order u/s 153C of the Act. Also in the last line of assessment order, AO had written that the order was passed u/s 144 rws 153C of the Act. Further, since the appellant had not filed return of income in response to notice issued u/s 153C/142(1), there was no question of issuing notice u/s 143(2) of the Act. Further in A.Y. 2011-12, where the order was passed u/s 144 rws 153B, notice u/s 143(2) of the Act was issued by the earlier AO on 08.05.2012 and the appellant had also not denied this fact and therefore, the proceeding completed u/s 144 rws 153B of the Act does not suffer from any infirmity. Further, the appellant had not submitted all the information required by the AO to complete the assessment, including the production of the books of account with supporting evidence and the letter dated ....
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....n made is therefore not only logical but also in line with the provisions of the section under which the same are made." 5.3 The remand report submitted by the AO was forwarded to the appellant for comments. The appellant commented as under "4.24 Ground No.9 : Appellant fails to understand the report of A.O. on the submissions of appellant on Ground No. 9. In the opinion of appellant they lack clarity. In fact A.O has not commented para wise on the submissions of appellant. No clarification is given by him how receipt of cheque has resulted into debit balance. The comments in the assessment order as well as in the remand report are not comprehensible". 5.4 I have considered the argument given by the appellant. Before coming to the contentions raised by the appellant, let us revisit the facts gathered during search action in the case of M/s Ashoka Buildcon Ltd. and the survey action on the appellant and IIEPL & Sunil Hi Tech Engineering Ltd, which are summarized below: i) Commission was issued to DDIT(Inv), Mumbai by the DDIT(Inv), Nagpur to ascertain genuineness of subcontractor payments made by Sunil Hi Tech Engineering Ltd to Four Pillar Commun....
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....lar Communication Ltd and Indi Infra & Elements Pvt Ltd would provide accommodation entry to Sunil Hi Tech for a commission of 1.133%. It was also agreed the Kalisah Sharma would create subcontractors for this purposes, names of which are mentioned in the above paragraph. xii) It was agreed in the MoU that appellant would arrange minimum cash of Rs. 60 lakhs and the same will be delivered in lieu of cheque payment. It was also agreed that in case of any contingencies during movement of cash Shri Kailash Sharma is responsible to show that the cash was duly accounted for and was moving for purpose of payment of salary or wages. xiii) During the search on Ashoka Buildcon Ltd, work orders in the name of the appellant were found. xiv) It was also gathered that in the case of Ashoke Buildcon Ltd. group, evidences were found, wherein amounts paid to sub-contractors were received back and they have approached the Income Tax Settlement Commission for settlement of issues, including the issue of sub-contractors and also offered income on that account. xv) Neither during the assessment proceedings nor the appellant proceedings, any evidence of doing any act....
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....fore, the total receipts were added to the income of the appellant. But the receipts as well as expenses for these transactions are to be considered as bogus for the accommodation entries for the entry provider and the whole amount can be added only in the hands of the beneficiary. It was not the finding of the AO that the appellant was actual beneficiary and as discussed above, it is clear that the appellant was only an accommodation entry provider w.r.t. these parties and not the beneficiary of these entries. Therefore, since the appellant was not the final beneficiary, as is clear from the MOU impounded and other surrounding facts related to Ashoka Buildcon mentioned above, in my considered opinion, the entire receipt cannot be taxed in the appellant's hand. It is pertinent to note that in the impounded MOU, which has been reproduced above, the commission amount of Rs. 1.133% was mentioned as consideration for providing the accommodation entries. Taking into account these facts, it is clear that the appellant was not the final beneficiary of these accommodation entries and it was only providing the accommodation entries to other parties. Accordingly, only the commission on t....
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.... 132693325 95360613 22808071 Relief Granted 2912543 130003230 93767364 22808071 *No amount credited for this year, though money received for accommodation entries given in the earlier years. **The AD made addition on the basis of year end balances of parties. 5.8 Thus, addition to the extent of Rs. 702014 is upheld. The appellant gets relief of Rs. 2912543. Ground raised by the appellant is thus partly allowed." 16. So far as the addition of Rs. 124,47,580/- made by the Assessing Officer out of transportation charges is concerned, he deleted the addition by observing as under: "6.2 I have considered the facts of the case. The AO had made addition of transportation charges for want of details considering the appellant's involvement of providing accommodation entries. It is seen that the appellant had shown income of Rs. 1,98,23,379/- from Transportation receipts and also shown Transportation charges of Rs. 1,24,47,580/-, which were disallowed by the AO. It is also seen from the copies of account filed by the appellant that the appellant had shown receipts of Rs. 2,15,52,018.25/- from M/s IIEPL during the year, which ar....
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....nt's transactions with Sunil Hi Tech Engineers Limited & Other companies, these evidences were not sufficient to prove genuineness. The appellant in its reply to remand report has not offered any comments on this issue. It is noticed that out of the five share applicants, three were family members, who invested Rs. 15,30,000/- in total. Shri Kailash Sharma who invested Rs. 6,00,000/- had shown Rs. 3,67,304/- as his income in the ITR filed for the year. Similarly, Shri Shivam Sharma, who invested Rs. 6,50,000/-, has shown return of Income of Rs. 2,42,513/- in the ITR filed and Smt Padma Sharma, who invested Rs. 2,80,000/- has shown income of Rs. 1,30,486/- in the ITR filed. Since, no other details were filed by the appellant for these three persons, the creditworthiness remained doubtful. Also, considering the fragmented bank account details submitted, the genuineness of these transactions remained to be established. In case of Creative Rex and ABC Corporation, who have invested Rs. 15,00,000/- each, the appellant only filed confirmation of accounts. No return of income or bank statements for these entities was filed. On perusal of the confirmation letter of ABC corporation, it ....
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....No.36/PUN/2022 1. In the facts of the case & in law, the learned CIT(A) erred in partly allowing the appeal of the appellant, when in fact he should have allowed it in full. 2. In the facts of the case & in law, the learned CIT(A) erred in refraining from deciding on the issue of validity of the Order passed u/s 127 for transfer of the case from the ITO, Ward 11(3), Delhi to the ACIT, Central Circle-1, Nashik. Therefore, it is prayed to hold that the transfer order passed u/s 127 is not legal & valid. 3. In the facts of the case & in law, the learned CIT(A) erred in upholding the proceedings initiated u/s 153C, the Notice issued u/s 153A & the Assessment Order passed u/s 144 r.w.s. 153C. Therefore, it is prayed to hold that the proceedings initiated u/s 153C, the Notice issued u/s 153A & the Assessment Order passed u/s 144 r.w.s. 153C were not legal & valid 4. In the facts of the case & in law, the learned CIT(A) erred in upholding the proceedings u/s 153C initiated on the basis of the illegally seized papers. Therefore, it is prayed to cancel the proceedings initiated u/s 153C & the consequent assessment order passed u/s 153C. 5. In the....
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.... erred in holding that the Appellant was involved in providing the accommodation entries to IIEPL to Ashoka Buildcon Ltd & to Sunil Hi Tech Ltd (except w.r.t. the transactions admitted in the statement u/s 131), only on the basis of the suspicion & without there being any evidence in support of such allegation. Therefore, it is prayed to cancel the addition made/retained on the allegation of providing the accommodation entries. 12. In the facts of the case & in law, the learned CIT(A) erred in estimating income from the alleged accommodation entries to IIEPL at Rs. 7,02,014/-, without bringing on record providing of any accommodation entry to IIEPL. Therefore, it is prayed to cancel the addition made/retained of Rs. 7,02,014/-. 13. In the facts of the case & in law, in any case, the learned CIT(A) erred in estimating the income from the alleged accommodation entries to IIEPL at Rs. 7,02,014/-, over & above the income declared i.e. without giving any credit for the income declared in the return. Therefore, it is prayed that, if at all any income from the alleged providing of the accommodation entries is to be upheld/retained, then credit for the income declared in ....
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....s comments on the details of receipts submitted by the assessee before the Ld.CIT(A). VIII. On the facts and circumstances of the case and in Law, the Ld. CIT(A) has failed to consider the decision of the Hon'ble Apex Court in the case of N. K. Proteins Ltd. in SLP 769/2017 dated 16.01.2017 wherein it has been clearly held that once the expenses are bogus addition should be made of the entire expenses and not only the profit embedded in such expenses. IX. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition made by the AO in respect of transportation expenditure of Rs. 1,24,47,580/- considering that this disallowance is already covered in commission calculated @1.133% without appreciating the fact that before arriving such conclusion detailed verification of the receipts and expenditure is needed. X. On the facts and in the circumstances of the case and in law the Ld CIT(A) has erred in giving telescoping benefit of Rs 7,02,014/- to the assessee without considering the fact that issue of accommodation entry and introduction of share capital are two different issues and should not be inter ....
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....d back by us (i.e. M/s Four Pillar Communication Pvt. Ltd of which Mr Kailash Sharma was MD) directly to M/s Sunil Hi-Tech Engineering Ltd through their proprietorship concerns DMI Infracon and Konark Steel and the balance was written by way of cash withdrawals done by the sub-contractors Vishnu Enterprises, Creative Rex, ABC Corporation, MB Mines etc. In other words, the payments by cheque to the assessee were returned by it to M/s Sunil Hi-Tech Engineering Ltd in cash. 1.3 It was in this background that the assessment of the assessee i.e. M/s Four Pillars Communications Private Limited was carried out by issuing notice u/s 153C of the Income-tax Act, 1961. 2. It is a fact that the assessee has not been subject to action under section 132 of the Income-tax Act, 1961 at any point of time but has been subjected to survey action u/s 133A of the Act. It has been the case of the assessee that as it was never subject to any search and seizure action under section 132 of the Act, therefore, it was incorrect to state that notice u/s 153A was issued to the assessee. It is the case of the assessee that notice was issued u/s 153A instead of 153C. Now, for the sake of refere....
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....lso, it is to mention that the AO had given opportunities during the assessment proceedings to the assessee and the assessee had responded to the same though partially and had never tried to make the said grievance before the AO. The assessee Appellant on the other hand was never cooperative and did not even file the return of income in response to the notice. 3.1 It is to state and submit that reliance is placed on the following judicial pronouncements by the Revenue: (i) Super Malls (P) Ltd vs PCIT, 8, New Delhi [2020] 115 taxmann.com 105(SC) (ii) K M Nagraj vs DCIT, Cent Cir 1(1), Bangalore [2020] 120 taxmann.com 425 (Karnataka) (iii) Rajesh Sunderdas Vaswani vs ACIT [2016] 76 taxmann.com 311 (Gujarat) 4. In view of the above, the order of the AO may be affirmed and the appeal of the assessee on this issue of notice being issued u/s 153A and assessment being completed under section 153C may kindly as a typographical error which would squarely fall within the scope and ambit of section 292B of the Income-tax Act, 1961. 5. The above written submission may kindly be taken on record of the Hon'ble Bench and be considered favo....
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.... had made an addition of the closing balance of the receivables of the aforesaid parties. The CIT(A) had considered the total receipts as a base as against the closing balance and had restricted the addition to 1.133% of those receipts. 8. Now, it is being appealed before your Honours that the addition should be made with respect to the entire receipts as against 1.133%. Accordingly, it is submitted that the addition of the amount which had not even been done by the AO is sought vide the present appeal. 9. Thus, it is submitted that the grounds have been raised before your Honours to facilitate an enhancement of income of the assessee. 10. As per Section 254 of the Act, it transpires that the powers of the ITAT are wide enough to pass an order as it thinks fit. 11. However, as per the Hon'ble Supreme Court decision in Hukumchand Mills Ltd., Vs. CIT reported in (1967) 63 ITR 232 (SC), the ITAT does not possess the power to enhance an assessment. The relevant Para is re-produced below: "6. In the case of Hukumchand Mills Ltd., Vs.CIT (1967) 63 ITR 232 (SC) this Court has held that under s. 33(4) of the IT Act, 1922 [equivalent to ....
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....ant's Contention: Facts of the case: 1. In the course of a search action against a third party 'Ashok Buildcon Ltd', the Assessing officer (AO) found certain work order copies bearing the appellant's name, based on which an action u/s 153A of the Act was initiated against the appellant vide notice dated 17.09.2012 pertaining to AY 2005-06 to AY 2010-11. 2. Thereafter, assessment orders for the respective years were passed under section 153C of the Act by the AO. 3. The AO made an addition of the closing balance of receivables from the below mentioned entities as unexplained expenditure u/s 69C of the Act, assuming the said balances to arise out of accommodation entries- • Ashok Buildcon Ltd • Indie Infra Energy Private Limited • Sunil Hi-tech Engineering Pvt. Ltd 4. Certain additions were also made by the AO with regards to share application money on the ground that the appellant failed to establish the genuineness of the same. 5. Based on the MOU entered into between the Director of the Appellant and Director of Sunil Hi-tech Engineering Pvt. Ltd., found during the survey u/s 133A on the A....
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....g para of the assessment order passed by the Ld. Assessing officer is re-produced below: "A search and seizure action under section 132 of the Income Tax Act 1961 was conducted in the Ashoka Group of cases on 20.04.2010. Simultaneously office premises of the company was also covered under search action. This case was centralized with this office by the order of the CIT Delhi-IV, New Delhi dated 28.08.2012 bearing F. No CIT-IV/Centralization/115/2012- 13/1391." 1.8 Thus, the impugned order bears an erroneous remark in its opening para itself that the Appellant was under search. It indicates that the Ld. Assessing officer was under an erroneous impression that a search was initiated on the Appellant's premises as well. 1.9 Thus, it is humbly submitted that the issue of notice u/s 153A was a conscious decision of the Ld. Assessing officer and not a mere typographical error. Without prejudice to the above contentions, and assuming but not accepting that the initiation of the impugned proceedings is valid, it is submitted that even the proceedings u/s 153C of the Act are invalid due to non-satisfaction of jurisdictional requirements, placing relying o....
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.... 3.4 Thus, to initiate proceedings u/s 153C of the Act, the work orders should belong to the appellant. 3.5 It is submitted that the record maintained by a person for his own purpose though referable to the assessee cannot be said to be belonging to the assessee within the meaning of section 153C of the Act. 3.6 Further, Section 132(4A) of the Act has a statutory presumption that any material seized during the search shall be presumed to belong to the party under search. 3.7 Further, the party Ashok Buildcon has accepted that fact that the said work papers belong to it. 3.8 In this regard, we rely on the Delhi High Court decision in Pepsi Food Pvt Ltd (W.P.(C) 415,568,570,571, 575 & 576/2014 decided on 07.08.2014), wherein it was held that: "15.Secondly, we may also observe that the finding of photocopies in the possession of a searched person does not necessarily mean and imply that they 'belong' to the person who holds the originals. Possession of documents and possession of photocopies of documents are two separate things. While the Jaipuria Group may be the owner of the photocopies of the documents it is quite possible that ....
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....o dated 17.09.2012. Further notice u/s 153A was also issued on 17.09.2012. 3.17 Since the date of search as well as the alleged satisfaction recorded and the notice issued u/s 153A are all prior to 01.06.2015 accordingly, it is submitted that the amendment is not applicable to the Appellant. The relevant para of the decision in Vikram Sujitkumar Bhati (Supra) is re- produced below: "10.3 Thus, as per the proviso to section 153C as inserted vide Finance Act, 2005, and the effect of the said proviso is that it creates a deeming fiction wherein any reference made to the date of initiation of search is deemed to be a reference made to the date when the Assessing Officer of the non-searched person receives the books of account or documents or assets seized etc. Thus, in the present case, even though the search under section 132 was initiated prior to the amendment to section 153C w.e.f. 1-6-2015, the books of account or documents or assets were seized by the Assessing Officer of the non-searched person only on 25-4-2017, which is subsequent to the amendment, therefore, when the notice under section 153C was issued on 4-5-2018, the provision of the law existing....
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....al u/s 153C. 4.8 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 u/s 153C. 4.9 Reliance is placed on the following decisions in this respect: • Commissioner of Income-tax-7 v. RRJ Securities Ltd [2015] 62 taxmann.com 391 (Delhi) • Principal Commissioner of Income-tax (Central) v. Sunway Realtech (P.) Ltd [2022] 142 taxmann.com 477 (Delhi) 5. Abated assessment years should not be disturbed 5.1 If during the course of a third party search, documents or material belonging to some other person are handed over to the AO having jurisdiction over such other person, the assessments which are pendingon the date of receipt of such documents by the AO are abated. 5.2 The notice initiating action u/s 153C of the Act was issued on 17.09.2012. 5.3 Thus, the Assessments for AY 2008-09 to AY 2010-11 are unabated as on the date of receiving the books of account or documents or assets seized or requisitioned by the AO having jurisdiction over the appellant. 5.4 In the App....
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....ced at pages 26 to 28 of the paper book which read as under: a) assessment year : 2008-09 b) Assessment year : 2009-10 c) Assessment year 2010-11 d) Assessment year : 2011-12 24. Further in the assessment orders for assessment years 2008-09, 2009-10, 2010-11 and 2011-12 the Assessing Officer has mentioned that search and seizure action u/s 132 of the Act has taken place in the case of the assessee. The relevant observation of the Assessing Officer in the first para of all the three years is as under: a) Assessment year 2008-09 INCOME-TAX DEPARTMENT I.T.N.S.-65 Sr. No 1 Name of the assessee : Four Pillars Communications Pvt. Ltd. 2 Address of the assessee : G-12, Plot No.5, MLU, Dwarka, New Delhi - 110075 3 PAN : AAACF2418C 4 District/Ward/Circle : ACIT, Central Circle-1, Nashik 5 Status Company 6 Assessment Year 2008-2009 7 Whether Resident/Resident but Resident not ordinarily resident/ Non-resident Resident 8 Method of accounting Mercantile 9 Previous....
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.... Sr No. 1 Name of the assessee Four Pillars Communications Pvt. Ltd. 2 Address of the assessee G-12, Plot No.5, MLU, Dwarka. New Delhi - 110075 3 PAN : AAACF2418C 4 District/Ward/Circle ACIT, Central Circle-1, Nashik 5 Status . Company 6 Assessment Year 2010-2011 7 Whether Resident/Resident but Resident not ordinarily resident/ Non-resident Resident 8 Method of accounting Mercantile 9 Previous Year 2009-2010 10 Nature of Business (es) Builder, Contractor & Wholesale Trader. 11 Date(s) of hearing As per order sheet 12 Date of order 28/03/2013 13 Section and sub-section under which the assessment is made 144 r.w.s. 153C of the I. T. Act, 1961 ASSESSMENT ORDER A search and seizure action under section 132 of the Income Tax Act. 1961 was conducted in the Ashoka Group of cases o....
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.... of the assessee and only a survey u/s 133A of the Act had taken place, the Assessing Officer not only issued notice u/s 153A but has also mentioned in paragraph 1 of the assessment order of each of the above assessment years that the case of the assessee was covered under search action. Therefore, it is not understood as to how the Assessing Officer has passed the order with the prior approval of the Joint Commissioner of Income Tax, Central Range, Nashik who vide his letter dated 28.03.2013 bearing No.Nsk/Jt.CIT(C)/153D/2012-13/1961 has given his approval u/s 153D of the Act for such order. This shows that the same was approved u/s 153D without application of mind. 26. We find that the Assessing Officer while issuing notice u/s 153C of the Act has recorded the following satisfaction on 17.09.2012, copy of which is placed at pages 30 to 31 of the paper book and which reads as under: "Order Sheet 17.09.2012 The documents has been seized from the office of M/s. Ashoka Bulldcon Limited as per Annexure-A-3/32, Page No. 8 to 22, which is a work order dated 19.05.2008. As per this work order M/s. ABL has allotted the work of four lanning of Jaora-Naygann Highway,....
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....n view of the above, there are doubts regarding the bonafides of the transactions between M/s. ABL and M/s. Four Pillar Communication Pvt. Ltd. The Addl DIT (Inv), Unit-IV, Mumbai, vide this office letter dated 21.06.2010 was requested to conduct the enquiries. The enquiry report in respect of M/s. Four Pillar Communication Pvt. Ltd. will be submitted after receipt of the same. For the above mentioned reasons it is the opinion of the undersigned that this is a fit case for issue of notice under section 153C of the Act. This case has been centralized to this office vide order of the CIT-IV, Delhi dated 28.08.2012 bearing F.No.CIT-IV/Centralization/115/2012-13/1391. Notices under section 153C of the Act for AYs 2005-06 to 2010-11 and notice u/s 142(1) for AY 2011-12 issued." 27. As per the provisions of section 153C of the Act, the Assessing Officer should satisfy himself and record a satisfaction note before issuing notice u/s 153C of the Act to the person other than the searched person. In other words one satisfaction is to be recorded by the Assessing Officer of the "searched person that the material found belongs to other person" and the second satisfaction is of the ....
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....n at the most can be said to be related to the assessee or the information contained therein relates to the assessee but certainly not belongs to the assessee. In our opinion, mere relation of the assessee with the seized papers is not enough for initiating an action u/s 153C of the Act unless the same belongs to the assessee since as per the existing law at the particular period, the work orders should belong to the assessee. As per the provisions of section 132(4A), the presumption is that any material seized during the search shall be presumed to belong to the party under search. Further, the party Ashoka Buildcon Ltd. has accepted the fact that the said work order papers belong to it which is evident from the confirmation letter dated 19.07.2018, copy of which is placed at page 95 of the paper book which reads as under: 29. We find the Hon'ble Delhi High Court in the case of Pepsi Food Pvt. Ltd. vs. ACIT (supra) has held that the finding of photocopies in the possession of a searched person does not necessarily mean and imply that they belong to the person who holds the originals. It has been held that unless it is established that documents in question, whether they be phot....
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....ommon impugned order dated 22nd March, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The common impugned order disposed of 67 appeals pertaining to 52 different assessees, amongst them were the present two respondents before us. The Revenue has filed these two appeals being aggrieved by the impugned order of the Tribunal to the extent it relates to assessment year 2007-08 in Income Tax Appeal No 150 of 2014 in the case of Ambit Realty (P) Ltd and it relates for assessment year 2008-09 in Income Tax Appeal No 83 of 2014 in the case of Arpit Land (P) Ltd. 2. Although multiple questions have been formulated in the appeal memo, Mr. Kotangale, learned counsel appearing on behalf of the Revenue urges only following question of law for our consideration: "(1) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in ignoring crucial evidence and surrounding circumstances and proceeding to interpret Section 153C of the Act, narrowly and mechanically, and deleting the additions made under Section 69C of the Act both on merits and point of law ?" 3. The undisputed facts before us are that in search and se....
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....d by the Assessing Officer cannot be found fault with. Thus the impugned order of the Tribunal calls for interference and these appeals be admitted. 6. We note that in terms of Section 153C of the Act at the relevant time i.e. prior to 1st June, 2015 the proceedings under Section 153C of the Act could only be initiated/proceeded against a party-assessee if the document seized during the search and seizure proceedings of another person belonged to the party-assessee concerned. The impugned order records a finding of fact that the seized documents which formed the basis of initiation of proceedings against the respondent assessees do not belong to it. This finding of fact has not been shown to us to be incorrect. Further, the impugned order placed reliance upon a decision of Gujarat High Court in Vijaybhal N. Chandrani. Asstt. CIT (2011) 333 ITR 436 which records that the condition precedent for issuing notice under Section 153C of the Act is that the document found during search proceedings should belong to assessee to whom notice is issued under Section 153C of the Act. It was fairly pointed out to us by Mr Mistry, the learned Senior Counsel for the respondent assessee tha....
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....ance Act, 2015. Prior to the said amendment, where search was conducted on a person and undisclosed assets/documents indicating undisclosed income are found as belonging to the "other person" other than, searched person", then in that case, proceedings u/s 153C would be undertaken against the "other person". The Finance Act, 2015 made certain amendments by widening the scope of the section by replacing the word "pertain to" instead of "belongs to". The said amendment was applicable from 01.06.2015 i.e. with prospective effect. 32. The Hon'ble Supreme Court in the case of ITO Vs. Vikram Sujitkumar Bhati [2023] 149 taxmann.com 123 (SC) has held that the amended provisions of 153C of the Act would apply where both the satisfaction note and assumption of jurisdiction were after 01.06.2015, even though the search was conducted prior to the amendment. Since in the instant case the search was conducted on 17.09.2012, the order sheet copy containing the satisfaction note is dated 17.09.2012 and the notice u/s 153A was also issued on 17.09.2012, therefore, the amendment to provisions of section 153C in our opinion is not applicable to the facts of the present case and therefore, the reco....
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....for return of Income for A.Y.2008-2009 due as a result of search operations conducted u/s 132 of the Income-Tax, 1961 on 20.04.2010. In pursuance of the provisions of Section 153A (Chapter XIV) of the Income-tax Act, 1961, you are required to prepare a true and correct return of your total Income in respect of which you as Individual/ HUF/ Firm-/ Company /-AOP/BOI are assessable for the Assessment Year 2008-09. 2. The return should be in the prescribed form, duly verified and signed in accordance with the provisions of section 140 of the Income-tax Act, 1961 and be delivered on or before 05/10/2012. Acochardand5, 112 [ RAJESH D. SAKHARDANDE ] Asst. Commissioner of Income-Tax Central Circle-1, Nashik SEAL' = Document 2 NOTICE UNDER SECTION 153A OF THE INCOME TAX ACT. 1961 603 PAN. :- AAACF2418C OFFICE OF THE ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, ROOM No.A-316, 3RD FLOOR, KENDRIYA RAJASWA BHAVAN, GADKARI CHOWK, OLD AGRA ROAD, NASHIK - 422 002. DATE: 17/09/2012 To, The Principal Officer Four Pillars Communications Pvt. Ltd., G-12, Plot No.5 MLU, Sector - 12 Dwarka, New Delhi - 110075 Reg .: Notice Under Section 153A of the Income Tax Act 196....