TaxTMI 
TaxTMI 
2024 (5) TMI 1692
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....rial / information and satisfy himself that the seized material is incriminating and has bearing on the determination of total income of the Assessee for any particular year. 3. The Commissioner (Appeals) failed to see that the Assessing Officer must be in possession of incriminating evidence gathered during search in order to invoke the provisions of section 153C. Nothing relating to the addition was seized during search. 4. The Commissioner (Appeals) erred in ignoring the fact that the Assessing Officer issued notice u/s 153C despite being aware that the documents seized during search had no bearing on the case of the Appellant for the year under consideration. The Assessing Officer, therefore, grossly erred in ignoring the jurisdictional condition precedent to the issue of notice u/s 153C that money, bullion, jewellery or other valuable article or thing or any books of account or document relevant for the year must be seized. Consequently, the satisfaction recorded by him for the year is bad in law and the assessment made in pursuance thereof is also bad in law and deserves to be quashed. 5. The Commissioner (Appeals) erred in not following Circular No....
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....issioner (Appeals) ought not to have made the addition of Rs. 7,33,944/-in the hands of the Appellant when the evidence corroborated that Mr. B. Venkatram Reddy was the recipient of the money, merely because that amount was received by Mr. B. Venkatram Reddy in cash. As is evident, the sole grievance of the assessee is addition of Rs. 7.33 Lacs. The assessee also assails the jurisdiction of Ld. AO on legal grounds. 2. The Ld. AR advanced arguments supporting the grounds of appeal and relied on various judicial decisions, the copies of which have been placed on record. The Ld. AR relied on the recent decision of Hon'ble Supreme Court in the case of Pr. CIT vs. Abhisar Buildwell (P.) Ltd. (149 Taxmann.com 399) as well as various other judicial decisions. The Ld. CIT-DR also advanced arguments supporting the case of the revenue. Having heard rival submissions, our adjudication would be as under. 3. Assessment Proceedings 3.1 Upon perusal of assessment order, it emerges that the assessee deals in real estate and it is a part of Platinum Group of companies. The group was being managed by Shri M. Sukumar Reddy (MSR) and Shri B. Venkatrama Reddy (BVR) who acted as di....
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.... was holding remaining 1% share. It was also noted that BVR was cousin of MSR and he had expired in May, 2013. During search proceedings, it was found that over and above the declared sale consideration for land, some on-money was paid by OSAPL to the director for sale of land of the group companies. However, MSR denied receipt of the same. 3.5 During investigation, two undisclosed bank accounts of BVR were discovered. In sworn statement recorded on 07.12.2011, MSR stated that BVR was a business associates and handled the affairs at Chennai. However, in sworn statement dated 21.06.2011, BVR stated that his role was to take care of construction and purchase and sale of land as directed by Board of directors. On these facts, Ld. AO concluded that BVR merely acted as an executive on behalf of directors and he was more of an employee. The wife and legal heir of BVR also stated that BVR only looked after the affairs of Platinum group companies and he did not carry out any other business activity. It also transpired that BVR resigned from directorship of the companies in December, 2009 but he continued to work for the companies even after he resigned as a director. 3.6 In the above....
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....diction u/s 153C. Mere possession of documents would not confer jurisdiction to AO for issuing notice u/s 153C. The AO should verify the seized material and satisfy himself that the same had bearing on determination of total income of the assessee. Therefore, the assessment was to be quashed, inter-alia, in terms of decision of Hon'ble Supreme Court in the case of CIT vs. Singhad Technical Education Society (84 Taxmann.com 290). 4.2 The assessee also submitted that alleged amount was never received by the assessee. The addition made merely on third-party evidences would not be sustainable. The assessee, inter-alia, submitted that impugned amounts may have been received by Shri BVR as agent / broker of OSAPL. It was pointed out that during search on assessee group, no evidence was found suggesting receipt of impugned amounts. The assessee also submitted that the account held with SBI by BVR was opened in the year 1999. The assessee company was incorporated on 24.04.2006 and Shri BVR was inducted as director only on 16.11.2006. The same would show that BVR had its own business much before his induction as director in the assessee company. Therefore, all the credit entries appearin....