TaxTMI 
TaxTMI 
2024 (5) TMI 1691
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.... order to invoke the provisions of section 153C. Nothing relating to the addition was seized during search. As is evident from paragraph 6 of the assessment order wherein the Assessing Officer clearly states that as per the cash hook submitted Rs. 25,00,000 was paid in cash on 9-9-2006. Therefore, the Assessing Officer had no material in his possession to suggest seizure of any incriminating material to even assume jurisdiction u/s 153C. 3. The Commissioner (Appeals) erred in ignoring the fact that the Assessing Officer issued notice u/s 153C despite being aware that the document 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. 4. The Commissioner (Appeals) erred in not following C....
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.... appellate proceedings, the assessee submitted that the addition was not based on any incriminating material as found during the course of search. The Ld. AO did not record any satisfaction note before making assessment u/s 153C. 3.4 Rejecting the same, Ld. CIT (A) held that notice u/s 153C was issued based on seized document which contain details of sales affected by the assessee. The Ld. AO recorded proper satisfaction before proceeding u/s 153C. However, Ld. CIT (A) concurred that it no such expenditure was claimed, no disallowance could be made. Further, the disallowance, if at all, was to be made then the same would be 20% of cash payment. The Ld. AO was directed accordingly. Aggrieved, the assessee is in further appeal before us. 3.5 From the facts, it would emerge that Ld. AO has made disallowance u/s 40A(3) which is for expenditure already recorded in the books of accounts. Apparently, the impugned addition is not based on any incriminating material unearthed during the course of search proceedings on assessee group. The jurisdictional requirement of Sec. 153C i.e., recording of satisfaction that certain document / information pertained to the assessee and the same ha....
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....res in cash. The cheque was stated to be paid to BVR in his own account whereas the cash was stated to be paid to 4 companies of the assessee group. The Ld. AO proceeded to add proportionate on-money in the hands of the assessee. The assessee denied having received any such payment and submitted that the same would have been received by BVR in his individual capacity. However, Ld. AO alleged that the assessee could not escape the responsibilities for the action by its directors. Finally, proportionate amount of Rs. 294.10 Lacs was added to the income of the assessee. Appellate Proceedings 5.1 The assessee raised pertinent legal issue assailing the assumption of jurisdiction u/s 153C. It was submitted that to assume such a jurisdiction, AO must be in possession of incriminating evidences gathered in the course of search. Nothing relating to the addition was seized in the course of search. The impugned addition was based on some alleged evidence found during earlier search conducted on OSAPL. No fresh incriminating material / evidence connected to the assessee were found during search on assessee group. The assessee, relying on CBDT Circular No. 24/2015 dated 31.12.20....
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..../ pertaining to the assessee. The AO duly recorded satisfaction note before issuance of notice u/s 153C which was sufficient enough to assume such a jurisdiction. Therefore, the proceedings were held to be valid. 5.6 Aggrieved as aforesaid, the assessee is in further appeal before us. Our findings and Adjudication 6. We find that similar issue, on identical facts, has already been decided by us in another group concern of the assessee in the case of M/s Jayam Infrastructure Private Limited, ITA No. 1061/Chny/2022 for AY 2008-09 as under: - 5. From the facts, it is quite clear that the impugned addition of on-money is not based on any incriminating material as unearthed during the course of search proceedings in the case of the assessee group. In para-5 of assessment order, the Ld. AO has referred to documents / information as unearthed during earlier search conducted in the case of OSAPL on 02.07.2010 which has led to impugned addition in the hands of the assessee. The impugned additions are thus based on incriminating material found in another search which has already concluded much before the date of search on the assessee. The search in assessee's case has....