TaxTMI 
TaxTMI 
2007 (8) TMI 366
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....on is not necessary to be recorded in writing. (c) Without prejudice to the above, the learned CIT(A) erred in not considering that satisfaction note, if any, pertained only of an amount of Rs. 25,00,000 and not the entire amount which has been assessed and confirmed by the CIT(A). (d) The learned CIT(A) erred in holding that the provisions of s. 158BD and s. 147 are analogous and once an assessment is reopened, the AO can make any addition in block assessment despite there being no material to justify the same. (e) The learned CIT(A) failed to consider that under a block assessment, addition can be made only on the basis of material found and the AO has to satisfy that there was material to meet such an addition. (4) The learned CIT(A) erred in confirming the addition on account of loose papers found during the course of search from the premises of Dr. Sheila Ahuja and thus confirming addition of Rs 1,68,75,500. The learned CIT(A) failed to consider that the loose papers were not in the handwriting of the deceased nor his legal heirs nor any of his employees. (5) Without prejudice to the above, the learned CIT(A) erred in not considering that the entries pertaining ....
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....the matter along with the assessment order and the CIT(A)'s order to the AO of the assessee for necessary action. 4. The learned Departmental Representative could not produce the original satisfaction recorded by the AO. He however admitted that on the basis of seized papers, the addition was initially made in the hands of the assessee. But it was referred to the AO of the assessee on receipt of the order of the CIT(A). 5. The learned counsel for the assessee has contended that for invoking provisions of s. 158BD, satisfaction of the AO, having jurisdiction over the assessee, upon whom search was conducted. is required on the basis of seized materials that it pertains to some other person. In that eventuality after recording a satisfaction, the AO shall forward the seized material to the AO of that assessee to whom the seized material relates. But in the instant case, AO has initially assessed the income on the basis of seized material in the hands of Mrs. Shobha Ahuja upon whom the search was conducted and later on when the addition on the seized material was deleted in her hands and CIT(A) made certain observations, the AO of Mrs. Shobha Ahuja has referred the matter to the....
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....ials does not belong to Mrs. Shobha Ahuja and it belongs to late 8hri L.T. Punjabi, the present assessee. On receipt of the order of the CIT(A) the AO has referred the seized material along with assessment order passed in the case of Mrs. Shobha Ahuja and the CIT(A)'s order with a request to take necessary action in the hands of Shri L.T. Punjabi, the assessee. On the basis of this information, the AO has framed the assessment in the hands of the assessee under s. 158BD of the IT Act. This action of the AO was challenged by the learned counsel for the assessee with the submissions that a reference of the seized materials along with the assessment order and the CIT(A)'s order by the AO of Mrs. Shobha Ahuja does not amount to a valid satisfaction recorded before invoking provisions of s. 158BD of the Act. 9. Before dwelling upon the issue, we would like to examine the provisions of s. 158BD and circumstances under which it can be invoked. For the sake of reference we extract the provisions of s. 158BD as under: "Where the AO is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under s. 132 or whose books of a....
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....n the case of Y. Subbaraju & Co. vs. Asstt. CIT. In the case of Janki International vs. Union of India, their Lordships of Delhi High Court have held that under s. 158BD, the AO has to be satisfied that there is undisclosed income. Upon such satisfaction, the AO is required to forward the relevant documents, papers, etc. to the other AO who has jurisdiction over the assessee. Once this is done, the assessee who is to be proceeded with under s. 158BD and then s. 158BC must be informed about the satisfaction of the AO which has been recorded and must be given a reasonable opportunity to object to the same. Satisfaction can be arrived at on some material. That material would provide a reasonable satisfaction. 11. From the careful perusal of the various judgments referred to by the assessee, we are of the view that before handing over the seized material and the documents to the AO of the other person to whom this seized material or documents relate, the AO of the searched person is required to record a satisfaction in this regard. If he fails to do so, there would not be assumption of jurisdiction under s. 158BD by the AO over the assessee to whom the alleged documents relate. 1....