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2017 (7) TMI 1324 - AT - Income TaxAssumption of jurisdiction u/s.153C - ‘Assessment of income of any other person - documents seized in search - HELD THAT:- In the present case, the income stands already returned with reference to the profit (loss) disclosed in the assessee’s operating statement (profit and loss account), found and seized in search. Also, the balance-sheet also agrees with that furnished as a part of the return of income. The opportunity provided by us to the Revenue to exhibit the AO’s satisfaction was guided primarily by the intent to find the basis thereof in-as-much as it could well be that there has been some omission in writing the satisfaction note, even as the satisfaction is otherwise discernible from the seized material itself. It is in doubt surprising, even as observed during hearing, that the assessee’s audited accounts were found at the place of another, but that, a valid ground for making further investigation, is by itself not sufficient for invoking s. 153C, or regarding the ingredients of the said provision, as satisfied. There has been thus no valid assumption of jurisdiction for the issue of notice there-under and, accordingly, the impugned assessment, framed u/s. 143(3) r/w s. 153A, is bad in law. It is not any seized material belonging to, but only that which has a bearing on the determination of total income of, such other person, that shall give rise to the special jurisdiction envisaged by the provision. The same only seeks to take the circumstance of the seized material found in search in respect of the assessee to its logical conclusion, without which the provision becomes open ended and, accordingly, liable to be regarded as arbitrary. Legislative intent is to be the foundation of any interpretative exercise. Again, it cannot be lost sight of that the earlier assessment may be, as in the instant case, under verification procedure, i.e., u/s. 143(3) or u/s. 144. And, therefore, in the absence of any such caveat or condition in the provision, the ensuing assessment would only be a review, impermissible under the scheme of the Act - See M/S. KELVINATOR OF INDIA LIMITED [2010 (1) TMI 11 - SUPREME COURT] and KALYANJI MAVJI AND CO. [1975 (12) TMI 2 - SUPREME COURT] - Decided in favour of assessee.
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