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2018 (12) TMI 1063 - AT - Income TaxProceedings initiated u/s 153C - payment of cash against the property on behalf of the assessee-company over and above what is recorded in the sale deed - mandation of recording satisfaction - as per assessee no document belongs to the assessee were found and seized during the course of search and that no valid satisfaction have been recorded under section 153C in the case of the person searched - Held that:- It is well settled law that recording of the satisfaction by the A.O. of the person searched is a condition precedent for initiating action under section 153C. In the present case, no satisfaction under section 153C have been recorded in case of the person searched i.e., Manish Mehta group of cases. The language of the satisfaction note reproduced above clearly show that it is recorded in the case of the assessee on 13.06.2011 and notice under section 153C have been issued on 14.06.2011 by ACIT, CC-3, New Delhi who has framed the assessment under section 153C in the case of the assessee. It is, therefore, clear that no satisfaction note as required by Law have been recorded in the case of the person searched i.e., Manish Mehta group of cases in whose case search have been conducted. The statement of Manish Mehta was recorded on 11.09.2009 after the search and was subjected to cross-examination on behalf of the assessee in which the assessee pointed-out several infirmities and inconsistencies because Manish Mehta was not connected with the seller M/s. Honest Estate Pvt. Ltd., and he denied meeting any of the Directors of the assessee-company. He has also stated that at no point of time he takes any cash from the Directors of the assessee-company. He has stated that cash was received from a local Agent whose name and address he does not remember. Further Manish Mehta retracted from his statement, therefore, such statement has no evidentiary value because the Revenue has failed to record statement of any of the Agent who have allegedly received any cash against the sale of the property. No evidence have been found on record to justify payment of cash against the property on behalf of the assessee-company over and above what is recorded in the sale deed. The person who has recorded BAHIs found during the course of search was not subjected to cross-examination on behalf of the assessee. Initiation of proceedings under section 153C is invalid and bad in law - Decided in favour of assessee.
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