TMI Blog2007 (11) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... up concern of Shri Reddy. It records the transaction carried out by that group. It does not record the transaction carried out by the assessee. In the instant case, documents or books of account found during the course of search and seized cannot be termed, to be indicating any limited interest of the ownership of the assessee in such books of account or documents. The language used in section 153C is materially different from the language used under section 158BD. As per section 158BD, if any undisclosed income relates to other person, then action against such other person can be taken provided such undisclosed income is referable to the document seized during the course of search. However, section 153C says that if valuable or books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of huge cash loans, repayment of cash loans and payment of interest on these loans to various parties were found and seized. Shri P. Srinivas Nayak, the assessee also advanced loan to M/s. Saravana Construction (P.) Ltd. during the period 1-4-1997 to 31-3-2004. The Assessing Officer has referred to the seized material which indicated the names of the persons who has given cash loan with dates on right hand side, repayment of cash loan by way of instalment on the left hand side and interest paid to these parties. The assessee confirmed that he has given cash loans to Shri L. Sambashiva Reddy. Before the Asstt. CIT, the assessee stated that loans were given out of funds belonging to the trust namely M/s. Pushpa Family Foundation Trust. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of search in the case of L. Sambashiva Reddy is dismissed. 4. If the search is initiated under section 132(1) of the Income-tax Act, then the Assessing Officer has to issue notice to such person to furnish the return of income in respect of each assessment year falling within six assessment years referred to in clause ( b ) of section 153A. Section 153C provides that where the Assessing Officer is satisfied any money, bullion, jewellery or other valuable article or thing or books of account or documents seized belong to a person other than the person referred under section 153A, then proceedings under section 153A are to be taken against such other person. During the course of proceedings before us, the learned Authorised Representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with provision of section 153A. From perusal of the record, it is noticed that search action under section 132 was conducted in the business as well as residential premises of Shri L. Sambashiva Reddy, who is the managing director of M/s. Sarvana Construction (P.) Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e their finding/direction in this case, since question of law arose first time with reference to the new provision of section 153C of the Act." 7. We have heard both the parties. It is an undisputed fact that books of account or document does not belong to the assessee, as these were seized from the premises of Shri Reddy. It is nowhere stated that these books of account or documents showed that all the transactions belonging to the assessee. Such books of account or documents contained the transactions relating to the group concerns of Shri Reddy. No valuable belonging to the assessee has been seized during the course of search. The term belonging, implied something more than the idea of casual association. It involves the notion of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, we are satisfied that books of account or documents do not belong to the assessee and, therefore, the Assessing Officer was not justified in initiating action under section 153A read with section 153C of the Income-tax Act. The Assessing Officer is free to take proper remedial measure as per law. In the result, the appeals filed by the assessee are allowed. Since, we are holding that Assessing Officer was not having jurisdiction to assess under section 153A read with section 153C, therefore, we are not deciding the issue on merits, so as to preempt any finding on merits in respect of the issues to be taken by the Assessing Officer in case recourse is taken for remedial measure if any. 212/3 ------------------------- *In fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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