TMI Blog2010 (11) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... 58 BD of the Act, in so far assessees are concerned, was the statement of Smt. Suraksha Charla recorded during the course of search. Revenue appeals dismissed in view of Manish Maheshwari Vs. ACIT, (2007 -TMI - 2889 - SUPREME COURT), Amity Hotels (P) Ltd. (2004 -TMI - 10034 - DELHI High Court) and CIT Vs. Karan Engg. P. Ltd. and Janki Exports International Vs. UOI, (2004 -TMI - 10668 - DELHI High Court) - 276/302/396/2009 - - - Dated:- 29-11-2010 - A.K. SIKRI, MANMOHAN SINGH , JJ. Appellant represented by:Ms. Rashmi Chopra, Respondent represented by: Mr. C.S. Aggarwal, Mr. Prakash Kumar, A.K. SIKRI,J. 1. All these appeals arise out of the common order dated 11th July, 2008 passed by the Income-Tax Appellate Tribunal thereby allowing three appeals of the assessees/respondents and deleting the additions made by the Assessing Officer. The respondents were the brothers and two of them passed away during the pendency of the Income Tax proceedings. Their spouses were impleaded in their place in their capacity as the legal heirs. These brothers were the joint owners of property bearing no. 112, Golf Link, New Delhi, which was sold to Sh. Sunil Charla and his wife Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of Income Tax (Inv.) Unit-II, New Delhi retracted her statement recorded during search on 24.09.2002. The DDI (Inv.)-II, New Delhi thereafter issued summons under section 131 to Smt. Surksha Charla. Her statement was recorded by DDIT (Inv.) on 01.11.2002. 5. The Assessing Officer considered that since buyers have paid sum over and above that stated in the sale deed, to that extent the amount is also received by the sellers (appellants herein). Since sellers have understated the value of property sold, action under Section 158 BD ought to be taken in the hands of the sellers of the property. Accordingly notices under Section 158 BC read with Section 158 BD were issued to the assessees. The Assessing Officer held that the assessee was confronted with the statement of Smt. Surksha Charla stating that property No. 112, Gold Link, New Delhi was purchased for ₹ 6 crores by them and hence the sale consideration of ₹ 6.5 crores was received over and above the stated consideration. The assessee contended that the property was sold for only the stated consideration as mentioned in the sale deed. It was duly registered and in respect of which capital gain was offered for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned order which reads as follows:- "8. We have carefully considered the relevant facts, arguments advanced and the case laws cited. In the present case, the Assessing Officer has sought to invoke provisions of Section 158 BD so as to compute the undisclosed income of the persons other than the persons searched. The pre-requisite for invoking the provisions of Section 158 BD is that where the Assessing Officer of the searched person is satisfied that undisclosed income belongs to person other than the person search, the books of accounts or other documents or assets seized shall be handed over to the assessing Officer having jurisdiction over such other person and the Assessing Officer of such other person shall proceed under Section 158 BC against such other person and then the provision of Chapter XIVB shall apply. However, in the present case it is seen that no books of accounts or other documents or assets pertaining to person other than person searched were found or seized. Thus there was no question of handing over such material to the Assessing Officer of the person other than the person searched. It was only the statement of Smt. Surksha Charla recorded during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessees herein under Section 158 BD of the Act. Law provides for block assessment in case of the assessee whose premises are searched under Section 158 BA of the Act. It can be done when some material during the said search is seized by the Income Tax authorities from which it is found that there was some undisclosed income which is found as a result of search of the persons whose premises was searched. When the block assessment proceedings are to be initiated against the persons whose premises are searched, procedure for that is provided under Section 158 BC of the Act. However, if during the search carried out at the premises of one person, some documents/material is found or asset seized etc. on the basis of which the Assessing Officer is satisfied that any undisclosed income belongs to a third person i.e. a person other than one whose premises were searched under Section 132 of the Act, the procedure for carrying out block assessment in that eventuality is provided under Section 158 BD of the Act. It was for this reason that in the case of these assessees provisions of Section 158 BD of the Act were invoked. Section 158 BD of the Act reads as under:- "where the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, therefore, is as to whether this statement can be treated as other documents‟. Prima facie, it is difficult to accept this proposition. Statement was not the document which was found during search. In fact this was the document which came to be created during the search as the statement was recorded at the time of search. Therefore, it cannot be said that the statement was seized‟ during the search and thus, would not qualify the expression "document" having been seized during the search. In such a scenario, proper course of action was reassessment u/s 147 read with section 148 of the Act. 14. Learned counsel for the Revenue relied upon the judgment of the Supreme Court in the case of CIT Vs. Mukundray K. Shah, 290 ITR 433. However, that was a case where during the search conducted in the premises of a company under Section 132 of the Act, apart from cash or jewellery, a diary belonging to the assessee was seized. The proceedings against the assessee under Section 158 BD of the Act originated on the basis of the said diary. This diary which belonged to the assessee was clearly a "document" seized during the search and on this basis the Supreme Court held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction must be recorded by the AO that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 of the Act; (ii) The books of account or other documents or assets seized or requisitioned had been handed over to the AO having jurisdiction over such other person; and (iii) The AO has proceeded under Section 158BC against such other person. The conditions precedent for invoking the provisions of Section 158BD, thus, are required to be satisfied before the provisions of the Chapter XIV-B are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under Section 132A of the Act." 19. We may also add that this Court in the case of Amity Hotels (P) Ltd. reported 272 ITR 75, has also held that the reasons must be recorded by the Assessing Officer having jurisdiction over the assessee who had been searched before issuing the notice u/s 158 BD of the Act. The aforesaid view has been reiterated by this Court in the case of CIT Vs. Karan Engg. P. Ltd. and Janki Exports International Vs. UOI, 193 CTR 730. 20. We, therefore, of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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