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TMI Blog2012 (11) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-03 being ITA No. 843/Hyd/2010. 3. Briefly, the facts of the case are that a search and seizure operation u/s 132 of the Act was conducted in the case of P. Prabhakar Reddy, Advocate. Apparently, during the course of search, certain information/document pertaining to the assessee were available in the seized material. Accordingly, notices u/s 153C were issued in response to which the assessee filed its return of income. Thereafter, the AO took up the cases for scrutiny assessment. In the assessment orders for all the six years under appeal, the AO had made only one addition i.e. disallowance of interest paid. While for the AY 2002-03 the disallowance of interest only on account of interest paid to N.K. Gupta and Manju Gupta, for the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn filed earlier u/s 139 of the Act. 5. As regards initiation of proceedings u/s 153C, it was submitted that for initiating proceedings u/s 153C against a person, it is the prerequisite that the AO is satisfied that any money, bullion or books of account or documents seized or requisitioned 'belong' to the person other than the person referred to in section 153A. It was further submitted that from the order passed by the AO it is very clear that existence of no such pre-requisite was ensured. It was argued that even if the proceedings u/s 153C are established to be in order, still the items of regular assessment cannot be added back in the proceedings u/s 153C when no incriminating documents were found in the search proceedings in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below. 9. We shall first deal with the preliminary ground raised by the assessee with respect to initiation proceedings u/s 153C of the IT Act. 10. In the present case, there is no incriminating material found during the course of search to frame assessment u/s 143(3) read with section 153C of the Act. The determination of undisclosed income consequent to search action and framing assessment under section 153C of the Act is different from regular assessment or it is not substitute for regular assessment. Being so, the AO shall frame assessment on the basis of incriminating material found during the course of search action under sec. 153C of the Act. The Assessing Officer was not justified in making additions by way of disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to whom search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A, he could proceed against such other person under section 158BC. Thus a condition precedent for issuing notice under section 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the requirement is not satisfied, recourse cannot be had to the provisions of section 153C. Held, allowing the petition, that admittedly, the three loose papers recovered during the search proceedings did not belong to the petitioner. It was not the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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