Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (5) TMI 545 - ITAT MUMBAI

2015 (5) TMI 545 - ITAT MUMBAI - TMI - Addition during search - proceedings u/s 153A challenged - CIT(A) confirming the addition to the extent of ₹ 3.00 crores, on the basis of loose papers found during the course of search in the premises of assessee’s father - Held that:- The “satisfaction” mandated in sec. 153C was not arrived at by the assessing officer while examining/assessing the searched person. In the absence of the same, the notice u/s 153C issued to the assessee herein is bad in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y talks about a property transaction only. Further, we notice that the assessing officer did not conduct any enquiry with the person named Pritibhabhi, the owners of the property or Jitendra Mehta to ascertain about the veracity of the document and further to establish that the advance payment of ₹ 3.00 crores stated therein was paid by the assessee out of his own funds. On the contrary, the assessing officer admitted in the remand report dated 20-02-2014 that the said property does not st .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

24-4-2015 - S/Shri B.R.Baskaran And Amit Shukla JJ. For the Appellant : Shri Vijay Mehta and Shri Harsh Bhuta For the Respondent : Shri Santosh Kumar ORDER Per B.R. Baskaran (AM) The appeal filed by the assessee is directed against the order dated 9.6.2014 passed by Ld CIT(A)-38, Mumbai and it relates to the assessment year 2009-10. The assessee is aggrieved by the decision of Ld.CIT(A) in confirming the addition to the extent of ₹ 3.00 crores, on the basis of loose papers found during th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

jected to search in connection therewith. During the course of search proceedings, a loose paper pertaining to the assessee was seized from the father of the assessee. Accordingly, the AO initiated proceedings u/s 153C of the Act in the hands of the assessee. The seized document was a letter addressed by the assessee to a person named as Mrs. Priti with regard to the purchase of a property situated at Alibaugh. The said letter stated that purchase price of property was ₹ 20.22 crores and a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

AO took the view that the total consideration mentioned in the loose sheet i.e. ₹ 20.22 crores is assessable in the hands of the assessee. In this regard, he took support from the provisions of section 132(4A) of the Act. Accordingly, the AO assessed a sum of ₹ 20.22 crores as undisclosed income of the assessee. 4. In the appellate proceedings, the assessee furnished certain additional evidences before the ld.CIT(A) to show that the impugned property transaction did not fructify. He .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld. CIT(A) took the view that the assessee had already paid advance amount of ₹ 3 crores to the land owner, even though the property transaction did not fructify. Accordingly, the ld. CIT(A) restricted the addition to ₹ 3 crores, thus granting a relief of ₹ 17.22 crores. Still aggrieved, the assessee has filed this appeal before us. 5. The Ld A.R first addressed the legal ground urged by the assessee. The Ld A.R submitted that the search was conducted in the hands of the fathe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

document to the assessing officer having jurisdiction over such other person and that AO shall proceed assess or reassess the income of such other person in accordance with the provisions of sec. 153A. 6. The A.R submitted that the assessing officer of the searched person did not record satisfaction as required under sec. 153C of the Act. In the absence of satisfaction, the impugned assessment order is not valid. In support of this proposition, the Ld A.R placed reliance on the following case la .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e and same person. He further submitted that the assessing officer has recorded satisfaction in the file of the assessee herein before issuing notice u/s 153C of the Act. Accordingly he submitted there was no requirement to record another satisfaction in the case of Shri Jitendra Mehta. He further submitted that the provisions of sec. 153C does not require recording of satisfaction and hence the satisfaction can be gathered from the seized material. In this regard, he placed reliance on the deci .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dated 09-04-2015 written by the assessing officer to the Ld CIT(DR), which reads as under:- 2. In this case, appellant assessee has requested for two satisfaction notes u/s 153C of the Income tax Act, 1961. In this matter, the undersigned would like to point out that action u/s 153A was taken in the case of Shri Jitendra Mehta, father of assessee as warrant was executed in the name of Shri Jitendra Mehta. Once warrant is executed in the name of particular person, proceedings u/s 153A can be begu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/s 153C to Shri Deven Mehta for block assessment (copy of satisfaction note is attached). 3. (sic) As it is evident that the assessing officer was same for both the cases i.e. Shri Jitendra Mehta and Shri Deven Mehta, there was no need for another satisfaction note to be recorded in the file of Shri Jitendra Mehta. 9. The satisfaction note referred in the above said letter reads as under:- Reasons for issuing notice u/s 153C of the I.T Act, 1961 In the case of Shri Deven Mehta A.Y 2005-06 to 201 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r proceeding u/s 153C of the I.T. Act, 1961 and accordingly notice u/s 153C is being issued in this case. 10. Since the dispute surrounds the provisions of sub. Sec. (1) of sec. 153C, we extract the same below, for the sake of convenience:- 153C. (1) Notwithstanding anything contained in section 139, section 147, section148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, Jewellery or other valuable article or thing or books of account .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ading of the above said provision would show that the assessing officer of the person referred to in section 153A (i.e., person in whose hands search was conducted) should arrive at Satisfaction that the money, bullion etc. belong to a person other than the person in whose hands search was conducted. Naturally, the satisfaction should be arrived by the assessing officer while assessing the income of searched person. 11. In the instant case, it is an admitted fact that there is no material to sho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, other documents, money, bullion, jewellery or other valuable article of thing found in the possession or control of any person in the course of search, it may be presumed that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person. In the instant case, the search was conducted in the hands of Shri Jitendra Mehta and the impugned document was seized from his possession. Hence, as per the provisions of sec. 132(4A), .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the document by disowning the same, thus rebutting the presumption prescribed in sec. 132(4A) of the Act. This situation could lead the assessing officer of the searched person to arrive at the satisfaction that the document or assets found in the possession of the searched person belongs or belongs to any other person or persons. In our view, even though the assessing officer was same for searched person or other person, yet the satisfaction prescribed in sec. 153C of the Act should be arrived .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the I.T Act, 1961 ) was written on 07.02.2013, i.e., after expiry of more than 2 years. Further, there was no explanation as to why the assessment of the present assessee was centralized with the assessing officer of the searched person that too without arriving at the satisfaction that any of the seized material belong to the assessee herein. 13. The proposition discussed above finds support from the decision rendered by Hon ble Delhi High Court in the case of Pepsi Foods P Ltd (supra). The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or reassess his income in accordance with the provisions of section 153A. Therefore, before a notice under section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he course of a search it may be presumed that such document belongs to such person. It is similarly provided in section 292C(1)(i). In other words, whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut the presumption and come to a conclusion or satisfaction that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

our view, the above said decision is not relevant here, since there is no cogent material on record in the case of searched person to show that the assessing officer has arrived at the Satisfaction at the time of assessing the income of the searched person. 15. In view of the above, we hold that the satisfaction mandated in sec. 153C was not arrived at by the assessing officer while examining/assessing the searched person. In the absence of the same, the notice u/s 153C issued to the assessee h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version