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2015 (6) TMI 762

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..... 1 in short the Act . 2. The assessee s pleadings in the former appeal challenge deemed dividend addition u/s.2(22)(e) of the Act amounting to ₹ 11.50 lacs. And in the latter appeal, its grievance against identical additions of ₹ 36,38,108/- and ₹ 2,58,175/-. The case files also reveal that the assessee has preferred identical additional grounds in both cases as under: 1. Assessee filed the appeal in ITA No. 503/A/2011 for A.Y. 2006-07 before Honourable Bench 'B' on 23.08.2011. The ground of appeal is raised for the first time before Honourable Tribunal as under: On the facts and in circumstances of the case as well as law on the subject, the Id. assessing officer has erred in issuing notice u/s. 153C and passing assessment order u/s.143(3) r.w.s. 153C when no valuable/material was found in the course of search of the third person. It is therefore prayed that the assessment made u/s.143(3) r.w.s. 153C may please be quashed. 2. Your Honours are requested to kindly admit the above additional ground in the interest of natural justice, equity and fair play as its omission in the main ground of appeal attached with Form 36 is purely unintent .....

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..... f Surat on 24/09/2008. Whereas I am satisfied that money / bullion / jewellery / other valuable articles or things and / or books of account / documents seized belongs to you. Therefore, your income six assessment years immediately preceding the assessment year relevant to previous year in which the search was conducted i.e. from A.Y. 2003-04 to A.Y. 2008-09 is required to be assessed/reassessed in accordance with the provisions of section 153C of the Act. You are, therefore, required to furnish return of the company s income u/s. 153C of the IT. Act 1961 for A.Y. 2006-07 being one out of the above six assessment years in respect of which you are assessable under the Income-Tax Act, 1961. The return should be filed in the appropriate form as prescribed in Rule 12 of the Income-Tax Rules, 1962. It should be duly verified and signed in accordance with the provisions of section 140 of the said Act and delivered at my office as mentioned above within THIRTY DAYS from the service of this notice. .....

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..... me. It only justifies the lower appellate order that once a search is conducted the only option available is to proceed u/s.153C r.w.s.153A of the Act since regular assessment proceedings abate. We tend to disagree with this reasoning. We are of the opinion that discovery of an incriminating material in the nature abovesaid forms is sine qua none before any satisfaction note is drawn u/s.153C of the Act. The same is nowhere forthcoming the present case. In these circumstances, we draw support from a co-ordinate bench decision in ACIT vs. Gambhir Silk Mills (2011) 45 SOT 20 (Ahd) subsequently affirmed by hon ble jurisdiction high court in Tax Appeal No.1493 of 2010 decided on 21.12.2011 holding on identical lines. The Revenue fails to point out any distinction on facts involved therein. Therefore, the assessee s additional grounds succeeds. There is one more legal aspect of the instant case. A perusal of section 153C notice reveals that it is the assessee s Assessing Officer who has expressed satisfaction before initiating the corresponding proceedings under challenge and not the one of the searched party (supra). The Revenue submits that Assessing Officer of the assessee as well .....

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..... s seized belong to the person other than the person searched is a sine qua non for initiating action under Section 153C. 10. The ld. Departmental Representative has contended that though the Assessing Officer of the person searched should be satisfied that money, bullion, jewellery or any other valuable article or the books of accounts or documents belong to the person other than the person searched, but there is no requirement of recording of a formal satisfaction by him. We are unable to agree with this contention of the ld. Departmental Representative. While taking this view, we derive support from the decision of Hon ble Apex Court in the case of Manish Maheshwari Vs. ACIT and Another, reported in (2007) 289 ITR 341 (SC), wherein their Lordships at page 348 held as under:- The condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. The said provision would apply in the case of any person in respect of whom search has been carried out under section 132A or documents or assets have been requisitioned under section 132A. Section 158BD, however, provide .....

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..... ning to the above named assessee have been found, I am satisfied that the provisions of Section 153C of the Act apply in this case and, therefore, notice u/s 153C is being issued. BARODA (AMAL GARG) Date : 08.11.2005 Dy. Commissioner of Income Tax Central Circle -1, Baroda 13. From the above, it is evident that the satisfaction is recorded in the case of Smt. Rekhaben K. Thakkar, proprietor of M/s. Durga Finance. Thus, the satisfaction is recorded in the case of the person ot .....

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