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Smt. Uma Prasad Versus The Deputy Commissioner of Income Tax, Central Circle 1 (1) , Bangalore.

2015 (8) TMI 218 - ITAT BANGALORE

Validity of assessment u/s 153C - whether on 8.5.2009, when proceedings were initiated against the assessee u/s. 153C, there was material to show that the document found and seized in the course of search of Skyline group of cases belonged to the assessee? - Held that:- The condition precedent for issuing notice u/s. 153C is that the document seized in the course of search of Skyline group of cases should belong to the assessee. In the present case, what was found was a photocopy of the agreemen .....

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re has been no post-search enquiries on the aforesaid document. In such circumstances, we fail to see as to how the AO formed an opinion that the document found in the course of search belongs to the assessee. The proceedings against the assessee commenced on issue of notice u/s. 153C on 8.5.2009. In the order u/s. 153C, there is a reference to the agreement for sale seized and the difference in value between registered document and agreement for sale. There is a reference to show cause notice d .....

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both the assessment years are required to be quashed. We also derive support for the above conclusion from the decision of Vijaybhai N Chandrani v. ACIT,(2010 (3) TMI 770 - Gujarat High Court ), wherein it was held that the fact of a reference to the name of person in the seized document cannot be the basis to come to the conclusion that the document belonged to the said person. - Decided in favour of assessee. - ITA No.323 & 324/Bang/2011 - Dated:- 30-7-2015 - SHRI N.V. VASUDEVAN AND SHRI ABRAH .....

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the Act in the case of Skyline group of cases on 28.2.2008. In the course of search, a document marked Exhibit SCHL/A/6 pages 60 to 65 were found and seized. The document so seized was an agreement to sell dated 18.4.2004 relating to property being dry land bearing Sy.No.239 measuring 4 acres 38 guntas at Kengeri Village, Kengeri Hobli, Bangalore South Taluk [hereinafter referred to as the property ]. Under this agreement, Smt. Nanjamma, Shri Kumar, Shri Sanjeeva and Smt. Anamma; the owners of t .....

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in the agreement for sale. 3. The Assessing Officer assessing the assessee as well as Skyline group of cases was one and the same person. He recorded the satisfaction note in the case of assessee for proceeding to make an assessment us/. 153C of the Act as follows:- Satisfaction note for initiating action u/s. 153C Action u/s. 132 was conducted in the premises of Skyline group of cases on 28/02/2008 based on the Authorization issued by the Addl. DIT (Inv)-II, Bangalore vide Warrant No. dated Du .....

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of the property was executed by the Vendors in favour of the assessee on 23.6.2005 and the value reflected in the registered sale deed was only a sum of ₹ 43,80,000. The AO was therefore of the view that a sum of ₹ 25 lakhs which was paid by cash as found recorded in the agreement of sale seized in the course of search had to be added as unexplained cash for AY 2005-06. The AO was also of the view that as far as AY 2006-07 is concerned, the sum of ₹ 6,20,000 had to be treated .....

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ccounted in the books of account and that the assessee would offer the same as income for the respective assessment years. The AO accordingly completed the assessment making addition of ₹ 25 lakhs and ₹ 6.20 lakhs for AYs 2005-06 & 2006-07 respectively. Aggrieved by the order of the AO, the assessee filed appeals before the CIT(Appeals). 6. Before CIT(Appeals), the assessee challenged the action of the AO in assuming jurisdiction u/s. 153C of the Act. Where there is a search u/s. .....

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rom the aforesaid provisions that the crucial condition for assuming jurisdiction u/s. 153C of the Act is that the AO of the searched person should be satisfied that the document found in the course of search belongs to some other person. It was the plea of the assessee before the CIT(Appeals) that the agreement for sale dated 18.4.2009 which was seized in the course of search of Skyline group of cases was not signed by the assessee. In such circumstances, according to the assessee, seizure of a .....

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quashed. 8. Apart from the above, the assessee also submitted cash book before the CIT(A) showing that there was availability of cash balance as per books of account from which the alleged cash payments could be explained and therefore no addition ought to have been made by the AO. 9. Both the aforesaid contentions were not accepted by the CIT(Appeals). On the argument that assessee had not signed the agreement for sale, the CIT(A) was of the view that absence of the assessee s signature in the .....

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that if the cash payments made and added in the assessment are reduced from the cash book filed by the assessee, then there would be a negative cash balance in AY 2008-09. The claim of the assessee was therefore rejected by the CIT(A). 11. Aggrieved by the order of the CIT(Appeals), the assessee has preferred the present appeals before the Tribunal. 12. We have heard the submissions of the ld. counsel for the assessee, who apart from reiterating the contentions put forth before the CIT(A), also .....

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dated 10.7.2015. He pointed out that the revenue has not produced the satisfaction note recorded in the case of the person searched u/s.132 of the Act. Further reliance was also placed on the decision of ITAT Delhi Bench in Tanveer Collections P. Ltd. v. ACIT, ITA No.2421/Del/2014, order dated 16.1.2015, wherein the Delhi Tribunal observed as follows:- 17. As regards the other argument of the ld. DR that since the AO of both the persons searched and the assessee is the same person, hence the req .....

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res the AO of the person searched to record the necessary satisfaction, it is the AO having jurisdiction over the person searched who is obliged to record such satisfaction in the capacity of that AO and that too in the case of the person searched. The mere fact that the AO of the person searched and the assessee is the same person, does not, in any manner, obliterate the requirement of law necessitating the recording of satisfaction in the case of the person searched that money, bullion, jewell .....

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nce (No.2) Act, 2014 w.e.f. 1.10.2014. The hitherto part of subsection (1) : and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person .........referred to in sub-section (1) of section 153A. has been substituted as under : - and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 1 .....

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al income of such other person before embarking upon the exercise of his assessment or reassessment. Therefore, now under the law, w.e.f. 1.10.2014 it has become obligatory not only for the AO of the person searched to record satisfaction before handing over books of account or documents, etc., to the AO of the other person , but, such AO of the other person is also required to record satisfaction that the books of account or documents, etc. have a bearing on the determination of the total incom .....

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a technical mistake and hence should not eclipse the assessment. Relying on certain judgments, the ld. DR submitted that the technicalities cannot be allowed to prevail in the course of indulgence of justice. 21. We agree in principle that technicalities cannot come in the way of dispensation of justice. However, it is important to note that the lack of jurisdiction by the AO cannot be put under the carpet in the guise of a technical defect. It goes without saying that no assessment or other pro .....

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ul consideration to the rival submissions. The condition precedent for issuing notice u/s. 153C is that the document seized in the course of search of Skyline group of cases should belong to the assessee. In the present case, what was found was a photocopy of the agreement for sale dated 18.4.2004. Purchaser has not signed this document. In the course of search nobody was examined nor post-search investigations was made regarding the absence of signature of the assessee in this document. It is n .....

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the assessee. The document in question is a photocopy of agreement for sale dated 18.4.2004, which is signed only by the Vendors and in which the assessee s name as purchaser is found, but the assessee s signature is not found in the said document. As we have already observed, there has been no post-search enquiries on the aforesaid document. In such circumstances, we fail to see as to how the AO formed an opinion that the document found in the course of search belongs to the assessee. The proc .....

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