TMI Blog2015 (9) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings are completed under Section 158BC of the Act of the searched person. The period of limitation prescribed under Section 158BC cannot be extended by issuing the belated notice under Section 158BD. The Hon’ble Jurisdictional High Court in the case of CIT Vs. Bharat Bhushan, [2015 (1) TMI 705 - DELHI HIGH COURT] held that having regard to the intent of the Hon’ble Supreme Court in Calcutta Knitwears, [2014 (4) TMI 33 - SUPREME COURT], the completion of assessment under Section 158BD of the Act nearly after one year, cannot be considered contemporaneous to the assessment proceedings of searched persons. Therefore, the Hon’ble High Court held that the delay in completion of assessment under Section 158BD vitiates the very proceedings itself. Applying the same ratio in this case, the assessment proceedings cannot be sustained in the eyes of law on this score alone - Decided in favour of assessee. - IT (SS) A No. 35/Del/2012 - - - Dated:- 9-9-2015 - Smt. Diva Singh And Shri Inturi Rama Rao, JJ. For the Appellant : Sh Gautam Jain, FCA Piyush Kumar Kamal, Adv For the Respondent : Sh. A.K. Saroha, CIT-DR ORDER Per Inturi Rama Rao, A. M. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment be quashed as such. 4 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding an addition of ₹ 1,46,069/- representing short term capital loss declared by the appellant and, held to be accommodation entry taken by the appellant. 4.1 That the learned Commissioner oflncome Tax (Appeals) has failed to appreciate the evidence tendered by the appellant to support the claim of loss on sale of shares and hence, findings recorded in disregard of evidence and based on irrelevant and extraneous considerations are misconceived and, misplaced. 4.2 That the learned Commissioner of Income Tax (Appeals) has proceeded to sustain the addition on surmises, conjectures and suspicion and therefore, the made and sustained is not warranted. 4.3 That addition confirmed is in disregard of decision of Special Bench in the case Manoj Aggarwal vs. DCIT reported in 113 ITD 377 (Del)(SB) and thus, is otherwise contrary to principle of judicial discipline and hence, unsustainable. 5 That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding an addition of ₹ 2,920/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, which read as under: 6.5 I have considered the order of the AO, remand report of the AO and the submission of the assessee and I do not find any merit in the submission of the assessee in the additional ground of appeal against the proceedings u/s 158BD/158BC. It is seen that the AO was in possessing of specific information regarding the bogus entries taken by the assessee and has recorded the reasons in detail and a copy of the satisfaction note dated 15.04.2004 of the AO is enclosed and marked as Annexure-A and the AO was satisfied regarding the concealment of income and accordingly, has issued a notice u/s 158BD/158BC. The AO had also issued a letter dated 17.01.2006 to the assessee regarding the reasons for initiation of block proceedings u/s 158BD/158BC and a copy of the letter is enclosed and market as Annexure-B. The AO has also submitted remand reports dated 30.04.2007 and 06.12.2007 (vide Annexure C D) in which it has been emphasized that the AO has made satisfaction note for initiating proceedings u/s 158BD and the AO has validly assumed the jurisdiction u/s 158BD/158BC. The case laws relied on by the assessee is on various issues and the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision that before invoking the provisions of section 158BD of the Act, the Assessing Officer of the person searched under section 132(1) must satisfy himself that some undisclosed income belongs to a person other than the persons with respect to whom search was made under section 132(1) of the Act. Such satisfaction must be based on the material found in the course of search. In the absence of any such satisfaction (which is to be recorded in writing) the concerned Assessing Officer does not get any jurisdiction to assess that other person by invoking the section 158BD of the Act. Further, the satisfaction of the Assessing Officer has to be in respect of the following aspects:- (i) there should be undisclosed income within the meaning of section 158(b) referable to the assets or books/documents found seized/requisitioned; (ii) there should a finding by the Assessing Officer that there was undisclosed income in such assets or books of account or documents of the searched person; (iii) and that such undisclosed income belonged to the person other than the one searched. 5.2 In the present case, admittedly, the search seizure operation was conducted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nferred that no satisfaction note was recorded, as per the law laid down by Hon ble Apex Court in the case cited supra. 7. Furthermore, the assessment in the case of searched person i.e. Mr. Manoj Kumar Aggarwal, completed on 29th August, 2002 and the notice under Section 158BD in this case was issued on 15th April, 2004 that is nearly after lapse of two years and two months. The Hon ble Apex Court in the case of CIT Vs. Calcutta Knitwears, 362 ITR 673 held that the recording of satisfaction on the issue of notice under Section 158BD should be done (a) at the time or along with the initiation of proceedings against the searched person under Section 158BC of the Act, (b) along with the assessment proceeding under Section 158BC of the Act, and (c) immediately after assessment proceedings are completed under Section 158BC of the Act of the searched person. 7. It was further held that vide para 43 of the judgment that the period of limitation prescribed under Section 158BC cannot be extended by issuing the belated notice under Section 158BD. The Hon ble Jurisdictional High Court in the case of CIT Vs. Bharat Bhushan, 370 ITR 695, held that having regard to the intent of the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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