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Smt Jyotsna Desai And Chandravadan Desai Versus Asstt Commissioner of Income Tax Circle-32, Kolkata

Validity of assessment u/s 153C - Held that:- No satisfaction in terms of section 153C of the Act were recorded by the Assessing Officer of the searched person u/s 132 of the Act to reach to a conclusion that the contents in the seized documents belongs to the assesses (i.e a person other than the searched person) and accordingly, we hold that the search assessments framed u/s 153C read with section 143(3) of the Act on the assesses herein are declared illegal and void abinitio. Since the appeal .....

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lkata in Appeal No.159/CIT(A)-XIX/ACIT. Cir-32/Kol/10-11 dated 26/07/2011 for the Asst Year 2002-03 & Appeal No.161/CIT(A)- XIX/ACIT, Cir-32/Kol/10-11 dated 27/07/2011 for the Asst Year 2005-06 in the hands of Smt.Jyotsna Desai; and in Appeal No.157/CIT(A)-XIX/ACIT, Cir-32/Kol/10-11 dated 28/07/2011 for the Asst Year 2003-04, Appeal No.156/CIT(A)-XIX/ACIT, Cir-32/Kol/10-11 dated 28/07/2011 for the Asst Year 2004-05, Appeal No. 155/CIT(A)-XIX/ACIT, Cir-32/Kol/10-11 dated 28/07/2011 for the As .....

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lved all these appeals are identical in nature and hence they are taken up together and disposed off by a common order for the sake of convenience and brevity. 4. The assesses have also raised additional grounds of appeal before us for all the aforesaid assessment years under appeal. We find that the same go into the root of the matter and the facts in respect of the same are already available in the file of the lower authorities and hence in the light of the decision rendered by the Hon'ble .....

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peal:- "1. For that on the facts and in the circumstances of the case the CIT(A) ought to have cancelled the assessment u/s. 153C since the conditions precedent for invoking the said provisions were not satisfied and in that view of the matter the assessment order ought to have been held to be ab intio void. 2. For that on the facts and in the circumstances of the case, the CIT(A) ought to have held that the proceedings u/s. 153C were wrongly initiated since no documents, books of account, .....

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lant were found in the course of search conduction u/s. 132 of the Act and in absence of such mandatory satisfaction by the AO of the person searched, proceedings u/s. 153C in the appellant's case were ab intio void. 4. For that the appellant craves leave to file additional grounds and/ or amend or alter the grounds already taken either before or at the time of hearing of the appeal." 6. The brief facts recorded by the Learned AO are that there was a search operation conducted u/s 132 o .....

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and cheques, cash to be paid , cheques to be paid, details of renegotiation, details of actual cash payment, details of actual cheque payments, etc. In the entries in the said records, 'sh' was found to represent cash portion, i.e on money or out of books portion and 'q' and 'chq' were found to represent cheque payments. In this regard, on page no. 8 of the seized document of Layer Exports Pvt Ltd, there is recording of transaction related to sale of flats by Layer Export .....

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ained in page 8 of the loose sheets seized from Bharat Shah Group at Mumbai. 7. The Learned AO based on this information received from ACIT, Central Circle 24 & 26, Mumbai vide abovementioned letter dated 21.12.2009 proceeded to issue notice u/s 153C of the Act on the assessee. The assessees prayed for dropping of proceedings initiated u/s 153C of the Act before the Learned AO and ignoring the contentions of the assesses, the Learned AO framed the assessment u/s 153C rws 143(3) of the Act on .....

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hich is in page 21 of the paper book) issued by the Learned AO to the assesses herein stating the purpose for which section 153C proceedings were initiated on the assesses, it could be seen that no satisfaction in terms of section 153C of the Act was recorded by the Assessing Officer of section 153A person that the entries in the seized documents indeed belongs to the assesses herein warranting the invocation of provisions of section 153C of the Act. Accordingly, he pleaded that the search asses .....

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tion 153C of the Act which are reproduced hereunder:- 153C.Assessment of income of any other person.- (1) Notwithstanding anything contained in section 139, section 147, section 148, 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 or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account .....

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132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the ret .....

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otice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 9.1. It is observed that page 1 of the paper book con .....

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009 To, Deputy Commissioner of Income Tax, 32 Kolkata 10 B Middleton Row Kolkata-76 Sub: Information in case of Jyotna Desai(PAN- AGPPD5544F) and Chandravadan Desai (PAN-AFQPD8487F) ….. Search operation u/s. 132 was conducted on the premises of Bharat Shah group, in which loose papers 1 to 19, contained in annexure A- 1, were seized from 55, Gamdevi 2nd floor, Panchshil Plaza, Mumbai on 15.3.2008, copy of which are annexed herewith. These loose papers are systematic records related to act .....

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t of books portion and " q" and " chq" represents cheques portion i.e which is accounted in the books. In this regard, on page no. 8, there is recording of transaction related to sales of flats by layer Exports Pvt. to Chandravadan Desai (PAN-AFQPD8487F) AND Jyotna Desai (PAN-AGPPD5544F), out of which Jyotna Desai is assessed in your charge. As per the said record, your assessee has paid cash money i.e. out of books money of ₹ 80139192 to my assessee. You are hereby req .....

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dings u/s 153C of the Act on them. For the sake of convenience, the said letter dated 4.5.2010 is reproduced herein below:- OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -32, KOLKATA No. ACIT?Circle-32?Scrut/09-10 May 4, 2010 To, Shri Chandrvadan Desai 37, Shakespeare Sarani, Kolkata-700017. Sub: Proceedings u/s 153C for the A.yrs 2002-03 to 2008-09-matters regarding ….. Please refer to the notice u/s. 153C issued by the undersigned and served on you; as well as to your reque .....

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d has accordingly passed the same to the respective assessing officers. The documents which bore specific information on your dealings/transactions/ acquisition were part of the said documents. Copy of the said documents are hereby provided for your purposes, in respone to the specific request made by you on this behalf. Yours faithfully, Sd/- (Abhijit Ghosh) Asstt. Commissioner of Income Tax Circle-32, Kolkata Code No.WBG C 132-1 9.3. We find that from the annexure referred to by the Learned AO .....

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ngs u/s 153C of the Act on the assesses herein. We find from the said seized loose paper, the notings in respect of "CHQ" alone are mentioned. We find that the transactions reflected as "CHQ" has been accepted as genuine by the Assessing officer of section 153A person itself and only the cash transactions were subjected to be verified in the hands of the assesses herein, for which purpose a letter dated 21.12.2009 together with the copy of the relevant seized document loose s .....

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of proceedings u/s 153C of the Act on the assesses herein in these facts and circumstances are not warranted and deserves to be quashed. Admittedly, the said seized loose sheets belong to the Bharat Shah Group (i.e the party searched u/s 132 of the act) and not to the assesses herein. We also hold that on perusal of the said contents of the seized loose sheets, no conclusion in accordance with law could be reached that it belongs to the person other than the person searched u/s 132 of the Act. .....

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C refers to any money, bullion, jewellery or other valuable article or things or books of accounts or documents seized or requisitioned belong to a person other than the person referred to in section 153A "( i.e the person where a search is initiated under section 132 or where books of accounts other documents or any assets are requisitioned under section 132A after 31st day of May, 2003)". In other words, therefore, while the emphasis was on "income belonging to other person" .....

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cle or things or books of accounts or documents seized or requisitioned should belong to such person, and that whether this requirement is not satisfied, resort cannot be had to the provisions of section 153C. It is thus clear that merely because a document is found in the premises of a third person, even if it indicates unaccounted entries of the assessee, it cannot be the reason enough to invoke section 153C unless the said document "belongs to" the person whose assessment is being s .....

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as much as his name is reflected in the list under the heading ' Samakarsh members details' and certain details are given under different columns against the name of the petitioner along with other members, however, it is nobody's case that the said documents belong to the petitioner. It is not even the case of revenue that the said three documents are in the handwriting of the petitioner. In the circumstances, when the condition precedent for issuance of notice is not fulfilled any .....

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o tax, it is not for us to supply any unintended omission even if it be so. Learned Departmental Representative's reliance on Hon'ble Delhi High Court's judgment in the case of SSP Aviation Ltd Vs. DCIT (20 Taxmann.com 214) is of no avail either, as it merely holds that even if documents belonging to the assessee is found in the premises of person searched does not show any undisclosed income, it can still be reason enough to trigger assessment u/s. 153C in the case of the person to .....

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of the Hon'ble Gujarat High Court in the case of Vijaybhai N. Chandrani -vs- ACIT and in the light of the Coordinate Benches decisions in the case of Meghmani Organics Ltd -vs- DCIT reported in 129 TTJ 255 (AHD), Ms. Shyam Lata Kaushik -vs- ACIT reported in 114 TTJ (Del) 940 and Shivnath Rai Harnarain (India) Ltd reported in 117 TTJ (Del) 480, we uphold the action of the CIT(A) and decline to interfere in the matter on the facts of this case and in the light of the undisputed situated that .....

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DR before us. b) Decision of Hon'ble Delhi High Court in the case of Pepsico India Holdings (P) Ltd vs ACIT reported in (2014) 50 taxmann.com 299 (Delhi) wherein it was held that "In order that the Assessing Officer of the searched person comes to the satisfaction that documents or materials found during the search belong to a person other than the searched person, it is necessary that he arrives at the satisfaction that the said documents or materials do not belong to the searched per .....

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isitioned belongs or belong to a person other than the person referred to in section 153A…'In view of this phrase, it is necessary that before the provisions of section 153C can be invoked, the Assessing Officer of the searched person must be satisfied that the seized material (which includes documents) does not belong to the person referred to in section 153A, i.e the searched person. In the satisfaction note, which is the subjectmatter of these writ petitions, there is nothing there .....

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ile the Jaipuria Group may be the owner of the photocopies of the documents, it is quite possible that the originals may be owned by some other person. Unless it is established that the documents in question whether they be photocopies or originals, do not belong to the searched person, the question of invoking section 153C does not arise. [Para 15] Thirdly, the Assessing Officers should not confuse the expression 'belongs to' with the expression 'relates to' or 'refers to .....

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