TMI Blog2013 (6) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the search operations conducted by the Income-tax Department at the premises of M/s. Radico Khaitan, UPDA and at the residence of Shri R.K. Miglani coupled with the statements of Shri R.K. Miglani recorded on 14.02.2006 under sec. 132(4) of the Act without appreciating the fact that the said seized documents did not or could not belong to the appellant company within the meaning of that word in section 153C of the Act and also simultaneously belong to the appellant company as well as to a large number of other entities which were members of UPDA. The impugned assessment order, therefore, requires to be quashed . At the very outset, I would like to mention that this ground of appeal is exactly the same as the appellant s ground of appeal No.2 for A.Y. 2004-05. the submissions both written and oral submissions made by Shri Gupta are also exactly the same as his submissions for A.Y. 2004-05. These submissions were considered by my predecessor and who vide detailed reasons given by him in para 4.5 and 4.6 of the appellant order for A.Y. 2004-05 has held that on the facts obtaining in the case of the appellant these contentions are not acceptable and that the A.O. has righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2012 and it has been followed by the ITAT in the case of the assessee. The discussions made by the ITAT while disposing of 31 appeals of different assessees read as under: 8. We have carefully considered the rival submissions, perused the relevant records and also the case laws on which reliance was placed. 8.1. During the course of action u/s 132 of the Act at the residential premises of Sri Miglani, some incriminating documents purported to have been unearthed which, according to Revenue, revealed illegal payments made by various distilleries to public servants and that the impounded materials revealed that the appellant was one of the members of UPDA which also indulged in certain illegal payments. On the basis of above narration, the appellant was called upon by way of issuance of notice u/s 153A r.w.s. 153C of the Act to furnish its returns of income. 8.1.1. Thus, the core issue before this Bench is: Whether the assessing officer was within his sphere to call upon the appellant to furnish its returns of income on the solitary reasoning that the appellant s was also one of the members of UPDA who had made certain illegal payments to various public servants? At thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L was also received from the DCIT, CC-19, New Delhi . Thus, the AO, in our considered view, was not within his realm for initiation of proceedings u/s 153A r.w.s 153C of the Act in the case of the present appellant. 8.1.3. Even from the legal angle too, the AO was not justified for initiation of action u/s 153A r.w.s 153C of the Act, as held by the Hon ble Bench in the case of P Srinivas Naik v. ACIT reported in (2008) 114 TTJ (Bng) 0856 wherein it has been declared that: 7. We have heard both the parties. It is an undisputed fact that books of accounts or documents do not belong to the assessee, as these were seized from the premises of Shri Reddy. It is nowhere stated that these books of account or documents showed that all the transactions belonging to the assessee. Such books of account or documents contained the transactions relating to the group concerns of Shri Reddy. No valuable belonging to the assessee has been seized during the course of search. The terms belonging implied something more than the idea of casual association. It involves the notion of continuity and indicates one more or less intimate connection with the person over a period of time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court of Gujarat in the case of Vijaybhai N Chandrani v. ACIT reported in (2010) 231 CTR 474 (Guj) ruled in a similar way thus: 13. Thus, a condition precedent for issuing notice under section 153C and assessing or reassessing income of such person, is that the money, bullion, jewellery or other Page 12 of 12 ITA Nos.1375 12 to 1378/Bang/2010 valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the said requirement is not satisfied, resort cannot be had to the provisions of section 153C of the Act. 8.2. Taking all the above facts into consideration and also the judicial pronouncements on a similar issue as discussed above, we are of the considered view that the stand of the CIT (A) is justified in the sense that the primary condition for issue of notices under section 153C of the Income-tax Act are not satisfied and, hence, the assessing officer was not justified in initiating proceedings under section 153C of the Income tax Act for all the assessment years under dispute. It is ordered accordingly. 9. In the result, the Revenue s appeals for the AYs 2002-03, 2003-04, 2004-05 and 2005-06 are dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of Bombay ILR 1942 Bom 463, 201 IC 329, 15 RB 66, 64 Bom LR 35, AIR 1942 Bom 183 ]. Mere possession, or joint possession, unaccompanied by the right to, or ownership of property does not amount to belong . [CWT v. Bishwanath Chatterjee (1976) 3 SCC 385]. Belong to. [See Owner , Raja Mohammad Amir Ahmad Khan v. Municipal Board, Sitapur AIR 1965 S.C. 1923. (1966) 1 SCJ 484]. Though the word belonging no doubt is capable of denoting an absolute title, it is nevertheless not confined to connoting that sense. Even possession of an interest less than that of full ownership could be signed by that word.. The precise sense which the word was meant to convey can, therefore, be gathered only by reading the document as a whole and adverting to the context in which it occurs. [Raja Md. Amir Ahmed Khan v. Municipal Board, Sitapur, supra. ] Section 2(m) of the WT Act, uses the expression belonging to and as such indicates something over which a person has dominion and lawful dominion should be the person assessable to wealth tax for this purpose. Even in some cases, the phrases belonging to is capable of connoting interest less than absolute perfect legal title. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat cannot be a document belonging to the assessee. It can be explained with a simple example, suppose an ex employee of a concern who has a knowledge of account makes extra polation of the accounts on the basis of his experience and that person was searched, can the document be considered as belonging to the assessee. It may give information to the Income-tax Department for investigation. It may lead to reopening of assessment but those details cannot be a gospel truth and cannot be considered as documents belonging to the erstwhile employer. 19. During the course of hearing, a query struck to our mind that UPDA is a society where all the assessees are members. According to the principle of mutuality, why the details prepared by the Secretary of the Society be not construed as belonging to all the members of the society. To this query, it was contended by the learned counsel for the assessee that UPDA is an independent taxable entity. It is not a members club and not a mutual benefit society. It is constituted under a separate Memorandum of Association. The Memorandum of Association does not provide that excess of the income shall be paid or transferred directly or indirectly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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