TMI Blog2015 (11) TMI 1682X X X X Extracts X X X X X X X X Extracts X X X X ..... have been recorded by the AO after drawing the inference from the seized documents that trend of payment of interest on PDCs by the group companies stood depicted and the assessee being a group company of BPTP Ltd., might have also paid interest on such PDCs. This approach of the authorities below, to our mind, is not tenable at all being based on fake inferences drawn. The assessee is a separate and distinct assessee under the Act and is to be assessed on the basis of material which belongs to it or specifically relevant for its assessment. In the instant case no specific document is pointed out belonging to the assessee nor any evidence or material, whatsoever, has been demonstrated by the authorities below to show that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h; (iii). That the conclusion of CIT(A) that seized documents prove the interest paid on PDC, is not sustainable because no document belong to assessee, no enquiry was made from any of the alleged recipient and no corroborating independent evidence was found; and (iv) That CIT(A) erred in upholding the addition of interest for the period for which PDC s were extended and directing the AO to compute the interest after six months from the date of sale. The Revenue, on the other hand challenged the impugned order on the ground that the CIT(A) has erred in deleting the addition of ₹ 33,78,805/- out of total addition of ₹ 34,67,098/- made by AO. 3. The brief facts of the case are that the original assessment order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed sources. 4. The assessee challenged the order of AO in appeal before the ld.CIT(A) both on validity of order u/s. 147 as well as merits of addition. The ld. CIT(A) after considering the matter at length concluded that the action taken u/s. 147 was legally valid and on merits directed the AO to compute the interest for the extended period of PDC, i.e., after 6 months from the date of sale on conservative side and accordingly, the appeal of the assessee was partly allowed vide the impugned order. Both the parties are not satisfied with the impugned order, hence, these cross appeals. For the sake of convenience, we proceed to decide the appeal of the assessee first. 5. The ld. AR of the assessee challenging the impugned order, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered opinion, the same analogy may also be applied to the person other than the person searched if some documents belonging to him are found and seized during the course of a search. The decision of Hon ble Supreme Court nowhere puts a bar on the action against the third party u/s. 147 if any information with regard to detection of material belonging to it is received by the AO. Moreover, ITAT, Lucknow Bench in the case of ACIT vs. M/s. Shivam Gramodyog Sansthan, Kanpur (ITA No. 110 to 113/LKW/2012) vide order dated 10.12.2014, after considering the decision of Hon ble Apex Court (supra), held as under in the case of person other than the person searched : 14. It is also settled position of law as held by the Hon'ble Apex court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT cannot be said to be without jurisdiction. 16. In the light of the aforesaid judgments, we are of the considered view that the impugned incriminating material found during the course of search can be used by the Assessing Officer against the assessee, as it relate to it. The ld. Counsel for the assessee has not placed before us any judicial pronouncement for the proposition that the material belonging to the person other than the person search, found and seized in the search and seizure operation, cannot be used against such person for the purpose of assessment u/s. 147. Accordingly, the first limb of assessee s stand challenging the validity of action u/s. 147 is rejected. 7. Now adverting to the second limb of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any evidence or material, whatsoever, has been demonstrated by the authorities below to show that the assessee had paid interest on PDCs. Therefore, there being no definite material belonging to the assessee, in our opinion, the reasons recorded for initiation of proceedings u/s. 147 against the assessee, are not in consonance with law, having been based on mere suppositions and surmises and extrapolation of material seized. The fact that the assessee is a group company of BPTP Ltd. and overall management is controlled by one person cannot be equated with the existence of incriminating material belonging to the assessee for drawing the adverse inference. We, therefore, find considerable force in the contention of the assessee that assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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