TMI Blog2018 (1) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions of Section 153C are not satisfied in this case. Therefore, there were no justification for the A.O. to make addition of ₹ 1.25 crores against the assessee in proceeding under section 153C of the I.T. Act, 1961. We, accordingly, set aside the orders of the authorities below and quash the proceedings under section 153C of the I.T. Act. Since, we quash the proceedings under section 153C of the Act, therefore, there is no need to decide the addition on merit - Decided in favour of assessee - ITA.No.448/Del./2016, C.O.No.183/Del./2016 And TA.No.448/Del./2016 - - - Dated:- 1-1-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Revenue : Ms. Rachna Singh, CIT-D.R. For The Cross-Objector : Shri Sajjan Kumar Tulsiyan, Advocate Ms. Nisha Rachh, C.A., Shri Karan Kumar, C.A. ORDER PER BHAVNESH SAINI, J.M. The Departmental Appeal as well as Cross Objection of the assessee are directed against the order of the Ld. CIT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2009-2010. 2. Briefly, the facts of the case are that search and seizure and survey operations under section 132/133A of the I.T. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... com 290 (SC), is bad in law. 5. Learned Counsel for the Assessee submitted that search was conducted in Aryan Sainik Group of cases and assessee- company was not subjected to search. The A.O. made addition on account of unexplained cash credit, under section 68 of the I.T. Act , which are recorded in the books of account of the assessee-company. He submitted that since no incriminating material/documents were found during the course of search against the assessee-company and it is not proved that any incriminating material belong to the assessee-company, therefore, conditions of Section 153C are not satisfied in this case. He has submitted that additional ground is legal in nature and can be decided on the basis of the material already brought on record, therefore, the same may be admitted for hearing and disposal of the appeal. He has relied upon the decision of the Hon ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society 84 taxman.com 290. 6. On the other hand, the Ld. D.R. relied upon the orders of the authorities below and objected to the admission of the additional ground at this stage. The Ld. D.R. submitted that in group cases, during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search belongs to the assessee-company or that whether A.O. is able to satisfy the conditions of Section 153C of the I.T. Act, in the present case. The additional ground is legal in nature and all the relevant facts and material are available in the orders of the authorities below and on record. The additional ground being legal in nature and goes to the route of the matter, therefore, it should be admitted for the purpose of disposal of the appeal. In support of our view, we rely upon the decision of the Hon ble Supreme Court in the case of National Thermal Power Company reported in 229 ITR 383 and also another decision of the Hon ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) in which the Hon ble Supreme Court held as under : Held, dismissing the appeals, (i) that the Tribunal permitted the assessee to raise the additional ground on the ground that it was a jurisdictional issue taken up on the basis of facts already on record, that under section 153C of the Act, incriminating material which was seized had to pertain to the assessment years in question, and that the documents which were seized did not establish any c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. However, there is a distinction between the two provisions inasmuch as under section 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under section 158BD if the Assessing Officer was satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A, he could proceed against such other person under section 158BC. Thus a condition precedent for issuing notice under section 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the requirement is not satisfied, recourse cannot be had to the provisions of section 153C. Held, allowing the petition, that admittedly, the three loose papers recovered during the search proceedings did not belong to the petitioner. It was not the case of the Revenue that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a distinction between loose papers found from the possession of the assessee and similar documents found from a third person. The documents were not found from the possession of the assessee but from the possession of a third person i.e., D. Mere mention of the names of the villages where the companies might have purchased lands would not give any basis to assume, presume or surmise that the names of the companies were mentioned in the documents. The Tribunal set aside the order of the Commissioner (Appeals) pertaining to the assessment year 2008-09 holding that the action under section 153C of the Act was bad in law. On appeal : Held, dismissing the appeal, that the finding that section 153C was not attracted and its invocation was bad in law was not based just on interpretation of section 153C but after holding that the ingredients thereof were not satisfied in the present case. That was an exercise carried out by the Tribunal as the last fact finding authority. Therefore, the finding was a mixed one. There was no substantial question of law arising from such an order which alternatively considered the merits of the case as well. The deletion of the addition was justified. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded any satisfaction that any seized document or material belongs to any person other person searched. Since the revenue is in appeal, therefore, burden was upon them to prove that necessary ingredients of section 153C have been complied with in this case before invoking jurisdiction under section 153C. It is added further here that the Assessing Officer has not referred to any seized document or material in the assessment orders on the basis of which, additions on merit have been made. Therefore, the conditions of section 153C as noted above are also not satisfied in this case. Therefore, there is no infirmity in the order of the Commissioner (Appeals) in quashing the proceedings under section 153C. 13. In the present case, is an admitted fact that no recovery has been made from the possession of the assessee-company. The department s belief is that some material found during the course of search in Aryan Sainik Group of cases. The A.O. on examining the books of account of the assessee-company found that assessee has received share application money of ₹ 1.25 crores in assessment year under appeal which were already disclosed to the Revenue De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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