TMI Blog2018 (12) TMI 1606X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned assessees, the Assessing Officer has only supplied the photocopies of the seized documents and not the documents, per se. In our understanding of the facts, one document can belong to one person. But, in the cases in hand, we find that whatever was seized from the premises of Shri R.K. Miglani/UPDA, all the seized documents were alleged to be belonging to the captioned assessees. A perusal of the satisfaction note shows that it is highly vague and too general and is prepared in a mechanical manner and without application of mind. A perusal of the assessment order shows that the entire findings of the Assessing Officer are solely based upon the seized documents supplied by the searched party and the impugned satisfaction note. The entire assessment order is devoid of any independent verification. Revenue failed to demonstrate that the production figures were in fact, forwarded by the concerned distilleries under its letter head or some other form. It is not known why Shri R.K. Miglani or for that matter UPDA was maintaining production details of various distilleries. No doubt, production figures gathered from respective distilleries do match with the production figure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the principles of natural justice and deserve to be tagged as nullity. Assessment barred by limitation - Held that:- The assessment proceedings u/s 153C were started on 11.12.2006 when the Assessing Officer received alleged satisfaction note and the documents belonging to the assessee. As per the provisions of the Act contained in section 153B(b) as stated hereinabove, the Assessing Officer had to frame assessment order by 22.03.2008, excluding the period of stay and adding the same period to nine months whereas assessment order is framed on 30.12.2008 and is, therefore, well beyond the period of limitation. In our considered opinion, when the stay got vacated on 07.05.2017 and there being no further stay only such time during which the order of the Hon'ble High Court had been passed granting stay till the same was allowed can alone be excluded. DR contention that the time taken for filing the appeal by the department before the Hon'ble High Court of Calcutta should also be excluded is without merit because the provision specifically provides that only that period will be excluded during which the proceedings have been stayed by the Hon'ble High Court. In our consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24/Del/2012, ITA No. 9 To 11/Del/2012, ITA No. 3208 To 3211/Del/2013, C.O. No. 126 To 131/Del/2013 (IN ITA No. 1648 To 1653/Del/2013) Assessment year : 2001-02 To 2007-08, Parties: DCIT Versus Sir Shadi Lal Enterprises Ltd. And Vice-Versa, Saraya Industries Ltd., Versus DCIT, ACIT Versus Saraya Industries Ltd., SVP Industries Ltd. Versus DCIT, DCIT Versus Kesar Enterprises Ltd. And Vice-Versa, M/s Narang Distillery Ltd., Versus DCIT And Vice-Versa, M/s National Industrial Corporation Ltd. Versus DCIT, and Vice-Versa, DCIT, Versus Modi Industries Ltd. and Vice-Versa, Simbholi Sugars Ltd. Versus DCIT, ACIT, Versus M/s Simbholi Sugars, DCIT Versus M/s Superior Industries Ltd. And Vice-Versa, U.P. Distillers Association, Versus DCIT, DCIT Versus DCM Shriram Industries Ltd. And Vice-Versa Shri N.K. Billaiya And Ms. Suchitra Kamble, JJ. Assessee by: Shri C.S. Agarwal, Shri G.N. Gupta, Shri Satyajeet Goel, Shri M.P. Rastogi, Shri Salil Kapoor, Ms Deepashree Rao, Shri Abhishek Arora, K. Sampat, Shri R.K. Kapoor, Department by: Shri S.S. Rana, CIT DR ORDER PER BENCH:- The Jurisdictional High Court of Delhi, vide order dated 22.01.2015, has considered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 534-537/2013, 252-256/2014, 418-423/2014, 447/2014, 759-761/2014 782-784/2014 Page | 7 rights and contentions of the parties, including that of the revenue, if they feel aggrieved against the orders of the ITAT, are kept open. It is also clarified that the findings of the ITAT, if adverse to the revenue, are open to challenge. 8. The above appeals are remitted to the ITAT for fresh consideration. ITAT shall consider and render findings on the grounds raised by or in the appeals before it by the concerned assessees. It is clarified that this is not a limited remand and the ITAT shall proceed to hear the merits of the appeals pending before it on other grounds as well. 4. Accordingly, the matters relating to Mohan Meakins Limited, National Industries Corporation Ltd, Superior Industries Ltd, DCM Shriram Industries Ltd, Saraya Industries, M/s Lords Distillery Limited and National Industrial Corporation Ltd were remitted to the Tribunal for reconsideration on the lines indicated in the said order of the Hon'ble High Court. 5. The representatives of the captioned assessees were heard at length. In addition to their respective oral submissions, each of them also preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eizure actions under section 132 of I.T. Act 1961 were taken on M/s Radico Khaitan Limited group of cases and also at the residence of Shri R.K. Miglani, Secretary General of UPDA on 14.2.2006. Simultaneously a survey u/s 133 A of the I.T. Act, 1961 was carried out at the office of the L'PDA (Uttar Pradesh Distillery Association). Various incriminating documents were found and seized therefrom. Action u/s 153A has been initiated against, various persons including M/s Radico Khaitan Ltd, and Shri R.K. Miglani. During the course of search various documents were seized / impounded and statements u/s 132(4) / 133 A were recorded including those of Shri R.K. Miglani. The scrutiny of incriminating documents found at the residence of Shri Miglani and also from the office of UPDA reveals that illegal payments were made by various Distilleries to various public servants. The UPDA acted as the nodal agency for making these illegal payments. The total of such illegal payments which are inadmissible expenditures works out to ₹ 246 crore as per details given hereunder {as understood from annexure A-l A-2 seized from the residential premises of Shri R K Miglani}:-' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 334 204.2 275.6 1015.8 16 Central 22 44 32.4 98.4 17 Modi 21 125 149.7 308.8 604.5 18 Superior/ITRC -- .. 46 34.7 233.6 320.3 19 72.5 72.5 TOTAL 59.80Cr. 75Cr. 46.10Cr. 65.23C 246.076Cr The distilleries appearing at S.No.12 13 belong to M/s Sir Shadi Lal Enterprises Ltd. So, from the above chart, the total of such illegal payments in respect of M/S. Sir Shadi Lai Enterprises Limited, 4A, Kansalaya, 15, Barakhamba Road, New Delhi, which are inadmissible expenditure works out to ₹ 992.9 lakh, as per details given hereunder:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d parties, who .have paid negligible taxes on this amount. Such charges were not paid till Financial Year 2001-02. (c) Many distilleries started paying commission on sales, expenses on sales, sales incentives etc. from F.Y. 2002-2003 onwards, when these types: of payments do not result into corresponding incidence of tax in the hands of the recipients. Sometimes these payments are made to business concerns in non-related business. Shamii and Pilkhani Distilleries. Daurala, Distillery.. M/S Lords Distillery have made such types of payments. (d) In most cases, expenses on empty bottles have increased disproportionately since F.Y. 2002- 2003. (e) Some of the distilleries like Saraya are paying inflated transportation charges if compared with other distilleries. In view of the above facts based on seized documents and coupled with the statements of Shri R.K. Miglani. Secretary General of UPDA, I am satisfied that the documents seized. Hence. Action u/s 153C is called for in the ease of above noted person who has incurred illegal expenditure as mentioned above. Photocopies of Annexures A-l to A-10 seized from the residence of Sh. R. K. Miglani and Annexures A-1 to A-8 imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of requisition under section 132A in the second proviso to 45[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. 17. A plain reading of the afore-stated relevant provision shows that the Assessing Officer has to firstly rule out that the books of account or documents seized do not belong to the person searched. The satisfaction note exhibited elsewhere clearly shows that nowhere it has been ruled out that the documents seized do not belong to the searched person. In our understanding of the law, once this possibility is ruled out that the seized documents do not belong to the person searched, then the officer should proceed in identifying the persons to whom such documents belong to. After identifying such other persons , books of account or documents shall be handed over to the Assessing Officer having jurisdiction over such other persons . 18. This means that after recording satisfaction, the Assessing Officer of the searched person shall hand over the documents on as is basis. We find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is after such satisfaction is arrived at that the document is handed over to the Assessing Officer of the person to whom the said document belongs . In the present cases it has been urged on behalf of the petitioner that the first step itself has not been fulfilled. For this purpose it would be necessary to examine the provisions of presumptions as indicated above. Section 132(4A)(i) clearly stipulates that when inter alia any document is found in the possession or control of any person in the course of a search it may be presumed that such document belongs to such person. It is similarly provided in Section 292C(1)(i). In other words, whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or satisfaction that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of satisfacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he satisfaction note were the ledger account maintained by the assessee showing the commission payments made by the assessee to R and the letter written by the assessee to R. Since the letter was written by assessee to R to be treated as a document belonging to R and not to the assessee. Whether it might or might not be related to the assessee was not relevant since the amendment to section 153C of the Act in that regard was prospective with effect from June 1,2015 i.e. subsequent to the date of preparation of the satisfaction note. With regard to the extract of the ledger account maintained by the assessee concerning the payments of commission made by it to R, even if it was held to belong to the assessee, it could not be an incriminating document. This was a document relevant only for the assessment year 2010- 11. It could not have been used for reopening the assessments of the earlier assessment years 2007-08 to 2009-10, 2011-12 and 2012-13. While the ledger account extract might be relevant for the assessment year 2010-11, it could not be an incriminating material warranting reopening of the assessment. The return originally filed by the assessee for the assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Limited relating to M/s Real Gains Estate Pvt Ltd. Page no. 123 is a fetter written by ARN Infrastructures India Limited dated 27/1/2010. The said satisfaction note prepared by the AO of the person searched has been kept on record. I have also examined the above documents and the contents noted/written therein. After examination of these documents, I am also satisfied, that these documents belong to M/s ARN Infrastructures India Limited. .In view of the same, I am; further satisfied that it is a fit case for initiating proceedings u/s 153C rws-153A of the Income Tax Act, 1961 for AYs 2007-08 to A.Y 2012-13. Accordingly, notices u/s 153A rws 153C are issued as per provisions of the IT Act, 1961. New Delhi Asst. Commissioner of Income Tax Central Circle-14, New Delhi. 21/7/2014 26. As mentioned elsewhere, the documents were seized from Shri R.K. Miglani or UPDA and, therefore, the presumption is that the same belonged to Shri R.K. Miglani/UPDA. The decision of the Hon'ble Delhi High Court in the case of ARN Infrastructure India Ltd [supra] clearly endorses this view. Documents not annexed with appeal were not considered by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payments made by the captioned assessees to the fund. This was allegedly used to bribe the public officials and politicians. The main thrust of the Revenue s grievance is with respect to amount stated to have been clandestinely given to UPDA as the captioned assessees contribution towards Slush Funds to be used as pay offs to politicians and public officers in return for favorable treatment. However, the Revenue has grossly failed in demonstrating the end use of such alleged slush funds . Moreover, the Assessing Officer during the course of assessment proceedings never examined the captioned assessees representatives/employees nor any cross verification was done from any of the beneficiary of this slush fund . 31. A perusal of the assessment order shows that the entire findings of the Assessing Officer are solely based upon the seized documents supplied by the searched party and the impugned satisfaction note. The entire assessment order is devoid of any independent verification. 32. Coming back to the facts relating to the seized documents, the ld. DR vehemently stated that the Assessing Officer has specifically relied upon the incriminating seized documents Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of normal business expenses, Shri R.K. Miglani replied that his office keeps record of contribution/payments by various members of UPDA directly to politicians and other persons/agencies. He showed his inability to furnish details of actual names and amount paid to various members. 37. This reply of Shri R.K. Miglani is also vague and is of general in nature, since he has categorically admitted that he has neither received any money nor he has disbursed any money. In fact, according to him, the various members of UPDA directly made payments to politicians and other persons/agencies. 38. There is nothing on record brought by the Revenue to demonstrate the details of payments and the names of the payees. 39. With respect to answer to Question No. 17, which is I am showing you page 77 to 79 of Annexure A-2. Please explain the amount written by hand on various dates and who has written these amounts , the answer was : The hand written entries are written by me and these are in respect of amount received by the Core Distilleries from other members towards contribution of amount to be paid to various Government Agencies/persons. 40. Once again, Shri R.K. Miglani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer which was affirmed by the Hon'ble High Court of Delhi. But this was in the context of provisions of section 12AA of the Act, and, therefore, cannot be stretched to the proceedings u/s 153C of the Act in respect of 11 distilleries. A judgment has to be considered in the context in which it was delivered. 46. The Assessing Officer, during the course of assessment proceedings, has heavily relied upon the entries found in the impounded documents. But, there is not even a single finding by the Assessing Officer which could suggest that the corresponding entries were found in the regular books of account of any of the distillery. This shows that no independent verification/examination was done by the Assessing Officer who simply relied upon the seized material supplied to him by the Investigation Wing. 47. The Revenue has strongly contended that the seized documents are such documents which belong to the captioned assessees. In our understanding of the facts and on perusal of the seized documents, this assertion of the Revenue is completely and wholly misplaced in law. The concept of the term belong to has judicially been examined as discussed elsewhere, where it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two employees but we have to say that during the course of assessment proceedings, these employees were never questioned by the Assessing Officer to verify whether they actually put the signatures on those documents. In our considered opinion, such documents are only hearsay evidence. 54. Another theory propounded by the Revenue is that every distillery had to contribute ₹ 20/- per case and had thus contributed such a sum is entirely unsupported by any material. It is not known who had collected the alleged sum to have been contributed and what is the destination of such sum. In none of the documents, name of the payee, any public servant or politician appears. This itself establishes that the documents are dumb. 55. Before us, the ld. DR has supplied the copies of the documents which form Annexure of the seized documents, but has failed to demonstrate the basis on which such documents belonged to the distilleries or any of the distilleries. The emphasis was on the names appearing in such loose sheets without there being any corroborative material. Therefore, these documents do not stand the test of judicial scrutiny to conclude that such documents belong to distillerie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot from the distilleries. The contents of the impugned documents have to be established as genuine by leading cogent positive evidence or material and have to be supported by corroborative material. In the present appeals, no such material has been brought on record. Therefore, we have no hesitation to hold that the proceedings u/s 153C of the Act have not been validly initiated and, therefore, deserve to be quashed. COMMON GRIEVANCE NO. 2 NO CROSS EXAMIANTION OF SHRI R.K. MIGLANI WAS ALLOWED BY THE REVENUE 61. All the appellant distilleries have raised another common issue claiming that the assessment orders have been framed in gross violation of principles of natural justice. It is strongly contended that the additions have been made on the basis of statement of Shri R.K. Miglani which was recorded during the course of search proceedings and in spite of repeated requests to the Assessing Officer to produce Shri R.K. Miglani for his cross examination opportunity was not provided to the assessed distilleries, therefore, the Assessing Officer has proceeded to make the additions in gross violation of principles of natural justice. 62. The Hon'ble High Court of Delhi i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d even from the statement, no conclusion can be drawn that the entries made on the relevant page belongs to the assessed and represents his undisclosed income. It is also an admitted fact that the statement of the assessed was not recorded at any stage during the assessment proceedings. The only conclusion which can be drawn about the nature and contents of the document is that it is a dumb document and on the basis of the entry of nothings or figure etc. in this document, it cannot be concluded that this represents the undisclosed income of the assessee. 65. The Hon'ble Supreme Court in the case of Andaman Timber Vs. CIT in Civil Appeal No. 4228 OF 2006 has held as under: According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity in as much as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. 66. The ld. DR has strongly emphasized on the evidentiary value of the statement recorded u/s 132(4) of the Act and has relied upon several j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; ii) that the contents of such books of account and other documents are true; and iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. Where any books of account, other documents or assets have been d to the requisitioning officer in accordance with the provisions of 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from on referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A had been found in the possession or control of that person in the course of a search u/s 132. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the opinion that the assessment framed u/s 153C of the Act is in gross violation of the principles of natural justice and deserve to be tagged as nullity. 73. We will now address to the specific issues raised in the captioned appeals. Lords Distillery Limited ITA No. 2576, 2577 2578/DEL/2010 [A.Ys. 2003-04, 2004-05 2005-06] [Assessee s appeals] 74. The assessee urged permission to raise the following additional ground of appeal in support of Ground No. 2 of the grounds of appeal. The specific ground of appeal reads as under: The assessment framed by the Assessing Officer on 30.12.2008 is barred by limitation and thus it be held to be without jurisdiction. 75. The ld. DR strongly objected to this plea of the ld. counsel for the assessee stating that this ground was not before the ld. CIT(A) and, therefore, cannot be taken up at this stage. The ld. DR further contended that in the first round of litigation, the matter travelled up to the Hon'ble High Court and the Hon'ble High Court, vide order dated 22.01.2015, set aside the order of the Tribunal with specific directions. A new ground cannot now be taken up after the orders of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause the order in such cases would lack inherent jurisdiction unless the conditions precedent are fulfilled and it would be a void order or a nullity. The settled distinction between invalidity and nullity is now well brought out in the decision in Dhirendra Nath Gurai v. Sudhir Chandra Ghosh, AIR 1964 SC 1300, 1304, where their Lordships had gone into this material question as to whether the act in breach of the mandatory provision is per force a nullity. The passage in Macnamara on Nullities and Irregularities, referred to in Ashutosh Sikdar v. Bihari Lai Kirtania [1907] ILR 35 Cal 61 [FB], at page 72, was in terms relied upon as under: ...no hard and fast line can be drawn between a nullity and an irregularity; but this much is clear, that an irregularity is a deviation from a rule of law which does not take away the foundation or authority for the proceeding, or apply to its whole operation, whereas a nullity is proceeding that is taken without any foundation for it, or is so essentially defective as to be of no avail or effect whatever, or is void and incapable of being- validated. Thereafter, their Lordships pointed out that whether a provision fell under one category or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the return period was an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. Further proceeding, at page 2071, their Lordships pointed out the settled legal distinction between the provisions which conferred jurisdiction and provisions which regulated procedure, because jurisdiction could neither be waived nor created by consent, while a procedural provision could be waived by conduct or agreement. Their Lordships pointed out that in that case the assessee could not be said to have waived the provisions of the statute because there could not be any waiver of a statutory requirement or provision which went to the jurisdiction of assessment. The origin of assessment was either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction did not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act related to the exercise of jurisdiction under the Act in all cases. The learned Chief Justice in terms pointed out that the revenue statutes are ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re inserted by the legislature simply for the security or benefit of the parties to the action themselves, and that no public interests are involved, such conditions will not be considered as indispensable, and either party may waive them without affecting the jurisdiction of the court. Therefore, the period of limitation prescribed under section 132(5) being intended for the benefit of the person concerned, it was held that the assessee could waive that provision. That decision could not, therefore, be invoked in the present context of such a jurisdictional provision which is also a mandatory provision enacted in public interest in this revenue statute as earlier pointed out and which could never be waived. Besides, the question of waiver could never be raised if the person had no knowledge of his legal rights so that he could make any such conscious waiver. In the present case, the Appellate Assistant Commissioner in his order had pointed out that it was when he perused the order sheet that he found that there were no reasons recorded by the Income-tax Officer for issuing notice under section 148. The entry on the order sheet dated September 3, 1963, simply contained the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the rent courts over the buildings in question. It is true that section 254(4) in terms provides that save as provided in section 256 (which provides for the reference to the High Court), orders passed by the Appellate Tribunal on appeal shall be final. That finality or conclusiveness could only arise in respect of orders which are competent orders with jurisdiction and if the proceedings of reassessment are not validly initiated at all, the order would be a void order as per the settled legal position which could never have any finality or conclusiveness. If the original order is without jurisdiction it would be only a nullity confirmed in further appeals. If the essential distinction is borne in mind in such cases when there is such defect of jurisdiction because the conditions to found jurisdiction are absent, the Tribunal also would be suffering from the same defect and it could not confer any jurisdiction on the Income-tax Officer by making the remand order, because of the settled legal principle that consent could not confer jurisdiction when jurisdiction could be created only by fulfilment of the condition precedent as in the present case. Therefore, no question of fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before the Supreme Court, because the High Court's order of remand was merely an interlocutory order, which did not terminate the proceeding pending before the munsif and which had not been appealed from at that stage. Consequently, in the appeal from the final decree or order it was open to the party concerned to challenge the correctness of the High Court's decision. The two special features which distinguished that case were: one, that the order of the High Court which was relied upon to invoke the principle of res judicata was an interlocutory order, and the other, that it was made in a pending suit which as a result of that order did not finally terminate. In the present case also the remand order did not terminate the proceedings at the earlier stage. In fact, no question of any bar of res judicata even at the subsequent stage of the same proceeding could arise in the present case for the simple reason that the original order is said to be without jurisdiction. The first condition in invoking any bar of res judicata is the condition about the competence of the court. Similarly, the provision of finality in this relevant provision in section 254(4) could also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rily require any new verification of facts. Respectfully following the judgment of the Hon'ble High Court of Gujarat [supra] and further drawing support from the judgment of the Hon'ble Karnataka High Court in ITA No. 2638 of 2005 order dated 05.04.2010 in the case of CIT Vs. Pai Vaibhav Hotels Private Limited, we hold that the assessment is barred by limitation. We accordingly, reject the contention of the ld. DR and allow the additional ground of appeal raised by the assessee. 80. The ld. counsel for the assessee, in support of his claim of this new plea, vehemently stated that it goes to the root of the matter, in as much as, the jurisdiction of the Assessing Officer is questioned. It is the say of the ld. counsel for the assessee that since the assessment is barred by limitation, the same cannot stand on its own legs. 81. The bone of contention is the period of limitation provided u/s 153B(b) of the Act. The said section reads as under: 153B. Time-limit for completion of assessment under section 153A.-(1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of or reassessment,- (a) in respect of each assessment year f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the words two years the words twenty-one months had been substituted; (ii) the period of limitation for making the assessment or reassessment in case of other J person referred to in section 153C, shall be the period of twenty-one months from the end of the financial year in which the last of the authorizations for search under section 132 or for requisition under section 132A was executed or nine months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:. Explanation.-In computing the period of limitation for the purposes of this Section (1) the period during which the assessment proceeding is stayed by an order or injunction of any court. 82. A plain reading of the aforesaid provisions alongwith proviso and relevant part of the explanation shows that the period of limitation expires nine months from the end of the F.Y. in which the books of account or documents or assets seized or requisition are handed over u/s 153C of the Act to the Assessing Officer having jurisdiction over such other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble High Court. In our considered opinion, the facts on record clearly show that the assessment order framed u/s 153C r.w.s 153A of the Act dated 30.12.2008 is barred by limitation. Since the assessment order has been held to be barred by limitation, proceedings subsequent to the happenings get vitiated. 87. In the result, the appeals of the assessee are allowed. Shadi Lal Enterprises Ltd ITA Nos. 454 to 456/DEL/2010 [Revenue s appeals CO Nos. 67 to 69/DEL/2010 [assessee s cross objections] 88. The CIT(A) has annulled the impugned assessment order holding that no addition has been made on the basis of seized documents in the impugned A.Ys. Therefore, the Assessing Officer has initiated the proceedings u/s 153C r.w.s 153A of the Act without any jurisdiction. Therefore, the proceedings initiated u/s 153C of the Act are not as per law. 89. The Revenue is aggrieved by this finding of the first appellate authority for the impugned A.Ys. 90. Assessment has been framed u/s 153C r.w.s 153A of the Act vide order dated 24.12.2007 for A.Ys 201-12 and 2002-03. A perusal of the assessment order shows that the entire assessment has been framed on the strength of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. 98. We have discussed this issue in detail while adjudicating common grievance Nos. 1 and 2 elsewhere. For our detailed discussion therein, we hold that the assessment framed u/s 153C r.w.s 153A of the Act is without jurisdiction and accordingly, assessment order is annulled for want of jurisdiction. 99. In the result, appeals of the assessee are allowed. 1537, 1538, 1539 4692/DEL/2012 Saraya Industries [Assessee s appeal] 100. The entire assessment has been framed on the strength of the documents seized from the premises of Shri R.K. Miglani. Certain documents were also found at the premises of the appellant. Scrutiny of page 13 of Annexure A-2 revealed that ₹ 2.63 crores have been paid by the appellant to UPDA from April to July 2005 and a further sum of ₹ 75 lakhs was paid to UPDA in the month of July 2005. The Assessing Officer was of the opinion that this payment stands verified from the amount received by UPDA from the documents found and seized from the premises of Shri R.K. Miglani where the amount received is shown at ₹ 74.98 lakhs and, therefore, matches with ₹ 75 lakhs 101. When these facts were confronted to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PDA. Therefore, it cannot be said that such documents do not have any evidentiary value. 105. We have given thoughtful consideration to the rival submissions and have carefully perused the orders of the authorities below. We have given elaborate findings on the documents seized from the premises of Shri R.K. Miglani/UPDA while adjudicating Common Grievance Nos. 1 and 2 elsewhere. For our detailed discussion given therein, we hold that such documents do not belong to the assessee and, therefore, the assessments framed on the strength of such documents are without jurisdiction and hence deserve to be annulled. 106. Now the issue is whether the entries in the seized documents were admissible as good evidence against the assessee. The answer is given by the Hon'ble Supreme Court in the case of V.C. Shukla [supra] wherein the Hon'ble Supreme Court held as under: A conspectus of the above decisions makes it evident that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness, fix a liability upon a person. Keeping in view the above principles, even if we proceed on the assumption that the entries made in MR 71/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while ordering investigation against any important constitutional functionary, officers or any person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence and not admissible evidence , whether it would be safe to even initiate investigation? In case it is done, the investigation can be as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any unscrupulous person or business house that too not kept in regular books of account but on random papers at any given point of time. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and that too, supported by some other circumstances pointing out that the particular third person against whom the allegations have been levelled was in fact involved in the matter or he has done some act during that period, which may have co-relations with the random entries. In case all these are not insisted, the process of law can be abused against all and sundry very easily to achieve ulterior goals and then no democracy can surv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have no evidentiary value against third parties. On the sis of the materials which have been placed on record, it is opined that no case is made out to direct investigation against any of the persons named in the Birla's documents or in the documents of Sahara. [Para 24] ■ In the case of State of Haryana v. Bhajan Lai 1992 Supp (1) SCC 335, this Court has laid down principles in regard to quashing the F.l.R. The Court can quash FIR also if situation warrant even before investigation takes place in certain circumstances. This Court has laid down thus: (1) Where the allegations made in the first information report of the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any. accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under section 156( 1) of the Code except under an order of a Magistrate within the purview of section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed documents do not hold any water and deserve to be deleted. This finding of ours is in addition to the detailed findings given in Common Grievance Nos. 1 and 2 elsewhere. 110. In the result, the appeals filed by the assessee are allowed. 1563 1564/DEL/2012 Saraya Industries [ Revenue s appeals] 111. The sole grievance of Revenue in both the appeals is that the CIT(A) erred in deleting the disallowance of ₹ 3,16,91,550/- in A.Y 2004-05 and ₹ 4,12,20,600/- in A.Y 2005-06. 112. Since we have categorically held that assessment framed u/s 153C r.w.s 153A of the Act is without jurisdiction and the same is annulled for want of jurisdiction, therefore, we do not find it necessary to dwell into the merits of the case. 113. In the result, the appeals filed by the Revenue stand dismissed. ITA Nos. 1654 to 1657/DEL/2013 SVP Industries Ltd [Revenue s appeals] 114. Common Grievance in both the impugned appeals by the Revenue is that the CIT(A) has erred in cancelling the assessment for the A.Ys under consideration. 115. Assessment has been framed u/s 153C r.w.s 153A of the Act vide order dated 19.12.2011 for A.Ys under consideration. Entire assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscussed elsewhere. Six A.Ys constitute block preceding year of search, therefore, in the case in hand, the six A.Ys will be as follows: 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 which means that the impugned A.Y 2006-07 is part of the block period, which means that the assessment ought to have been framed u/s 153C r.w.s 153A of the Act which is the mandate of relevant provisions relating to assessment in the case of search and seizure operation. The present assessment order is framed u/s 143(3) of the Act and is, therefore, bad in law. Accordingly, we do not have any hesitation in annulling the assessment order. Since the assessment order has been annulled, all the subsequent happenings get vitiated. 123. In the result, the appeal filed by the assessee is allowed. ITA No. 457/DEL/2010 Kesar Enterprises Ltd [Revenue s appeal] 124. The CIT(A) has annulled the impugned assessment order framed u/s 153C r.w.s 153A of the Act dated 26.12.2018. 125. A perusal of the order of the CIT(A) shows that the CIT(A) annulled the assessment holding the impounded documents from the premises of Shri R.K. Miglani/UPDA do not belong to the assessee. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ITA Nos. 2071, 2072 2073 /DEL/2010 Narang Distillery Ltd [Assessee s appeal] 135. The sum and substance of the grievance of the assessee is that the CIT(A) grossly erred in confirming the action of the Assessing Officer in assuming jurisdiction u/s 153C r.w.s. 153A of the Act when no satisfaction as per law was recorded in the case of the appellant company. 136. The assessee is further aggrieved by the addition of ₹ 39.81 lakhs added by the Assessing Officer on account of expenditure from undisclosed sources. 137. The peculiar facts of the case are that satisfaction note, which triggered the proceedings u/s 153C of the Act was recorded in the name of M/s Narang Distillery Limited. Moreover, the impounded documents found from the premises of Shri R.K. Miglani/UPDA contained the list of distilleries who have contributed to UPDA. Sl. No. 4 refers to Narang. Therefore, it cannot be conclusively stated that Narang refers to Narang Distilleries only because satisfaction has been recorded in the name of Narang Industries. 138. Be that as it may, assumption of jurisdiction u/s 153C of the Act on the basis of documents impounded from the premises of Shri R.K. Mig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the addition. 143. In the result, the appeal of the assessee is allowed. ITA No. 2827/DEL/2010 Narang Distillery Ltd [Revenue s appeal] 144. The revenue is aggrieved by the deletion of addition of ₹ 2.66 crores. 145. While deleting the impugned addition, the CIT(A) was of the view that since the original assessment was not pending as on the date of initiation of charge, the same has not abated and admittedly, nothing was found during the search to suggest that any income in regard to the ground raised by the assessee appellant has escaped assessment and no books of account, documents or other assets being found or seized in the search belong to the appellant. In regard to the additions made thereafter, no addition can be made to the income of the appellant u/s 153C r.w.s 153A of the Act which is not based on the books of account, documents or other assets found and seized during search. 146. Assessment/additions made on the basis of documents impounded from the premises of Shri R.K. Miglani/UPDA have been held by us not relevant for framing assessment u/s 153C of the Act while deciding common Grievance No. 1 elsewhere. For our detailed discussion given t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed because of the following: Sl No. Assessment Year ITA Number Total Quantum Tax Effect [Calculated @ 33.99%] 1. 2000-01 ITA No. 2053/Del/2010 ₹ 17,58,000 Involved Rs.5,97,544 2. 2002-03 ITA No. 2054/ Del/2010 Rs.32,89,000 ₹ 11,17,931 3. 2004-05 ITA No. 2772/Del/2012 Rs.12,51,000 Rs.4,25,215 4. 2005-06 ITA No. 2773/Del/2012 Rs.23,28,000 Rs.7,91.287 5. 2006-07 ITA No. 2774/Del/2012 Rs.5,44,000 ₹ 1,84,906 155. As can be seen from the afore-mentioned chart, the tax effect is less than ₹ 20 lakhs in all the A.Ys. In the light of the CBDT Circular No. 3/2018 dated 11.07.2018 by which the Board has revised the monetary limit for filing of appeals by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he premises of Shri R.K. Miglani and impounded from the premises of UPDA. Since we have annulled the assessment framed u/s 153C of the Act on the basis of documents found from the premises of Shri R.K. Miglani, for our detailed discussion given in common grievance Nos. 1 and 2, we hold that the assessment so framed u/s 153C r.w.s 153A of the Act is bad in law and without jurisdiction 163. In the result, the appeal of the Revenue is dismissed. ITA No. 5572/Del/2014 ITA No. 4215/Del/2010 ITA No. 4216/Del/2010 ITA No. 4217/Del/2010 Simbholi Sugars Limited [Assessee s appeals] 164. The sum and substance of the grievance of the assessee is that since the assessment for A.Y 2006-07 was framed u/s 143(3) of the Act, reassessment on the total income u/s 153A of the Act can only be made on account of material found during the course of search operation. The assessee alleges that the assessment has been framed on the basis of documents found during the course of search and seizure proceedings conducted on third party, namely Shri R.K. Miglani or survey operation of UPDA. Therefore, the assessment framed is bad in law. 165. Before us, strong reliance was placed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. (v) In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word assess in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word reassess to completed assessment proceedings. (vi) Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. (vii) Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the impugned addition. 179. While adjudicating common grievance No. 1, we have categorically held that the documents seized from the premises of Shri R.K. Miglani do not have any evidentiary value and further while adjudicating common grievance No. 2, we have held that the additions made on the statement of Shri R.K. Miglani who was not subjected to cross examination is not sustainable. 180. We have discussed this issue in detail while adjudicating common grievance Nos. 1 and 2 elsewhere. For our detailed discussion therein, we hold that the assessment framed u/s 153C r.w.s 153A of the Act is without jurisdiction and accordingly, assessment order is annulled for want of jurisdiction. Therefore, the Assessing Officer is directed to delete the impugned addition. 181. In the result, the appeals of the assessee are allowed. ITA No. 1648/Del/2013 ITA No. 1649/Del/2013 ITA No. 1650/Del/2013 ITA No. 1651/Del/2013 ITA No. 1652/Del/2013 ITA No. 1653/Del/2013 DCM Shriram Industries Ltd [Revenue s appeals] 182. Grievance of the Revenue in all the appeals is that the CIT(A) erred in cancelling the assessment for the years under consideration. 183. A perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegorically mentioned that the premises of the assessee were searched u/s 132 of the Act on 14.02.2006 and various incriminating documents were found and seized. 193. There is no dispute that search operations were carried out when the Warrant of Authorisation u/s 132 of the Act is executed. The mandatory requirement of a Warrant of Authorisation u/s 132 as given in Form No. 45 are names of the persons to be searched and the names of the premises to be searched. A Warrant of Authorisation may contain name of more than one person but for each premise, Warrant of Authorisation is required. Both the ld. AR and ld. DR have supplied the copy of Warrant of Authorisation which is part of record. A perusal of Warrant of Authorisation u/s 132 of the Act shows the names of the following persons: 1. Shri R.K. Miglani 2. Shri Lalit Khaitan 3. M/s Radico Khaitan Ltd 4. UPDA 194. Address on which this Warrant of Authorisation was to be executed is P/25, 1st Floor, South Extension, Part 2, New Delhi. Indeed, the name of the assessee is very much there in the Warrant of Authorisation but the name of the premises is where Shri R.K. Miglani resided. This means that no Warrant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the premises and u/s 133A of the Act at the premises of the assessee. This also makes it clear that Shri R.K. Miglani was searched and UPDA was surveyed. Otherwise, there was no need for examining Shri R.K. Miglani under two different sections i.e. 132(4) and 133A of the Act. 199. If the search warrant was never executed at the premises of the assessee, it leads to only one conclusion that the assessee wsa never searched. If the assessee was never searched u/s 132 fo the Act, assessments framed u/s 153A of the Act are bad in law because provisions of section 153A provides for assessment in case of search or requisition. 200. The ld. AR has heavily relied upon the decision in the case of N.K. Jewellers Vs. CIT wherein the Hon'ble Supreme Court has held that : In view of the amendment made in section 132A by the Finance Act 2017, reason to believe as the case may be, is not required to be disclosed to any person or any authority or Appellate Tribunal as recorded by revenue authority u/s 132 or section 132A of the Act. 201. We fail to understand how the decision in this case is relevant and applicable to the facts of the case in hand. As mentioned elsewhere, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SSL (Mansurpur) 463 607 374.8 591 2035.8 5 Lords (D. K. Modi) 582 616 404.9 486.9 2089.8 6 Daurala (DCM) 374 453 310.2 245448.6 1585.8 7 Kesar (Baheri) 419 317 176.3 348.6245 1157.3 8 NIC (National) 327 359 242.4 348.6 1277 9 Simbholi 298 472 278.5 583.1 1631.6 10 Balrampur 298 328 244.5 870.5 11 Narang 61 153 105.1 235.7 554.8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Shri R.K. Miglani his Assessing Officer is satisfied that these documents do not belong to Shri R.K. Miglani but belong to UPDA. However, having made these observations, we would like to make it clear that the impugned assessments are not a product of section 153C but section 153A of the Act. 209. Adverting to the facts relating to the additions made u/s 68 of the Act, we must first understand the precondition for invoking the provisions of section 68 of the Act and the precondition is that where any sum is found credited in the books of the assessee maintained for any previous year. No such entries are found in the books of the assessee. What was found was merely notings in loose papers/spiral bound diaries. Whether entries in loose sheets can be construed as entries in the books of account, the Hon'ble Supreme Court in the cases of Common Cause, A Registered Society Vs. UOI 394 ITR 220 wherein the Hon'ble Supreme Court considered the following facts: Raids were conducted on the Birla and Sahara Group of Companies and incriminating materials in form of random sheets and loose papers, computer prints, hard disk, pen drives etc. were found. Evidence of certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ■ In case of Sahara, in addition there is adjudication by the Income Tax Settlement Commission. The order has been placed on record. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen drive etc. do not comply with the requirement of the Indian Evidence Act and are not admissible evidence. It further observed that the department has no evidence to prove that entries in these loose papers and electronic data were kept regularly during the course of business of the concerned business house and the fact that these entries were fabricated, non-genuine was proved. It held as well that the PCIT/DR have not been able to show and substantiate the nature and source of receipts as well as nature and reason of payments and have failed to prove evidentiary value of loose papers and electronic documents within the legal parameters. The Commission has also observed that department has not been able to make out a clear case of taxing su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (13) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (14) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. [Para 26] ■ Considering the aforesaid principles which have been laid down, it is opined that the materials in question are not good enough to constitute offences to direct the registration of F.I.R. and investigation therein. The materials should qualify the test as per the aforesaid decision. The complaint should not be improbable and must show sufficient ground and commission of offence on the basis of which registration of a case can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lani. On the strength of such data, provisions of section 153C were invoked in the case of distilleries who are members of UPDA and additions have been made in their respective hands as unexplained expenditure. While making additions in the hands of the distillers, heavy reliance was placed on the statement of Shri R.K. Miglani recorded u/s 132(4) of the Act. In answer to one of the questions, Shri R.K. Miglani had categorically stated that the member distillers have not made any payments to UPDA. Whatever payments have been made, the distillers have directly paid to the politicians/government officials. On the one hand on the basis of some data, the Revenue has taken a view in the hands of the distillers but the statement of Shri R.K. Miglani tells a different story when he says that he is not aware to whom the distillers had made payments and his office only keeps record of the contribution/ payments made by the various members of UPDA directly to politicians and other persons/agencies. 213. The Assessing Officer has heavily relied upon page 81/A-3 seized from Shri R.K. Miglani s residence in which total country liquor produced by each distillery is given, which is converted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged amounts were not found noted anywhere in the books of accounts of the assessee. None is cited or referred by the Assessing Officer in his assessment. Though Shri R.K. Miglani in his statement has stated that the amounts mentioned in the seized documents have come from distillery member and were utilized for payment to civil servants and politicians, but neither Shri R.K. Miglani nor the Assessing Officer has brought anything on record which could suggest the names of the payees/recipients of such illicit payments. Apart from the computerized sheets, there are loose papers seized which have been written by Shri R.K. Miglani in his own handwriting. The Assessing Officer alleges that Shri R.K. Miglani has written weekly information for the assessment years 2002-03, 2005-06. As mentioned elsewhere Shri R.K. Miglani joined in June 2003, then how can he write weekly data in his own handwriting for F.Y. 2001-02. 219. The entire case of the Revenue revolves around the payments made to UPDA by the distillery members and statement of Shri R.K. Miglani. Incidentally, the very same documents were considered by the Hon'ble High Court of Delhi in the case of Radico Khaitan Ltd 396 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any investigation connected with any proceeding under the Indian Income- tax Act, 1922 (11 of 1922 ), or under this Act.] (4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person' s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. It is evident that in the absence of these foundational facts, the revenue is under an obligation to establish through materials re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculations as evidenced from the expression expected and that it did not have anything to do with actual state of affairs. The assessee's managing director prepared these estimates. The Commission accepted this contention and concluded that the revenue's arguments were based upon surmise; the Commission also felt that the documents did not disclose that any payments made were illegal. Furthermore it relied upon the document observing that it contained no writings highlighting that in case a means was made in further expenses would have been incurred in respect of various divisions of the assessee. Here too the interpretation of the documentary evidence by the Commission which is to be viewed with caution, does not appear to be contrary to law or unreasonable. In the circumstances the revenue's contentions on this aspect too cannot be accepted. 220. The very same documents are the subject matter of the present appeal and the Hon'ble High Court has categorically mentioned that the linkage between the material seized from UPDA s premise as well as statement of Shri R.K. Miglani was not established through any objective material. Without bringing any cogent mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritable purpose only if they come within the ambit of the clause advancement of any other object of general public utility . It now needs to be analysed whether the Assessee with its stated object can be considered as an association working for the object of general public utility. Consumption of alcohol is injurious to health and consumption of alcohol is against state policy so much that the states of Gujarat prohibits the consumption of alcohol. Time and again other states e.g. Haryana, Andhra Pradesh have also imposed ban on consumption of alcohol it is therefore clear that time and again the States has toyed with the idea of imposing a prohibition with consumption of alcohol. Even the article 47 of the Constitution of India, in the Directive Principles of State Policy has stated that the state shall endeavor to bring about prohibition of the consumption except for medicinal purpose sine of intoxicating drink and of drugs which are injurious to health. The Constitution of India also visualizes the production and consumption of alcohol as being injurious to health and the objects of the association are against state policy. Many WHO articles have pointed out as to how th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are similar to the facts considered by the Tribunal in ITA No. 573/DEL/2005, respectfully following the findings of the co-ordinate bench, we direct the Assessing Officer to allow benefit of section 11 12 of the Act. 228. It would not be out of place to refer to the findings of the Hon'ble High Court given in the judgment delivered on 23.10.2017 in ITA No. 830/2017 wherein the Hon'ble High Court has clarified that the cancellation of registration in this case should have related back only from the date of introduction u/s 12AA(3) of the Act which is w,e,f 1.10.2014 and not earlier. Against this judgment of the Hon'ble High Court, the Revenue had preferred a SLP before the Supreme Court but the same was dismissed. 229. The ld. DR strongly relied upon the decision in the case of Bangalore Club Vs. CIT 350 ITR 509 to assert that the claim of mutuality does not apply to the facts of the case in hand. In our considered opinion, this decision relied upon by the ld. DR would not apply to the facts of this case because in the case of Bangalore Club [supra] the source of interest income was from an related party to which mutuality of interest could not be attributed. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was cancelled, the assessee was assessed in the status of an AOP. The ld. CIT(A) found that surplus of receipt over expenditure is ₹ 4,88,140/-. According to the ld. CIT(A), this income should have been brought to tax by the Assessing Officer. The ld. CIT(A) issued notice of enhancement in reply to which the assessee strongly contended that it is not carrying out any business activity and that it has not earned during the year under appeal which can be subjected to income tax. It was further brought to the notice of the first appellate authority that the assessee has only received membership subscription of ₹ 22.34 lakhs. The surplus of ₹ 4.88 lakhs is the unspent amount from out of the membership subscription received during the year under appeal. 238. The Hon'ble Bombay High Court in the case of Trustees of Shri Kot Hindu Stree Mandal Vs. CIT 209 ITR 396 has held that : When a person pays membership fee or subscription to a society or a trust, he does not make a gift of the membership fee or subscription amount to the society. The amount of subscription paid by a member to the society can never be considered as gratuitous payment made by the member ..... X X X X Extracts X X X X X X X X Extracts X X X X
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