TMI Blog2019 (4) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary that before the provisions of Section 153C of the said Act can be invoked, the Assessing Officer of the searched person must be satisfied that the seized material (which includes documents) does not belongs to the person referred to in Section 153A (i.e., the searched person). Since the Hon ble Jurisdictional High Court decisions mentioned above is in favour of the assessee, the Assessing Officer of the search Company namely DCIT, Central Circle-4, Hyderabad, in the Satisfaction Note had not stated that the seized material do not belong to the searched person. Therefore, based on the above decisions of the Hon ble Jurisdictional High Court, the issue of notice under section 153C of the Act to the assessee had to be considered as illegal and as a result, Ld. CIT(A) has rightly allowed the legal grounds raised by the assessee, hence, we do not find any infirmity in the action of the Ld. CIT(A), therefore, we uphold the action of the Ld. CIT(A) on the legal issues and dismissed the legal grounds raised by the Revenue. Undisclosed income - sale of property - HELD THAT:- Assessing Officer presumed that the assessee had received the entire consideration of ₹ 6,45,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder:- 1. The order of the Ld. CIT(A) is bad in law and not inconsonance with the facts of the case. 2. The Ld. CIT(A) failed to appreciate the efforts of the Assessing Officer of the searched party by holding the notice u/s 153C of the Act as illegal under the circumstances that the Assessing Officer of the searched party recorded his satisfaction on the basis of the statement of Sri Sabbineni Surendera. a main person of the M/s Coastal Projects group, that the seized documents belong to the assessee, Sh. Gulshan Kumar Sethi. 3. The Ld. CIT(A) erred in holding the notice u/s 153C as invalid merely on the submissions and evidences furnished by the assessee during the course of appellate proceedings many of them being in the nature of additional evidence/argument and not affording opportunity to the Assessing Officer by way of seeking remand report from her. 4. The Ld. CIT(A) erred in deciding the appeal by not stepping into the shoes of the Assessee Officer by not requisitioning records of the searched party from Hyderabad. 5. The Ld. CIT(A) erred in deleting the addition of ₹ 6,45,00,000/- by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the addition of ₹ 6.45 Crores. Aggrieved with the order of the Ld. CIT(A)-19, New Delhi the Revenue is in appeal before the Tribunal. 4. Ld. DR relied upon the Order of the AO. She stated that order of the Ld. CIT(A) is bad in law and not inconsonance with the facts of the case, because he failed to appreciate the efforts of the Assessing Officer of the searched party by holding the notice u/s 153C of the Act as illegal under the circumstances that the Assessing Officer of the searched party recorded his satisfaction on the basis of the statement of Sri Sabbineni Surendera, a main person of the M/s Coastal Projects group, that the seized documents belong to the assessee, Sh. Gulshan Kumar Sethi. She further stated that Ld. CIT(A) wrongly observed that the notice u/s 153C is invalid merely on the submissions and evidences furnished by the assessee during the course of appellate proceedings and even many of them being in the nature of additional evidence/argument and not affording opportunity to the Assessing Officer by way of seeking remand report from her. It was further submitted that Ld. CIT(A) wrongly deleted the addition of ₹ 6,45,00,000/- by igno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by someone regarding proposed purchase of Plot no. C-l, Sector-65, and the Same was forwarded to someone else with the concluding remark for the kind information of MD . [Note: This document do not bear the signature of Sh. Gulshan Kumar Sethi]. 4. The ITO, Ward- 36(2) New Delhi had mechanically recorded his satisfaction on 10.10.2014 (EXHIBIT- 4), while stating that he is satisfied that proceedings u/s 153C of the I.T. Act 1961 are required to be initiated. Thereafter, the ITO, Ward- 36(2) New Delhi had issued notices u/s 153C for A.Y. 2006-07 to A.Y. 2012- 13. 5. Ultimately the ACIT, Circie-59(1) New Delhi had passed the assessment order u/s 153C r.w.s153A or. 31.03.2015, thereby making addition in the hands of the assessee at ₹ 6,45,00,000/- represented the value of Plot no. C-l. Sector-65, as found mentioned on page 19. 6. On appeal before the Id. CIT(A), the assessee had challenged the initiation of proceedings u/s 153C on the ground that the assessing officer of the searched person has not recorded his satisfaction that those documents do not belong to the searched person. For such proposition, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sethi had received ₹ 6,45,00,000/-. [Note: The Id. CIT(A) had called for the assessment record to himself verify the documents lytng sn tr*e assessment folder as to whether there is any evidence showing receipt of ₹ 6,45,00,000/- by Guishan Kumar Sethi.] 5.1 In support of aforesaid contention mentioned in the synopsis, Ld. counsel for the assessee has relied upon the following case laws, by filing the copies thereof. a) Hon ble Delhi High Court decision in the case of Pepsi Foods P. Ltd. vs. ACIT (2014) 367 ITR 112 (Del.) b) Hon ble Delhi High Court decision in the case of Pepsico India Holdings P. Ltd. vs. ACIT and Another (2015) 370 ITR 295 (Del.) c) Hon ble Delhi High Court decision in the case of Canyon Financial Services Ltd. vs. ITO (2017) 399 ITR 202 (Del.) d) Hon ble Delhi High Court decision in the case of CIT vs. (1) Renu Constructions Pvt. Ltd. (ITA No. 499 of 2011); (2) Ankit Gupta (ITA Nos. 32 and 35 of 2012); and (3) Ankit Gupta, L/H Manoj Kumar (ITA Nos. 41 and 125 of 2017) vide order dated 6.9.2017 (2017) 399 ITR 262 (Del.) 6. We have heard both the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business premises of M/s. Coastal Projects Pvt. Ltd. as per Panchanama dated 25.11.2011. On verification of the sheet numbered as 18-19 of the above annexure. I am satisfied that these papers belongs to the following person in accordance with the provisions of section 153C of the Income Tax Act, 1961. Name Address Permanent Account Number Shri Gulshan Kumar AASPS1248Q S/o. G. C. Sethi A-12, Swasthya Vihar, New Delhi - 92. 2. I have been directed to hand over a copy of above seized material to the Jurisdictional Assessing Officer as above for assessing or re-assessing the income of the above person in accordance with the provisions of section 153A. Hence the same is forwarded to you. A copy of the relevant portion of the Appraisal Report is also forwarded for necessary action at your end. 3. The Assessing Officer is requested to issue notices under section 153C in the above case for Assessment Year Assessment Year 2006-07 to 2012-13 and complete the assessment. It is further requested to note that the Time Barring date for completion of assessment 131.03.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant portion of the above decision of Pepsico India Holdings Pvt. Ltd. reported in 367 ITR 112 is as follows:- Unless and until it is established that the documents do not be Ions to the searched person, the provisions of Section 153C of the said Act do not set attracted because the very expression used in Section 153C of the said Act is that 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 In view of this phrase, it is necessary that before the provisions of Section 153C of the said Act can be invoked, the Assessing Officer of the searched person must be satisfied that the seized material (which includes documents) does not belongs to the person referred to in Section 153A (i.e., the searched person). 7. Since the Jurisdictional High Court s decision mentioned above is in favour of the appellant, as the Assessing Officer of the search Company namely DCIT, Central Circle-4, Hyderabad, in the Satisfaction Note had not stated that the seized material do not belong to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings stated that the appellant ceased to be the Director of the above Company M/s. Humming Birds Solution Pvt. Ltd. w.e.f. 16.03.2007. The appellant also filed a copy of Form No. 32 filed before the Registrar of companies indicating that he had resigned as a Director of the above Company from 15.03.2007. The audited Balance Sheet of the above Company M/s. Humming Birds Solution Pvt. Ltd. for the year ending 31.03.2010 filed before me indicates the names of the Directors as Sandeep Malik and Veena Malik, but the Assessing Officer is either not aware of these Directors or even if aware, had not carried out any enquiries on their sources of income. It appears that the Assessing Officer presumed that the appellant had received the entire consideration of ₹ 6,45,00,000/-, though the seized document only indicates that there was some negotiations for the sale of property bearing No. Sector- 65, Noida and there is no indication in it of any definite transaction. There is no mention in the assessment order about the date of sale or any detail regarding the sale transaction. The seized document also indicates the possibility of M/s. Coastal Projects Ltd. acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The first step is that the Assessing Officer of the person who is searched must arrive at satisfaction that a document seized from him does not belong to him but to some other person. It is only in the second step that the document is to be handed over to the Assessing Officer of the person to whom the seized document 'belongs'. In the above decision, the Hon'ble Jurisdictional High Court had stated that the normal presumption is that the document found during the search belongs to the person on whom the search was conducted. Therefore, it is for the Assessing Officer of the searched person to rebut that presumption and come to a conclusion or 'satisfaction' that the document in fact belongs to somebody else. Thus, in the case of the assessee, the Assessing Officer of the searched person had not rebutted the presumption that the seized documents 18-19 belonged to M/s. Coastal Projects Ltd. Therefore, in light of the above decision of the Jurisdictional High Court, the first step itself had not been fulfilled and thus, the issue of notice under section 153C of the Act on the assessee is illegal. We further note that the Hon'ble Jurisdictional High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d income tax return of the above Company for Assessment Year 2010-11 and as per the same, the Company s Permanent Account Number is AABCH8051J and assessed by ITO, Ward 12(4), Delhi. Copy of the seized document No. 18 mentions the name of the Company differently as M/s. Birds Software Pvt. Ltd. and the relevant portion is as follows:- Name of the Company: Birds Software Pvt. Ltd. - The sale procedure shall be through Company transfer in the name of the buyer as happened in previous transaction. 6.3 After perusing the aforesaid details, it reveals that it was a transfer of Company and not the transfer of the property as stated by the Assessing Officer in the assessment order. The assessment order is also silent regarding the date of the transfer or about any document indicating the transfer of the above property. The assessment order mentions that sale consideration was paid by cheque and also by cash. But there is no mention about the date of the cheque or about the recipient of cheque for ₹ 70,00,000/-. The Assessing Officer had completed the assessment on the presumption that the assessee is the owner of the property based on the seized doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 6,45,00,000/- on the assessee is based only on assumptions and thus, not sustainable. Also as per the assessment order, Sh. Subbineni Surendra of M/s. Coastal Projects Ltd. had admitted the payment of ₹ 6,45,00,000/- to Sh. Gulshan Kumar as per letter dated 17.3.2015 of DCIT, Central Circle 2(2), Hyderabad, which the Ld. CIT(A) has verified with the assessment records and there is nothing in the above letter dated 17.3.2015 to indicate that the assessee had received ₹ 6,45,00,000/- from M/s. Coastal Projects Ltd.. Even the Assessing Officer had failed to carry out any enquiries to find out the actual recipient / recipients of ₹ 6,45,00,000/- from M/s. Coastal Projects Ltd before adding the above sum as assessee s undisclosed income. In the absence of any concrete evidence, to indicate that the assessee had received the sum of ₹ 6,45,00,000/- from M/s. Coastal Projects Ltd., Ld. CIT(A) has rightly deleted the addition of ₹ 6,45,00,000/- made by the Assessing Officer, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) on this issue and dismiss the ground raised on the merits of the case. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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