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TMI Blog2019 (7) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing. 2. The facts giving rise to the present appeal are that a search & seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter called as 'the Act') was carried out at the premises of M/s. Fortune Builder and M/s. Fortune Soumya Housing, Bhopal on 30.11.2012. During the course of search various documents were seized from the searched premises belonging to the assessee. A statement of the assessee u/s 131 of the Act on 30.4.2013 was also recorded, wherein she had admitted that she had sold 3 acres of land in M/s. Fortune Soumya Housing, Bhopal on 9.8.2011 for Rs. 61 lakhs. Notice u/s 153C of the Act was issued and the assessment u/s 153C r.w.s. 143(3) of the Act was framed. During the course of assessment proceedings, the A.O. observed that the assessee had purchased some land on 4.6.2009 from 3 persons for a total consideration of Rs. 4,08,131/-. The A.O. not finding the explanation of the assessee acceptable, made addition of Rs. 4,08,121/- as unexplained investment u/s 69 of the Act. Aggreived against this, assessee preferred an appeal before Ld. CIT(A), who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the orders of the authorities below. The assessee in this case is aggrieved by the proceedings initiated u/s 153C of the Act. The contention of the assessee is that the proceedings have not been validly initiated. It is contended that the seized document do not relate to the assessment year under appeal, where there is no correlation between the documentwise with the relevant assessment. The notice so issued would be invalid and void-ab-initio. The reliance is placed on the judgement of the Hon'ble Delhi High Court in the case of PCIT-2 Vs. Index Securities Pvt. Ltd. 86 Taxmann.com 290. Another objection of the assessee that there should be two satisfaction note one by the assessing officer of the searched party and another by the assessing officer of the assessee. In support of this contention, reliance is made on the judgement of jurisdictional High Court rendered in the case of CIT Vs. Machmen (2015) 60 Taxman.com 484 (MP). Lastly, it is stated that transaction was duly recorded and accounted. It is stated that the capital gain arising out of sale of 3 acres of land to Future Soumya Housing was already offered for tax in the assessment year 2012-13. It is argued that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person 97[for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A : Provided that in case of such other person, the reference to the date of initiation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r requisitioned have to be satisfied qua the material seized. The Hon'ble jurisdictional High Court in the case of CIT Vs. Mechmen (Supra) has held as under: "18. The concomitant of this conclusion, is that, the legal position as applicable to Section 158BDregarding satisfaction in the first instance of the first Assessing Officer forwarding the items to theAssessing Officer having jurisdiction; and in the second instance of the Assessing Officer having jurisdiction whilst sending notice to such other person (other than the person referred to in Section 153A), must apply proprio vigore. The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). The question as to whether that may influence the opinion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, respectfully following the judgement of the Hon'ble jurisdictional High Court rendered in the case of CIT Vs. Mechmen (supra), I hold that the proceedings u/s 153C of the Act are not validly initiated. Now coming to the another objection of the assessee that there is no correlation documentwise with the relevant assessment year. In support of this contention, the assessee has relied upon the judgement of Hon'ble Delhi High Court rendered in the case of Pr. CIT (Central)-2 Vs. Index Securities (P) Ltd. (2017) 86 Taxmann.com 84 (Delhi), wherein the Hon'ble High Court has held as under: "31. As regards the second jurisdictional requirement viz., that the seized documents must be incriminating and must relate to the Assessment years whose assessments are sought to be reopened, the decision of the Supreme Court in Sinhgad Technical Education Society (supra) settles the issue and holds this to be an essential requirement. The decisions of this Court in RRJ Securities and ARN Infrastructure India Ltd. Vs. Asst. CIT (2017) 394 ITR 569/8 taxmann.com 260 (Delhi) also hold that in order to justify the assumption of jurisdiction under Section 153C of the Act the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and the same is hereby quashed. Ground No.1 of the assessee's appeal is allowed. 13. Ground No.2 is against sustaining the addition of Rs. 4,08,131/- treating the same as unexplained investment. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions. Ld. Counsel for the assessee submitted that cash flow statement as well as balance sheet was submitted before the Ld. CIT(A). In support of this, he drew my attention to paper book page Nos.11 to 13 to buttress the contention that the source of investment is duly explained. He submitted that as per the cash book, the opening balance was Rs. 4,36,261/- as on 1.4.2009. The Ld. Counsel for the assessee has also taken me through computation of total income pertaining to the assessment year 2010-11, wherein the assessee has disclosed income from house property, income from business or profession, capital gain and other sources. 14. Ld. D.R. opposed these submissions and supported the orders of the authorities below. 15. I have heard the rival contentions. We find from the reply furnished to the A.O. enclosed at paper book pages 16 to 19 that assessee had purchased properties in the years 2002 & 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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