TMI Blog2019 (8) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 satisfaction . Having regard to the materials on record, if the CIT, Ahmedabad and the Appellate Tribunal relied upon the decision of the Delhi High Court in the case of Pepsi Foods Private Limited [ 2014 (8) TMI 425 - DELHI HIGH COURT] then, in our opinion, no error much less an error of law could be said to have been committed in taking the view that there is no cogent material for arriving at the substantive satisfaction. In the documents, which were seized during the course of search, there may be some reference of the assessee, but that itself would not be sufficient. It is necessary to show some nexus on the basis of some cogent materials between the documents seized and the assessee. - appeal fails and is hereby dismissed - R/TAX APPEAL NO. 342 of 2019 - - - Dated:- 30-7-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Appellant (s) : MRS MAUNA M BHATT (174) For The Opponent (s) : None ORAL ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rahul Gautam Group from the Pradhuman Patel Group and others Patel Group, substantial consideration was paid by the Rahul Gautam Group to the Pradhuman Patel Group and others in cash outside the books of account. As per the evidences found and seized, it was revealed that the total sale consideration for the shares as held by the Pradhuman Group and other patel group in M/s. Sheela Foams Pvt. Ltd. was ₹ 88.90 crores out of which ₹ 52.78 crores was paid through cheques and the balance amount of ₹ 36.10 (₹ 31.85 crores to Pradhuman Patel Group 4.25 crore to other patel group) crores was paid in cash by the Rahul Gautam Group to the Pradhuman Patel Group and other patel group. As per seized documents (Page no.41 to 85 of Annexure A1, Page no.20, 21 of Annexure7, Page no.12 of Annexure5, Page no.21 of Annexure8), it is clearly evident that the group run by Sh. Rahul Gautam, MD of M/s. Sheela Foam Private Limited, has paid huge amount of cash as indicated on the seized documents to Sh. Pradhuman Patel and his group for purchase of shares. As per the statement of Shri Rahul Gautam (MD of M/s. Sheela Foam Private Limited) vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atel for sale 678680 shares of M/s. Sheela Foam Pvt. Ltd. Page22 25 contains photocopies of cheque issued by M/s. Sheela Foam Private Limited, M/s. Serta India P. Ltd., Rahul Gautam to Pradhuman Patel. Page27, receipt dated 21/10/2009 of ₹ 41334060/issued to Rahul Gautam by Pradhuman Patel for sale shares of M/s. Sheela Foam Pvt. Ltd. Page29, receipt dated 20/12/2009 of ₹ 35000/issued to Rahul Gautam by Pradhuman Patel for sale shares of M/s. Polyflex Marketing P Ltd. Page 28, receipt dated 21/10/2009 of ₹ 34000/issued to Rahul Gautam by Pradhuman Patel for sale shares of M/s. Starlite India Pvt. Ltd., Page 36, contain confirmation regarding no claim against M/s. Sheela Foam Private Limited. Page 35 contain confirmation regarding current or contingent liabilities against the legal beneficiary ownership of sale of shares. Page 30 contain receipt dated 31/10/2009 for ₹ 35000/issue to Sh. Rahul Gautam against sale 350 equity shares. In view of the above, I am satisfied that documents seized belongs to a person other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arent that if the satisfaction note, does not have any reasons for such conclusion, it is not in accordance with the law. For invoking jurisdiction under section 153C of the Income Tax Act. Such is the case before us, where there is no reason recorded by the learned assessing officer stating that why these documents belong to the assessee and not to the person from whom it is found. 25. However before parting we would also like to state that it cannot be a rule in its absoluteness that one document cannot be held to be belonging to more than one person. The striking example of the same is a joint bank account pass book of several persons together may be belonging to all those persons. 26. Therefore, respectfully following the above judicial precedents of the honourable Delhi High Court, we do not find any reason to interfere in the order of the learned CIT A, wherein it has been held relying upon the decision of the honourable Delhi High Court in case of Pepsi Foods Private Limited (Supra) that there is no satisfaction recorded by the learned assessing officer that the impounded documents belong to the various assessee and therefore, the jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant provisions of the said Act as applicable to the assessment years under consideration: - 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, 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, 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 such other person notice and assess or reassess WP(C) 415/2014 Ors. Page 6 of 15 income of such other person in accordance with the provisions of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to subsection (1) of section 153A shall be construed as reference to the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 133A, it may, in any proceeding under this Act, 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; 16. On a plain reading of Section 153C, it is evident that the Assessing Officer of the searched person must be satisfied that inter alia any document seized or requisitioned belongs to a person other than the searched person. It is only then that the Assessing Officer of the searched person can handover such document to the Assessing Officer having jurisdiction over such other person (other than the searched person). Furthermore, it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or reassess his income in accordance with the provisions of Section 153A. Therefore, before a notice under Section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step is af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. 29. The search in the case before the Supreme Court was prior to 1st June 2015. Apart from the fact that the Supreme Court approved the above decision of the Gujarat High Court holding that the seized documents should 'belong' to the other person, the legal position in this regard where the search has taken place prior to 1st June 2015 has been settled by the decision of this Court in Pepsico India Holdings (P.) Ltd. (supra). In Vinita Chaurasia (supra), this Court reiterated the above legal position after discussing the decisions in Super Malls (P.) Ltd (supra) and Nau Nidh Overseas (P.) Ltd. (supra). The essential jurisdictional requirement for assumption of jurisdiction under Section 153C of the Act (as it stood prior to its amendment with effect from 1st June 2015) qua the 'other person' (in this case the assessees) is that the seized documents forming the basis of the satisfaction note must not merely 'pertain' to the other person but must belong to the 'other person'. 18. Having heard Mrs. Mauna Bhatt, the learned senior standing counsel appearing for the Revenue and having gone through the materials o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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