TMI Blog2018 (12) TMI 1751X X X X Extracts X X X X X X X X Extracts X X X X ..... the present appeals, the burden is thus on the Revenue to establish that the documents found from the third persons are reliable and authentic and also such documents belong to the distilleries which is uncorroborated by any evidence and even the author of the documents have not been identified. Therefore, it can safely been concluded that the Revenue has not discharged its burden. The mere fact that some of the distilleries are members of the association [UPDA] does not by itself lead to a conclusion that adverse inference can be drawn against members of the association since documents were found from the premises of the association and not 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. Gross violation of principles of natural justice - No cross examination was allowed by the revenue - Revenue accepted what was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any objective material. Without bringing any cogent material on record, it is merely a presumption that the UPDA has been primarily engaged in the work of facilitating the collection and payment of bribe money. Some more issues have been raised by the ld. DR. (i) On the basis seized from the residence of Shri R.K. Miglani, M/s Radico Khaitan Ltd surrendered ₹ 27.50 crores and Balrampur Chini Mills surrendered ₹ 8.90 crores. We fail to understand how the action of some other tax payer is relevant in the case of the appellant. The wisdom of Radico Khaitan Ltd and Balrampur Chini Mills cannot be considered and should not be considered in the hands of the appellant. Incriminating documents were also seized from the laptop of Shri Ajay Agarwal, General Manager of M/s Radico Khaitan Ltd. Again, it is between M/s Radico Khaitan Ltd and its General Manager to explain the incriminating documents. The assessee cannot be held to be responsible for the same. DR has further asserted that the Revenue has produced a number of evidences in support of the fact that the distillers had made unaccounted payments to UPDA. In this regard, we have to point out that except fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 2576, 2577, 2578, 454, 455, 456, 457, 458, 1864, 2678, 2679, 2226, 2227, 2071, 2072, 2073, 2827, 1658, 1871, 1042, 1043, 1044, 2806, 2807, 2053, 2054, 2496, 4215, 4216, 4217/Del/2010, ITA No. 9, 10, 11, 720, 721, 722, 1022, 1023, 1024, 1310, 1311, 1312, 1537, 1538, 1539, 4692, 1563, 1564, 2013, 2772, 2773, 2774, 2177, 2178, 2151/Del/2012, ITA No. 1654, 1655, 1656, 1657, 3208, 3209, 3210, 3211, 1648, 1649, 1650, 1651, 1652, 1653/Del/2013, ITA No. 3328, 5056/Del/2011, ITA No. 5572, 3001/Del/2014, C.O. 67, 68, 69, 84, 127, 128, 129/Del/ 2010, C.O. No. 126, 127, 128, 129, 130, 131/Del/2013 ORDER PER BENCH:- The Jurisdictional High Court of Delhi, vide order dated 22.01.2015, has considered a batch of appeals preferred by the Revenue, challenging the common order of the Tribunal dated 23.11.2012. 2. The question of law, sought to be urged by the Revenue is as to whether section 153C of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short], to the extent it, inter alia, enables the Assessing Officer to issue notice to third parties, on the basis of satisfaction that any money, bullion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 written synopsis. 6. The ld. CIT-DR was also heard at length, who also preferred to file written synopsis alongwith certain documents, which formed the basis of satisfaction note and ultimately the assessment orders framed u/s 153C of the Act. 7. Arguing his case for UPDA, the ld. AR Shri Sampat vehemently stated that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly 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}:-' S.No. Name of the Distillery 2002-03 2003-04 2004-05 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 554.8 12 **Pilkhani 162 339 185.3 213.6 899.9 13 **Shamli 93 93 14 Cooperative 150 182 99.8 194.8 626.6 15 ***M. Meakins 202 334 204.2 275.6 1015.8 16 Central 22 44 32.4 98.4 17 Modi 21 125 149.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in the Financial Year 2005-06. These illegal payments to public servants are fixed on the basis of monthly production / different distilleries. The total illegal payment amount is settled with the public servants and then this amount is divided proportionately on the basis of production / sales of different Distilleries. These figures of production / sales reflected in the papers impounded / seized from LPDA headquarters and the residence of its Secretary General Shri R. K. Miglani, in fact, tallies with the actual production / sales shown by different distilleries in their books of a/c, which, in a way indicate that these papers depict the illegal payments made and are not imaginary papers. These distilleries have adopted different methods for siphoning off / generation of this illegal payment amounts. Some of the instances noticed are as under:- (a) M/S National Industrial Corporation Ltd. (NICL) has paid more than ₹ 10 Crores in F.Y. 2002-2003 and 2003-2004 to M/S Aneja Co. as commission / supervision charges. M/S Aneja Co. even after including these amounts did not have to pay any tax. (b) M/S Unnao Distil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 153C(1) reads as under: 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 (a) any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs, or (b) any books of account or documents or assets 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 Assessing Officer having jurisdiction over such other person] and that Assessing Officer shall proceed against each such other person and issue notice 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 [for six assessment iimmediately preceding the assessment year relevant to the previ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine these writ petitions in detail it would be pertinent to point out that recently in the case of Pepsi Foods Pvt. Ltd. Vs. Assistant Commissioner of Income Tax, WP (C) No.415/2014 and other connected matters, this court had occasion to examine the very provisions which are under consideration in the matters before us. In the judgement delivered on 07.08.2014 in the case of Pepsi Foods Pvt. Ltd. (supra), after examining the provisions of Sections 153C, 132(4A)(i) 292C(1)(i) of the said Act, this Court had observed as under: 6. 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 http://www.itatonline.org WP (C) Nos.414, 566, 567, 572, 573 574 of 2014 Page 5 of 17 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than the searched person, it is necessary that he arrives at the satisfaction that the said documents or materials do not belong to the searched person. At this stage, we may point out that nowhere the Assessing Officer has mentioned that neither Shri R.K. Miglani nor the UPDA have disclaimed the seized documents. 23. The Hon'ble High Court of Delhi in the case of ARN Infrastructure India Limited 394 ITR 569 had the occasion to consider the following facts: A search was conducted in the case of a company E and when the panchnama for the search was prepared, the name of the company R was also added to it. During the course of search, a letter written by the assessee to the company R was found, which contained the details of commission payments by the assessee to R in that year with a request to issue bills to the assessee A copy of the ledger account of R maintained by the assessee as proof of payments made through official channel was also seized. The seized documents were handed over to the Assessing Officer, but, only one document namely the letter written by the assessee to R was handed over to the Officer of the assessee. A notice under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23, 2014 issued by the Assessing Officer to the assessee under section 153A read with section 153C of the Act and all proceedings consequent thereto were to be quashed. 25. Satisfaction note in the case of ARN Infrastructure India Limited [supra] reads as under: Satisfaction note for initiating proceedings under Section 153C read with 153A of the Income Tax Act, 19611n the case of M/s ARN Infrastructures India Limited, 9, Birla House, Arya Samaj Road, Karol Bagh, Karol Bagh, Delhi- 110005 (PAN AAFCA6403M) A search action u/s 132 of the I T Act,. 1,961 was initiated in the case of M/s Earth Infrastructures Ltd, at B-100, Indl Area Naraina, Phase-I, New Delhi on 16/01/2013. It has been brought to the notice by the AO of M/s Earth Infrastructures Ltd,(in this case the AO is same as undersigned) in whose cases-action under section 132 of the Income Tax Act was taken place that various documents/books of accounts etc were found, and seized during the course of search and statement of various persons were recorded; The AO of the searched persons has recorded his satisfaction that the following seized papers / documents belonged to the assessee i.e. M/s ARN I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the residence of Shri R.K. Miglani. The allegation of the Revenue is that these documents seized from the residence of Shri R.K. Miglani and from the office of UPDA were regular books of account of money received date-wise from member distilleries from F.Ys 2002-03 till date of search i.e. 14.02.2006. The basis of determination of this contribution by each distillery and manner of spending this money as per these documents and statements of Shri R.K. Miglani of each member was fixed on the basis of country liquor produced by each distillery. These collections made by the UPDA from its members were on regular basis given to various officials and politicians which basically represented illegal payments. 29. This whole activity was coordinated through select committee known as Core Committee and Shri R.K. Miglani as General Secretary, maintained regular books of account of this collection and payments. The ld. CIT-DR vehemently stated that the department has produced a number of evidences in support of the fact that the distilleries had made unaccounted payments to UPDA and in such of his contentions, reliance was placed on the decision of the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific findings on the status of such documents. The Hon'ble High Court of Delhi observed that if the production figures were in fact forwarded by the concerned unit under a letter or some other form connecting it with material form seized, inference would be of a particular kind. 33. However, the 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 figures mentioned in the seized documents but then it does not prove that any of the distilleries has authored the seized document. 34. In his statement recorded u/s 132(4) of the Act, Shri R.K. Miglani, in reply to Question No. 10, which was I am showing you pages 150 to 155 of Annexure A-1. Have these papers been written by you and if yes, please explain the transactions on these papers. Answered - Pages 152 and 155 only have been written by me. However, all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is marked Confidential . Please explain the transaction recorded on this paper. Answer: This is details of expenses to be incurred by each member of UPDA @ ₹ 20/- per case and the amount to be paid by each party has been calculated on this basis and mentioned against each of them. 42. Once again, it cannot be said that the said Exhibit 94 of Annexure A-3 was authored by any of the distilleries. 43. Considering the nature of each document relied upon by the Assessing Officer in the assessment order and supported by the ld. CIT-DR before us, it cannot be said that these documents were ever authored by any of the distilleries and, therefore, cannot be said to be belonging to them or any of them. The documents were seized from Shri R.K. Miglani or UPDA and, therefore, any presumption under the Act is against these persons and not against any of the distilleries. 44. In continuation of his arguments, the ld. DR heavily relied upon the proceedings u/s 12AA of the Act in the case of UPDA and stated that the Tribunal has upheld the cancellation of registration u/s 12AA of the Act and endorsed the findings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the expression belong to of a document and pertaining to or relating to a document. In our understanding, the term belongs to is not synonymous to the expression pertaining to or relating to . 48. This has prompted the Legislature to bring amendment to section 153C of the Act vide Finance Bill, 2015 wherein in clause (b) to section 153C, belong to has been replaced by relates to . But the Legislature, in its wisdom, has given effect to this amendment w.e.f 01.06.2015. Therefore, the same cannot be applied to the assessment years under consideration. 49. Moreover, the Hon'ble Supreme Court in the case of Chuharmal Vs. CIT 172 ITR 250 has held that possession is proof of ownership and the seized documents were found from the possession of Shri R.K. Miglani. 50. As mentioned elsewhere, none of the documents referred to by the Assessing Officer belong to the captioned assessees nor it has been identified that which documents belong to which captioned assessees. In our considered opinion, the Assessing Officer has exceeded in his jurisdiction to initiate the proceedings u/s 153C of the Act. 51. The ld. DR has he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various impounded sheets as members of the core committee or any other person have been examined by the Assessing Officer during the course of assessment proceedings. There is no independent evidence that the captioned assessees have contributed any sum except notings in the seized documents, which have been conclusively held hereinabove do not belong to the captioned assessees. 57. The Hon'ble High Court of Delhi in the case of Radico Khaitan Ltd 396 ITR 544 was seized with the appeal of the Revenue wherein the Revenue had challenged the order of the Settlement Commission in a Writ Petition filed by it. 58. The Hon'ble High Court, while dismissing the writ petition of the Revenue, inter alia, held that in the absence of any linkage between the material seized from the assessee s premises and those from the UPDA s premises as well as statement of Shri R.K. Miglani through any objective material, does not establish the allegation. 59. It would be pertinent to mention here that the documents are very same documents which have been considered by the Assessing Officer of the captioned assessees. In our considered opinion, there remains n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Gupta in TA No. 1264/2008 has held that: Once there is a violation of principles of natural justice, in as much as seized material is not provided to an assessee nor is cross examination of the person whose statement the Assessing Officer relies upon, granted, then, such deficiencies would amount to denial of opportunity and consequently would be fatal to the proceedings. 63. Strongly opposing the contentions of the assessed distilleries, the ld. DR vehemently stated that every possible effort was made to allow cross examination, but Shri R.K. Miglani was working for UPDA of which the distilleries were members and, therefore, it was for the distilleries to produce Shri R.K. Miglani. It is the say of the ld. DR that not providing cross examination of Shri R.K. Miglani is irrelevant, in as much as, Shri R.K. Miglani is Secretary General of UPDA in which the distilleries are members. Therefore, if the statement of Shri R.K. Miglani which was adverse to the members was untrue, then immediately Shri R.K. Miglani could have been removed from the post of Secretary General of UPDA or he could have been brought before the I.T. authorities. It is the say of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded u/s 132(4) of the Act and has relied upon several judicial decisions to support his contentions. The ld. DR further relied upon the provisions of section 132(4A) of the Act and 292C of the Act. These sections read as under: Section 132(4) in The Income- Tax Act, 1995 (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is fond to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income- tax Act, 1922 (11 of 1922 ), or under this Act. 1 Explanation.- For the removal of doubts, it is hereby declared that the examination of any person under this sub- section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income- tax Act, 1922 (11 of 1922 ), or under this Act.] Section 132(4A) in The Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 67. A plain reading of the aforementioned sections would show that the presumption is available in the case of a person who was found in the possession or control i.e. the searched person . Therefore, the presumption may be good against Shri R.K. Miglani or UPDA. But not in the cases of the other person which are the distilleries in the present appeals. Therefore, the judicial decisions relied upon by the ld. DR are misplaced and, therefore, needs no specific mention. 68. At this stage, it would not be out of place to point out that the premises of Shri R.K. Miglani were searched, which means that Shri R.K. Miglani was the searched person and all the presumptions were available against him in respect of the seized documents/notings in the seized documents and other things. 69. Surprisingly, the assessments of Shri R.K. Miglani have been made on the returned income which will be clear from the following table: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing 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'ble High Court. In support of his contention, strong reliance was placed on the judgment of the Hon'ble High Court of Bombay in the case of Ultratech Cement Limited 2017-TIOL-785. 76. In our considered opinion and understanding of law, jurisdiction of the Assessing Officer can be challenged at any stage because it goes to the root of the matter. If the assessment is framed without jurisdiction, then subsequent happenings get vitiated. 77. The answer to this question has been given by the Hon'ble Gujarat High Court in the case of P.V. Doshi 113 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larities, 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 the other was not easy of discernment as in the ultimate analysis, it depended upon the nature, scope and object of the particular provision. Their Lordships in terms approved a workable test laid down by Justice Coleridge in Holmes v. Russel [1841] 9 Dowl 487 as under: It is difficult sometimes to distinguish between an irregularity and a nullity; but the safest rule to determine what is an irregularity and what is a nullity is to see whether the party can waive the objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 based on public policy. The revenue statutes protect the public on the one hand and confer power on the State on the other. Therefore, even in the context of such a revenue statute like a taxation measure such fetter on the jurisdiction being a fetter laid to protect public, on wider ground of public policy, it was held that such provisions which confer jurisdiction on assessment and reassessment could never be waived for the simple reason that jurisdiction could neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 direction: Issue notice under section 148 , and no reasons were recorded by the Income-tax Officer before reopening the assessment. Even the relevant sub-section of section 147 under which the assessment was sought to be reopened was not mentioned. These facts, prima facie, disclosed that the reasons came to the notice of the assessee for the first time when the Appellate Assistant Commissioner perused this order sheet an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 finality of the remand order could ever arise in the present context, if the mandatory conditions for founding jurisdiction for initiating reassessment proceeding were absent. This is the view in Commissioner of Income-tax v. Nanalal Tribhovandas [1975] 100 ITR 734 (Guj), agreeing with the Madras view that there would be no such finality by remand because consent could not confer jurisdiction, and so, such object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial 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 not be attracted in such a case, where the question admittedly, went to the root of the jurisdiction and if that contention was upheld, it would have made all the proceedings of reassessment totally void and without jurisdiction. As per the aforesaid settled legal position such a point could not be waived and there can be no question of the earlier remand order operating as a final order, because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, 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 falling within six assessment years ret in clause (b) of sub-section (1) of section 153A, within a period of two years end of the financial year in which the last of the authorizations for search section 132 or for requisition under section 132A was executed; b) in respect of the assessment year relevant to the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 person. As is evident from the assessment order, a satisfaction as per provisions of section 153A of the Act was recorded by the ACIT, Central Circle 4, New Delhi on 07.12.2006. 83. On 06.12.2006, the assessee filed a writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment 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 the documents seized from the premises of Shri R.K. Miglani and on the statement of Shri R.K. Miglani recorded u/s 132(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered Society [supra] are not relevant for the appeal under consideration. It is the say of the ld. DR that the notings found in the documents seized from the assessee clearly show a payment of ₹ 2.63 crores to UPDA. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot admissible under section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. The entire prosecution based upon such entries which led to the investigation was quashed by this Court. [Para 20] The Court has to be on guard 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat for entries relied on in these loose papers and electronic data were not regularly kept during course of business, such entries were discussed in the order passed in Sahara's case by the Settlement Commission and the documents have not been relied upon the Commission against assessee and thus such documents 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be legally justified, safe, just and proper to direct investigation. [Para 27] 109. It is true that the afore discussed judgments of the Hon'ble Supreme Court were not considered in the context of Income-tax proceedings, but the ratio decidendi is directly applicable on the facts of the case in hand. Therefore, we have no hesitation to hold that the additions made on the basis of the impugned seized 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of additional ground/challenges from the jurisdiction of the Assessing Officer in the case of Lord s Distillery Limited in ITA No. 2576 to 2578/DEL/2010 at para 79 page 74. For our detailed discussion therein, the additional ground is admitted and since it goes to the root of the mater, we will first address to this additional ground raised by the appellant. 122. Facts of the case reveal that a satisfaction note received by the Assessing Officer is dated 10.04.2007 which date has to be taken as the date of search in the case of the other person . In the light of the provisions of section 153C of the Act discussed 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 presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rossly erred in confirming the action of the Assessing Officer in assuming jurisdiction u/s 153C r.w.s. 153A of the Act merely on the basis of certain documents found during the course of search. The assessee is further aggrieved by the addition of ₹ 3.367 crores in A.Y 2003-04, ₹ 3.07 in A.Y 2004-05 and ₹ 1.44 crores in A.Y 2005-06 made by the Assessing Officer on account of alleged unaccounted contribution made to UPDA on the basis of impounded documents and statements of Shri R.K. Miglani. 133. 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. 134. In the result, the appeals filed by the assessee are allowed. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of satisfaction note would amount to date of search i.e. 01.12.2006. Therefore, the six A.Ys forming block will be year ending 31.03.2006, 31.03.2005, 31.03.2004, 31.03.2003, 31.03.2002 and 31.03.2001, which means that for the year ending 31.03.2006 for A.Y 2006-07 , the A.Y under consideration, assessment had to be framed u/s 153C of the Act whereas the assessment has been farmed u/s 143(3) of the Act. Therefore, the same is bad in law. 142. 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. Miglani/UPDA has been held by us as unlawful. Accordingly, we have annulled the assessment order so framed while deciding common Grievance No. 1. For our detailed discussion given therein, added with our findings given in common grievance No. 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. Since we have annulled the assessment, there is no need to dwell into the merits of the addition. 143. In the result, the appeal of the assessee is allowed. ITA No. 2827/DEL/2010 Narang Distillery Ltd [Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l/2010 C.O. No. 129/Del/2010 National Industrial Corporation Ltd [Revenue s appeals and assessee s cross objections] 150. Grievance of the Revenue is that the CIT(A) erred in annulling the assessment by holding that no document was seized during the search pertaining to this A.Y. 151. In its cross objection, the assessee has challenged the assumption of jurisdiction u/ 153C of the Act. 152. 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. Miglani/UPDA has been held by us as unlawful. Accordingly, we have annulled the assessment order so framed while deciding common Grievance No. 1. For our detailed discussion given therein, added with our findings given in common grievance No. 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. 153. In the result, Cross objections of the assessee are allowed and the appeals filed by the Revenue are dismissed. ITA No. 2053/Del/2010 ITA No. 2054/Del/2010 ITA No. 2772/Del/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order relatable to such case. Such application should be filed within the time period prescribed in the Act. 157. In the light of the aforesaid CBDT Circular, the appeals filed by the Revenue are dismissed. 158. In the result, all the appeals of the Revenue stand dismissed. ITA No. 2177/Del/2012 ITA No. 2178/Del/2012 ITA No. 2496/Del/2010 Modi Industries Limited [Assessee s appeals] 159. The sum and substance of the grievance of the assessee is that the CIT(A) grossly erred in confirming the assessment framed u/s 153C r.w.s. 153A of the Act. 160. A perusal of the assessment order dated 28.12.2007 shows that the entire assessment has been framed on the strength of the documents seized from the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Singhad Technical Education 397 ITR 344. 167. It would be pertinent to refer to the findings of the Hon'ble Delhi High Court in the case of Kabul Chawla [supra] which reads as under: The decision in CIT Vs. Anil Kumar Bhatia does not deal with a situation where, as in the present case, no incriminating material was found during the search conducted u/s 132 Nevertheless, it was interesting to note that in CIT Vs. Chetan Das Lachman Das the court underscored the need for department to have unearthed material during the search to justifying the assessment sought to be made. It was held that an assessment u/s 153A has to be made under this section only on the basis of seized material. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i) Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dwell into the merits of the case. Though the additions made by the Assessing Officer are on the basis of statement of Shri R.K. Miglani, this issue has been discussed at length by us while deciding common Grievance No. 2. On this count also, addition is not maintainable. 169. In the result appeals of the assessee are allowed. ITA No. 3001/DEL/2014 Simbholi Sugars 170. Since the assessment has been held quashed, we do not find it necessary to dwell into the merits of the case. 171. In the result appeal of the Revenue is dismissed. 458/DEL/2010 Superior Industries Ltd 172. Grievance of the Revenue is that the CIT(A) erred in annulling the assessment by holding that no document was seized during the search pertaining to this A.Y. 173. Facts on record show that search and seizure operation u/s 132 of the Act was undertaken on the business premises as well as residential premises of Shri R.K. Miglani/UPDA. Facts on record also show that no documents have been seized which can be said to be belonging to the assessee for F.Y. 1999-2000 pertaining to A.Y 2000-01. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) erred in cancelling the assessment for the years under consideration. 183. A perusal of the order of the CIT(A) shows that the CIT(A) has followed the earlier order of the Tribunal wherein the Tribunal has held that the documents seized and evidences gathered from the residence of Shri R.K. Miglani during search do not belong to the members of UPDA and as the present appellant is member of UPDA, assessment framed u/s 153C was held to be bad in law. 184. We have given elaborate findings on the documents seized from the premises of Shri R.K. Miglani/UPDA while adjudicating Common Grievance No. 1 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. 185. In the result, appeals of the Revenue stand dismissed. C.O. No. 126/Del/2013 C.O. No. 127/Del/2013 C.O. No. 128/Del/2013 C.O. No. 129/Del/2013 C.O. No. 130/Del/2013 C.O. No. 131/Del/2013 186. The cross obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i 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 Authorisation u/s 132 of the Act was executed at the premises of the assessee on 14.02.2006. 195. The question arises, then what was executed at the premises of the assessee. The answer is given by authorisation u/s 133A of the Act dated 14.02.2006. This authorisation is also part of our record which clearly mentions the name of the premises as 4th Floor, PHD Chamber of Commerce, Hauz Khas, New Delhi. This is the address of the assessee. 196. Panchnama of the assessee reads as under: Order u/s 133A(3) (1a) of the I.T Act. The following books of accounts/documents found during the course of survey u/s 133A at the premises of UPDA, 4th Floor, PHD House, August the premises of UPDA, 4th Floor, PHD House, August Kranti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, 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, the dispute in the present case is whether the Warrant of Authorisation was executed at the premises of the assessee searched or not. It is not the case of the assessee that the person who has issued the Warrant of Authorisation has reason to believe or reason to suspect . 202. Although we have held that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07 56.41 crores 206. The above amounts, extracted from the seized documents, have been treated as unexplained cash credits in the respective A.Ys. 207. As a result of search conducted at the resident of Shri R.K. Miglani on 14.02.2006, documents A-1 to A-10 were found and seized therefrom. The Assessing Officer has further observed that Annexure A-1 to A-10 were also impounded from the office of UPDA during survey for which Panchnama was provided. 208. The Assessing Officer has mentioned that what was taken out from the computer at UPDA premises were only copies of papers impounded from the residence of Shri R.K. Miglani. What was found from the residence of Shri R.K. Miglani cannot be construed as documents belonging to the assessee to trigger the provisions of section 153 of the Act unless in the 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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 survive in case investigations are lightly set in motion against important constitutional functionaries on the basis of fictitious entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily. The materials which have been placed on record either in the case of Birla or in the case of Sahara are not maintained in regular course of business and thus lack in required reliability to be made the foundation- of a police investigation. [Para 21] 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 dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty do not prima facie constitute any offence or make out a case against the accused. (9) 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. (10) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (11) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated u/s 155(2) of the Code. (12) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis 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 le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by Mr. Altaf Ahmed in this regard. Suffice it to say that the statements of the for witnesses, who have admitted receipts of the payments as shown against them in MR 71/91, can at best be proof of reliability of the entries so far they are concerned and not others. In other words, the statements of the above witnesses cannot be independent evidence under Section 34 as against the above two respondents. So far as Shri Advani is concerned Section 34 would not come in aid of the prosecution for another reason also. According to the prosecution case itself his name finds place only in one of the loose sheets (sheet No. 8) and not in MR 71/91. Resultantly, in view of our earlier discussion, section 34 cannot at all be pressed into service against him. 211. In the light of the ratio laid down by the Supreme Court in the above cases. We do not find any merits in the impugned additions made u/s 68 of the Act. 212. It is not in dispute that the entire additions have been made because some data is alleged to have been recorded in the computer of Shri R.K. Miglani. On the strength of such data, provisions of section 153C were invoked in the case of distiller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its books of account. 216. The ld. DR has heavily relied upon various judicial decisions to buttress his stand in respect of statements recorded u/s 132(4) of the Act and the presumption of entries found recorded in the books of account seized during search as per section 132(4) and 292C of the Act. 217. We do not find any relevance on these judicial decisions of the High Courts in as much as the presumption is against a person whose statement has been recorded u/s 132(4) of the Act during the course of search and seizure proceedings. As mentioned elsewhere, no search operation was conducted at the business of the appellant. It was Shri R.K. Miglani whose premises were searched. WE have summarized the assessment status of Shri R.K. Miglani elsewhere from which it can be seen from the returned income of Shri R.K. Miglani was assessed as such. Presumptions u/s 132(4), 132(4A) and 292C of the Act are available in respect of Shri R.K. Miglani only. Ironically, no such presumption was availed in the case of Shri R.K. Miglani as no additions were made in his hands. 218. It is an undisputed fact that the alleged amounts were not found noted anywher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates to material documents and books of account seized of from the assessee's premises and the presumption that can be made from it, not from materials seized and statement recorded, of third parties. Only if the materials that are sought to be relied upon emanate from the premises of the party subject to assessment, that the presumption can be drawn. This is evident from Sections 132 (4) and (4A) of the Act, which read as follows: Section 132.... (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income- tax Act, 1922 (11 of 1922 ), or under this Act. 1 Explanation.- For the removal of doubts, it is hereby declared that the examination of any person under this sub- section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the UPDA, was not established. The findings of the Commission therefore cannot be faulted as contrary to law. 25. As far as suppression of profits for various financial years, alleged by the revenue, the Commission was of the opinion that the documents relied upon were work estimates and projections that revealed tentative profitability in respect of the assessee's activities towards sale of country liquor i.e. that the documents did not reflect actual figures. The documents reflected profit methods for both years which left the Commission to infer they were in fact not based upon actuals but alternative projections. Here again the view taken by the Commission cannot be said to be unreasonable as to warrant interference. Likewise, so far as suppression of profits for financial year 2004-05 is concerned the revenue in its Rule 9 report stated that the extra money generated was ₹ 33.35 crores and expenditure incurred was ₹ 17.35 crores [of this substantial bribe amount were paid]. According to the revenue major expenditure out of this ₹ 17.35 cores was illegal and could not be allowed. The assessee's stand was that the internal indicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the distillers had made unaccounted payments to UPDA. In this regard, we have to point out that except for the notings in the loose sheets/impounded documents, the Revenue has brought nothing on record to establish any payments made by the distillers to UPDA. Whatever a member distiller has contributed to UPDA is recorded in the regular books of account of the assessee. Preponderance of probabilities do not allow us to assume or presume non existing facts. Considering the facts in totality from all possible angles, we do not find any merit in the additions made u/s 68 of the Act. 225. Coming to the issue relating to denial of benefit of sections 11 and 12 of the Act, the Assessing Officer in Para 13 of the assessment order for assessment year 2001-02 held that the assessee is not eligible for exemption u/ss 11 12 of the Act for the following reasons: 1. The A.O in Para 13 of the assessment order for Assessment Year 2001-02, held that assessee is not eligible for exemption u/s 11 12 of IT Act as follows: 13. The perusal of the object of the association, specially object mentioned above, it is, clear that the UP Distilleries Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76,04,15,200 3 2005-06 45,22,94,401 4 2006-07 56,41,74,550 The above unaccounted receipts are not reflected in the return of income filed by the assessee. Moreover, at no stage of the proceedings, the assessee has claimed or furnished documentary evidence in support of the fact that the above amounts were spent for charitable purposes, which is the primary condition for claiming exemption u/s 11 12 of IT Act. 226. Barring the issue relating to the additions made u/s 68 of the Act as per the aforesaid chart, the other issues were considered in the appellate proceedings for assessment year 2001-02 and the matter had travelled upto the Tribunal and the Tribunal in ITA No. 573/DEL/2005 has allowed the benefit of provisions of section 11 and 12 of the Act to the assessee. 227. The only distinguishing feature is the addition made u/s 68 of the Act. The allegation of the Assessing Officer is that the aforesaid receipts are unaccounted and are not reflected in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the assessments framed u/s 143(3) of the Act in assessment year 2006-07 ITA Nos. 3211/DEL/2013 and assessment year 2007-08 in ITA No. 11/DEL/2012. 233. In ITA No. 3211/DEL/2013, the assessee is aggrieved by the rejection of registration granted u/s 12AA of the Act by adding a sum of ₹ 2,2,5,209/- and is further aggrieved by the addition of ₹ 56.41 crores being unexplained credit entries u/s 68 of the Act. 234. We have already granted benefit of sections 11 12 of the Act and in so far as rejection of registration granted u/s 12AA of the Act is concerned, as mentioned elsewhere, the Hon'ble High Court has protected the assessee by its order till 01.10.2014. Further, we have directed for deletion of the addition made u/s 68 of the Act. Considering all these issues in totality, the appeal of the assessee is allowed. 235. In ITA No. 11/DEL/2012 for assessment year 2007-08, the assessee is aggrieved by the cancellation of registration granted u/s 12AA of the Act and is further aggrieved by the enhancement of the income by the ld. CIT(A) from NIL income to ₹ 4,88,140/- regardless of the fact that the amount of ₹ 4,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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