TMI Blog2021 (5) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... The sequitur of the judgment which can be culled out is that, seized incriminating material has to pertain to the assessment year in question and have co-relation, document-wise, with the assessment year. This requirement u/s 153C is essential and becomes a jurisdictional fact. It is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in S. 153A. This judgment of the Hon ble Supreme Court clearly clinches the issue in favour of the assessee in this case. Thus we hold that the additions made in the order passed u/s 143(3) r.w.s. 153C, for the captioned assessment years which are unabated assessments, cannot be made, because same are beyond the scope of assessments u/s 153C/ 153A as the same are without any incriminating documents found during search. - Decided against revenue. - ITA Nos. 286 & 287/Del/2015 - - - Dated:- 11-5-2021 - Shri Amit Shukla, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Rakesh Joshi, C.A.; For the Department : Ms. Pramita M. Biswa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch, i.e., 22.11.2011 and sent notices u/s 153C dated 20.09.2013 for filing of return of income for both the assessment years after recording the satisfaction . In response to notice u/s 153C, return of income was filed on 30.12.2013 with the ACIT, Central Circle-19, New Delhi. In the meantime, the CIT (Central)-III, New Delhi had transferred the case to the ACIT, Central Circle-19, New Delhi vide his order u/s 127 of the Act dated 12.11.2013. So, the assessments in the case of the appellant company have been completed by the ACIT, Central Circle-19, New Delhi. Ld. Assessing Officer, upon receipt of case on transfer from the ACIT, Central Circle-23, New Delhi, resumed the assessment proceedings and completed the assessment on 30.03.2014 after making the aforesaid additions made u/s 68 of ₹ 99,84,26,936 in the AY 2010-11; and ₹ 45,57,85,000/- in the AY 2011-12 on account of share capital and premium. These additions have been made, based on entries of inventories of shares as given in balance sheet already on record, rather than any incriminating or seized documents or anything mentioned in the satisfaction note. 4. In first appeal, Ld CIT (A) has deleted the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lata and Group companies. The same is detail of companies also available at MCA site. A perusal of the above reveals that Annexure A-9 page 44-46 contains balance sheet of the appellant company. Additions are made on account of share capital. Therefore, the additions are relatable to seized document. I rely on the decision of hon ble Delhi High Court in the case of Sh. Anil Bhatia in ITA 1626, 1632, 1998, 2006, 2019 2020 of 2010 dated 7.08.2012 that the jurisdiction of assessing officer u/s 153A is to assess total income for the year and not restricted to seized material. Where it has been held that even if for one assessment year, there are seized documents, the relatable to addition, the assessing officer can be made addition for all assessment years covered u/s 153A. Accordingly, on jurisdictional ground, the grounds of appeal are dismissed for both the assessment years. 5. On merits the findings of Ld. CIT (A) are as under:- I have considered all the basis of addition and arguments of Ld. AR. During the assessment proceedings, the appellant has submitted evidences such as confirmation of purchase of invest, ITR of purchasing co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to find identity of such shareholder documents submitted by the shareholder in response to notice u/s 133(6), asked to produce directors of these shareholder companies. In my view, once the appellant has filed all documents in support of share capital and new address of the share holder companies, onus was lying on the assessing officer to disprove the same. Without disproving these evidences onus will not shift back to the appellant. Under these circumstances, even the decision of Hon ble High Court of Delhi in the case of N.R. Portfolio Pvt. Ltd., will not help the case, as in that case, the assessing officer has made enquiry to disprove apparently the evidences filed by the assessee, then the decision was given that the onus was shifted back on the assessee to produce directors. The above findings are applicable in all purchasers of the investment of the appellant except M/s. S. S. Securities which has not replied the notice u/s 133(6). M/s. S. S. Securities is claimed as share broker by the appellant and the appellant has not produced even the bill for the sale of investment. Therefore, in the case of M/s. S. S. Securities, in my view, the appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be reckoned from the date of recording of satisfaction note or from the date of search carried out in a case of a person provided in Section 153A. This precise issue has been dealt by the Hon ble Delhi High Court in the case of CIT vs. RRJ Securities Ltd. as reported in 380 ITR 612 in the context of Section 153C of the Act, wherein it was laid down as under: Further, the period of six years would also have to be reckoned with respect to the date of recording of satisfaction note - that is, 8th September, 2010 - and not the date of search. 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings by virtue of Section 153C(1) of the Act would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year. This principle was further reiterated in the case of ARN Infrastructure India Ltd. v. ACIT as reported in 394 ITR 569, wherein it has been held as under: 12. The decision in RRJ Securities Ltd. (supra) is categorical that under / Section 153C of the Act, the period of six years as regards the person other than the searched person would commence only from the year in which the satisfaction not is prepared by the AO of the searched person and a notice is issued pursuant thereto. The date of the Satisfaction Note is 21st July, 2014 and the notice under Section 153C of the Act was issued on 23rd July, 2014. The previous six AYs would therefore be from AY 2009-10 to AY 2014-15. This would therefore not include AYs 2007-08 and 2008-09. 9. Here in this case, in view of above judicial precedence, it cannot be disputed that both the Assessment years, i.e., A Y 2010-11 2011-12 were non-abated assessment year as per second proviso to section 153A of the Act, which is clear from the following chart summarizing the various events:- Sl. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember 2013. Thus, the date of issuance of notice has to be reckoned as date of initiation in this case. Extract of the order sheet notings for A Y 2010-11 2011-12 (scan copy) as placed on record before is reproduced as under:- 12. From the above order sheet it is very clear that the deemed date of search as per proviso to 153C (1) is 20/09/2013 and accordingly, on that date both the assessment years are unabated as per second proviso to section 153A of the Act. 13. During the course of search which is an admitted fact that, no incriminating documents relating to impugned addition made on account of share capital or share premium was found. Details of documents belonging to assessee found during the course of search are listed on page 17 of Ld CIT (A) order as incorporated above. Assessee also filed copies of these documents which are on page 423-437 of the paper book. These documents are in the nature of audited balance sheet and email exchanged for finalization of accounts and there is no connection of these documents with the addition made by the AO. Such documents cannot be held to be incriminating to come to even prima facie satisfaction that some undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the seized material is in the form of audited balance sheet of the assessee found and the addition is related to share capital which is part of balance sheet. Hence addition relates to seized material. At any stretch of imagination, audited balance sheet cannot be termed as incriminating document so as to draw adverse inference of any undisclosed income as they are already disclosed in the return of income and are already part of earlier assessment as they have been duly disclosed in the balance sheet filed along with the return of income which assessments have attained finality. Once the addition has been made without any incriminating documents or material especially for unabated assessments, then in view of principle laid down by the Hon ble Delhi High Court in case of CIT Vs. Kabul Chawla, reported in 380 ITR 573 (Delhi) such additions cannot be roped in the assessments made u/s 153A. It has held that completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred. 19) We, thus, find that the ITAT rightly permitted this additional ground to be raised and correctly deal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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