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TMI Blog2022 (9) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... s only with regard to the stock in trade and not capital asset 3. The CIT(A) should have quashed the assessment, in the facts and circumstances and in Law, as not valid. The assessee has filed additional ground of appeal on 31.05.2018 which read as under: - The learned CIT(A) has failed to appreciate that the order dated 31.03.2015 made u/s 153C rws 143(3) of the I.T.Act, 1961 by the AO was without jurisdiction, as the provisions of Section 153C(1) of the I.T.Act, 1961 did not apply to the assessment years, in question, in facts and the circumstances of the case and in law. 2. Drawing attention to legal grounds, Ld. AR submitted that this year fall outside the period of six assessment years and therefore, Ld. AO had no jurisdiction to frame assessment u/s 153C rws 153A(1)(b). Reliance has been placed on various decisions, the copies of which have been placed on record. In particular, the decision of Hon'ble Delhi High Court in the case of CIT V/s RRJ Securities Ltd. (380 ITR 612) is stated to be directly applicable to the facts of this case. The Ld. CIT-DR, on the other hand, controverted the arguments of Ld. AR and placed on record a copy of satisfaction note recorded by Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving jurisdiction over both the assessees was one and the same, it may be seen that the document in question was already in the custody of AO. Therefore, the date of receipt of relevant documents from AO of the searched person would not arise at all. Accordingly, the objection was over-ruled. 3.4 In the above background, Ld. AO proceeded to compute the income arising to the assessee out of JDA. It was noted that as land owner, the assessee was entitled for 30% of super built-up area in the project. This land was purchased by the assessee and was shown as capital asset. Accordingly, in exchange of 70% undivided share of land, the landowner would get 30% of super built-up area. The sale of land was completed when the JDA was affected by the land owner and the possession was handed over on the said date i.e., 31.03.2007. The estimated cost to complete the project was pegged at Rs.71.79 Crores and the assessee' share therein (30%) would come to Rs.21.53 Crores which would constitute sale consideration. After deducting there-from 70% of total land cost, the resultant short-term capital gain was computed by Ld. AO at Rs.19.63 Crores. 3.5 The assessee opposed the same on the ground tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with same AO and a satisfaction note initiating proceedings u/s 153C in the case of assessee was recorded on 24.09.2013, a copy of which has been placed on record by the revenue. Therefore, to count the jurisdiction of AO, this date i.e., 24.09.2013 assumes importance. The provisions of Sec.153C(1) provide 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer having jurisdiction over such other person. 8. The provision of Sec.153A (1)(a) postulates issuance of notice in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to previous year in which search is conducted. In the present case, the satisfaction note (as placed by revenue on record) has been recorded by Ld. AO on 24.09.2013 which falls in previous year 2013-14, the relevant assessment year for which is AY 2014-15. Therefore, considering the statutory mandate, the notice that could be issued to the assessee would be as under: - Year No. Previous Year Assessment Year 1. 2012-13 2013-14 2. 2011-12 2012-13 3. 2010-11 2011-12 3. 2009-10 2010-11 5. 2008-09 2009-10 6. 2007-08 2008-09 The year before us is AY 2007-08. Clearly, this year would be out of the purview of proceedings u/s 153C as per statutory mandate. This being so, the Ld. AO, in our considered opinion, had no jurisdiction to proceed u/s 153C and therefore, the consequential assessment as framed by Ld. AO could not be sustained in the eyes of law. 9. Our aforesaid conclusion is duly supported by the case law of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of Section 153C(1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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