TMI Blog2022 (12) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Ld. CIT(A), who deleted the addition made by the Assessing Officer u/s. 68 - Decided in favour of assessee. Assumption of jurisdiction under 153C - what is the relevant date from which the amended provisions of section 153C would be applicable? - HELD THAT:- No doubt, the amended provisions has been expressly brought into force with effect from 01.06.2015. However the search action has been conducted in this case on 10.03.2015 which is prior to 01.06.2015. Hence the provisions of law, as existing on the date of search namely 10.03.2015 in this case is to be followed. Therefore the satisfaction note recorded by the Assessing Officer on 17.11.2017 (which is extracted in Para 2.1 of this order), invoking the amended provisions of section 153C namely various documents were seized which relates to and the information contained therein pertains to the assessee is not correct in law. Even as per the pre-amended provisions of Section 153C, AO has to record satisfaction to the effect that seized material belongs or belongs to other person. In this case, the A.O. has not put on record that any material seized during the course of search does belong to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein related to the assessee. Therefore satisfaction is recorded by the Assessing Officer on 17.11.2017 as follows: In view of above facts as mentioned in the Annexure-B, I am satisfied that the above mentioned documents seized from the premises (i) Terrace of Crystal Arcade, Nr. Navrangpura Telephone Exchange, C.G. Road, Ahmedabad and (ii) 901, Sapphire complex, Opp. Ratnam, C.G. Road, Ahmedabad and during the course of search, various documents were seized which relates to and the information contained therein pertains to the assessee. M/s. Ashrita Construction Pvt. Ltd. for A.Y. 2013-14. Since the assessee company being other than the person referred to in section 153A of the Act. I have satisfaction to proceed against the assessee M/s. Ashrita Construction Pvt. Ltd. as per the provisions of Section 153C of the Income Tax Act, 1961 as it has bearing on the determination of the total income for the assessment year. Therefore, it is fit case for initiation of proceeding u/s. 153C of the I.T. Act. 2.2. After recording the above satisfaction notice u/s. 153C of the Act was issued on 17.11.2017 requiring the assessee to file its return of income within 30 days of receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led copy of the acknowledgement of Income Tax Return, Tax Audit Report, Copy of the account confirmation and Bank Statement of Sunderdeep Builders for the relevant assessment year. Thus the assessee contended these documents prove the identity of the creditor, genuineness of the transactions and creditworthiness of the creditor have been established beyond doubt. The assessee further contended that the assessee name is not mentioned in the documents seized during the course of search but an initial 'YT' is written which is nowhere established that it is the name of the assessee. If it is the case of the department 'YT' stand for Yashwant Thakkar and in that case the transactions should be considered in his individual hand and not in the hands of the assessee. Further these documents were not found from the premises of the assessee and not relating to it and therefore the addition made on this account is liable to be deleted. The Ld. CIT(A) after considering the above submission deleted the addition made by the Assessing Officer as follows: 6.2 Facts of the case with reference to submission of the appellant, assessment order and case laws relied upon by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not match exactly, so as to warrant additions. It is important to mention that at the year end, M/s. Sunderdeep Builders had closing balance of Rs. 31.40 crore, which was taken to next year. The appellant paid interest upon this balance during next financial year, but the same was considered genuine by the A.O. and no addition was made. Even for the year under consideration, no interest was disallowed upon the so called unexplained loan considered by the AO. These show the contradictory stand taken while passing the assessment order. The AO has mentioned statement of few people and director of Venus group in the assessment order while making these additions, but no opportunity to cross examine these people was provided inspite of specific request made by the appellant during the assessment proceedings. I inclined to agree with the argument of the appellant that presumption u/s. 292C of the Act is not applicable against the appellant, as these documents were not found from the premises of the appellant. To prove the genuineness of transactions u/s. 68 of the Act, identify of the creditor, genuineness of the transactions and creditworthiness of the creditor is required to be proved. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 3. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 4.1. The Revenue's appeal in ITA No. 2023/Ahd/2018 for A.Y. 2015-16 raising the following Grounds of Appeal. 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 6,50,00,000/- made by the AO u/s. 68 of the Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 3. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 4.2. The Assessee's appeal in C.O. No. 28/Ahd/2021 for A.Y. 2013-14 raising the following Grounds of Appeal: 1. The Ld. A.O. has erred in law and on facts in assuming jurisdiction u/s. 153C of the IT Act, 1961 and thus erred in passing the assessment order. The Ld. CIT(A) has also erred in confirming the jurisdiction of A.O. under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Total Income of Rajesh Vaswani proprietor of M/s. Sunderdeep Builders. At Page No. 61 to 67 of the Paper Book and Tax Audit Report of Rajesh Vaswani at page no. 68 to 84. Thus the Ld. Senior Counsel submitted that all the three ingredients as prescribed u/s. 68 of the Act namely identity of the payer, genuineness of the transaction and creditworthiness of the lender are being proved by the assessee and discharged its initial onus cast upon it. 6.1. It is also settled principle of law that source of source is not required to be proved by the assessee and relied upon Jurisdictional High Court Judgment in the case of DCIT vs. Rohini Builders 256 ITR 360 (Guj.), in the case of Murlidhar Lahorimal vs. CIT 280 ITR 512 (Guj.), in the case of CIT vs. Pragati Cooperative Bank Ltd. 278 ITR 170 (Guj.) and in the case of CIT vs. Orissa Corporation Pvt. Ltd. 159 ITR 78 (SC). 6.2. The Ld. Senior Counsel also further submitted that the assessee received Rs. 35 Crores from the lender during the year. However the Assessing Officer doubted only Rs. 5 Crores received from the lender and not doubted 30 Crores received from the lender. The A.O. has not appreciated the repayment of Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83,79,553/- as against the above loan, with appropriate TDS made by the Assessee. Therefore the addition made by the Assessing Officer u/s. 68 of the Act is not sustainable in law. Further the Hon'ble Jurisdictional High Court in the case of Ayachi Chandrashekhar Narsangji (cited supra) it was held as follows: Section 68, read with section 143, of the Income-tax Act, 1961 - Cash credit [Loans] -Assessment year 2006-07 - Assessing Officer framed assessment under section 143(3) wherein he made addition of Rs. 1.45 crore under section 68 on ground that loan taken from one 'IA' was not explained satisfactorily - On appeal, Commissioner (Appeals) was satisfied with respect to genuineness of transaction and creditworthiness of MA' and, therefore, deleted addition - It was found that total loan of Rs. 1.60 crore was advanced to assessee, out of which Rs. 15 lakh was repaid -Therefore, an amount of Rs. 1.45 crore remained outstanding to be paid to 'IA' - Balance loan amount was repaid by assessee in immediately next financial year - Whether when Department had accepted same, addition made by Assessing Officer was to be deleted - Held, yes [Para 6] [In favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, 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 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. 12. The moot question that arise for consideration in the present case is what is the relevant date from which the amended provisions of section 153C would be applicable. No doubt, the amended provisions has been expressly brought into force with effect from 01.06.2015. However the search action has been conducted in this case on 10.03.2015 which is prior to 01.06.2015. Hence the provisions of law, as existing on the date of search namely 10.03.2015 in this case is to be followed. Therefore the satisfaction note recorded by the Assessing Officer on 17.11.2017 (which is extracted in Para 2.1 of this order), invoking the amended provisions of section 153C namely various documents were seized which relates to and the information contained ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicable, as to whether it relates to the date of search; or the date of recording of satisfaction by the Assessing Officer of the searched person; or the date of recording of satisfaction by the Assessing Officer of the other person; or the date of issuance of notice under section 153C. [Para 19.8] In the facts of the present case, the search was conducted in all the cases on a date prior to 1-6-2015. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to the effect that the seized material belongs or belong to the other person. In the present case, the hard disc containing the information relating to the petitioners admittedly did not belong to them, therefore, as on the date of the search, the essential jurisdictional requirement to justify assumption of jurisdiction under section 153C in case of the petitioners, did not exist. It was only on 1-6-2015 when the amended provisions came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
