Shri Amit Pande, Bhopal v. The ACIT, Bhopal

CO 34/IND/2009 | 1999-2000
Pronouncement Date: 28-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 3422723 RSA 2009
Assessee PAN AHFPP8309C
Bench Indore
Appeal Number CO 34/IND/2009
Duration Of Justice 2 year(s) 3 month(s) 11 day(s)
Appellant Shri Amit Pande, Bhopal
Respondent The ACIT, Bhopal
Appeal Type Cross Objection
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 28-07-2011
Date Of Final Hearing 16-06-2011
Next Hearing Date 16-06-2011
Assessment Year 1999-2000
Appeal Filed On 16-04-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NOS. 88 AND 90 TO 94/IND/2008 AYS: 1999-00 AND 2001-02 TO 2005-06 ASSTT. COMMISSIONER OF INCOME TAX 1(1) BHOPAL ..APPELLANT V/S. AMIT PANDE BHOPAL PAN AHFPP 8309C ..RESPONDENT CO NOS. 34 TO 40/IND/09 (ARISING OUT OF ITA NOS. 88 TO 94/IND/08 AMIT PANDE BHOPAL ..OBJECTOR VS ASSTT. COMMISSIONER OF INCOME TAX ASSESSEE 1(1) BHOPAL ..RESPONDENT 2 DEPARTMENT BY : SHRI DARSHAN SINGH RESPONDENT BY : SHRI H.P. VERMA AND SHRI GIRISH AGRAWAL ORDER PER JOGINDER SINGH JUDICIAL MEMBER THE REVENUE HAS COME UP IN APPEAL WHEREAS THE CROSS OBJECTIONS HAVE BEEN FILED BY THE ASSESSEE AG AINST THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) DATED 21.2.2008 21.12.2007 21.2.2008 21.2.2008 21.2.2008 AND 21.2.2008 OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IN THE APPEA LS THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- IT(SS)A NO. 88/IND/08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS E RRED IN 1. DELETING THE ADDITION OF RS.25 00 000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE EXPENDITURE ON ACQUISITION OF HOUSE PROPERTY AT 106 MALVIYA NAGAR BHOPAL BY ADMITTING FRESH EVIDENCES PRODUCED DURING THE APPELLATE PROCEEDINGS WITHOUT GIVING AN OPPORTUNITY TO THE A.O. TO EXAMINE AN INVESTIGATE INTO THE MATTER OF VIOLATION OF RULE 46 A OF THE I.T. RULES 1962. 2. DELETING THE ADDITION OF RS. 25 00 000/- MADE BY TH E A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE 3 EXPENDITURE ON ACQUISITION OF HOUSE PROPERTY AT 106 MALVIYA NAGAR BHOPAL PARTICULARLY WHEN THE ASSESSEE FAILED TO SUBSTANTIATE THE SOURCE OF FUNDS DURING ASSESSMENT PROCEEDINGS BEFORE THE A.O. 3. DELETING THE ADDITION OF RS. 1 50 000/- OUT OF TOTA L ADDITION OF RS.2 00 000/- MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES WITHOUT ASSIGNING SUBSTANTIAL REASONING CONTRARY TO THE PROPER REASON S AND FINDINGS MADE BY THE A.O. IT(SS)A NO. 90/IND/08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS E RRED IN- 1. DELETING THE ADDITION OF RS. 6 06 125/- OUT OF TOTA L ADDITION OF RS. 6 38 025/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY AT DYNAMIC C ENTRE HOLDING THAT THE ASSESSEE WAS EARNING ONLY BROKERAGE/COMMISSION AND CONFIRMED ONLY 5% OF THE RECEIPTS AS HIS COMMISSION EVEN THROUGH THE ASSESSE E FAILED TO DISCHARGE THE ONUS AS REGARDS TO THE ASSE SSEE BEING HOLDER OF POWER OF ATTORNEY OF THE PROPERTY A ND HE WAS NOT THE REAL OWNER OF THE PROPERTY. 2. DELETING THE ADDITION OF RS. 15 000/- MADE ON ACCOU NT OF UNDISCLOSED PROFIT FROM SALE OF SHOPS AT DYNAMIC CE NTRE BY HOLDING THAT THE ASSESSEE WAS A BROKER IN THE TRANSACTIONS AND NOT THE REAL OWNER IGNORING THE FA CT THAT THE ADDITION WAS MADE ON THE BASIS OF SEIZED DOCUME NTS AND VARIOUS BANK DETAILS OBTAINED DURING THE ASSESS MENT PROCEEDINGS FOR WHICH THE ASSESSEE COULD NOT GET CONVINCING REPLY. 3. DELETING THE ADDITION OF RS. 1 94 000/- OUT OF TOTA L ADDITION OF RS. 3 57 700/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED RENTAL INCOME RECEIVED BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS THE REAL OWNER OF ALL THE PROPERTIES MENTIONED IN THE ASSESS MENT ORDER AND CONTINUES TO ENJOY THE RIGHTS THEREOF. 4. DELETING THE ADDITION OF RS. 1 00 000/- MADE ON ACC OUNT OF UNEXPLAINED DEPOSITS IN THEN BANK ACCOUNTS EVEN THO UGH NO CASH FLOW STATEMENT OR STATEMENT OR STATEMENT OF AFFAIRS 4 WAS PRODUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS INSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE. 5. DELETING THE ADDITION OF RS. 1 70 000/- OUT OF TOTA L ADDITION OF RS. 2 50 000/- MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES WITHOUT ASSIGNING SUBSTANTIAL REASONING CONTRARY TO THE PROPER REASONS AND FINDIN GS MADE BY THE A.O. IT(SS)A NO. 91/IND/08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. DELETING THE ADDITION OF RS.45 962/- OUT OF TOTAL A DDITION OF RS. 48 382/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLA INED INVESTMENT IN THE PROPERTY AT DYNAMIC CENTRE HOLDIN G THAT THE ASSESSEE WAS EARNING ONLY BROKERAGE/COMMISSION AND CONFIRMED ONLY 5% OF THE RECEIPTS AS HIS COMMISSION EVEN THOUGH THE ASSESSEE FAILED TO DISCHARGE THE ONUS AS REGARDS TO THE ASSESSEE BEING HOLDER OF POWER OF AT TORNEY AND HE WAS NOT THE REAL OWNER OF THE PROPERTY. 2. DELETING THE ADDITION OF RS. 2 34 000/- OUT OF TOTA L ADDITION OF RS. 3 97 700/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED RENTAL INCOME RECEIVED BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS THE REAL OWNER OF ALL THE PROPERTIES MENTIONED IN THE ASSESS MENT ORDER AND CONTINUES TO ENJOY THE RIGHTS THEREOF. 3. DELETING THE ADDITION OF RS.6 31 000/- MADE ON ACCO UNT OF UNEXPLAINED DEPOSITS IN BANK ACCOUNTS EVEN THOUGH N O CASH FLOW STATEMENT OR STATEMENT OF AFFAIRS WAS PRO DUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS I NSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE. 4. DELETING THE ADDITION OF RS.1 65 000/- OUT OF TOTAL ADDITION OF RS. 2 60 000/- MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES WITHOUT ASSIGNING SUBSTANTIAL REASONING CONTRARY TO THE PROPERTY REASONS AND FIND INGS MADE BY THE A.O. IT(SS)A NO. 92/IND/08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS E RRED IN - 5 1. DELETING THE ADDITION OF RS.48 650/- OUT OF TOTAL A DDITION OF RS. 51 210/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLA INED INVESTMENT IN THE PROPERTY AT DYNAMIC CENTRE HOLDIN G THAT THE ASSESSEE WAS EARNING ONLY BROKERAGE/COMMISSION AND CONFIRMED ONLY 5% OF THE RECEIPTS AS HIS COMMISSION EVEN THOUGH THE ASSESSEE FAILED TO DISCHARGE THE ONUS AS REGARDS TO THE ASSESSEE BEING HOLDER OF POWER OF AT TORNEY AND HE WAS NOT THE REAL OWNER OF THE PROPERTY. 2. DELETING THE ADDITION OF RS.32 700/- MADE BY THE A. O. ON ACCOUNT OF UNDISCLOSED PROFIT FROM SALE OF SHOPS AT DYNAMIC CENTRE BY HOLDING THAT THE ASSESSEE WAS A BROKER IN THE TRANSACTIONS AND NOT THE REAL OWNER IGNORING THE FACT THAT THE ADDITION WAS MADE ON THE BASIS OF SEIZED DOCUMENTS AND VARIOUS BANK DETAILS OBTAINED DURING THE ASSESSMENT PROCEEDINGS FOR WHICH THE ASSESSEE COULD NOT GIVE CONVINCING REPLY. 3. DELETING THE ADDITION OF RS.2 34 000/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED RENTAL INCOME RECEIVED BY TH E ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASS ESSEE IS THE REAL OWNER OF ALL THE PROPERTIES MENTIONED IN T HE ASSESSMENT ORDER AND CONTINUES TO ENJOY THE RIGHTS THEREOF. 4. DELETING THE ADDITION OF RS.8 26 000/- MADE ON ACCO UNT OF UNEXPLAINED DEPOSITS IN BANK ACCOUNTS EVEN THOUGH N O CASH FLOW STATEMENT OR STATEMENT OF AFFAIRS WAS PRO DUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS I NSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE 5. DELETING THE ADDITION OF RS.7 98 673/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED LONG TERM CAPITAL GAIN ON TH E SALE OF PROPERTY AT 70 ZONE-I M.P. NAGAR BHOPAL WITHOUT CONSIDERING THE FACT THAT THE FULL PARTICULARS WERE NEVER PRODUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS. 6. DELETING THE ADDITION OF RS. 1 70 000/- OUT OF TOTA L ADDITION OF RS. 2 75 000/- MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES WITHOUT ASSIGNING SUBSTANTIAL REASONING CONTRARY TO THE PROPER REASONS AND FINDIN GS MADE BY THE A.O. 6 IT(SS)A NO. 93/IND/08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS E RRED IN - 1. DELETING THE ADDITION OF RS.10 91 225/- OUT OF TOTA L ADDITION OF RS. 11 48 658/- MADE BY THE A.O. ON ACC OUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY AT DYNAMI C CENTRE HOLDING THAT THE ASSESSEE WAS EARNING ONLY BROKERAGE/COMMISSION AND CONFIRMED ONLY 5% OF THE RECEIPTS AS HIS COMMISSION EVEN THOUGH THE ASSESSEE FAILED TO DISCHARGE THE ONUS AS REGARDS TO THE ASSE SSEE BEING HOLDER OF POWER OF ATTORNEY AND HE WAS NOT TH E REAL OWNER OF THE PROPERTY. 2. DELETING THE ADDITION MADE ON ACCOUNT OF UNDISCLOSE D PROFIT FROM SALE OF SHOPS AT DYNAMIC CENTRE BY HOLD ING THAT THE ASSESSEE WAS A BROKER IN THE TRANSACTIONS AND NOT THE REAL OWNER IGNORING THE FACT THAT THE ADDITION WAS MADE ON THE BASIS OF SEIZED DOCUMENTS AND VARIOUS BANK DETA ILS OBTAINED DURING THE ASSESSMENT PROCEEDINGS FOR WHIC H THE ASSESSEE COULD NOT GIVE CONVINCING REPLY. 3. DELETING THE ADDITION OF RS.2 64 000/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED RENTAL INCOME RECEIVED BY TH E ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASS ESSEE IS THE REAL OWNER OF ALL THE PROPERTIES MENTIONED IN T HE ASSESSMENT ORDER AND CONTINUES TO ENJOY THE RIGHTS THEREOF. 4. DELETING THE ADDITION OF RS.3 15 050/- MADE ON ACCO UNT OF UNEXPLAINED DEPOSITS IN BANK ACCOUNTS EVEN THOUGH N O CASH FLOW STATEMENT OR STATEMENT OF AFFAIRS WAS PRO DUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS I NSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE. 5. DELETING THE ADDITION OF RS. 8 LACS OUT OF TOTAL AD DITION OFRS. 10 LAKHS MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF LAND AT BAWADIYA KALAN BHOPAL IGNORING THE FACT THAT NO CA SH FLOW STATEMENT IN THE PURCHASE OF LAND AT BAWADIYA KALAN BHOPAL IGNORING THE FACT THAT NO CASH FLOW STATEMENT WAS PRODUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS TO SUBSTANTIATE THE SOURCE O F INVESTMENT. 7 6. DELETING THE ADDITION OF RS. 1 80 000/- OUT OF TOTA L ADDITION OF RS. 3 00 000/- MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES WITHOUT ASSIGNING SUBSTANTIAL REASONING CONTRARY TO THE PROPER REASONS AND FINDIN GS MADE BY THE A.O. IT(SS)A NO. 94/IND/08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS E RRED IN - 1. DELETING THE ADDITION OF RS.5 70 000/- OUT OF TOTAL ADDITION OF RS. 6 00 000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY AT DYNAMIC C ENTRE HOLDING THAT THE ASSESSEE WAS EARNING ONLY BROKERAGE/COMMISSION AND CONFIRMED ONLY 5% OF THE RECEIPTS AS HIS COMMISSION EVEN THOUGH THE ASSESSEE FAILED TO DISCHARGE THE ONUS AS REGARDS TO THE ASSE SSEE BEING HOLDER OF POWER OF ATTORNEY AND HE WAS NOT TH E REAL OWNER OF THE PROPERTY. 2. DELETING THE ADDITION MADE ON ACCOUNT OF UNDISCLOSE D PROFIT FROM SALE OF SHOPS AT DYNAMIC CENTRE BY HOLD ING THAT THE ASSESSEE WAS A BROKER IN THE TRANSACTIONS AND NOT THE REAL OWNER IGNORING THE FACT THAT THE ADDITION WAS MADE ON THE BASIS OF SEIZED DOCUMENTS AND VARIOUS BANK DETA ILS OBTAINED DURING THE ASSESSMENT PROCEEDINGS FOR WHIC H THE ASSESSEE COULD NOT GIVE CONVINCING REPLY. 3. DELETING THE ADDITION OF RS. 2 34 000/- OUT OF TOTA L ADDITION OF RS. 3 91 667/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED RENTAL INCOME RECEIVED BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS THE REAL OWNER OF ALL THE PROPERTIES MENTIONED IN THE ASSESS MENT ORDER AND CONTINUES TO ENJOY THE RIGHTS THEREOF. 4. DELETING THE ADDITION OF RS.2 93 550/- MADE ON ACCO UNT OF UNEXPLAINED DEPOSITS IN BANK ACCOUNTS EVEN THOUGH N O CASH FLOW STATEMENT OR STATEMENT OF AFFAIRS WAS PRO DUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS I NSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE. 5. DELETING THE ADDITION MADE BY THE A.O. ON ACCOUNT O F UNEXPLAINED INVESTMENT IN THE PURCHASE OF PROPERTY AT E- 1/41 ARERA COONY BHOPAL PARTICULARLY WHEN THE ADD ITION WAS MADE ON THE BASIS OF SEIZED DOCUMENTS WHICH CLE ARLY INDICATES THAT THE ASSESSEE HAD PAID RS. 5 LAKHS AS ADVANCE FOR THE PURCHASE OF THE SAID PROPERTY. 8 6. DELETING THE ADDITION OF RS. 1 90 000/- OUT OF TOTA L ADDITION OF RS. 3 25 000/- MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES WITHOUT ASSIGNING SUBSTANTIAL REASONING CONTRARY TO THE PROPER REASONS AND FINDIN GS MADE BY THE A.O. IN THE CROSS-OBJECTIONS THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- C.O. NO.34/IND/09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE TOTAL ADDITION AND UPHOLDING THE ADDITION OF RS. 50 000/- TOWARDS HOUSEHOLD EXPENSES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT CANCELLING THE NOTICE U/S 274 READ WITH SECTION 271(1)(C). THE ASSESSEE HAS ALSO TAKEN THE FOLLOWING ADDITIONA L GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT 1961 IS INVALID AND WITHOUT JURISDICTION. C.O. NO.35/IND/09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE ENTIRE ADDITION OF RS. 3 00 000/- AND THEREBY UPHOLDING THE ADDITION OF RS.15000/- ON ACCOUNT OF COMMISSION ON THE SALE PROCEEDS OF PARTS OF COMMERCIAL PROPERTY IN DYNAMIC CENTRE AND ALSO ON THE AMOUNTS OF RENTALS AND LEASE RENTALS RELEASED DURING THE YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING 9 THE TOTAL ADDITION AND UPHOLDING THE ADDITION OF RS. 65 000/- TOWARDS HOUSEHOLD EXPENSES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT CANCELLING THE NOTICE U/S 274 READ WITH SECTION 271(1)(C). THE ASSESSEE HAS ALSO TAKEN THE FOLLOWING ADDITIONA L GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT 1961 IS INVALID AND WITHOUT JURISDICTION. C.O. NO.36/IND/09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE ENTIRE ADDITION OF RS.3 00 000/- AND THEREBY UPHOLDING THE ADDITION OF RS. 31 900/- ON THE COMMISSION ON THE SALE PROCEEDS OF PARTS OF COMMERCIAL PROPERTY IN DYNAMIC CENTRE AND ALSO ON THE AMOUNTS OF RENTALS AND LEASE RENTALS RELEASED DURING THE YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING TOTAL ADDITIONS OF RS. 3 57 700 CONTAINING RENTAL INCOME FROM VARIOUS PROPERTIES AND THEREBY IN MAINTAINING ADDITION OF RS. 1 63 700/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE TOTAL ADDITION AND UPHOLDING THE ADDITION OF RS. 80 000/- TOWARDS HOUSEHOLD EXPENSES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT 10 CANCELLING THE NOTICE U/S 274 READ WITH SECTION 271(1)(C). THE FOLLOWING ADDITIONAL GROUNDS ARE ALSO TAKEN BY THE ASSESSEE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT 1961 IS WITHOUT JURISDICTION AND INVALID AS : (A) THERE WAS NO RELEVANT EVIDENCE OR SEIZED MATERIAL ON THE BASIS OF WHICH THERE COULD BE ANY REASON TO BELIEVE OR SATISFACTION TO ISSUE NOTICE U/S 153C. (B) NO SATISFACTION WAS RECORDED FOR ISSUE OF NOTICE U/S 153C. CO NO. 37/IND/209 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE ENTIRE ADDITION OF RS.3 00 000/- AND THEREBY UPHOLDING THE ADDITION OF RS. 2420/- ON THE COMMISSION ON THE SALE PROCEEDS OF PARTS OF COMMERCIAL PROPERTY IN DYNAMIC CENTRE AND ALSO ON THE AMOUNTS OF RENTALS AND LEASE RENTALS RELEASED DURING THE YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING TOTAL ADDITIONS OF RS. 3 57 700 CONTAINING RENTAL INCOME FROM VARIOUS PROPERTIES AND THEREBY IN MAINTAINING ADDITION OF RS. 1 63 700/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE TOTAL ADDITION AND UPHOLDING THE ADDITION OF RS. 95 000/- TOWARDS HOUSEHOLD EXPENSES. 11 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT CANCELLING THE NOTICE U/S 274 READ WITH SECTION 271(1)(C). THE FOLLOWING ADDITIONAL GROUNDS ARE ALSO TAKEN BY THE ASSESSEE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT 1961 IS WITHOUT JURISDICTION AND INVALID AS : (A) THERE WAS NO RELEVANT EVIDENCE OR SEIZED MATERIAL ON THE BASIS OF WHICH THERE COULD BE ANY REASON TO BELIEVE OR SATISFACTION TO ISSUE NOTICE U/S 153C. (B) NO SATISFACTION WAS RECORDED FOR ISSUE OF NOTICE U/S 153C. CO NO. 38/IND/09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE ENTIRE ADDITION OF RS.3 00 000/- AND THEREBY UPHOLDING THE ADDITION OF RS. 2560/- ON THE COMMISSION ON THE SALE PROCEEDS OF PARTS OF COMMERCIAL PROPERTY IN DYNAMIC CENTRE AND ALSO ON THE AMOUNTS OF RENTALS AND LEASE RENTALS RELEASED DURING THE YEAR. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE TOTAL ADDITION AND UPHOLDING THE ADDITION OF RS.1 05 000/- TOWARDS HOUSEHOLD EXPENSES. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT CANCELLING THE NOTICE U/S 274 READ WITH SECTION 271(1)(C). 12 THE FOLLOWING ADDITIONAL GROUNDS ARE ALSO TAKEN BY THE ASSESSEE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT 1961 IS WITHOUT JURISDICTION AND INVALID AS : (A) THERE WAS NO RELEVANT EVIDENCE OR SEIZED MATERIAL ON THE BASIS OF WHICH THERE COULD BE ANY REASON TO BELIEVE OR SATISFACTION TO ISSUE NOTICE U/S 153C. (B) NO SATISFACTION WAS RECORDED FOR ISSUE OF NOTICE U/S 153C. CO NO. 39/IND/09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE ENTIRE ADDITION OF RS.3 00 000/- AND THEREBY UPHOLDING THE ADDITION OF RS. 57 433/- THE COMMISSION ON THE SALE PROCEEDS OF PARTS OF COMMERCIAL PROPERTY IN DYNAMIC CENTRE AND ALSO ON THE AMOUNTS OF RENTALS AND LEASE RENTALS RELEASED DURING THE YEAR. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE TOTAL ADDITION AND UPHOLDING THE ADDITION OF RS.1 20 000/- TOWARDS HOUSEHOLD EXPENSES. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE TOTAL ADDITION OF RS. 10 00 000/- ON ACCOUNT OF SALE OF PROPERTY AND THEREBY MAINTAINING THE ADDITION OF RS. 2 00 000/-. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT 13 CANCELLING THE NOTICE U/S 274 READ WITH SECTION 271(1)(C). THE FOLLOWING ADDITIONAL GROUNDS ARE ALSO TAKEN BY THE ASSESSEE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT 1961 IS WITHOUT JURISDICTION AND INVALID AS : (A) THERE WAS NO RELEVANT EVIDENCE OR SEIZED MATERIAL ON THE BASIS OF WHICH THERE COULD BE ANY REASON TO BELIEVE OR SATISFACTION TO ISSUE NOTICE U/S 153C. (B) NO SATISFACTION WAS RECORDED FOR ISSUE OF NOTICE U/S 153C. CO NO. 40/IND/09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE ENTIRE ADDITION OF RS.3 00 000/- AND THEREBY UPHOLDING THE ADDITION OF RS. 30 000/- ON THE COMMISSION ON THE SALE PROCEEDS OF PARTS OF COMMERCIAL PROPERTY IN DYNAMIC CENTRE AND ALSO ON THE AMOUNTS OF RENTALS AND LEASE RENTALS RELEASED DURING THE YEAR. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT DELETING THE TOTAL ADDITION AND UPHOLDING THE ADDITION OF RS.1 35 000/- TOWARDS HOUSEHOLD EXPENSES. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN NOT CANCELLIN G THE NOTICE U/S 274 READ WITH SECTION 271(1)(C) THE FOLLOWING ADDITIONAL GROUNDS ARE ALSO TAKEN BY THE ASSESSEE :- 14 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT 1961 IS WITHOUT JURISDICTION AND INVALID AS : (C) THERE WAS NO RELEVANT EVIDENCE OR SEIZED MATERIAL ON THE BASIS OF WHICH THERE COULD BE ANY REASON TO BELIEVE OR SATISFACTION TO ISSUE NOTICE U/S 153C. (D) NO SATISFACTION WAS RECORDED FOR ISSUE OF NOTICE U/S 153C. 2. DURING HEARING OF THESE APPEALS AND CROSS OBJECTIONS AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE STRONGLY PLEADED THAT THE NOTICE ISSUED U/S153C IS INVALID AND WITHOUT JURISDICTION THEREF ORE THE ADDITIONAL GROUND RAISED THROUGH CROSS OBJECTIO NS FILED ON 16.4.2009 WHICH GOES TO THE ROOT OF THE I SSUE MAY BE DECIDED FIRST. THE LEARNED SENIOR DR CONTEN DED THAT IT IS TOO LATE TO ADMIT THE ADDITIONAL GROUND. SINCE THE LEGAL ISSUE HAS BEEN RAISED BY THE ASSESSEE THEREFORE WE ARE OF THE VIEW THAT IT DESERVES TO B E ADMITTED FOR HEARING. AT THE SAME TIME PROPER OPPORTUNITY WAS GIVEN TO THE DEPARTMENT TO PUT-FORT H ITS 15 CASE. AFTER HEARING THE FOLLOWING NOTE SHEETS DES ERVE TO BE MENTIONED :- PRESENT SHRI H.P. VERMA & ASHISH GOYAL LD. COUNSEL S FOR THE ASSESSEE SHRI K.K. SINGH LD. CIT DR 7.1.2011 MR. VERMA HAS AGAIN CONTENDED THAT THE ASSESSEE HAS BEEN APPROACHING THE DEPARTMENT TO GET THECOPIES OF STATEMENTS RECORDED ALONG WITH THE REASONS RECORDED FOR INITIATION OF PROCEEDINGS U/S 153C BY THE DEPARTMENT BUT THE SAME HAVE STILL NOT BEEN GIVEN TO THE ASSESSEE. IT IS ALSO SEEN THAT ON EARLIER OCCASION ON 2.3.10 THE BENCH HAS ALREADY GIVEN LAS T OPPORTUNITY TO DEPARTMENT TO FURNISH THE COPY OF STATEMENT AND REA SONS RECORDED. TODAY AT THE TIME OF THE HEARING LD. CIT DR AGAIN ASKED FOR ONE MORE OPPORTUNITY. IN THE INTEREST OF JUSTICE LAST AND FINAL OPPORTUNITY IS GRANTED TO THE DEPARTMENT WITH DIRECTION TO THE CONCERNED LD. A.O. TO APPEAR IN PERSON BEFORE THIS BENCH ON NEXT DATE OF HGEARING ALONG WITH COPY OF STATEME NT OF ASSESSEE SO RECORDED AND REASONS RECORDED FOR INITIATION OF PR OCEEDINGS U/S 153C IF ANY OTHERWISE ADVERSE VIEW WILL BE TAKEN. ADJOURNED TO 4.2.2011. COPY OF THIS ORDER SHEET BE SENT TO LD. CCIT BHOPAL LD. CIT D R & LD. A.O. FOR COMPLIANCE AND NECESSARY ACTION. ANNOUNCED IN THE OPEN COURT. SD SD AM JM PRESENT SH. H.P. VERMA & A. GOYAL SH. KESHAV SAXENA LD. CIT DR A/W SH. SHRIKANT NAMDEV A.O. 4 2.11 LD. CIT DR SUBMITTED THAT A.O. HAS NOT BROUG HT SEIZED RECORD WHICH WILL NEED IN THE MATTER THEREFORE DEPARTMENT MAY BE GIVEN M ORE TIME TO PRODUCE THE SAME. HE ALSO FILED WRITTEN SUBMISSION WITH REGARD TO ADDITIONAL GROUND RAISED BY THE ASSESSEE IN THE CROSS OBJECTIONS WIT H A COPY TO LD. COUNSEL FOR THE ASSESSEE. IN VIEW OF THIS LAST OPPORTUNITY IS GIVEN TO DEPARTMENT TO PRODUCE THE SEIZED RECORD. MATTER IS ADJ. TO 20.4. 11 AS SUGGESTED BY BOTH SIDES. ANNOUNCED IN THE OPEN COURT. SD SD AM JM 20.4.11 PRESENT SH. H.P. VERMA & A. GOYAL SH. KESHAV SAXENA CIT DR DUE TO PAUCITY OF TIME THIS GROUP IS ADJ. TO 16.6 .11. LD. CIT DR IS DIRECTED TO COMPLY WITH EARLIER ORDER SHEETS. ANNOUNCED IN THE OPEN COURT. SD SD AM JM 16 SOME OF THE AFORESAID NOTINGS IN THE NOTE SHEET ARE SELF- EXPLANATORY AS EVEN THE ORDER SHEET WAS SENT TO TH E LEARNED CCIT BHOPAL LEARNED CIT DR AND THE ASSESSING OFFICER FO R COMPLIANCE AND NECESSARY ACTION (ORDER SHEET ENTRY DATED 7.1.2011) . ON 7.1.2011 THE LEARNED CIT DR MERELY FILED THE APPRAISAL REPOR T IN THE CASE OF RAJ BUILDERS & ASNANI GROUP OF BHOPAL WHEREIN AT SERIA L NO. 14 THE NAME OF THE ASSESSEE I.E. SHRI AMIT PANDEY C-4 74 BUN GALOW BHOPAL HAS BEEN MENTIONED. HOWEVER THE DEPARTMENT WAS DIRECT ED TO PRODUCE THE COPY OF SATISFACTION SO RECORDED FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT WHICH COULD NOT BE PRODUCED BY THE DEPARTMENT. WE THEREFORE PROCEED TO DECIDE THE MATTER ON THE BASIS OF MATERIAL AVAILABLE ON THE FILE. SINCE THE GROUND RAISED BY THE ASSESSEE IN REGARD TO VALIDITY OF JURISDICTION OF THE ASSESSING OFFICER U/S 153C OF THE ACT GOES TO THE ROOT OF THE MATTER WE WOULD LI KE TO DEAL WITH THE SAME FIRST. 17 3. WE FIND THAT IN IDENTICAL SITUATION THE INDORE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT 1(2) BHOPAL VS. M/S. CHIRCHIND HYDRO POWER LIMITED IN I.T(SS).A.NOS.171 172 AND 174/IND/2008 ETC. ORDER DATED 29.12.2010 HAS DELIB ERATED UPON THE ISSUE AT LENGTH. THE RELEVANT PORTION OF THE S AME IS REPRODUCED HEREUNDER :- 78. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AND DELIBERATED ON THE CASE LAWS REFERRED BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AN D BY THE RESPECTIVE COUNSELS DURING THE COURSE OF HEARI NG BEFORE US. FROM THE RECORD WE FIND THAT THE SEARCH WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF DIRECTORS/PARTNERS OF THESE CONCERNS AND NOT AT THE PREMISES OF THESE CONCERNS. AFTER THE SEARCH WAS CARRIED OUT AT THE RESIDENCE OF DIRECTORS/PARTNERS OF THESE ASSOCIATE CONCERNS ASSESSMENT WAS FRAMED IN RESPECT OF THESE CONCERNS U/S 153C OF THE ACT ON TH E PLEA THAT INCRIMINATING MATERIAL WAS FOUND DURING T HE COURSE OF SEARCH AT THE RESIDENCE OF PARTNERS/DIREC TORS. THE ASSUMPTION OF POWER BY THE ASSESSING OFFICER U/ S 153C OF THE ACT FOR FRAMING THE ASSESSMENT IS SUBJE CT TO THE CONDITION THAT THE ASSESSING OFFICER ASSESSI NG THE SEARCH PARTY IS SATISFIED THAT THE JEWELLERY O R OTHER VALUABLE ARTICLES OR THINGS OR BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED PERTA IN TO SOME PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A THEN THE BOOKS OF ACCOUNTS OR THE DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER BY THE ASSESSING OFFICER OF SEARCHED PERSON TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT THE ASSESSING OFFICER SH ALL PROCEED AGAINST EACH OF SUCH PERSONS AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME O F 18 SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE ACT. THE OPENING WORD OF SECTI ON 153C SPEAKS THAT NOT-WITH-STANDING ANYTHING CONTAINED IN SECTIONS 139 147 148 149 151 AND 153 WHERE THE ASSESSING OFFICER IS SATISFIED THA T ANY MONEY JEWELLERY OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS TO A PERS ON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A MEANING THEREBY THE ASSESSING OFFICER IS TO RECORD A SATISFACTION TO THE EFFECT THAT SUCH JEWELLERY OR DOCUMENT SO SEIZED DOES NOT BELONG TO THE SEARCHED PERSON BUT TO SOME OTHER PERSON REFERRED TO IN SECT ION 153A OF THE ACT. THUS THE PRE-REQUISITE OF SECTIO N 153C IS THAT THE ASSESSING OFFICER MAKING THE ASSESSMENT OF THE SEARCHED PERSON HAS TO SATISFY HIMSELF THAT SOME MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE BELONGS TO SOME PERSON OTHER THA N THE SEARCHED PERSON. THEN THE ASSESSING OFFICER MAKING THE ASSESSMENT OF SEARCHED PERSON HAS TO HAND-OVER THE SAID INCRIMINATING MATERIAL BELONGING TO SOME PERSON OTHER THAN THE SEARCHED PERSON TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SAID OTHER PERSON. THEREAFTER THE ASSESSING OFFICER HA VING THE JURISDICTION OVER THE PERSON OTHER THAN THE SEARCHED PERSON SHALL ISSUE A NOTICE U/S 153C TO SU CH OTHER PERSON AND ASSESS HIS INCOME IN TERMS OF THE PROVISIONS OF SECTION 153A OF THE ACT. THUS THE N OTICE U/S 153C OF THE ACT IS TO BE ISSUED ONLY AFTER RECO RDING OF SATISFACTION. THE ASSUMPTION OF JUSRISDICTION TO ISSUE NOTICE AND FRAME ASSESSMENT UNDER SECTION 153C READ WITH SECTION 153A IS ACQUIRED BY THE ASSESSING OFFI CER ONLY AFTER HAVING BEEN SATISFIED AND SUCH SATISFACT ION IS RECORDED IN WRITING. THESE PROVISIONS OF SECTIO N 153C ARE IN PARI MATERIA WITH THE PROVISIONS OF SEC TION 158BD WHICH PROVIDES THAT THE ASSESSING OFFICER MAKING THE ASSESSMENT OF THE SEARCHED PERSON HAS TO SATISFY HIMSELF THAT SOME UNDISCLOSED INCOME FOUND BY HIM BELONGS TO SOME PERSON OTHER THAN THE SEARCHED PERSON AND THEN HE OR THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AFTER RECEIPT O F RECORD FROM THE ASSESSING OFFICER OF THE SEARCHED PERSON HAS TO ISSUE NOTICE U/S 158BD OF THE ACT AND 19 HAS TO ASSESS INCOME OF SUCH OTHER PERSON. THE PROVISIONS OF SECTION 158BD OF THE ACT WERE EXAMINE D IN DETAIL BY THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI; 208 CTR 97. THE SAID HONBLE SUPREME COURT DECISION WAS FOLLOWED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF NEW DELHI AUTO FINANCE LIMITED; 300 ITR 83. THE HONBLE SUPREME COURT HAS LAID DOWN A PROPOSITION THAT THE ASSESSIN G OFFICER MAKING THE ASSESSMENT OF THE SEARCHED PERSO N HAS TO NECESSARILY RECORD IN WRITING THE SPECIFIC OBJECTIVE SATISFACTION WHICH IS MANDATORY TO THE EF FECT THAT THE UNDISCLOSED INCOME FOUND BY HIM ON THE BASIS OF SEIZED MATERIAL BELONGS TO SOME PERSON OT HER THAN THE SEARCHED PERSON. INSOFAR AS THE PROVISION S OF SECTION 153C OF THE ACT ARE IN PARI MATERIA WITH TH E PROVISIONS OF SECTION 158BD OF THE ACT WITH REGARD TO THE REQUIREMENTS OF RECORDING NECESSARY SATISFACTIO N BY THE ASSESSING OFFICER OF SEARCHED PERSON THE LA W LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA) SHALL APPLY WITH FULL FOR CE IN CASE OF INITIATION OF PROCEEDINGS U/S 153C. THE ASSUMPTION OF JURISDICTION AND FRAMING OF ASSESSMEN T BY THE ASSESSING OFFICER U/S 153C WITHOUT RECORDING SUCH SATISFACTION IS VOID AB INITIO. APPLYING THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE SUPREME COURT AS DISCUSSED ABOVE IT IS QUITE EVIDENT THAT RECORDING OF SATISFACTION BEFORE ISSUE OF NOTICE U/ S 153C IS MANDATORY AND IN CASE WHERE NO SUCH SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER IN THE CASE OF SEARCHED PERSON TO THE EFFEC T THAT SOME INCRIMINATING MATERIAL SO FOUND BELONGS TO SOM E OTHER PERSON THE ASSESSMENT FRAMED U/S 153C WILL B E LIABLE TO BE QUASHED. HOWEVER DETAILED FINDING HA S BEEN RECORDED BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AFTER EXAMINING THE ASSESSMENT RECORDS OF THE CONCERNED PERSON/PARTIES TO THE EFFE CT THAT NO SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. THIS FIND ING OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON RECORD. ACCORDING LY APPLYING THIS PROPOSTION OF LAW THE ASSUMPTION OF 20 JURISDICTION AND FRAMING OF ASSESSMENT IN THE INSTA NT CASES BY THE ASSESSING OFFICER U/S 153C WERE BAD IN LAW. 79. IT WAS ARGUED BY SHRI K.K. SINGH THE LEARNED C IT DR THAT SATISFACTION NOTE AS STIPULATED U/S 153C OF THE ACT IS TO BE SEEN IN THE CONTEXT OF SATISFACTI ON NOTE PREPARED BY THE ADIT IN THE FORM OF APPRAISAL NOTE AFTER THE SEARCH IS OVER. HE PLACED ON RECORD A CO PY OF THE APPRAISAL NOTE WHICH IS PREPARED BY THE ADIT AF TER THE SEARCH WAS OVER WHEREIN DETAILS OF SEARCH HAVIN G BEEN CARRIED OUT ALONG WITH THE SURVEY CARRIED OUT ON THE SAME FAMILY MEMBERS OF THE GROUP WERE DULY MENTIONED ALONG WITH ASSERTION FOR ISSUE OF NOTICE U/S 153C IN CASES OF ASSESSEE NOT COVERED BY SEARCH BUT WHERE ONLY SURVEY ACTION HAS BEEN UNDERTAKEN. IT WAS CONTENDED BY THE LEARNED CIT DR THAT WHENEVER A SEARCH IS BEING PLANNED ON THE BASIS OF DETAILED INFORMATION COLLECTED BY THE DEPARTMENT AND AFTER D UE APPLICATION OF MIND STRATEGIES ARE FINALIZED IN RE SPECT OF PLACES/PERSONS/CONCERNS WHERE SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT IS TO BE UNDERTAKEN AS WE LL AS THE PLACES/PERSONS/CONCERNS WHERE ACTION U/S 133A OF THE ACT WILL SERVE THE PURPOSE. THE WHOLE ACTION OF SEARCH AND SURVEY IS PLANNED AT A TIME AN D THE DEPARTMENT ALSO KEEPS IN MIND THAT THERE SHOULD NOT BE ANY HARASSMENT TO THE PERSONS/CONCERNS FALLI NG IN THE SAME GROUP WHO ARE NOT SO IMPORTANT BUT ARE VERY MUCH RELEVANT AND ASSOCIATED WITH THE ASSESSEE WHICH NECESSITATED SIMULTANEOUS SURVEY AT THEIR PREMISES SO THAT NOTHING IS LEFT OUT. OUR ATTENTI ON WAS DRAWN TO VARIOUS LISTS PREPARED AS A PART OF APPRAISAL NOTE DULY MENTIONING THE NAMES OF THE PERSONS ALONG WITH THEIR ADDRESSES DATE OF SEARCH WHO ARE APPEARING IN THE WARRANT OF AUTHORIZATION U /S 132. A LIST WAS ALSO PREPARED TO SHOW THE PREMISES WHEREIN SURVEY WAS UNDERTAKEN U/S 133A OF THE ACT. IN THE APPRAISAL NOTE A LIST WAS ALSO GIVEN WHERE ACTION U/S 153C OF THE ACT WAS INTENDED TO BE INITIATED. AS PER THE LEARNED CIT DR SUCH LIST COMPRISES OF THE PERSONS OTHER THAN THE PERSON AT WHOSE PREMISES SEARCH IS BEING CARRIED OUT IN RESPE CT 21 OF THE DOCUMENTS FOUND AT SUCH PLACES WHICH PERTAIN TO THE PERSON OTHER THAN PERSON AGAINST WHOM ACTION U/S 132 WAS UNDERTAKEN. AS PER THE LEARNED CIT DR IT IS NOT ONLY THE OFFICER FRAMING THE ASSESSMENT SHOULD BE CONSIDERED AS ASSESSING OFFICER FOR RECORDING SATISFACTION BUT THE OTHER OFFICERS INVOL VED IN THE SEARCH AND SURVEY LIKE ADIT/DDIT SHOULD ALSO BE CONSIDERED. OUR ATTENTION WAS ALSO DRAWN TO THE PROVISIONS OF SUB-SECTION (7A) OF SECTION 2 DEFININ G THE ASSESSING OFFICER TO MEAN ASSISTANT COMMISSIONER DEPUTY COMMISSIONER ASSISTANT DIRECTOR DEPUTY DIRECTOR OR THE ITO WHO IS VESTED WITH THE RELEVAN T JURISDICTION BY VIRTUE OF DIRECTIONS OR ORDERS ISSU ED UNDER SUB-SECTION (1) OR SUB-SECTION (2) OF SECTION 120 OR ANY OTHER PROVISION OF THIS ACT AND THE ADDITION AL COMMISSIONER OR THE ADDITIONAL DIRECTOR OR JOINT COMMISSIONER OR JOINT DIRECTOR WHO IS DIRECTED UND ER CLAUSE (B) OF SUB-SECTION (4) OF THAT SECTION TO EX ERCISE OR PERFORM ALL OR ANY OF THE POWERS AND FUNCTIONS CONFERRED ON OR ASSIGNED TO AN ASSESSING OFFICER. AS PER THE LEARNED CIT DR UNDER THE NEW SCHEME OF SECTION 153A/C THERE IS NO NEED TO FIND OUT UNDISCLOSED INCOME BUT THE ASSESSMENT IS MADE AFTE R THE SEARCH IS CARRIED OUT TO ASSESS OR REASSESS THE INCOME OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDIN G SIX ASSESSMENT YEARS AND THE CURRENT ASSESSMENT YEAR FALLING UPTO THE DATE OF SEARCH. HE FURTHER CONTENDED THAT UNDER THE OLD SCHEME OF SECTION 158BC/158BD OF THE ACT THE DEPARTMENT WAS TO ASSESS THE UNDISCLOSED INCOME ON THE BASIS INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH WHEREAS UNDER THE NEW SCHEME OF SECTION 153A/153C WHERE A SEARCH IS INITIATED U/S 132 OR BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED U/S 132A THEN THE DEPARTMENT HAS TO ASSESS OR REASSESS THE TOTAL INCOME OF SUCH ASSESSEE FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ACCORDINGLY IT WAS PLEADED TH AT JUDICIAL COGNIZANCE GIVEN TO THE LANGUAGE OF SECTIO N 158BD IN CASE OF MANISH MAHESHWARI BY THE HONBLE 22 SUPREME COURT INSOFAR AS RECORDING OF NECESSARY SATISFACTION IS CONCERNED SHOULD NOT BE TAKEN WHIL E INTERPRETING SECTION 153C OF THE INCOME TAX ACT UND ER THE NEW SCHEME OF FRAMING ASSESSMENT IN SEARCH CASES. AS PER THE LEARNED CIT- DR IN THE NEW SCHE ME OF THE ACT APPRAISAL REPORT AMOUNTS TO SATISFACTIO N BY THE ASSESSING OFFICER FOR ISSUING A NOTICE U/S 153C OF THE ACT. 80. ON THE OTHER HAND IN REPLY TO THE LEARNED CIT DR'S CONTENTIONS IT WAS ARGUED BY THE LEARNED COUN SEL FOR THE ASSESSEE THAT EVEN UNDER THE NEW SCHEME OF ASSESSMENT U/S 153C OF THE ACT SATISFACTION IS TO BE NECESSARILY RECORDED BY THE ASSESSING OFFICER OF TH E SEARCHED PERSON INDICATING THE DOCUMENTS SEIZED OR REQUISITIONED WHICH BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. HE INVITED OUR ATTENTION TO THE PRECISE LANGUAGE USED IN SECTION 153C OF THE ACT WHICH CATEGORICALLY REQUIRE S THE ASSESSING OFFICERS SATISFACTION TO THE EFFECT THAT VALUABLES SEIZED DOCUMENTS FOUND DURING THE COURSE OF SEARCH WHICH BELONG TO A PERSON OTHER THAN A PERSON SEARCHED AND THE PROCEDURE OF HANDING OVER O F THESE DOCUMENTS/VALUABLES ETC. TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THEREAFTER OBLIGATION OF THE ASSESSING OFFICER OF S UCH OTHER PERSON TO PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND THEREAFTER TO ASSESS OR REASSESS THE INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE ACT. AS PER THE LEARNED COUNSE L FOR THE ASSESSEE COPY OF SUCH SATISFACTION NOTE SHOULD BE GIVEN TO THE ASSESSEE WHEREAS THE APPRAISAL NOTE A S REFERRED BY THE LEARNED CIT DR IS A CONFIDENTIAL DOCUMENT PREPARED BY THE DEPARTMENT FOR THEIR INTERNAL USE AND COPY OF WHICH IS NOT HANDED OVER T O THE ASSESSEE. SUCH APPRAISAL REPORT IS A SECRET DOCUMENT PREPARED BY THE DEPARTMENT AND WHICH IS NOT OPEN TO THE ASSESSEE THEREFORE CANNOT BE TREA TED AT PAR WITH THE SATISFACTION NOTE AS CONTEMPLATED U /S 153C OF THE ACT WITH REGARD TO THE DOCUMENTS SEIZED DURING THE PROCEEDINGS U/S 132 WHICH IS ALLEGED TO BE 23 BELONGING TO A PERSON OTHER THAN THE PERSON REFERRE D TO IN SECTION 153A OF THE ACT. RELIANCE WAS ALSO PLAC ED ON THE PROPOSITION LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI; 289 ITR 341(SUPRA) AND G.K. DRIVE SHAFT; 259 ITR 19 AND TH E DECISION OF THE JURISDICTIONAL TRIBUNAL IN THE CASE OF RISHI CONSTRUCTION; 10 ITJ 346 AND ASNANI BUILDERS; 10 ITJ 618. 81. WE HAVE DELIBERATED UPON THE CONTENTIONS OF THE LEARNED CIT DR SHRI K.K. SINGH AND LEARNED COUNSEL FOR THE ASSESSEE SHRI H.P. VERMA WITH REG ARD TO INTERPRETATION OF RECORDING OF SATISFACTION WHIL E ASSUMING JURISDICTION U/S 153C OF THE ACT. EVEN IN THE NEW SCHEME OF FRAMING OF ASSESSMENT IN CASE OF SEARCH CASES THE LEGISLATURE HAS CLEARLY STIPULATE D THE REQUIREMENT FOR RECORDING OF SATISFACTION WHILE ASSUMING JURISDICTION TO ISSUE NOTICE AND FRAME ASSESSMENT U/S 153C OF THE ACT WHICH REQUIRES THAT SATISFACTION TO BE RECORDED WITH REFERENCE TO THE DOCUMENTS AND OTHER MATERIALS FOUND DURING THE COURSE OF SEARCH BELONGING TO A PERSON OTHER THAN T HE SEARCHED PERSON. PRIMA FACIE ASSESSING OFFICER OF SEARCHED PERSON SHOULD FORM AN OPINION WITH REGARD TO ANY DOCUMENT VALUABLE ETC. AS FOUND DURING THE COURSE OF SEARCH THAT SUCH DOCUMENT WHICH IS DECLINED BY THE SEARCHED PERSON ACTUALLY BELONGS T O SOME OTHER PERSON AGAINST WHOM PROCEEDINGS U/S 153C ARE REQUIRED TO PUT INTO OPERATION. AFTER SUCH RECORDING OF SATISFACTION THE DOCUMENTS SO SEIZED SHOULD BE HANDED OVER TO THE ASSESSING OFFICER OF S UCH OTHER PERSON. THE LEGAL REQUIREMENT OF RECORDING O F SUCH SATISFACTION CANNOT BE SUBSTITUTED BY APPRAISA L NOTE WHICH IS PREPARED BY THE SEARCH PARTY AFTER COMPLETION OF SEARCH INSOFAR AS SUCH APPRAISAL NOTE IS A SECRET DOCUMENT PREPARED BY THE DEPARTMENT FOR THEIR INTERNAL USE CONTENTS OF WHICH ARE NOT CONVE YED TO THE ASSESSEE NOR ITS COPY IS SUPPLIED TO THE ASSESSEE EVEN ON MAKING A WRITTEN REQUEST. THE APPRAISAL NOTE SO PREPARED BY THE DEPARTMENT IS MEANT TO MONITOR AFTER THE SEARCH PROCEEDINGS ARE O VER SO AS TO ENSURE EXHAUSTIVE ASSESSMENT OF ALL SEARCH ED 24 PERSON WITH RESPECT TO THEIR CORRECT INCOME AND TO PLAN A STRATEGY FOR FURTHER DEEP INQUIRY AND INVESTIGATI ON OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH. SINC E COPY OF SUCH APPRAISAL NOTE IS NOT SUPPLIED TO THE ASSESSEE IT CANNOT BE TAKEN AT PAR WITH THE REQUIREMENT OF RECORDING OF SATISFACTION NOTE AS STIPULATED U/S 153C OF THE ACT WHICH IS A MANDATOR Y REQUIREMENT. WHAT IS THE LEGISLATIVE INTENT OF SUC H SATISFACTION AND IN WHAT MANNER IT SHOULD BE RECORD ED HAS BEEN DEALT WITH IN THE JUDICIAL PRONOUNCEMENTS IN THE CASES OF MANISH MAHEHWARI AND G.K. DRIVE SHAFT BY THE HONBLE SUPREME COURT. ACCORDINGLY WE ARE NOT INCLINED TO AGREE WITH THE PROPOSITION THAT THE APPRAISAL NOTE PREPARED BY THE DEPARTMENT SHOULD BE TREATED AS A SATISFACTION NOTE AS REQUIRED TO BE RECORDED IN TERMS OF SECTION 153C OF THE ACT SO AS TO EMPOWER THE ASSESSING OFFICER TO ASSUME JURISDICTIO N TO ISSUE NOTICE AND THEREAFTER FRAME ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE ACT. 82. IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIO NER OF INCOMETAX (APPEALS) WHO HAS QUASHED THE ASSESSMENT FRAMED U/S 153C OF THE ACT. FURTHER THE DETAILED FINDING RECORDED BY THE LEARNED COMMISSION ER OF INCOMETAX (APPEALS) WITH RESPECT TO RECORDING OF SATISFACTION HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON RECORD. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) QUASHING THE ASSESSMENTS FRAMED U/S 153C OF THE ACT IN THE CASES OF ALL THESE ASSESSES. 4. IN THE LIGHT OF THE ABOVE ORDER IT IS CLEAR THA T EVEN IN THE NEW SCHEME OF FRAMING OF ASSESSMENT IN SEARCH CASES RE CORDING OF SATISFACTION WHILE ASSUMING JURISDICTION TO ISSUE N OTICE AND TO FRAME ASSESSMENT U/S 153C OF THE ACT THE PRE-REQUIREMENT IS RECORDING OF 25 SATISFACTION WITH REFERENCE TO THE DOCUMENTS AND OT HER MATERIAL IF ANY FOUND DURING THE COURSE OF SEARCH BELONGING T O A PERSON OTHER THAN THE SEARCHED PERSON. PRIMA FACIE THE ASSESSING OFFICER OF THE SEARCHED PERSON SHOULD FORM AN OPINION WITH REGARD TO ANY DOCUMENT VALUABLES ETC. AS FOUND DURING THE COUR SE OF SEARCH AND THAT SUCH DOCUMENT WHICH ARE DECLINED BY THE SEARC HED PERSON ACTUALLY BELONGS TO SOME OTHER PERSON AGAINST WHOM PROCEEDINGS U/S 153C ARE REQUIRED TO BE PUT INTO OPERATION. AF TER RECORDING OF SUCH SATISFACTION THE DOCUMENT SO SEIZED SHOULD BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON THEREFORE THE REQUIREMENT OF RECORDING OF SUCH SAT ISFACTION CANNOT BE SUBSTITUTED BY AN APPRAISAL NOTE WHICH IS PREPAR ED BY THE SEARCH PARTY AFTER COMPLETION OF SEARCH. APPRAISAL NOTE I S A SECRET INTERNAL DOCUMENT OF THE DEPARTMENT FOR ITS INTERNAL USE AND THE CONTENTS OF THE SAME ARE NOT CONVEYED TO THE ASSESSEE NOR ITS C OPY SUPPLIED TO THE ASSESSEE EVEN ON MAKING A WRITTEN REQUEST THER EFORE IT CANNOT BE TREATED AT PAR WITH THE RECORDING OF SATISFACTIO N AS STIPULATED U/S 153C OF THE ACT WHICH IS A MANDATORY REQUIREMENT. THE LEGISLATIVE 26 INTENT OF SUCH SATISFACTION AND ITS MANNER HAS BEEN DEALT WITH IN VARIOUS JUDICIAL PRONOUNCEMENTS LIKE MANISH MAHESHW ARI AND G.K. DRIVE SHAFT BY THE HONBLE APEX COURT. RECENTLY T HE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RADHEY SHYAM BANS AL HELD AS UNDER :- (II) THE WORD SATISFACTION HAS NOT BEEN DEFINED I N THE ACT. BY ITS VERY NATURE SATISFACTION MUST PRECEDE THE SENDING OF PAPERS/DOCUMENTS BY THE SEARCHED PERSON S A.O. TO THE THIRD PERSONS A.O. MERE USE OR MENTION OF THE WORD SATISFACTION IN THE ORDER/NOTE WILL NOT MEET THE REQUIREMENT OF CONCEPT OF SATISFACTION AS USED IN S. 158BD. THE SATISFACTION HAS TO BE IN WRITING AND CAN BE GA THERED FROM THE ASSESSMENT ORDER IF IT IS SO MENTIONED/RE CORDED OR FROM ANY OTHER ORDER NOTE OR RECORD MAINTAINED BY THE A.O. OF THE PERSON SEARCHED. THE A.O. MUST REACH A CLEAR CONCLUSION THAT GOOD GROUND EXISTS FOR THE A.O. OF THE THIRD PERSON TO INITIATE PROCEEDINGS AS MATERIAL BEFORE H IM SHOWS OR WOULD ESTABLISH UNDISCLOSED INCOME OF A THIRD PERSON. THERE MUST BE RATIONAL AND TANGIBLE NEXUS BETWEEN THE MATERIAL FOUND IN SEARCH AND THE SATISFACTION : (III) ON FACTS (WITHOUT GOING INTO THE ISSUE OF WHE THER THE A.O. WAS FUNCTUS OFFICIO) THE ASSESSMENT OR DER PASSED IN THE CASE OF MANOJ AGGARWAL DOES NOT SHOW ANY SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGS TO THE ASSESSEE. THOUGH MANOJ AGGARWALS A.O. WROTE A LETTER TO THE ASSESSEES A.O. INFORMING HIM THAT THE ASSESSEE WAS PROVIDING BOGUS ACCOMMODATION BOOK ENTRIES AND THE QUANTUM OF TRANSACTIONS WAS GIVEN AS PER ANNEXURES THE ANNEXURES WERE MISSING FROM THE FILE. NO EVIDENCE AND MATERIAL WAS BROUGHT ON RECORD TO SHOW THAT THE ASS ESSEE 27 HAD RECEIVED CASH FOR THE ENTRIES. SO THE ONUS ON THE A.O. THAT THERE WAS VALID SATISFACTION WAS NOT DISCHARGE D. IN VIEW OF THESE FACTS WE ARE NOT INCLINED TO AGRE E WITH THE PROPOSITION/ARGUMENT OF THE LEARNED CIT DR THAT THE APPRAISAL NOTE SHOULD BE TREATED AS SATISFACTION AS REQUIRED TO BE RECORDED IN TERMS OF SECTION 153C OF THE ACT EMPOWERING THE ASSESSING OFFICER TO ASSUME JURISDICTION TO ISSUE NOTICE AND THEREAFTER FRAME ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE ACT. WE THEREFORE FOLLOWING THE OBSERVATIONS AND REASONINGS CONTAINED IN THE AFORESAID ORDER OF THE TRIBUNAL HOLD THAT SINCE THE NOTICE U /S 153C OF THE INCOME TAX ACT 1961 WAS INVALID AND WITHOUT JURISD ICTION THEREFORE THE ENTIRE ASSESSMENTS HAVE BECOME NULL AND VOID. WE THEREFORE DO NOT FIND ANY JUSTIFICATION TO GO INTO THE MERITS OF THE CASE. SINCE THE ENTIRE ASSESSMENTS HAVE BEEN ANNULLED HAVING B EEN FRAMED WITHOUT JURISDICTION THE APPEALS FILED BY THE REVE NUE ARE DISMISSED AND THE CROSS OBJECTIONS OF THE ASSESSEE STAND PART LY ALLOWED AS INDICATED ABOVE. 28 5. FINALLY THE APPEALS OF THE REVENUE ARE DISMISSE D WHEREAS THE CROSS OBJECTIONS OF THE ASSESSEE STAND PARTLY ALLOW ED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JULY 2011. ( R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :_28 JULY 2011 COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD FILE DN/