M/s. Amarpali Grand, Noida V. ACIT, New Delhi

CO 150/DEL/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1418 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Search and seizure; Document seized; Opportunity of being heard; Notional interest; Documents seized; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `A NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A.NO.6205/DEL/2013 ASSESSMENT YEAR : 2009-10 ASSTT.COMMISSIONER OF INCOME TAX, VS M/S A MRAPALI GRAND, CENTRAL CIRCLE-7, NEW DELHI. C-56/40, SECTOR-62, NOIDA- U.P. (AAMFA2157N) C.O.NO. 150/DEL/2014 ( IN I.T.A.NO.6205/DEL/2013) ASSESSMENT YEAR : 2009-10 M/S AMRAPALI GRAND, VS ACIT, CC-7, NOIDA- U.P. NEW DELHI. (APPELLANT) (RESPON DENT) APPELLANT B Y: SHRI RAMESH CHANDER, CIT DR RESPONDENT BY : SHRI AMIT GOEL & SAURABH GOEL DATE OF HEARING: 28.8.2015 DATE OF PRONOUNCEMENT: 23.11.2015 O R D E R PER CHANDRAMOHAN GARG, J.M. THIS APPEAL OF THE REVENUE AS WELL AS C.O. OF THE A SSESSEE HAVE BEEN PREFERRED AGAINST THE ORDER OF THE CIT(A)-I, NEW DE LHI DATED 18.9.2013 PASSED IN APPEAL NO. 93/13-14 FOR ASSESSMENT YEAR 2009-10. 2. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 9.9.2010 IN AMRA PALI GROUP OF CASES. I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 2 SUBSEQUENTLY, A NOTICE U/S 153C OF THE ACT WAS ISSU ED ON 12.4.12 TO THE PRESENT ASSESSEE AND IN RESPONSE TO WHICH THE ASSESSEE FILE D A LETTER STATING THAT THE RETURN DECLARING INCOME OF RS. 1,01,96,580 FILED ON 30.09.2009 MAY BE TREATED AS FILED IN RESPONSE TO THE SAID NOTICE. FURTHER, NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE ON 8.2.2012 AND 7.9.2012 AND ANOTHER NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 7.9.12. THE ASSESSING OFFICER VIDE A SSESSMENT ORDER DATED 18.3.2013 ASSESSED TAXABLE INCOME OF THE ASSESSEE B Y MAKING TWO ADDITIONS VIZ. FIRST ADDITION ON ACCOUNT OF BOGUS PURCHASES AND SE COND ADDITION ON ACCOUNT OF NOTIONAL INTEREST DISALLOWED FROM EXPENDITURE CLAIM ED BY THE ASSESSEE UNDER THE HEAD OF INTEREST ON TERM LOAN. THE ASSESSEE PREFER RED AN APPEAL BEFORE THE CIT(A) AGITATING THE VALIDITY OF NOTICE U/S 153C OF THE ACT AS WELL AS ON MERIT AGITATING THE ADDITIONS MADE BY THE ASSESSEE. THE C IT(A) GRANTED RELIEF TO THE ASSESSEE ON BOTH THE GROUNDS ON MERIT AND DELETED B OTH THE SAID ADDITIONS. HOWEVER, THE FIRST APPELLATE AUTHORITY DISMISSED TH E LEGAL GROUND OF THE ASSESSEE UPHOLDING THE VALIDITY OF NOTICE U/S 153C OF THE AC T AS WITHIN VALID JURISDICTION OF THE ASSESSING OFFICER. NOW, THE REVENUE IS BEFOR E THIS TRIBUNAL AGITATING THE ORDER OF THE CIT(A) WHICH GRANTED RELIEF TO THE ASS ESSEE ON BOTH THE COUNTS BUT THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS CHALLE NGING THE CONCLUSION OF THE CIT(A) WHICH UPHOLD THE VALIDITY OF ACTION AND NOT ICE U/S 153C OF THE ACT. I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 3 C.O. NO.150/DEL/14 3. AT THE VERY OUTSET, BOTH THE PARTIES ARE AGREED THAT THE C.O. OF THE ASSESSEE BEING LEGAL MAY BE CONSIDERED AND HEARD FI RST. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED T HE RELEVANT MATERIAL PLACED ON RECORD. LD. AR SUBMITTED THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE AND IN LAW, NOTICE U/S 153 OF THE ACT ISSUED TO THE ASS ESSEE WAS ILLEGAL AND WITHOUT JURISDICTION AND ACCORDINGLY, THE ASSESSMENT ORDER PASSED ON THE FOUNDATION OF SUCH NOTICE IS NOT SUSTAINABLE AND IS LIABLE TO BE QUASHED. LD. AR FURTHER SUBMITTED THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE CIT(A) SHOULD HAVE HELD THAT THE ASSESSMENT ORDER PASSED B Y THE ASSESSING OFFICER IS BAD IN LAW AND VOID AB INITIO . FURTHER ELABORATING THE STAND OF THE ASSESSING OFFICER, LD. AR SUBMITTED THAT SATISFACTION NOTE DO ES NOT EVEN SATISFY AS TO THE CAPACITY OF THE ASSESSING OFFICER ON WHICH PERSONAL SATISFACTION HAS BEEN RECORDED. LD. AR FURTHER SUBMITTED THAT THERE ARE NO DOCUMENTS BELONGING TO THE ASSESSEE FOUND DURING SEARCH AND SEIZURE OPERAT ION AND EVEN AS PER CONTENTS OF THE SATISFACTION NOTE ITSELF, THERE ARE NO DOCUM ENTS FOUND BELONGING TO THE ASSESSEE. LD. AR VEHEMENTLY CONTENDED THAT AS PER C ONTENTS OF THE SATISFACTION NOTE, ANNEXURE A-1, AB-1 PAGE NO. 53 & 54, SATISFAC TION HAS BEEN RECORDED BUT THE SAME DOCUMENTS/PAGES DO NOT BELONG TO THE ASSES SEE AND IT IS NOT EVEN THE CASE OF THE ASSESSING OFFICER THAT THESE DOCUMENTS BELONG TO THE ASSESSEE. LD. AR POINTED OUT THAT IN THE SECOND PARA OF SATISFACT ION NOTE, THE ASSESSING I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 4 OFFICER WRITES THAT THEREFORE, THE COMPANY WISE INFORMATION APPEARING I N THESE PAGES WILL BE TREATED AS DOCUMENTS PERTAINING TO AL L THE RESPECTIVE COMPANIES IN THE SAID CHART. THEREFORE, IT IS APPARENT THAT ACCORDING TO THE AS SESSING OFFICER HIMSELF, THERE WERE NO DOCUMENTS PERTAINING TO THE ASSESSEE BUT CERTAIN INFORMATION IN THE FORM OF CHART WAS TREATED AS DOC UMENTS BELONGING TO THE ASSESSEE. LD. AR FURTHER SUBMITTED THAT THE MANNER IN WHICH SATISFACTION NOTE HAS BEEN RECORDED ON THE BASIS AND CONTENTS OF THE SAID SATISFACTION NOTE DOES NOT EXPRESS ANY FACT THAT ANY DOCUMENT OR OTHER ART ICLE BELONGING TO THE ASSESSEE WAS RECOVERED DURING SEARCH AND SEIZURE OPERATION. LD. AR FURTHER POINTED OUT THAT FIRSTLY THE ASSESSING OFFICER OF THE SEARCHED PERSON HAS TO HOLD THAT THE DOCUMENTS ETC. SEIZED DURING THE SEIZURE OPERATION BELONGS TO OR BELONG TO THE OTHER PERSON, OTHER THAN THE PERSON SEARCHED IS A P REREQUISITE AND IN ABSENCE OF SUCH SATISFACTION PROCEEDINGS U/S 153C OF THE ACT C ANNOT BE INITIATED AGAINST SUCH OTHER PERSON. 4. LEARNED COUNSEL OF THE ASSESSEE FURTHER REFERRED TO HIS WRITTEN SYNOPSIS AND SUBMITTED THAT THE FIRST REQUIREMENT OF LAW IS THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON IS REQUIRED TO REBUT APPEAL PRE SUMPTION U/S 132(4A)(I) AND U/S 292C(1)(I) THAT SEIZED DOCUMENTS DO NOT BELONG OR BELONGS TO THE SEARCHED PERSON AND THEN THE ASSESSING OFFICER OF THE SEARCH ED PERSON HAS TO DRAW AN INFERENCE AS TO WHOM THE SEIZED DOCUMENTS BELONG TO THE PERSON OTHER THAN THE PERSON SEARCHED. LD. AR FURTHER CONTENDED THAT IN THE CASE OF PEPSI FOOD PVT. I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 5 LTD. VS ACIT REPORTED AS (2014) 52 TAXMANN.COM 220( DELHI), THE HON'BLE JURISDICTIONAL HIGH COURT OF DELHI HAS HELD THAT IT IS FOR THE ASSESSING OFFICER OF THE SEARCHED PERSON TO REBUT THE PRESUMPTION AND CO ME TO A CONCLUSION OR SATISFACTION THAT THE DOCUMENTS IN FACT BELONG TO S OMEBODY ELSE. THERE MUST BE COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICE R BEFORE HE/SHE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELO NG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE AND SUBMISSIONS AND CONJECTURES OF THE ASSESSING OFFICER CANNOT TAKE PLACE OF LEGAL SATISFACTION AS REQUIRED BY SECTION 153C OF THE ACT. 5. LD. AR ALSO POINTED OUT THAT THIS BEING A POSITI ON OF VERY FIRST STEP OF THE ASSESSING OFFICER OF THE PERSON SEARCHED PRIOR TO T HE HANDING OVER SUCH DOCUMENT ETC. TO THE OTHER PERSON AND THE ASSESSING OFFICER OF THE OTHER PERSON HAS TO RECORD SATISFACTION AS PER PROVISIONS OF SEC TION 153C OF THE ACT AND IN THE PRESENT CASE, FROM FIRST STEP PRIOR TO THE ISSUANCE OF NOTICE U/S 153C OF THE ACT HAS NOT BEEN FULFILLED AND INASMUCH AS THIS CONDITI ON PRECEDENT HAS NOT BEEN MET BY THE ASSESSING OFFICER, THEREFORE, NOTICE U/S 153 C OF THE ACT IS LIABLE TO BE QUASHED. 6. LD. AR FURTHER PLACED RELIANCE ON THE JUDGMENT O F HON'BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF P EPSICO INDIA HOLDINGS PVT. LTD. VS ACIT (2014) 50 TAXMANN.COM 299 (DEL) AND SUBMITTED THAT THE HON'BLE HIGH COURT HAS MADE IT CLEAR THAT THE ASSES SING OFFICER SHOULD NOT CONFUSE THE EXPRESSION BELONGS TO WITH THE EXPRES SIONS RELATES TO OR REFERS I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 6 TO AND THAT TOO IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT MENTIONED THAT ANY DOCUMENTS ETC. BELONG TO OR BELONGS TO WAS RECOVERED OR UNEARTHED DURING SEARCH AND SEIZURE OPERATION, HENCE, THIS SA TISFACTION NOTE IS HIT BY THE PROPOSITION LAID BY HON'BLE HIGH COURT OF DELHI IN THE CASE OF PEPSI INDIA HOLDING PVT. LTD. (SUPRA). LD. LD. DR HAS ALSO DRA WN OUR ATTENTION TO LAST LINE OF PARA 2 OF THE IMPUGNED SATISFACTION NOTE WHEREIN THE SATISFACTION HAS BEEN RECORDED AND SUBMITTED THAT THE ASSESSING OFFICER H AS SIMPLY MENTIONED THAT THE COMPANY WISE INFORMATION APPEARING IN THESE PAG ES (ANNEXURE 1 PARTY AB- 1 PAGE NO. 53 & 54) WILL BE TREATED AS DOCUMENT PER TAINING TO ALL THE RESPECTIVE COMPANIES, APPEARING IN THE SAID CHART. LD. AR VEH EMENTLY CONTENDED THAT SAID MENTIONING OF THE ASSESSING OFFICER CLEARLY REVEALS THAT THERE WERE NO DOCUMENTS ETC. BEFORE THE ASSESSING OFFICER AT THE TIME OF RECORDING SATISFACTION AS PER SECTION 153C OF THE ACT AND MERELY A CHART S HOWING DETAILS OF PROJECTS OF AMRAPALI GROUP CANNOT BE HELD AS BELONGS TO OR BELO NG TO THE PRESENT ASSESSEE COMPANY. 7. FURTHER, LD. AR ALSO PLACED RELIANCE ON THE RECE NT JUDGMENT DATED 10.7.2015 OF HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF CIT VS MECHMEN PASSED IN I.T.A. NO. 44/2011 AND OTHER RELATED APPEALS AND CONTENDED THAT WHEN NO SATISFACTION NOTE HAS BEEN R ECORDED BY THE ASSESSING OFFICER OF THE OTHER PERSON BEFORE ISSUING NOTICE U /S 153C OF THE ACT AND NONE OF THE PAPERS BELONG TO OR BELONGS TO THE ASSESSEE HAVE BEEN FOUND DURING SEARCH I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 7 AND SEIZURE OPERATION, THEN THE NOTICE U/S 153C OF THE ACT AND NONE OF THE PAPERS BELONG TO OR BELONGS TO THE ASSESSEE HAVE BE EN FOUND DURING SEARCH AND SEIZURE OPERATION, THEN THE NOTICE U/S 153C OF THE ACT CANNOT BE HELD AS VALID ASSUMPTION OF JURISDICTION AND ALL PROCEEDINGS IN P URSUANCE THERETO SHOULD BE HELD AS BAD IN LAW AND VOID AB INITIO . 8. LD. AR FURTHER CONTENDED THAT WITHOUT PREJUDICE TO THE ABOVE LEGAL CONTENTIONS, IT IS ALSO SUBMITTED THAT EVEN IF, FOR THE SAKE OF ARGUMENTS BUT NOT ADMITTING, IT IS PRESUMED THAT THE SEIZED DOCUMENTS REFERRED TO IN SATISFACTION NOTE WERE BELONGING TO THE ASSESSEE AND THAT THE ASSESSING OFFICER WAS ENTITLED TO ISSUE NOTICE U/S 153C OF THE ACT, EVEN IN SUCH A SITUATION, THE ASSESSING OFFICER WAS DUTY BOUND TO CLOSE THE PROCE EDINGS AFTER CALLING OFF RETURNS U/S 153C OF THE ACT BECAUSE THERE IS NOTHIN G INCRIMINATING IN THE SEIZED DOCUMENTS. TO SUPPORT THIS CONTENTION, LD. AR PLAC ED RELIANCE ON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE C ASE OF SSP AVIATION VS DCIT (2012) 20 TAXMAN.COM 214 (DELHI) . 9. LD. DR VEHEMENTLY CONTENDED THAT THE C.O. OF THE ASSESSEE CHALLENGING THE JURISDICTION OF THE ASSESSING OFFICER IS NOT MA INTAINABLE IN THE LIGHT OF PROVISIONS OF SECTION 124 OF THE ACT. LD. DR PLACIN G RELIANCE ON THE DECISION OF ITAT AHMEDABAD BENCH IN THE CASE OF DCIT VS SANDIP M. PATEL SAID TO BE REPORTED IN 22 TAXMANN.COM (AHD. TRI) SUBMITTED THAT INDEPENDENT LEGAL I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 8 GROUND CANNOT BE RAISED BY WAY OF CROSS OBJECTION. HE POINTED OUT PARA NO. 3.8 AT PAGE 27 OF THIS JUDGMENT TO SUPPORT THIS LEGAL C ONTENTION. 10. LD. AR STRONGLY OPPOSED THE AFORESAID LEGAL CON TENTION OF THE DEPARTMENT AND SUBMITTED THAT THE PROVISION OF SECTION 124 OF THE ACT IS ONLY RELATED TO THE TERRITORIAL JURISDICTION OF THE ASSESSING OFFICER W HICH NOWHERE STATES ABOUT THE JURISDICTION OF THE ASSESSING OFFICER PROVIDED U/S 153A OR 153C OF THE ACT WHICH IS RELEVANT TO THE PRESENT CASE. LD. AR FURT HER POINTED OUT THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE QUITE DIS SIMILAR AND DISTINGUISHABLE FROM THE FACTS OF THE CASE OF SANDIP M. PATEL (SUPR A) AS RELIED BY THE LD. AR. 11. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS A ND LEGAL CONTENTIONS OF THE LD. LD. DR, WE ARE OF THE VIEW THAT FROM BARE R EADING OF PROVISIONS OF SECTION 124 OF THE ACT, IT IS AMPLY CLEAR THAT THIS PROVISION MANDATES ABOUT THE TERRITORIAL JURISDICTION OF THE ASSESSING OFFICER O VER ANY ONE AND A RIDER HAS BEEN PUT ABOUT CHALLENGE OF ASSESSEE REGARDING TERRITORI AL JURISDICTION BY THIS PROVISION, HENCE, WE DECLINE TO ACCEPT THE CONTENTI ON OF LD. CIT DR THAT THE ASSESSEE CANNOT AGITATE VALIDITY OF NOTICE U/S 153C OF THE ACT U/S 124 OF THE ACT. FURTHERMORE, WHEN WE PROCEED TO CONSIDER THE FACTS AND CIRCUMSTANCES OF THE CASE OF SANDIP M. PATEL, WE SEE THAT THE AHMEDABAB TRIBUNAL HAS NEVER DECIDED THAT THE ASSESSEE CANNOT RAISE LEGAL OBJECTION TO T HE VALIDITY OF NOTICE U/S 153C OF THE ACT BY WAY OF CROSS OBJECTION. ON CAREFUL R EADING OF SAID RELEVANT PARA 3.8 AT PAGE 27 OF THE SAID ORDER, WE NOTE THAT THES E OBSERVATIONS AS RELIED BY LD. I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 9 DR HAVE BEEN GIVEN IN A CERTAIN SITUATION WHICH IS NOT SIMILAR TO THE PRESENT CASE AND HENCE, WE RESPECTFULLY HOLD THAT THE BENEF IT OF THE RATIO OF THE DECISION OF COORDINATE BENCH OF ITAT, AHMEDABAD IN THE CASE OF DCIT VS SANDIP N. PATEL IS NOT AVAILABLE FOR THE REVENUE. ACCORDINGL Y, WE PROCEED TO DECIDE THE CROSS OBJECTION OF THE ASSESSEE CHALLENGING THE VAL IDITY OF NOTICE U/S 153C OF THE ACT AND ALL SUBSEQUENT PROCEEDINGS HELD IN PURSUANC E THERETO. 12. ON CROSS OBJECTIONS, LD. DR FURTHER SUPPORTED T HE ACTION OF THE ASSESSING OFFICER AND SUBMITTED THAT THE CIT(A) RIGHTLY DISMI SSED GROUND NO. 1,2, 3, 5 (B) AND 6 (B) OF THE ACT UPHOLDING THE VALIDITY OF NOTI CE U/S 153C OF THE ACT AND REASSESSMENT ORDER PASSED U/S 153C R/W SECTION 143( 3) OF THE ACT AS THE ASSESSING OFFICER RIGHTLY ASSUMED JURISDICTION TO I SSUE NOTICE U/S 153C OF THE ACT AND MAKING REASSESSMENT PROCEEDINGS CONSEQUENTI AL. 13. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS O F BOTH THE SIDES, AT THE VERY OUTSET, WE MAY POINT OUT THAT THE ASSESSING OF FICER ISSUED A NOTICE U/S 153C OF THE ACT ON 12.4.12 TO THE ASSESSEE ASKING T O FILE THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR AFTER RECORDING RE ASONS FOR INITIATION OF ACTION U/S 153C OF THE ACT. LD. AR HAS PLACED A COPY OF T HE SAID REASONS SPREAD OVER 4 PAGES WHICH WE ARE ENCLOSING WITH THIS ORDER AS ANN EXURE A-1 FOR THE SAKE OF CLARITY AND BREVITY IN OUR FINDINGS AND OBSERVATION S. 14. FURTHER, BEFORE WE PROCEED TO ADJUDICATE THE AL LEGATION OF ASSESSEE CHALLENGING THE VALID ASSUMPTION OF JURISDICTION FO R ISSUANCE OF NOTICE U/S 153C I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 10 OF THE ACT AND ALL SUBSEQUENT PROCEEDINGS, WE FIND IT APPROPRIATE TO CAREFULLY PERUSE THE PROPOSITION AND DICTA LAID DOWN BY HON'B LE JURISDICTIONAL HIGH COURT AND OTHER HON'BLE HIGH COURTS ON THIS ISSUE. FIRST LY, WE OBSERVE THAT IN THE CASE OF PEPSI FOOD PVT. LTD. VS ACIT (SUPRA) THE HON'BLE JURISDICTIONAL HIGH COURT HELD AS UNDER:- 6. ON A PLAIN READING OF SECTION 153C, IT IS EVIDENT THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE 'S ATISFIED' THAT INTER ALIA ANY DOCUMENT SEIZED OR REQUISITIONED 'BE LONGS TO' A PERSON OTHER THAN THE SEARCHED PERSON. IT IS ONLY T HEN THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON CAN HANDOV ER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON (OTHER THAN THE SEARCHED PERSON). FUR THERMORE, IT IS ONLY AFTER SUCH HANDING OVER THAT THE ASSESSING OFF ICER OF SUCH OTHER PERSON CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR RE- ASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THEREFORE, BEFORE A NOTICE UNDER SECTION 153C CAN BE ISSUED TWO STEPS HAVE TO BE TAKEN. THE FIRST STEP I S THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUS T ARRIVE AT A CLEAR SATISFACTION THAT A DOCUMENT SEIZED FROM HIM DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON. THE SECOND STEP IS AFTER SUCH SATISFACTION IS ARRIVED AT THAT THE DOCUMENT IS HA NDED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM THE SAID DO CUMENT 'BELONGS'. IN THE PRESENT CASES IT HAS BEEN URGED O N BEHALF OF THE PETITIONER THAT THE FIRST STEP ITSELF HAS NOT BEEN FULFILLED. FOR THIS PURPOSE IT WOULD BE NECESSARY TO EXAMINE THE PROVIS IONS OF PRESUMPTIONS AS INDICATED ABOVE. SECTION 132(4A)(I) CLEARLY STIPULATES THAT WHEN INTER ALIA ANY DOCUMENT IS FOU ND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE O F A SEARCH IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON. IT IS SIMILARLY PROVIDED IN SECTION 292C(1)(I). IN OTHER WORDS, WHENEVER A DOCUMENT IS FOUND FROM A PERSON WHO IS BEING SEAR CHED THE NORMAL PRESUMPTION IS THAT THE SAID DOCUMENT BELONG S TO THAT PERSON. IT IS FOR THE ASSESSING OFFICER TO REBUT TH AT PRESUMPTION AND COME TO A CONCLUSION OR 'SATISFACTION' THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. THERE ,MUST BE SOME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICER BEFOR E HE/SHE ARRIVES I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 11 AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES N OT BELONG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE. SURMISE AND C ONJECTURE CANNOT TAKE THE PLACE OF 'SATISFACTION'. XXXXXXXXXXX 11. IT IS EVIDENT FROM THE ABOVE SATISFACTION N OTE THAT APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONE R AND THAT THE ASSESSING OFFICER IS SATISFIED THAT IT IS A FIT CAS E FOR ISSUANCE OF A NOTICE UNDER SECTION 153C, THERE IS NOTHING WHICH W OULD INDICATE AS TO HOW THE PRESUMPTIONS WHICH ARE TO BE NORMALL Y RAISED AS INDICATED ABOVE, HAVE BEEN REBUTTED BY THE ASSESSIN G OFFICER. MERE USE OR MENTION OF THE WORD 'SATISFACTION' OR T HE WORDS 'I AM SATISFIED' IN THE ORDER OR THE NOTE WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 1 53C OF THE SAID ACT. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSION THAT THE ASSESSING OFFICER OF TH E SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUMENTS BELON G TO A PERSON OTHER THAN THE SEARCHED PERSON. WE ARE AFRAID, THAT GOING THROUGH THE CONTENTS OF THE SATISFACTION NOTE, WE ARE UNABL E TO DISCERN ANY 'SATISFACTION' OF THE KIND REQUIRED UNDER SECTION 1 53C OF THE SAID ACT. 12. THIS BEING THE POSITION THE VERY FIRST STEP PRIOR TO THE ISSUANCE OF A NOTICE UNDER SECTION153C OF THE SAID ACT HAS NOT BEEN FULFILLED. INASMUCH AS THIS CONDITION PRECEDEN T HAS NOT BEEN MET, THE NOTICES UNDER SECTION 153C ARE LIABLE TO B E QUASHED. IT IS ORDERED ACCORDINGLY. THE WRIT PETITIONS ARE ALLOWED AS ABOVE. THERE SHALL BE NO ORDER AS TO COSTS. 15. WE FURTHER OBSERVE THAT IN THE CASE OF PEPSICO INDIA HOLDINGS PVT. LTD. VS ACIT, THE HON'BLE JURISDICTIONAL HIGH COURT OF DELH I IN PARA 12 TO 16 HELD AS FOLLOWS:- 12. HOWEVER, BY VIRTUE OF THE ORDER DATED 02.12.2 013, THE ASSESSING OFFICER REJECTED EACH ONE OF THESE OBJECT IONS AND OBSERVED THAT THE PROVISIONS OF SECTION I53C OF THE SAID ACT HAD BEEN RIGHTLY INVOKED AND THE PETITIONER WAS DIRECTE D TO COMPLY WITH THE ASSESSMENT PROCEEDINGS UNDER SECTION 153C READ WITH I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 12 SECTION 143(3) OF THE SAID ACT INSOFAR AS THE ASSES SMENT YEARS 2006-2007 TO 2011-2012 WERE CONCERNED. 13. HAVING SET OUT THE POSITION IN LAW IN THE DEC ISION OF THIS COURT IN THE CASE OF PEPSI FOODS PVT, LTD. (SUPRA), IT MUST BE SEEN AS TO WHETHER THE ASSESSING OFFICER OF THE SEA RCHED PERSON (THE JAIPURIA GROUP) COULD BE SAID TO HAVE ARRIVED AT A SATISFACTION THAT THE DOCUMENTS MENTIONED ABOVE BEL ONGED TO THE PETITIONERS. 14. FIRST OF ALL WE MAY POINT OUT, ONCE AGAIN, T HAT IT IS NOBODY'S CASE THAT THE JAIPURIA GROUP HAD DISCLAIME D THESE DOCUMENTS AS BELONGING TO THEM. UNLESS AND UNTIL IT IS ESTABLISHED THAT THE DOCUMENTS , DO NOT BELONG TO T HE SEARCHED PERSON, THE PROVISIONS OF SECTION 153C OF THE SAID ACT DO NOT GET ATTRACTED BECAUSE THE VERY EXPRESSION USED IN SECTI ON 153C OF THE SAID ACT IS THAT 'WHERE THE ASSESSING OFFICER S ATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISIT IONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A IN VIEW OF THIS PHRASE, IT IS NECES SARY THAT BEFORE THE PROVISIONS OF SECTION 153C OF THE SAID A CT CAN BE INVOKED, THE ASSESSING OFFICER OF THE SEARCHED PERS ON MUST HE SATISFIED THAT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE PERSON REFERRED TO IN SECTIO N 153A (I.E., THE SEARCHED PERSON). IN THE SATISFACTION NOTE, WHI CH IS THE SUBJECT MATTER OF THESE WRIT PETITIONS, THERE IS NO THING THEREIN TO INDICATE THAT THE SEIZED DOCUMENTS DO NOT BELONG TO THE JAIPURIA GROUP. THIS IS EVEN APART FROM THE FACT THAT, AS WE HAVE NOTED ABOVE, THERE IS NO DISCLAIMER ON THE PART OF THE JA IPURIA GROUP INSOFAR AS THESE DOCUMENTS ARE CONCERNED. 15. SECONDLY, WE MAY ALSO OBSERVE THAT THE FINDIN G OF PHOTOCOPIES IN THE POSSESSION OF A SEARCHED PERSON DOES NOT NECESSARILY MEAN AND IMPLY THAT THEY 'BELONG' TO TH E PERSON WHO HOLDS THE ORIGINALS. POSSESSION OF DOCUMENTS AN D POSSESSION OF PHOTOCOPIES OF DOCUMENTS ARE TWO SEPA RATE THINGS. WHILE THE JAIPURIA GROUP MAY BE THE OWNER O F THE PHOTOCOPIES OF THE DOCUMENTS IT IS QUITE POSSIBLE T HAT THE ORIGINALS MAY BE OWNED BY SOME OTHER PERSON. UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION, WHETHER THEY BE PHOTOCOPIES OR ORIGINALS, DO NOT BELONG TO THE SEAR CHED PERSON, THE QUESTION OF INVOKING SECTION 153C OF THE SAID A CT DOES NOT ARISE. 16. THIRDLY, WE WOULD ALSO LIKE TO MAKE IT CLEAR THAT THE ASSESSING OFFICERS SHOULD NOT CONFUSE THE EXPRESSIO N 'BELONGS TO' WITH THE EXPRESSIONS 'RELATES TO' OR 'REFERS TO '. A REGISTERED SALE DEED, FOR EXAMPLE, 'BELONGS TO' THE PURCHASER OF THE PROPERLY ALTHOUGH IT OBVIOUSLY 'RELATES TO' OR 'REF ERS TO' THE VENDOR. IN THIS EXAMPLE IF THE PURCHASERS PREMISES ARE SEARCHED AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT H E SAID THAT IT I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 13 'BELONGS TO' THE VENDOR JUST BECAUSE HIS NAME IS ME NTIONED IN THE DOCUMENT. IN THE CONVERSE CASE IF THE VENDOR'S PREMISES ARE SEARCHED AND A COPY OF THE SALE DEED IS SEIZED, IT CANNOT BE SAID THAT THE SAID COPY 'BELONGS TO' THE PURCHASER JUST BECAUSE IT REFERS TO HIM AND HE (THE PURCHASER) HOLDS THE ORIG INAL SALE DEED. IN THIS LIGHT, IT IS OBVIOUS THAT NONE OF THE THREE SETS OF DOCUMENTS - COPIES OF PREFERENCE SHARES, UNSIGNED L EAVES OF CHEQUE BOOKS AND THE COPY OF THE SUPPLY AND LOAN AG REEMENT -J CAN BE SAID TO 'BELONG TO' THE PETITIONER. 16. WE FURTHER OBSERVE THAT IN THE CASE OF CIT VS M ECHMEN (SUPRA), THE HONBLE MADHYA PRADESH HIGH COURT IN PARA 22 AND 23 HELD AS FOLLOWS:- 22. REVERTING TO THE SUBSTANTIAL QUESTIONS OF LAW ARTICULATED WHILE ADMITTING THESE APPEALS, WE HOLD THAT THE SAME WILL BE OF NO AVAIL TO THE DEPARTMENT CONSIDERING T HE FACT SITUATION OF THE PRESENT CASE AND FOR THE REASONS M ENTIONED HITHERTO. IN THAT, WE HAVE REJECTED THE ARGUMENT TH AT EVEN IN CASES, UNDER SECTION 153C THE ASSESSING OFFICER(S) NEED NOT RECORD SATISFACTION AND IN PARTICULAR AT BOTH THE S TAGES - BE IT ASSESSING OFFICER OF SEARCHED PERSON OR ASSESSING O FFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. NOTABLY, THE R EQUIREMENT OF RECORDING SATISFACTION IS NOT FOR THE BENEFIT OF TH E ASSESSING OFFICER(S), BUT LENDING CREDENCE TO HIS SATISFACTIO N AND ON WHICH MATTERS THE ASSESSCE CAN GIVE MEANINGFUL EXPLANATIO N AND REASON IT OUT AS AND WHEN OPPORTUNITY IS GIVEN TO THE CONC ERNED ASSESSEE. 23. IN THE PRESENT CASE, THE CONCURRENT FINDING OF FACT RECORDED BY THE APPELLATE FORUMS IS THAT, NO SATISFACTION HAS B EEN RECORDED BY THE ASSESSING OFFICER BEFORE ISSUING OF NOTICE U NDER SECTION 153C FURTHER, NONE OF THE PAPERS SEIZED BELONGS OR BELONG TO THE ASSESSEE (NOTICEE). THE APPELLATE FORUMS HAVE FURTH ER FOUND THAT NO ADDITION OR EVEN OBSERVATIONS HAVE BEEN MADE BY THE ASSESSING OFFICER IN ANY OF THE ORDERS FOR THE RELE VANT ASSESSMENT YEARS IN CONNECTION WITH ANY MATERIAL FOUND DURING THE COURSE OF SEARCH EVEN FOR THAT REASON NO ACTION UNDER SECTION 153C, IS JUSTIFIED. THESE FINDINGS OF FACT NEED NO INTERFERE NCE AND HAVE NOT BEEN QUESTIONED BEFORE US. CONSIDERING THE ABOVE, T HESE APPEALS MUST FAIL. I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 14 17. FURTHER, HON'BLE JURISDICTIONAL HIGH COURT OF D ELHI IN THE CASE OF S.S.P. AVIATION VS DCIT (SUPRA) IN PARA 17 HELD THUS:- 17. THE JUDGMENT OF THIS COURT IN SARAYA INDUSTR IES LTD. (SUPRA) WAS RELIED UPON BY MR. BAJPAI, IN SUP PORT OF HIS CONTENTION THAT THE SEIZURE OF THE DOCUMENT MUS T BE OF SUCH NATURE THAT EVEN CLOSED ASSESSMENTS FOR SIX YE ARS COULD BE REOPENED AND THIS REQUIREMENT POSTULATES T HAT THE PROVISIONS OF SECTION 153C CAN BE SET IN MOTION ONLY IF THERE IS A FINDING THAT THE SEIZED DOCUMENT OR B OOKS OF ACCOUNT OR VALUABLE ARTICLE REPRESENTS THE UNDISCLO SED INCOME OF THE OTHER PERSON. THE SAID DECISION DOES NOT ASSIST THE PETITIONER. THE SECTION MERELY ENABLES T HE REVENUE AUTHORITIES TO INVESTIGATE INTO THE CONTENT S OF THE DOCUMENT SEIZED, WHICH BELONGS TO A PERSON OTHER TH AN THE PERSON SEARCHED SO THAT IT CAN BE ASCERTAINED W HETHER THE TRANSACTION OR THE INCOME EMBEDDED IN THE DOCUM ENT HAS BEEN ACCOUNTED FOR IN THE CASE OF THE APPROPRIA TE PERSON. IT IS AIMED AT ENSURING THAT INCOME DOES NO T ESCAPE ASSESSMENT IN THE HANDS OF ANY OTHER PERSON MERELY BECAUSE HE HAS NOT BEEN SEARCHED UNDER SECTI ON 132 OF THE ACT. IT IS ONLY A FIRST STEP TO THE ENQU IRY, WHICH IS TO FOLLOW. THE ASSESSING OFFICER WHO HAS REACHED THE SATISFACTION THAT THE DOCUMENT RELATES TO A PERSON OTHER THAN THE SEARCHED PERSON CAN DO NOTHING EXCEPT TO FORWARD THE DOCUMENT TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER THE OTHER PERSON AND THEREAFTER I T IS FOR THE ASSESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON TO FOLLOW THE PROCEDURE PRESCRIBED BY SECTIO N 153A IN AN ATTEMPT TO ENSURE THAT THE INCOME REFLEC TED BY THE DOCUMENT HAS BEEN ACCOUNTED FOR BY SUCH OTHER PERSON. IF HE IS SO SATISFIED AFTER OBTAINING THE R ETURNS FROM SUCH QTHER PERSON FOR THE SIX ASSESSMENT YEARS , THE PROCEEDINGS WILL HAVE TO BE CLOSED. IF THE RETURNS FILED BY THE OTHER PERSON FOR THE PERIOD OF SIX YEARS DOES N OT SHOW THAT THE INCOME REFLECTED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR, ADDITIONS WILL BE ACCORDINGLY MADE A FTER FOLLOWING THE PROCEDURE PRESCRIBED BY LAW AND AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO SUCH OTHER PERSON. THAT, IN SUM AND SUBSTANCE, IS THE POSITION . 18. IN THE LIGHT OF AFORESAID PROPOSITION/DICTA OF HON'BLE JURISDICTIONAL HIGH COURT OF DELHI AND HONBLE M.P. HIGH COURT, WHEN WE ANALYSE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE OBSERVE THAT FROM REASONS RECORDED BY THE ASSESSING OFFICER FOR INITIATION OF ACTION AND ISSU ANCE OF NOTICE U/S 153C OF THE I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 15 ACT, FROM THE CONTENTS OF REASONS RECORDED, IT IS A PPARENT THAT THESE REASONS HAVE BEEN RECORDED IN THE CASE OF AMRAPALI GRAND AND THE SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT ON 9.9.2010 WAS CON DUCTED IN THE AMRAPALI GROUP WHICH IS A SEPARATE ENTITY AND THUS WE SAFELY INFER THAT THE REASONS AS (ANNEXURE 1) WERE RECORDED IN THE CASE OF THE OTHER PERSON OTHER THAN THE PERSON SEARCHED. FROM THE CONTENTS OF REASONS RECORDED FO R ISSUANCE OF NOTICE U/S 153C OF THE ACT, WE NOTE THAT AFTER STATING THE DETAIL O F SEARCH AND SEIZURE OPERATION, THE ASSESSING OFFICER OF THE OTHER PERSON MENTIONS THAT AS PER ANNEXURE A-1, PAGES 53 & 54 VIZ. DETAILED CHART OF ALL THE PROJEC TS UNDERTAKEN BY AMRAPALI GROUP WHICH CONTAINS COMPANY WISE DETAIL OF PROJECT S UNDERTAKEN BY VARIOUS COMPANIES OF AMRAPALI GROUP, IT MAY BE MENTIONED TH AT AMRAPALI GROUP IS NOT A LEGAL ENTITY BUT COMPRISES OF GROUP OF COMPANIES WHICH INDIVIDUALLY AND SEPARATELY ARE HAVING THEIR DIFFERENT CORPORATE/PAR TNERSHIP FIRM ENTITIES. SUBSEQUENTLY, THE ASSESSING OFFICER OF THE OTHER PE RSON I.E. PRESENT ASSESSEE STATES THAT THEREFORE, THE COMPANY WISE INFORMATIO N APPEARING IN THESE PAGES WILL BE TREATED AS DOCUMENTS PERTAINING TO ALL THE RESPECTIVE COMPANIES, APPEARING IN THE SAID CHART. 19. AT THIS POINT, WE MAY POINT OUT THAT THE CHART APPEARING ON PAGE 53 & 54 CONTAINS DETAIL OF PROJECTS WHEREIN PRESENT ASSESSE E I.E. AMRAPALI GRAND HAS BEEN ENLISTED AT SL. NO. 1 AND IN THE OTHER RELEVAN T COLUMNS, LOCATION PROJECT WISE STAGE OF COMPLETION, COST INCURRED, COST TO BE INCURRED, BALANCE AMOUNT TO I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 16 BE RECEIVED FROM CASHIER, SALE VALUE OF UNSOLD FLAT S, TOTAL RECEIVABLES AND SURPLUS AMOUNTS HAVE BEEN MENTIONED. THIS CHART CONTAINS D ETAILS OF 12 COMPANIES INCLUDING THE PRESENT ASSESSEE AND TITLE OF THIS CH ART IS MENTIONED AS AMRAPALI GROUP, DETAIL OF PROJECTS. 20. WE FURTHER OBSERVE THAT IN THE FIRST PARA APPEA RING ON PAGE NO. 2 OF THE REASONS RECORDED, THE ASSESSING OFFICER OF THE OTHE R PERSON HAS NOTED THE DETAILS OF COMPANIES AND THEIR MANAGERS OF AMRAPALI GROUP A ND SUBSEQUENTLY IT HAS BEEN MENTIONED THAT DURING THE COURSE OF SEARCH, IN CRIMINATING DOCUMENTS AS TO UNACCOUNTED CASH RECEIPTS TOTALLING TO RS.31.33 CRO RE WERE SEIZED WHICH HAVE BEEN ADMITTED TO BE UNACCOUNTED BY THE MANAGEMENT O F SEARCH PERSON/ENTITY, HENCE SURRENDERED AS UNEXPLAINED INCOME IN THE BOOK S OF M/S ULTRA HOMES CONSTRUCTION (P) LTD. IN PARA 1& 2 OF THE REASONS RECORDED, THE ASSESSING OFFICER OF THE OTHER PERSON NOTED THAT HOWEVER, TH E RECEIPT OF UNACCOUNTED CASH AND PAYMENT OF UNACCOUNTED EXPENSES BY THE MANAGEME NT IN RESPECT OF AMRAPALI GRAND IS IMMINENTLY POSSIBLE WHICH IS ALSO EVIDENT BY THE DOCUMENTS SEIZED AT PAGES 54 & 55 OF ANNEXURE SEIZED BY PARTY AB-1. IN VIEW OF LOGICAL AND VIGILANT READING OF REASONS RECORDED BY THE ASS ESSING OFFICER OF THE OTHER PERSON SET OUT IN THE EARLIER PARAS, IT IS CLEAR TH AT THE REASONS HAVE BEEN RECORDED BY THE PERSON OTHER THAN THE PERSON SEARCHED AND IN THE VERY FIRST PART OF ALLEGATIONS, THE ASSESSING OFFICER OF THE OTHER PER SON NOTED THAT A DETAILED CHART SHOWING COMPANY WISE INFORMATION WILL BE TREATED AS DOCUMENT PERTAINING TO I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 17 RESPECTIVE COMPANIES APPEARING IN THE SAID CHART. FROM THESE OBSERVATIONS OF THE ASSESSING OFFICER OF THE OTHER PERSON, WE CAN S AFELY INFER THAT ACCORDING TO THE ASSESSING OFFICER HIMSELF, THERE WERE, IN FACT, NO DOCUMENTS BELONGING TO THE ASSESSEE BUT CERTAIN INFORMATION IN THE FORM OF CHART SHOWING DETAILS OF COMPANY WISE PROJECTS, WHICH WAS RECOVERED DURING T HE SEARCH AND SEIZURE OPERATION ON AMRAPALI GROUP, HAS BEEN TREATED AS DO CUMENTS PERTAINING TO ALL THE RESPECTIVE COMPANIES APPEARING IN THE SAID CHAR T INCLUDING THE PRESENT ASSESSEE. IN THE SAID STIPULATIONS OF REASONS RECO RDED, WE ARE UNABLE TO SEE ANY OBSERVATIONS OR FACTS OR ANY OTHER MATERIAL WHICH W AS RECOVERED OR UNEARTHED DURING THE SEARCH AND SEIZURE OPERATION ON AMRAPALI GROUP ON 9.9.2010. WE MAY POINT OUT THAT THE ASSESSING OFFICER IN PARA 2 OF THE REASONS RECORDED HIMSELF NOTED THAT DURING THE COURSE OF SEARCH, INC RIMINATING DOCUMENTS AS TO THE UNACCOUNTED CASH RECEIPTS TOTALLING TO RS.31.33 CRORE WERE SEIZED WHICH HAVE BEEN ADMITTED TO HAVE BEEN UNACCOUNTED BY THE MANAGEMENT OF SEARCH ENTITY AND THE SAME WAS SURRENDERED AS UNEXPLAINED INCOME IN THE BOOKS OF M/S ULTRA HOME CONSTRUCTION (P) LTD. WHICH IS A COMPANY OF AMRAPALI GROUP. IN THIS POSITION, WHEN THE UNACCOUNTED CASH RECEIPTS H AVE BEEN ACCOUNTED AND SURRENDERED AS UNEXPLAINED INCOME TO M/S ULTRA HOME , WE ARE UNABLE TO SEE ANY OTHER INCRIMINATING MATERIAL OR DOCUMENT ETC. W HICH COULD LEAD THE ASSESSING OFFICER OF OTHER PERSON TO RECORD HIS SAT ISFACTION THAT DOCUMENTS ETC. BELONG TO OR BELONGS TO THE PRESENT ASSESSEE (OTHER PERSON) WERE SEIZED DURING SEARCH AND SEIZURE OPERATION ON AMRAPALI GROUP. IN THIS POSITION, WHEN THE I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 18 UNACCOUNTED CASH RECEIPTS HAVE BEEN ACCOUNTED AND S URRENDERED AS UNEXPLAINED INCOME OF M/S ULTRA HOME, WE ARE UNABLE TO SEE ANY OTHER INCRIMINATING MATERIAL OR DOCUMENT ETC. WHICH COULD LEAD THE ASSE SSING OFFICER OF OTHER PERSON TO RECORD HIS SATISFACTION THAT DOCUMENTS ET C. BELONG TO OR BELONGS TO THE PRESENT ASSESSEE (OTHER PERSON) WERE SEIZED DURING SEARCH AND SEIZURE OPERATION ON AMRAPALI GROUP. 21. IN VIEW OF FOREGOING DISCUSSION, WE ARE UNABLE TO HOLD THAT THE ONLY BASIS OF REASONS RECORDED FOR ACTION U/S 153C OF THE ACT BEFORE THE ASSESSING OFFICER OF THE OTHER PERSON I.E. PRESENT ASSESSEE WAS A CHA RT CONTAINING DETAILS OF PROVISION OF 12 COMPANIES OF AMRAPALI GROUP INCLUDI NG PRESENT ASSESSEE BUT THIS CHART DOES NOT QUALIFY THE DEFINITION OF DOCUM ENT BELONGING TO PERSON OTHER THAN THE SEARCHED PERSON VIZ. THE PRESENT ASSESSEE AND FOR INITIATION OF ACTION AND ISSUANCE OF NOTICE U/S 153C OF THE ACT BUT SEIZURE OF DOCUMENT ETC. BELONGING TO OTHER PERSON IS A PREREQUISITE AND IN ABSENCE OF SE ARCH AND SEIZURE OPERATION PROCEEDINGS U/S 153C OF THE ACT, NOTICE UNDER THE S AID PROVISION CANNOT BE INITIATED AND ISSUED AGAINST SUCH OTHER PERSON. AT THE COST OF REPETITION, WHEN WE ANALYSE THE PROPOSITION LAID DOWN BY HON'BLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF PEPSI FOOD PVT. LTD. VS CIT (SUPRA) , W E CLEARLY OBSERVE THAT THEIR LORDSHIPS HAVE EXPLICITLY HELD THAT BEFORE A NOTICE U/S 153C OF THE ACT CAN BE ISSUED, TWO STEP HAVE TO BE TAKEN; THE FIRST STEP I S THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE AT A CLEAR SATISFACTION THAT THE DOCUMENT I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 19 DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON, T HE SECOND STEP IS; AFTER SUCH SATISFACTION IS ARRIVED AT, THE DOCUMENTS BE HANDED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM SUCH DOCUMENT BELONGS. THEIR LORDSHIPS FURTHER HELD THAT FOR THIS PURPOSE, IT WOULD BE NECESSARY TO EXAMINE THE PROVISIONS OF PRESUMPTION WHEREIN SECTION 132(4A)(I) CLEARLY STIP ULATES THAT WHEN INTER ALIA ANY DOCUMENT IS FOUND IN THE CONTROL AND POSSESSION OF ANY PERSON IN THE COURSE OF SEARCH, IT MAY BE PRESUMED THAT SUCH BOOKS OF AC COUNT, OTHER DOCUMENTS, OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS T O SUCH PERSON AND IT IS ALSO SIMILARLY PROVIDED IN SECTION 292C(I). THEIR LORDS HIPS LAYING DOWN A DICTA WHICH IS BINDING ON US, FURTHER HELD THAT WHENEVER A DOCUMENT IS FOUND FROM A PERSON WHO IS BEING SEARCHED, THE PRESUMPTION IS TH AT THE SAID DOCUMENTS BELONG TO THAT PERSON AND IT IS FOR THE ASSESSING O FFICER OF THE SEARCHED PERSON TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR SATISFACTION THAT THE DOCUMENT, IN FACT, BELONGS TO SOMEBODY ELSE. IT WA S FURTHER HELD THAT THERE MUST BE COGENT REASON AVAILABLE WITH THE ASSESSING OFFIC ER BEFORE HE/SHE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELONG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE AND SURMISES AND CONJECTURES C ANNOT TAKE PLACE OF SATISFACTION. 22. IN THE PRESENT CASE, UNDISPUTEDLY AND ADMITTEDL Y, THERE WAS NO SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER OF THE PERSO N SEARCHED. THIS BEING THE POSITION, THE FIRST STEP PRIOR TO THE ISSUANCE OF N OTICE U/S 153C OF THE ACT HAS NOT I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 20 BEEN FULFILLED BY THE ASSESSING OFFICER OF THE PERS ON SEARCHED I.E. AMRAPALI GROUP. WHEN WE PROCEED TO EVALUATE THE VALIDITY OF REASONS RECORDED BY THE ASSESSING OFFICER OF THE OTHER PERSON FOR ISSUANCE OF NOTICE AND INITIATION OF PROCEEDINGS U/S 153C OF THE ACT, THEN FROM THE REAS ONS RECORDED (ANNEXURE A- 1), IT IS AMPLY CLEAR THAT THE ASSESSING OFFICER HA S MERELY PICKED ON PAGES NO. 53 & 54 OF THE SIZED MATERIAL WHICH IS, IN FACT, A CHART SHOWING DETAIL OF PROVISION OF AMRAPALI GROUP COMPANY INCLUDING NAME OF THE PRESENT ASSESSEE OF AMRAPALI GRAND AT SL. NO.1 BUT THIS CANNOT BE HELD AS BELONG TO OR BELONGS TO THE PRESENT ASSESSEE. IT IS FURTHER OBSERVED THAT EVEN THE ASSESSING OFFICER OF THE OTHER PERSON HAS NOT USED THE WORDS BELONG TO OR B ELONGS TO IN THE REASONS RECORDED AND HE HAS NOTED THAT THE COMPANY WISE INF ORMATION APPEARING IN THESE PAGES WILL BE TREATED AS DOCUMENT PERTAINING TO ALL THE RESPECTIVE COMPANIES APPEARING IN THE SAID CHART. LD. DR HAS POINTED OU T THAT AS PER AMENDED SECTION 153C OF THE ACT, THE WORD PERTAINS TO IS SUFFICIE NT FOR VALID ASSUMPTION OF JURISDICTION, ISSUANCE OF NOTICE U/S 153C OF THE A CT. HOWEVER, WE DO NOT AGREE WITH THIS CONTENTION OF THE LD. CIT DR AS THE PRESE NT CASE IS RELEVANT TO ASSESSMENT YEAR 2009-10 AND THE AMENDMENT INSERTED IN SECTION 153C OF THE ACT BY FINANCE ACT 2015 IS APPLICABLE W.E.F. 1.6.20 15 AND ONWARDS WHICH CANNOT BE TAKEN AS RETROSPECTIVE FOR PLACING WORD PERTAIN TO OR PERTAINS TO. PER CONTRA, FROM THE READING OF PRE-REVISED SECTION 153C, IT IS CLEAR THAT THERE WERE WORDS BELONG TO OR BELONGS TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153C OF THE ACT AND IN THE PRESENT CASE, THE ASSESS ING OFFICER OF THE OTHER PERSON HAS NOT I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 21 MENTIONED BELONGS TO OR BELONG TO IN THE REASON S RECORDED CLEARLY DEMONSTRATE THAT THE ASSESSING OFFICER HIMSELF WAS NOT SURE ABOUT THE CHART WHICH WAS USED AS PERTAIN TO THE PRESENT ASSESSEE AS TO WHETHER THE SAME CAN BE TREATED AS PERTAIN TO OR PERTAINS TO THE PRE SENT ASSESSEE. THIS AMBIGUOUS STATE OF MIND OF THE ASSESSING OFFICER OF THE OTHER PERSON CLEARLY DEMONSTRATES THAT THE ASSESSING OFFICER PROCEEDED TO INITIATE PR OCEEDINGS AND TO ISSUE NOTICE U/S 153C OF THE ACT WITHOUT ASSUMPTION OF VALID JUR ISDICTION FOR THE SAME. 23. AT THIS JUNCTURE, WE FURTHER TAKE COGNIZANCE OF THE DICTA LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PE PSICO INDIA LTD. VS CIT (SUPRA) WHEREIN SPEAKING FOR THE JURISDICTIONAL HIG H COURT, THEIR LORDSHIPS IN PARA 16 HELD THAT THE THE ASSESSING OFFICER SHOULD NOT CONFUSE THE EXPRESSION BELONG TO WITH THE EXPRESSION RELATES TO OR RE FERS TO. IT IS FURTHER PERTINENT TO TAKE COGNIZANCE OF DECISION OF MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS MECHMEN WHEREIN THEIR LORDSHIPS AFTER REFERRING TO THE DECISIONS OF HON'BLE DELHI HIGH COURT IN THE CASE OF PEPSI FOOD PVT. LTD ., PEPSICO HOLDING PVT. LTD. AND OBSERVATIONS IN THE CASE OF SSP AVIATION LTD. ( SUPRA), IT HAS BEEN HELD THAT EVEN IN CASES U/S 153C OF THE ACT, THE ASSESSING OF FICER NEED NOT RECORD SATISFACTION IN PARTICULAR AT BOTH THE STAGES, BE I T ASSESSING OFFICER OF THE SEARCHED PERSON OR ASSESSING OFFICER HAVING JURISDI CTION OVER SUCH OTHER PERSON, THE REQUIREMENT OF RECORDING SATISFACTION I S NOT FOR THE BENEFIT OF THE ASSESSING OFFICER BUT LENDING CREDENCE TO HIS SATIS FACTION AND ON WHICH MATTERS I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 22 THE ASSESSEE CAN GIVE MEANINGFUL EXPLANATION AND RE ASON IT OUT AS AND WHEN OPPORTUNITY IS GIVEN TO THE CONCERNED ASSESSEE. 24. AT THIS JUNCTURE, IT IS ALSO RELEVANT TO RESPEC TFULLY TAKE COGNIZANCE OF DICTA LAID DOWN BY HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT VS M GF AUTOMOBILES LTD. DATED 13.8.15 I.T.A. 13 & 14/2015 WHEREIN SPEAKING FOR THE JURISDICTIONAL HIGH COURT, THEIR LORDSHIPS HELD THA T THE ASSESSING OFFICER PROCEEDED TO FRAME ASSESSMENT U/S 153A OF THE ACT R ELYING ON SOME INFORMATION NOT UNEARTHED DURING THE SEARCH, THEN THE ASSESSMEN T ORDERS PASSED WITH REFERENCE TO SECTION 153A(1) OF THE ACT WERE UNSUST AINABLE IN LAW. FURTHERMORE, THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF PCIT VS KURELE PAPER MILL PVT. LTD. I.T.A. NO.369/2015 DATED 6.7.1 5 , THEIR LORDSHIPS HELD AS FOLLOWS:- 2. THE COURT FINDS THAT THE ORDER OF THE CIT(APPEA LS) REVEALS THAT THERE IS A FACTUAL FINDING THAT NO INCRIMINAT ING EVIDENCE RELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING TH E COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE AO. CO NSEQUENTLY, IT WAS HELD THAT THE AO WAS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACC OUNT OF SHARE CAPITAL. 25. FIRST OF ALL, IT WOULD BE APPROPRIATE TO DEAL WITH THE CONTENTION OF THE LD. DR THAT IN THE REASONS RECORDED, THE ASSESSING OFFI CER RIGHTLY HELD THE CHART SHOWING PROJECT WISE DETAIL OF THE AMRAPALI GROUP O F 12 COMPANIES INCLUDING THE PRESENT ASSESSEE PERTAINED TO PRESENT ASSESSEE AND THUS, THE ACTION OF THE ASSESSING OFFICER IN ISSUANCE OF NOTICE U/S 153C OF THE ACT AND FRAMING I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 23 ASSESSMENT UNDER SAID PROVISION WAS QUITE CORRECT I N VIEW OF THE AMENDMENT IN SECTION 153C OF THE ACT WHEREIN THE WORDS PERTAIN TO OR PERTAINS TO OR ANY INFORMATION CONTAINED THEREIN RELATES TO HAVE BEE N INSERTED. WHILE WE ANALYSE THE INTENTION OF THE LEGISLATURE, WE ARE IN AGREEME NT WITH THE CONTENTION OF THE LD. AR THAT THIS AMENDMENT IS NOT RETROSPECTIVE BUT PROSPECTIVE BECAUSE SAID AMENDMENT WAS INSERTED BY FINANCE ACT 2015 W.E.F. 1 .6.15 PROSPECTIVELY WHICH CANNOT APPLY TO THE PRESENT CASE WHICH PERTAINS TO ASSESSMENT YEAR 2009-10. 26. ON THE BASIS OF OUR FOREGOING DISCUSSION AND IN THE LIGHT OF PROPOSITION AND DICTA LAID DOWN BY HON'BLE HIGH COURT OF DELHI AND HONBLE M.P. HIGH COURT, WE ARE OF THE OPINION THAT THE FOLLOWING FAC TS AND CIRCUMSTANCES EMERGING FROM THE BASE DOCUMENT ANNEXURE A-1 I.E. R EASONS RECORDED FOR INITIATION OF PROCEEDINGS AND ISSUANCE OF NOTICE U/ S 153C OF THE ACT:- I) UNDISPUTEDLY, ANNEXURE A-1 SPREAD OVER 4 PAGES, AS ANNEXED TO THIS ORDER, HAS BEEN RECORDED IN THE CASE OF OTHER PERSON I.E. PRESENT ASSESSEE. II) FROM THE RECORD WE ARE UNABLE TO SEE ANY REASON OR SATISFACTION RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED P ERSON PRIOR TO HANDING OVER OF ALLEGED PAGES 53 & 54 TO THE ASSESS ING OFFICER OF THE OTHER PERSON. III) ANNEXURE A-1 CLEARLY REVEALS THAT THE SOLE BASIS OF THE DEMAND BY THE ASSESSING OFFICER IS THE CHART I.E. PAGE NO. 53 & 54 WHICH I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 24 CONTAINS THE PROJECT WISE DETAIL OF 12 COMPANIES OF AMRAPALI GROUP INCLUDING THE PRESENT ASSESSEE WHICH HAS BEEN TABLED AT SL. NO. 1 IN THIS CHART. THE ASSESSING OFFICER OF THE PRESENT ASSESSEE HAS NOTED THAT THIS CHART IS BEING TREATED AS DOCUM ENT PERTAINING TO ALL THE RESPECTIVE COMPANIES APPEARING IN THE SAID CHART. THE PROVISIONS OF SECTION 153C OF THE ACT, AS EXISTED A T THE TIME OF RECORDING REASON, REQUIRE THAT WHERE THE ASSESSING OFFICER IS SATISFIED WITH ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS TO OR BELONGED TO A PERSON OT HER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT, THEN THE BOOKS OF ACCOUNTS OR DOCUMENTS ETC. SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER FOR JURISDICTION OVER SUCH OTHER PERSON. IN THE PRESENT CASE, THE ASSESSING OFFICER OF THE SEARCHED PERSON HAS NOT RECORDED ANY SATISFACTION TO REBUT T HE PRESUMPTION U/S 132(4A)(I) AND U/S 292C(I) THAT SEIZED DOCUMENT S DO NOT BELONG TO THE SEARCHED PERSON. FURTHERMORE, THE REASONS R ECORDED BY THE ASSESSING OFFICER OF THE OTHER PERSON I.E. PRESENT ASSESSEE, ANNEXURE A-1 CLEARLY REVEALS THAT THE ASSESSING OFF ICER OF THE OTHER PERSON IN THE REASONS RECORDED PRIOR TO INITI ATION OF ACTION AND ISSUANCE OF NOTICE U/S 153C HAS NOT RECORDED THAT T HE CHART PAGES 53 & 54 IN ANNEXURE A-1 PARTY AB-1, THE SOLE ALLEGE D DOCUMENT I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 25 BELONG TO OR BELONGS TO THE PRESENT ASSESSEE. HOWE VER, THE ASSESSING OFFICER OF THE PRESENT ASSESSEE REFERRING TO THE SAID CHART HAS MERELY MENTIONED THAT THE COMPANY WISE NON-APPE ARING IN THESE PAGES WILL BE TREATED AS DOCUMENT PERTAINING TO ALL THE RESPECTIVE COMPANIES WHICH IS NOT A PROPER AND VALI D REASON FOR INITIATION OF ACTION AND ISSUANCE OF NOTICE U/S 153 C OF THE ACT. IV) WE ALSO OBSERVE THAT EXCEPT CHART PAGES 53 & 54, TH ERE WAS NO OTHER DOCUMENT ETC. BEFORE THE ASSESSING OFFICER OF THE PRESENT ASSESSEE AT THE TIME OF RECORDING REASONS FOR INITI ATION OF ACTION AND ISSUANCE OF NOTICE U/S 153C OF THE ACT. 27. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANC ES AND OUR FINDING AS NOTED ABOVE, ABOUT THE INITIATION OF ACTION AND ISSUANCE OF NOTICE U/S 153C OF THE ACT, WE REACH TO A LOGICAL CONCLUSION THAT AS PER PROPOS ITION LAID DOWN BY THE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF P EPSI FOOD VS ACIT, PEPSICO INDI HOLDINGS PVT. LTD. VS ACIT (SUPRA) WHICH WERE REFERRED TO BY HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS ME CHMEN (SUPRA), IT IS VIVID THAT THE FIRST REQUIRED STEP OF THE ASSESSING OFFIC ER OF THE PERSON WHO WAS SEARCHED HAVE NOT RECORDED SATISFACTION THAT THE SO LE DOCUMENT VIZ. CHART PAGES 53 & 54 SEIZED DURING THE SEARCH AND SEIZURE OPERAT ION OF AMRAPALI GROUP DO NOT BELONG TO THE SEARCHED PERSON BUT TO THE PRESEN T ASSESSEE. WE FURTHER OBSERVE THAT THE REASONS RECORDED BY THE ASSESSING OFFICER OF THE PRESENT I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 26 ASSESSEE DO NOT QUALIFY THE REQUIREMENT OF VALID SA TISFACTION AS PER PROVISIONS OF SECTION 153C OF THE ACT (AS EXISTED IN THE ACT AT T HE TIME OF RECORDING SATISFACTION) AS THERE IS NO MENTION OF ANY ALLEGAT ION THAT THE CHART PAGES 53 & 54 BELONG TO OR BELONGS TO THE PRESENT ASSESSEE. A T THIS STAGE, IT IS PROFITABLE TO TAKE NOTE OF THE JUDGEMENT OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF PEPSICO INDIA HOLDING PVT. LTD. WHEREIN THEIR LORDS HIPS MAKE IT CLEAR THAT THE ASSESSING OFFICER SHOULD NOT CONFUSE THE EXPRESSION BELONG TO WITH THE EXPRESSION RELATES TO OR REFERS TO, MEANING THE REBY THAT AS PER DICTA LAID DOWN BY JURISDICTIONAL HIGH COURT, THE MAIN REQUIREMENT IS THAT THE REASON FOR INITIATION OF ACTION AND ISSUANCE OF NOTICE U/S 153 C OF THE ACT, THE ASSESSING OFFICER OF THE OTHER PERSON IS MANDATORILY REQUIRED TO RECORD THAT THE DOCUMENTS ETC. BELONG TO BELONGS TO THE OTHER PERSON AND OVER SUCH OTHER PERSON, HE HAS JURISDICTION TO ASSESS. 28. IN THE PRESENT CASE, THE BASE OF DOCUMENT I.E. CHART PAGES 53 & 54 DOES NOT BELONG OR BELONGS TO THE PRESENT ASSESSEE AS TH E ASSESSING OFFICER OF THE OTHER PERSON HIMSELF WAS NOT CLEAR IN HIS MIND THAT WHETHER THIS CHART BELONGS TO OR BELONG TO THE PRESENT ASSESSEE, THEREFORE, HE MA DE JUGGLERY OF WORDS BY MENTIONING THAT THE COMPANY WISE NON APPEARING IN T HESE PAGES WILL BE TREATED AS DOCUMENTS PERTAINING TO ALL RESPECTIVE COMPANIES INCLUDING THE ASSESSEE COMPANY APPEARING IN THE SAID CHART. IN THIS SITUA TION, WE ARE INCLINED TO HOLD THAT THE REASONS RECORDED BY THE ASSESSING OFFICER OF THE PRESENT ASSESSEE FOR I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 27 INITIATION OF ACTION U/S 153C OF THE ACT AND ISSUAN CE OF NOTICE UNDER THE SAID PROVISION DO NOT QUASH THE REQUIREMENT OF SAID PROV ISION AS ACCEPTED IN THE ACT AT THE TIME OF RECORDING SATISFACTION. IT IS ALSO RELEVANT TO MENTION THAT THE SO- CALLED SEIZED DOCUMENT I.E. CHART CANNOT BE HELD AS BELONGS TO OR BELONG TO THE PRESENT ASSESSEE AND ON THIS GROUND ALSO, THE VALID ITY OF REASONS RECORDED COMES WITHIN THE TEETH OF PROPOSITION LAID DOWN BY HON'BL E JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSICO HOLDING PVT. LTD. (SUPRA) AN D PEPSI FOOD PVT. LTD. VS CIT (SUPRA). RESPECTFULLY FOLLOWING THE PROPOSITION LA ID DOWN BY HON'BLE JURISDICTIONAL HIGH COURT, WE ARE INCLINED TO HOLD THAT THE REASONS RECORDED FOR ACTION U/S 153 OF THE ACT AND ISSUANCE OF NOTICE UN DER THE SAID PROVISION WAS NOT ONLY BAD IN LAW BUT VOID AB INITIO WHICH CANNOT BE HELD AS SUSTAINABLE AND CONSEQUENTLY, WE QUASH THE SAME. ACCORDINGLY, C.O. OF THE ASSESSEE IS HEREBY ALLOWED. I.T.A. NO. 6205/DEL/2013 FOR A.Y. 2009-10 ON MERITS 29. THIS APPEAL HAS BEEN PREFERRED AGAINST THE SAME ORDER OF LD. CIT(A) (SUPRA) WHICH UPHELD THE VALIDITY OF NOTICE AND ACT ION U/S 153C OF THE ACT. 30. GROUND NOS. 1 & 4 ARE GENERAL IN NATURE WHICH N EED NO ADJUDICATION. THE MAIN GROUNDS RAISED BY THE REVENUE READ AS UNDE R:- 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 1, 12,60,413/- MADE BY AO ON ACCOUNT OF BOGUS PURCHASES OF RAW MATERIAL . I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 28 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.1,7 1,85,440/- MADE BY AO ON ACCOUNT OF INTEREST FREE LOAN & ADVANCES. GROUND NO. 3 OF THE REVENUE 31. APROPOS GROUND NO. 2 THE LD. CIT DR POINTED OUT PARA 7.10 OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE DI D NOT CHARGE ANY INTEREST IN RESPECT OF ADVANCES GIVEN TO THEM NOR ANY GOODS HAV E BEEN RECEIVED DURING THE YEAR AND AT THE SAME TIME, THE ASSESSEE HAS BORROWE D HUGE INTEREST BEARING FUNDS AND HAS ALSO MADE PAYMENT OF INTEREST ON LOAN TO BANK OF MAHARASHTRA THUS THE NOTIONAL INTEREST @ 8% PER ANNUM ON INTERE ST FREE ADVANCES WAS RIGHTLY DISALLOWED FROM INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. THE LD. AR FURTHER POINTED OUT THAT THE LD. CIT(A) GRANTED REL IEF TO THE ASSESSEE WITHOUT ANY BASIS, HENCE, THE IMPUGNED ORDER MAY BE SET ASI DE BY RESTORING THAT OF THE A.O. 32. THE LD. AR REPLIED THAT THE ASSESSEE USED ITS F UNDS WHICH WERE INFUSED BY THE PARTNERS INTO THE APPELLANT FIRM FOR THE PRO JECT AND ADVANCES MADE TO THESE PERSONS BY THE ASSESSEE WERE TO RAISE CAPITAL FOR THE PURPOSE OF BUSINESS AND THESE TRANSACTIONS ARE NOT IN THE NATURE OF BUS INESS ADVANCES. THE LD. AR VEHEMENTLY CONTENDED THAT THE INTEREST PAYMENTS MAD E BY THE APPELLANT FIRM TO BANK OF MAHARASHTRA ALSO DO NOT APPEAR TO HAVE ANY NEXUS WITH THE MONEY ADVANCED AS ALL THE PAYMENTS ARE RELATED TO THE TER M LOAN FROM THE BANK FOR I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 29 VARIOUS PAYMENTS TO VARIOUS AUTHORITIES AND ALL THE RECEIPTS ARE FROM M/S ULTRA HOMES AS PARTNERS CONTRIBUTION TO THE APPELLANTS ON GOING PROJECTS. 33. THE LD. DR ALSO PLACED REJOINDER BY SUBMITTING THAT NO REMAND REPORT WAS CALLED BY THE LD. CIT(A) BEFORE GRANTING RELIEF TO THE ASSESSEE AND ASSESSEE CANNOT BE ALLOWED TO MAKE A NEW CASE DURING APPELLA TE PROCEEDINGS. 34. AT THE VERY OUTSET, WE OBSERVE THAT THE LD. CIT (A) GRANTED RELIEF FOR THE ASSESSEE WITH FOLLOWING OBSERVATIONS AND CONCLUSION S: 6.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E SUBMISSIONS MADE. FACTS ARE THAT THE APPELLANT FIRM HAS ADVANCED THE MONEY TO THESE PERSONS WHO ARE DIRECTO RS IN M/S ULTRA HOME CONSTRUCTION PVT. LTD. FUNDING FOR VARIO US PROJECTS OF THE AMRAPALI GROUP IS RAISED MAINLY FROM BANKS / FINANCIAL INSTITUTIONS, WHICH REQUIRE THAT THE DIRECTORS / PA RTNERS MUST ALSO GIVE PERSONAL GUARANTEES FOR THE LOANS AND FOR SUCH GUARANTEES THEY MUST THEMSELVES HAVE ADEQUATE ASSET S AND LIQUID FUNDS. M/S ULTRA HOME CONSTRUCTION PVT. LTD. IS THE FLAG- SHIP COMPANY OF AMRAPALI GROUP AND BANK FINANCE IS RAISED BY THIS COMPANY. THIS COMPANY IS ALSO MAJORITY PARTNER OF THE APPELLANT FIRM. FUNDS ARE INFUSED BY THE PARTNERS I NTO THE APPELLANT FIRM FOR THE PROJECT, WHICH IN TURN ADVAN CES MONEY TO THE DIRECTORS OF ULTRA HOME CONSTRUCTION PVT. LTD. SO THAT MORE FUNDS / FINANCES CAN BE RAISED AS THE PROJECT PROGR ESSES. THE ADVANCES MADE TO THESE PERSONS BY THE APPELLANT FIR M WERE TO RAISE CAPITAL FOR THE PURPOSE OF BUSINESS. THEREFOR E, THESE TRANSACTIONS ARE NOT IN THE NATURE OF LOAN BUT IN T HE NATURE OF BUSINESS ADVANCES. THE INTEREST PAYMENT MADE BY THE APPELLANT FIRM TO BANK OF MAHARASTRA ALSO DOES NOT APPEAR TO HAVE ANY NEXUS WITH THE MONEY ADVANCED AS ALL THE PAYMENTS A RE RELATED TO THE TERM LOAN FROM THE BANK OR VARIOUS PAYMENTS TO VARIOUS AUTHORITIES AND ALL THE RECEIPTS ARE FROM M/S ULTRA HOME AS PARTNERS CONTRIBUTION TO THE APPELLANTS ONGOING P ROJECT. I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 30 35. IN VIEW OF ABOVE, THE LD. AR HAS PLACED RELIANCE ON THE ORDER OF HONBLE HIGH COURT OF DELHI IN THE CASE OF TINBOX CO. 260 I TR 637 (DELHI) AND SUBMITTED THAT WHERE THE FIRM ADVANCED INTEREST FRE E FUNDS TO SISTER CONCERN, AND THERE ARE FINDINGS THAT CAPITAL OF FIRM AND INTERES T FREE UNSECURED LOANS EXCEEDED AMOUNTS ADVANCED TO SISTER CONCERN, THE DISALLOWANC E OF PART OF INTEREST ON BORROWED CAPITAL IS NOT JUSTIFIED. IN THE PRESENT CASE, THE A.O PROCEEDED TO MAKE ADDITION BY OBSERVING THAT THE ASSESSEE HAS NO T CHARGED INTEREST IN RESPECT OF ADVANCES OF RS. 21.48 LAC GIVEN TO THE PERSONS C LOSELY CONNECTED NOR ANY GOODS HAVE BEEN RECEIVED FROM THEM AND ON THE OTHER HAND, THE ASSESSEE HAS TAKEN HUGE INTEREST BEARING LOAN FROM BANK OF MAHAR ASHTRA AND HAS ALSO PAID RS. 3.17 CRORES THEREON. FURTHER, AFTER NOTING ABO VE FACTS, THE A.O PROCEEDED TO MAKE PROPORTIONATE DISALLOWANCE OF RS.1.71,85,440/- REDUCING THE INTEREST CLAIM OF THE ASSESSEE. 36. ON APPEAL BY THE ASSESSEE, THE LD. CIT(A) GRANT ED RELIEF WITH A CONCLUSION AND OBSERVATIONS AS REPRODUCED ABOVE. TH E LD. CIT(A) PLACING RELIANCE ON THE JUDGMENT OF HONBLE DELHI HIGH COUR T IN THE CASE OF SSP AVIATION LTD. VS DCIT (SUPRA) HELD THAT THE IMPUGN ED ADDITION BASED ON DISALLOWANCE OF INTEREST DOES NOT RELATE TO EMANATI NG FROM THE ALLEGATION OF SUPPRESSION OF SALES OR RECEIPT OF UNACCOUNTED CASH IN SALE OF FLATS. FURTHER, THE FIRST APPELLATE AUTHORITY ALSO NOTED THAT THE ADVAN CES MADE TO THESE PERSONS/ENTITIES BY THE ASSESSEE FIRM WERE TO RAISE CAPITAL FOR THE PURPOSE OF I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 31 BUSINESS AND ALSO THAT THESE TRANSACTIONS ARE NOT I N THE NATURE OF BUSINESS ADVANCES. THE LD. CIT(A) ALSO NOTED THAT THE INTER EST PAYMENT MADE BY THE ASSESSEE TO BANK OF MAHARASHTRA ALSO DOES NOT APPEA R TO HAVE ANY NEXUS WITH THE MONEY ADVANCED AS ALL PAYMENTS. IN THE LIGHT O F ABOVE NOTED FACTS, WHEN WE ANALYSE THE ACTION OF THE A.O. AND CONTENTIONS OF T HE LD. LD. DR, WE OBSERVE THAT AFORESAID OBSERVATIONS OF THE LD. CIT(A) HAVE NOT BEEN CONTROVERTED BY THEM. THIS VIEW ALSO FINDS SUPPORT FROM THE DICTA LAID DOWN BY HONBLE HIGH COURT IN THE CASE OF TIN BOX (SUPRA). ACCORDINGLY, WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH THE ORDER OF THE FIR ST APPELLATE AUTHORITY. THUS, GROUND NO. 3 OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED. GROUND NO.2 37. APROPOS GROUND NO. 2, WE HAVE HEARD ARGUMENTS O F BOTH THE SIDES AND CAREFULLY PERUSED THE MATERIAL PLACED ON RECORD BEF ORE US ON THIS ISSUE. THE LD. DR SUPPORTED THE ACTION OF THE A.O AND SUBMITTED TH AT THE ASSESSEE CLAIMED EXPENDITURE ON ACCOUNT OF PURCHASE FROM CERTAIN PAR TIES WHO WERE INVOLVED IN MERELY ISSUE OF PURCHASE BILLS EFFECTING THE PAYMEN TS THROUGH BANKING CHANNELS FOR COMMISSION NOT ACTUALLY SUPPORTED WITH PHYSICAL VERIFICATION OF GOODS. THE LD. DR ALSO POINTED OUT THAT SHRI A. K. SHARMA, DIR ECTOR OF GROUP COMPANY, M/S ULTRA HOMES IN HIS STATEMENT RECORDED ON 9/9/20 10, DURING SEARCH AND SEIZURE OPERATION, HAD AGREED TO SURRENDER HUGE AMO UNTS AND HENCE, WHEN THE ASSESSEE FAILED TO PRODUCE THE RELEVANT PARTY (SELL ER) TO PROVE THE GENUINENESS OF I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 32 ALLEGED PURCHASE, THE A.O WAS QUITE CORRECT IN MAKI NG ADDITION IN THIS REGARD. THE LD. DR VEHEMENTLY ARGUED THAT THE LD. CIT(A) GR ANTED RELIEF WITHOUT ANY BASIS HENCE IMPUGNED ORDER MAY BE SET ASIDE BY REST ORING THAT OF THE A.O. 38. REPLYING TO THE ABOVE, THE LD. COUNSEL OF THE A SSESSEE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE SUBMITTED ALL RELEVANT PURCHASE BILLS, FREIGHT BILLS AND DHARMA K ANTA WEIGH BILLS BUT THE A.O SIMPLY NOTED THAT THE ASSESSEE FAILED TO PRODUCE TH ESE ALLEGED VENDORS, HENCE HE PROCEEDED TO MAKE FURTHER ADDITION TREATING THE SAM E AS BOGUS PURCHASES WITHOUT ANY BASIS AND COGENT REASONING WHICH WAS RI GHTLY DELETED BY THE LD. CIT(A) ON THE BASIS OF PROPER APPRECIATION OF FACTS , DOCUMENTS AND CIRCUMSTANCES OF THE CASE. 39. FROM THE OPERATION PART OF THE FIRST APPELLATE ORDER, WE NOTE THAT THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE WITH FOLLOWIN G OBSERVATIONS AND CONCLUSION: 3.5 HOWEVER, SO FAR AS THE SECOND ASPECT OF THE M ATTER IS CONCERNED, WHETHER AO CAN TRAVEL BEYOND THE SATISFA CTION RECORDED, IN MY CONSIDERED VIEW THE PROVISION U/S 1 53C IS MORE AKIN TO THE PROVISIONS OF SECTION 147. THE ASS ESSMENT IS TO BE FRAMED ONLY WHEN THE AO COMES TO THE FINDING THAT THE MATERIAL FOUND BELONGING TO THE PERSON INDICATES OR ESTABLISHES INCOME THAT HAS NOT BEEN DISCLOSED IN THE TAX RETUR NS FILED. THIS IMPLIES THAT THE AO IS TO LIMIT HIS ACTION WIT HIN THE CONFINES OF THE MATERIAL FOUND. SECTION 153C DOES N OT PERMIT ROVING ENQUIRES NOR CONFERS OMNIBUS POWERS ON THE R EVENUE TO ASSESS OR REASSESS THE INCOME. WHEN THE FACT OR MAT ERIAL, THE BASIS ON WHICH THE PROCEEDING WAS INITIATED, IS VER IFIED AND DOES NOT LEAD TO THE CONCLUSION OF UNDISCLOSED INCO ME, THE I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 33 PROCEEDING HAS TO BE NECESSARILY CLOSED. IN THE VIE W 1 HAVE TAKEN ABOVE, I AM SUPPORTED BY HON'BLE DELHI HIGH C OURT IN SSP AVIATION LTD V. DC IT [2012] 346 UR 177 CITED B Y LD. AR ABOVE. THE AO HAD JURISDICTION TO INITIATE PROCEEDI NGS U/S 153C BUT HAVING VERIFIED THE MATERIAL BELONGING TO THE APPELLANT, AND NOT FINDING ANY UNDISCLOSED INCOME O N THAT BASIS, SHOULD HAVE CLOSED THE PROCEEDINGS. I HOLD ACCORDINGLY. 5.2 THE FACTS ARE THAT THE APPELLANT APPARENTLY PUR CHASED CERTAIN CONSTRUCTION MATERIALS FROM SHREE SARASWATI STEEL CENTRE, GHAZIABAD (TOR STEEL) AND LAXMI ENTERPRISES , GHAZIABAD (CEMENT). THE BILLS AND OTHER DOCUMENTS F OR THESE PURCHASES WERE PRODUCED BEFORE THE AO. THE PAYMENTS FOR THE PURCHASES WERE MADE BY THE APPELLANT FROM ITS BANK ACCOUNT WITH CORPORATION BANK (A/C NO.CBCA-27) AND BANK OF MAHARASTRA (CA-227) CREDITED TO THE BANK ACCOUNTS O F SHREE SARASWATI STEEL CENTRE (A/C NO.00191131000233) AND LAXMI ENTERPRISES (A/C NO.00191131000929) MAINTAINED WITH ORIENTAL BANK OF COMMERCE, WRIGHT GANJ, GHAZIABAD. THE ONLY REASON FOR THE REVENUE TO TREAT THESE TRANSACT IONS AS BOGUS IS THAT SHREE SARASWATI STEEL CENTRE, STATED TO BE RUNNING ITS BUSINESS FROM 50, MALI WARA GHAZIABAD ( LIP), WAS NOT FOUND AT THE SAID PREMISES AND THE PROPRIET OR OF LAXMI ENTERPRISES DID NOT PERSONALLY APPEAR (ALTHOUGH REP LY WAS FILED BY THE SAID CONCERN). THE REVENUE HAS ALSO LI NKED THESE TRANSACTIONS WITH AN ADMISSION MADE BY SH. ANIL SHA RMA, THE MANAGING DIRECTOR AND MAIN PERSON OF THE AMRAPALLI GROUP, DURING THE COURSE OF SEARCH THAT THE GROUP HAD ENGA GED IN UNSUBSTANTIATED PURCHASES AND HIS OFFER TO TAX OF U NDISCLOSED INCOME AMOUNTING TO RS.44,87,02,688/- ON THIS COUNT . 5.3 I HAVE CAREFULLY CONSIDERED THE CASE MADE OUT B Y THE REVENUE IN THE ASSESSMENT ORDER VIS-A-VIS THE SUBMI SSIONS OF THE APPELLANT AND THE DOCUMENTS PRODUCED BEFORE ME (ALSO PRODUCED BEFORE THE AO). ADMITTEDLY, ALL THE DOCUME NTS REQUIRED TO ESTABLISH THE PURCHASES WERE PRODUCED B Y THE APPELLANT BEFORE THE AO. HOWEVER, ON FAILURE OF THE APPELLANT TO PRODUCE SHREE SARASWATI STEEL CENTRE, THE REVENU E ISSUED TWO SUMMONS TO THE SAID PARTY TO ENFORCE ATTENDANCE , BUT THE SUMMONS WERE RETURNED BY POST WITH THE REMARK THAT THE FIRM HAD ''LEFT. THE APPELLANT WAS, THEREAFTER, AGAIN REQUIRED TO I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 34 PHYSICALLY PRODUCE THE PARTY FOR VERIFICATION AND U PON FAILURE TO DO SO THE REVENUE TREATED THE TRANSACTIONS AS BO GUS. HOWEVER, THE MOOT QUESTION HERE IS WHETHER IT WAS I N ORDER FOR THE REVENUE TO SUBSEQUENTLY REQUIRE THE APPELLANT T O PRODUCE THE PARTY FOR PHYSICAL VERIFICATION? THE REVENUE JU STIFIES THE ADVERSE VIEW IT HAS TAKEN FOR THE REASON THAT THE P ARTY HAD NOT BEEN FOUND AT THE GIVEN ADDRESS. THE APPELLANTS CL AIM ON THE OTHER HAND IS THAT IT IS NOT THE CASE THAT THE PART Y WAS NOT IN EXISTENCE BUT RATHER THE PARTY HAD LEFT THE PREMISE S AS EVIDENCED BY THE NOTING OF THE DEPARTMENT OF POSTS ON THE RETURNED SUMMONS. PRODUCTION OF THE DOCUMENTS EVIDE NCING THE TRANSACTIONS WAS IN ITSELF SUFFICIENT TO DISCHA RGE THE PRIMARY ONUS ON THE APPELLANT, AND THERE WAS NO OBL IGATION ON THE APPELLANT TO PHYSICALLY PRODUCE THE PARTY BEFOR E THE AO UNLESS SOME DEFECT HAD BEEN FOUND IN THE DOCUMENTAR Y EVIDENCE SO PRODUCED. THOUGH TECHNICAL RULES OF EVI DENCE ARE NOT STRICTLY APPLICABLE TO TAX PROCEEDINGS (DHAKESW ARI COTTON MILLS LTD. V. CIT [1954] 26 ITR 775 & DHAKESWARI CO TTON MILLS LTD. V. CIT [1955] 27 ITR 126 (SC)}, TAXING A UTHORITIES ARE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING A T THE DOCUMENTS PRODUCED BEFORE THEM AND THEY ARE TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY O F THE RECITALS MADE IN THOSE DOCUMENTS {CIT V. DURGA PRAS AD MORE [1971] 82 ITR 540 (SC)). THEREFORE, IN THE PRESENT CASE IT WAS NOT APPROPRIATE TO REQUIRE THE APPELLANT TO PRODUCE THE PARTY FOR PHYSICAL VERIFICATION WITHOUT FINDING ANY DEFEC T IN THE DOCUMENTARY EVIDENCE PRODUCED. FURTHER, NON APPEARA NCE OF THE PROPRIETOR OF LAXMI ENTERPRISES COULD NOT BE HE LD AGAINST THE APPELLANT UNLESS APPELLANT HAD BEEN PROVIDED WI TH THE OPPORTUNITY TO PRODUCE THE SAID PARTY, WHICH DOES N OT APPEAR TO HAVE BEEN DONE. FROM THE DOCUMENTS PRODUCED, IT IS SEEN THAT M/S SHREE SARASWATI STEEL CENTRE WAS DULY REGI STERED WITH THE VAT AUTHORITY HAVING TIN: 09190900301 AND CST N O, GD 5243336 AND VAT@ 4% WAS ALSO DEDUCTED ON THE SALES; AND M/S LAXMI ENTERPRISES WAS DULY REGISTERED WITH TIN: 09388805587 SINCE 01.12.2007 AND VAT @ 12.5% HAD BE EN CHARGED ON THE SALES. THE APPROPRIATE COURSE OF ACT ION WAS TO INFORM THE VAT AUTHORITIES ABOUT THE TAX DEDUCTED S O THAT THE DEPOSIT OF TAX COULD HAVE BEEN VERIFIED BY THEM. TH E AO OF THE SELLING PARTIES COULD HAVE ALSO BEEN INFORMED ABOUT THE SALES MADE AND WHETHER THESE HAD BEEN REFLECTED IN THE TA X RETURNS FILED AND TO TAKE ACTION IF NO RETURN HAD BEEN FILE D. IN ANY CASE, ADVERSE VIEW COULD STILL HAVE BEEN TAKEN AGAINST TH E APPELLANT I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 35 IF NEITHER THE VAT HAD BEEN DEPOSITED NOR THE SAID PARTIES FILED ANY INCOME-TAX RETURN. MOREOVER, THE BANK ACCOUNTS OF THE PARTIES, AVAILABLE WITH THE AO, COULD ALSO HAVE BEE N FURTHER INVESTIGATED. NONE OF THESE COURSES OF ACTION APPEA R TO HAVE BEEN TAKEN BY THE REVENUE. INSTEAD, ADDITION WAS MA DE FOR NON- PRODUCTION OF THE SAID PARTY. BUSINESS RELATIO N CAN BE TRANSACTION-BASED, AND IT IS NOT POSSIBLE FOR ANY B USINESS CONCERN TO PHYSICALLY PRODUCE ALL THE PARTIES WITH WHICH IT MAY HAVE HAD TRANSACTIONS IN THE PAST. THEREFORE, THE A DVERSE INFERENCE DRAWN BY THE REVENUE IS PRE-MATURE AND WI THOUT SOUND BASIS. 40. AT THE VERY OUTSET, WE NOTE THAT THE CIT(A) HAS FOL LOWED PROPOSITION LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT (SUPRA) I N THE CASE OF SSP AVIATION LTD. VS DCIT. WE FURTHER OBSERVE THAT AFTER DETAIL ED DISCUSSION ON THE DOCUMENTARY EVIDENCE OF THE ASSESSEE, THE LD. CIT(A ) RIGHTLY NOTED THAT IN THE EVENTUALITY WHEN ASSESSEE FAILED TO PRODUCE ALLEGED VENDORS, THE APPROPRIATE COURSE OF ACTION FOR A.O WAS TO INFORM VAT AUTHORIT IES ABOUT THE TAX SAID TO BE DEDUCTED BY THE SELLERS SO THAT THE DEPOSIT OF VAT TAX COULD HAVE BEEN VERIFIED BY THEM. SIMULTANEOUSLY, THE A.O OF THE VENDORS CO ULD HAVE ALSO BEEN INFORMED ABOUT THE SALES MADE AND TO VERIFY WHETHER THESE SALES HAD BEEN REFLECTED IN THEIR RESPECTIVE TAX RETURNS. THE LD. CIT(A) ALSO MENTIONS THAT THE A.O COULD ALSO HAVE INVESTIGATED BANK ACCOUNTS OF T HE PARTIES (VENDORS) AVAILABLE WITH HIM AND NONE OF THESE COURSES HAVE B EEN TAKEN BY THE A.O. THE FIRST APPELLATE AUTHORITY RIGHTLY CONCLUDED THAT IN STEAD OF ADOPTING SAID AVAILABLE COURSES, THE A.O PROCEEDED TO MADE DISALL OWANCE AND ADDITION FOR NON-PRODUCTION OF VENDORS PARTIES AND ADVERSE INFER ENCE DRAWN BY THE A.O WAS I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 36 PRE-MATURE AND WITHOUT ANY SOUND BASIS. THE LD. CI T(A) RIGHTLY CONCLUDED THAT U/S 153C OF THE ACT, THE A.O CANNOT TRAVEL BEYOND T HE SATISFACTION RECORDED AND THE IMPUGNED ADDITION BASED ON ALLEGED BOGUS PURCHA SES DOES NOT PERTAIN TO OR EMANATE FROM ALLEGATION OF SUPPRESSION OF SALES OR RECEIPT OF UNACCOUNTED CASH IN THE SALE OF FLATS. THIS VIEW ALSO FINDS SUPPORT FROM DICTA LAID DOWN BY HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS M GF AUTOMOBILES LTD. (SUPRA) AND PR. CIT VS KURELE PAPER MILLS. P. LTD (SUPRA). ACCORDINGLY, WE ARE UNABLE TO SEE ANY PERVERSITY OR ANY OTHER VALID REA SON TO INTERFERE WITH THE IMPUGNED ORDER AND THUS WE UPHOLD THE SAME ON THIS ISSUE OF ADDITIONS IN REGARD TO PURCHASES. ACCORDINGLY, GROUND NO. 2 OF THE REV ENUE FAILS. 41. IN THE RESULT, CROSS-OBJECTIONS OF THE ASSESSEE ARE ALLOWED AND APPEAL OF THE REVENUE ON BOTH THE GROUNDS IS DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 23. 11.15. SD/- SD/- (L.P. SAHU) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23RD NOVEMBER, 2015 GS I.T.A. 6205 & CO 150/D/14 ASSESSMENT YEAR 2009-10 37 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI