M/s. S3H Builders Pvt. Ltd., New Delhi V. ACIT, New Delhi

CO 183/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3457 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained expenditure; Search and seizure; Loose papers; Opportunity of being heard; Question of law; Cancellation of registration; Documents seized
• Section: 69C; 143(3); 153A; 68; 6; 132; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.NO.448/DEL./2016 ASSESSMENT YEAR 2009-2010 THE ACIT, CENTRAL CIRCLE - 17, ROOM NO.101, HALL NO.1, 1 ST FLOOR, ARA CENTRE, E-2, JHANDEWALAN.NEW DELHI. VS., M/S. S3H BUILDERS PVT. LTD., J-1/160, RAJOURI GARDEN, NEW DELHI. PAN AAMCS3772Q (APPELLANT) (RESPONDENT) C.O.NO.183/DEL./2016 ARISING OUT OF ITA.NO.448/DEL./2016 ASSESSMENT YEAR 2009-2010 M/S. S3H BUILDERS PVT. LTD., J-1/160, RAJOURI GARDEN, NEW DELHI. PAN AAMCS3772Q VS., THE ACIT, CENTRAL CIRCLE - 17, ROOM NO.101, HALL NO.1, 1 ST FLOOR, ARA CENTRE, E-2, JHANDEWALAN.NEW DELHI. (CROSS OBJECTOR) (RESPONDENT) FOR REVENUE : MS. RACHNA SINGH, CIT - D.R. FOR CROSS-OBJECTOR : SHRI SAJJAN KUMAR TULSIYAN, ADVOCATE MS. NISHA RACHH, C.A., SHRI KARAN KUMAR, C.A. DATE OF HEARING : 07.12.2017 DATE OF PRONOUNCEMENT : 0 1 .01.2018 2 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. ORDER PER BHAVNESH SAINI, J.M. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTIO N OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 09.11.2015, FOR THE A.Y. 2009-2010. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE AND SURVEY OPERATIONS UNDER SECTION 132/133A OF THE I.T. ACT WERE CONDUCTED ON 12 TH APRIL, 2012 IN THE CASE OF THE ASSESSEE ALONG WITH OTHER CASES OF ARYAN SAINIK GROUP AT VARIOUS RESIDE NTIAL AND BUSINESS PREMISES. THE A.O. ISSUED NOTICE DATED 06. 02.2015 UNDER SECTION 153C R.W.S.153A TO THE ASSESSEE AND IN RESP ONSE THERETO, ASSESSEE FILED RETURN OF INCOME DECLARING LOSS OF R S.58,423. THE A.O. AT THE ASSESSMENT STAGE DISALLOWED EXPENDITURE OF R S.55,923. THE A.O. ALSO FOUND THAT ASSESSEE HAD RECEIVED SHARE AP PLICATION MONEY AMOUNTING TO RS.1,25,00,000 FROM KOLKATA BASED COMP ANIES. THE A.O. AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, MADE THE ADDITION OF RS.1.25 CRORES ON ACCOUNT OF UNEXPLAINE D SHARE APPLICATION MONEY AND TREATED THE SAME AS UNEXPLAIN ED CASH CREDIT UNDER SECTION 68 OF THE I.T. ACT, 1961. THE A.O. PA SSED THE 3 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. ASSESSMENT ORDER DATED 30 TH MARCH, 2015 UNDER SECTION 143(3) R.W.S.153A/153C OF THE I.T. ACT, 1961. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A). THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED IN T HE APPELLATE ORDER. THE LD. CIT(A) FOUND THAT ASSESSEE HAS PROVE D THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLI CANTS BY SUBMITTING THEIR NAME, ADDRESS, PAN, BANK STATEMENT S AND BALANCE CONFIRMATIONS AND ITR/ACKNOWLEDGMENTS. IT WAS, THER EFORE, NOTED THAT ASSESSEE PROVED THE CONDITIONS OF SECTION 68 O F THE I.T. ACT. THE ADDITION OF RS.1.25 CRORES WAS DELETED AND APPEAL O F ASSESSEE ALLOWED. 4. THE REVENUE, IN ITS APPEAL, CHALLENGED THE DELE TION OF ADDITION OF RS.1.25 CRORES UNDER SECTION 68 OF THE I.T. ACT. THE ASSESSEE IN THE CROSS OBJECTION SUPPORTED THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION AS WELL AS RAISED THE ISSU E THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND NO MATERIAL WAS RECOVERED DURING THE COURSE OF SEARCH AND ORIGINAL ASSESSMENT HAD BEEN COMPLETED, THEREFORE, NO ADDITI ON IS WARRANTED AS PER THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT 4 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. VS. KABUL CHAWLA 61 TAXMANN.COM 412. THE ASSESSEE F ILED CROSS OBJECTION AND ALSO RAISED AN ADDITIONAL GROUND WHIC H READS AS UNDER: THAT THE IMPUGNED PROCEEDINGS U/S. 153C OF THE ACT INITIATED BY THE A.O. BEING DEVOID OF ANY INCRIMINATING MATERIAL IN TERMS OF THE RECENT DECISION OF THE HONBLE APEX COURT DATED 29.08.2017 IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY, (2017) TAX PUB (DT) 3941 84 TAXMANN.COM 290 (SC), IS BAD I N LAW. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SEARCH WAS CONDUCTED IN ARYAN SAINIK GROUP OF CASES AND AS SESSEE- COMPANY WAS NOT SUBJECTED TO SEARCH. THE A.O. MADE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT, UNDER SECTION 6 8 OF THE I.T. ACT , WHICH ARE RECORDED IN THE BOOKS OF ACCOUNT OF THE A SSESSEE-COMPANY. HE SUBMITTED THAT SINCE NO INCRIMINATING MATERIAL/D OCUMENTS WERE FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSES SEE-COMPANY AND IT IS NOT PROVED THAT ANY INCRIMINATING MATERIAL BE LONG TO THE ASSESSEE-COMPANY, THEREFORE, CONDITIONS OF SECTION 153C ARE NOT SATISFIED IN THIS CASE. HE HAS SUBMITTED THAT ADDIT IONAL GROUND IS LEGAL IN NATURE AND CAN BE DECIDED ON THE BASIS OF THE MATERIAL ALREADY BROUGHT ON RECORD, THEREFORE, THE SAME MAY BE ADMITTED FOR 5 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. HEARING AND DISPOSAL OF THE APPEAL. HE HAS RELIED U PON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY 84 TAXMAN.COM 290. 6. ON THE OTHER HAND, THE LD. D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND OBJECTED TO THE ADMISSION OF THE ADDITIONAL GROUND AT THIS STAGE. THE LD. D.R. SUBMITTED THAT I N GROUP CASES, DURING THE COURSE OF SEARCH MATERIAL WAS FOUND TO I NITIATE PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT AGAI NST THE ASSESSEE COMPANY. THEREFORE, A.O. CORRECTLY INITIATED THE PR OCEEDINGS UNDER SECTION 153C OF THE I.T. ACT. THE LD. D.R. SUBMITTE D THAT ASSESSEE FAILED TO PROVE IDENTITY, CREDITWORTHINESS AND GENU INENESS OF THE TRANSACTION. THEREFORE, ADDITION WAS CORRECTLY MADE BY THE A.O. 7. THE LEARNED COUNSEL FOR THE ASSESSEE IN THE REJ OINDER RELIED UPON THE SUBMISSIONS MADE BEFORE THE LD. CIT (A) AND SUBMITTED THAT ASSESSEE PRODUCED SUFFICIENT DOCUMEN TS BEFORE A.O. TO PROVE INGREDIENTS OF SECTION 68 OF THE I.T. ACT. THEREFORE, ADDITION WAS CORRECTLY DELETED BY THE LD. CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE R EVENUE DEPARTMENT MADE A CASE UNDER SECTION 153C OF THE I. T. ACT AGAINST 6 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. THE ASSESSEE ON THE BASIS OF THE SEARCH CONDUCTED I N ARYAN SAINIK GROUP OF CASES. ACCORDING TO SECTION 153C OF THE I. T. ACT, THE A.O. SHOULD BE SATISFIED THAT ANY MONEY, BULLION, JEWELL ERY OR OTHER ARTICLES OR THINGS OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED O R REQUISITIONED BELONGS OR BELONG TO THE PERSON OTHER THAN THE PERS ON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENT S OR ASSETS SEIZED ARE REQUISITIONED, SHALL BE HANDED-OVER TO T HE A.O. HAVING JURISDICTION OVER OTHER PERSON AND THAT A.O. SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR RE-ASSESS THE INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE I.T. ACT . 8.1. IT IS CLEAR FROM THE LANGUAGE OF SECTION 153C OF THE I.T. ACT THAT BEFORE ISSUING NOTICE UNDER SECTION 153C OF TH E I.T. ACT, THE PRIMARY CONDITION THAT HAS TO BE FULFILLED IS THAT THE MONEY, BULLION, DOCUMENTS ETC., SEIZED SHOULD BELONG TO SUCH OTHER PERSON. IF THIS CONDITION IS NOT SATISFIED, NO PROCEEDINGS COULD BE TAKEN UNDER SECTION 153C OF THE I.T. ACT. 8.2. IN THE PRESENT CASE, IT IS AN ADMITTED FACT T HAT SINCE NO SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE-CO MPANY AND THE 7 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. A.O. PROCEEDED TO MAKE ASSESSMENT UNDER SECTION 153 C OF THE I.T. ACT AGAINST THE ASSESSEE-COMPANY AND MADE THE ADDIT ION ON THE BASIS OF THE ENTRIES CONTAINED IN THE BOOKS OF ACCO UNT OF THE ASSESSEE- COMPANY CONSIDERED AT ASSESSMENT STAGE, IT WOULD HA VE TO BE SEEN WHETHER REVENUE HAS BROUGHT ON RECORD ANY MATERIAL TO PROVE THAT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH BELONGS TO THE ASSESSEE-COMPANY OR THAT WHETHER A.O. IS ABL E TO SATISFY THE CONDITIONS OF SECTION 153C OF THE I.T. ACT, IN THE PRESENT CASE. THE ADDITIONAL GROUND IS LEGAL IN NATURE AND ALL THE RE LEVANT FACTS AND MATERIAL ARE AVAILABLE IN THE ORDERS OF THE AUTHORI TIES BELOW AND ON RECORD. THE ADDITIONAL GROUND BEING LEGAL IN NATURE AND GOES TO THE ROUTE OF THE MATTER, THEREFORE, IT SHOULD BE ADMITT ED FOR THE PURPOSE OF DISPOSAL OF THE APPEAL. IN SUPPORT OF OUR VIEW, WE RELY UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F NATIONAL THERMAL POWER COMPANY REPORTED IN 229 ITR 383 AND A LSO ANOTHER DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY (2017) 397 ITR 344 (SC) IN WHICH THE HONBLE SUPREME COURT HELD AS UNDER : 8 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. HELD, DISMISSING THE APPEALS, (I) THAT THE TRIBUNAL PERMITTED THE ASSESSEE TO RAISE THE ADDITIONAL GROU ND ON THE GROUND THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FACTS ALREADY ON RECORD, THAT UNDER SECTIO N 153C OF THE ACT, INCRIMINATING MATERIAL WHICH WAS SEIZED HA D TO PERTAIN TO THE ASSESSMENT YEARS IN QUESTION, AND TH AT THE DOCUMENTS WHICH WERE SEIZED DID NOT ESTABLISH ANY C O- RELATION, DOCUMENT-WISE, WITH THESE FOUR ASSESSMENT YEARS. THE TRIBUNAL FOUND THAT THE MATERIAL DISCLOSED IN T HE SATISFACTION NOTE BELONGED TO ASSESSMENT YEAR 2004- 05 OR THEREAFTER. THE TRIBUNAL RIGHTLY PERMITTED THIS ADD ITIONAL GROUND TO BE RAISED AND CORRECTLY DEALT WITH THE GR OUND ON THE MERITS AS WELL. THE HIGH COURT WAS RIGHT IN AFF IRMING THIS VIEW OF THE TRIBUNAL. DECISION OF THE BOMBAY HIGH COURT IN CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY [2015] 378 ITR 84 (BOM) AFFIRMED. (II) THAT THE ASSESSMENT ORDER PASSED BY THE ASSESS ING OFFICER COVERED EIGHT ASSESSMENT YEARS. FOR SIX ASS ESSMENT 9 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. YEARS THE ASSESSMENT WAS UNDE R SECTION 153C OF THE ACT. THE ASSESSMENT ORDER WAS SET ASIDE ONLY IN RESPECT OF FOUR OF THOSE ASSESSMENT YEARS AND ON A TECHNICAL GROUND . THE OBJECTION PERTAINING TO THE FOUR ASSESSMENT YEARS I N QUESTION DID NOT RELATE TO THE OTHER TAX ASSESSMENT YEARS, NAMELY, 2004-05 AND 2005-06. NOR DID THIS DECISION HAVE A BEARING IN RESPECT OF ASSESSMENT FOR ASSESSMENT Y EAR 1999-2000 OR ASSESSMENT YEAR 2006-07. THE NECESSARY CONSEQUENCE WOULD BE THAT THE CONCLUSIONS OF THE AS SESSING OFFICER IN HIS ASSESSMENT ORDER REGARDING THE ACTIV ITIES OF THE TRUST NOT BEING GENUINE AND NOT CARRIED OUT IN ACCORDANCE WITH THE TRUST DEED OR CANCELLATION OF REGISTRATION, DENIAL OF BENEFITS OF SECTIONS 11 AND 12 WOULD NOT BE AFFECTED BY THIS JUDGMENT. 8.3. CONSIDERING THE FACTS OF THE CASE IN THE LIGH T OF ABOVE DECISIONS, IT IS CLEAR THAT ADDITIONAL GROUND BEING LEGAL IN NATURE AND ALL MATERIAL FACTS ARE AVAILABLE ON RECORD AND IT B EING THE JURISDICTIONAL ISSUE, WE ADMIT THE ADDITIONAL GROUN D FOR THE PURPOSE OF HEARING AND DISPOSAL OF APPEAL. 10 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. 9. THE HONBLE GUJRAT HIGH COURT IN THE CASE OF VI JAYBHAI N. CHANDRANI VS. ACIT (2011) 333 ITR 436 (GUJ.) HELD A S UNDER : SECTIONS 153A, 153B AND 153C OF THE INCOME-TAX ACT , 1961, LAY DOWN A SCHEME FOR ASSESSMENT IN CASE OF S EARCH AND REQUISITION. SECTION 153C WHICH IS SIMILARLY WO RDED TO SECTION 158BD OF THE ACT, PROVIDES THAT WHERE THE A SSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWEL LERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A HE SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND IS SUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INC OME OF SUCH OTHER PERSON. HOWEVER, THERE IS A DISTINCTION BETWEEN THE TWO PROVISIONS INASMUCH AS UNDER SECTION 153C N OTICE CAN BE ISSUED ONLY WHERE THE MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG TO SUCH OT HER PERSON, WHEREAS UNDER SECTION 158BD IF THE ASSESSIN G OFFICER WAS SATISFIED THAT ANY UNDISCLOSED INCOME B ELONGS 11 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT T O WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS WERE REQUISITI ONED UNDER SECTION 132A, HE COULD PROCEED AGAINST SUCH O THER PERSON UNDER SECTION 158BC. THUS A CONDITION PRECED ENT FOR ISSUING NOTICE UNDER SECTION 153C AND ASSESSING OR REASSESSING INCOME OF SUCH OTHER PERSON, IS THAT TH E MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHO ULD BELONG TO SUCH PERSON. IF THE REQUIREMENT IS NOT SA TISFIED, RECOURSE CANNOT BE HAD TO THE PROVISIONS OF SECTION 153C. HELD, ALLOWING THE PETITION, THAT ADMITTEDLY, THE T HREE LOOSE PAPERS RECOVERED DURING THE SEARCH PROCEEDINGS DID NOT BELONG TO THE PETITIONER. IT WAS NOT THE CASE OF TH E REVENUE THAT THE THREE DOCUMENTS WERE IN THE HANDWRITING OF THE PETITIONER. IN THE CIRCUMSTANCES, WHEN THE CONDITIO N PRECEDENT FOR ISSUANCE OF NOTICE WAS NOT FULFILLED ACTION TAKEN UNDER SECTION 153C OF THE ACT STOOD VITIATED. 12 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. 10. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF C IT VS. LAVANYA LAND PVT. LTD., (2017) 397 ITR 246 (BOM.) H ELD AS UNDER : IT IS CLEAR THAT BEFORE ISSUING NOTICE UNDER SECTI ON 153C OF THE INCOME-TAX ACT , 1961, THE PRIMARY CONDITION THAT HAS TO BE FULFILLED IS THAT THE MONEY, BULLION, DOCUMENTS, ETC., SEIZED SHOULD BELONG TO SUCH OTHER PERSON. IF THIS CONDITION IS NOT SATISFIED, NO PROCEEDINGS COULD BE TAKEN UND ER SECTION 153C. THE JC GROUP WAS A PARTNER IN THE MUMBAI SPECIAL ECONOMIC ZONE AND NAVI MUMBAI SPECIAL ECONOMIC ZONE PROJECTS OF INDIA. THIS GROUP HAD FLOATED VARIOUS C OMPANIES TO PURCHASE LARGE CHUNKS OF LAND IN THE VICINITY OF THE SPECIAL ECONOMIC ZONES. THE GROUP'S REAL ESTATE OPERATIONS WERE BEING HANDLED BY V, G AND D. D WAS ALSO THE MANAGIN G LAND TRANSACTIONS OUTSIDE THE MUMBAI SPECIAL ECONOM IC ZONE. THE ASSESSEE WAS ONE OF THE COMPANIES FLOATED BY THIS GROUP TO PURCHASE LAND OUTSIDE THE MUMBAI SPEC IAL ECONOMIC ZONE. DURING SEARCH OF D'S RESIDENCE, CERT AIN INCRIMINATING DOCUMENTS WERE SEIZED AND HIS STATEME NT 13 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. WAS RECORDED. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE INFORMING IT THAT RS. 38.45 CRORES, WHICH WAS A SUM REFLECTED FROM THE DOCUMENTS SEIZED FROM D'S RE SIDENCE AND RS. 4 CRORES IN ADDITION, WHICH WAS EVIDENCED B Y LOOSE DOCUMENTS IN THE FORM OF CASH RECEIPTS, WERE FOUND DURING SEARCH AND SEIZURE PROCEEDINGS. THE ASSESSEE WAS CA LLED UPON TO EXPLAIN AND SHOW CAUSE WHY THESE AMOUNTS SH OULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE UNDER SEC TION 69C OF THE ACT, SINCE THE ASSESSEE DID NOT PROVIDE ANY EXPLANATION WITH REGARD TO THE DOCUMENTS SEIZED UND ER SECTION 132 OF THE ACT FOR THE ASSESSMENT YEARS FRO M 2003 TO 2009 AND 2009-10. THE ASSESSMENT ORDER WAS PASSE D AND THE ADDITIONS WERE MADE. THE UNEXPLAINED EXPEND ITURE WAS APPORTIONED TO ALL THE LAND COMPANIES FLOATED B Y THE JC- GROUP. THE TRIBUNAL HELD THAT AN ENTRY IN THE H OOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE OF BUSINESS IS RELEVANT FOR THE PURPOSE OF CONSIDERING THE NATURE AND IMPACT OF A TRANSACTION, BUT NOTINGS ON SLIPS OF PA PER OR LOOSE SHEETS OF PAPER WERE REQUIRED TO BE SUPPORTED OR 14 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. CORROBORATED BY OTHER EVIDENCE. THERE WAS A DISTINC TION BETWEEN LOOSE PAPERS FOUND FROM THE POSSESSION OF T HE ASSESSEE AND SIMILAR DOCUMENTS FOUND FROM A THIRD P ERSON. THE DOCUMENTS WERE NOT FOUND FROM THE POSSESSION OF THE ASSESSEE BUT FROM THE POSSESSION OF A THIRD PERSON I.E., D. MERE MENTION OF THE NAMES OF THE VILLAGES WHERE THE COMPANIES MIGHT HAVE PURCHASED LANDS WOULD NOT GIVE ANY BASIS TO ASSUME, PRESUME OR SURMISE THAT THE NAMES OF THE COMPANIES WERE MENTIONED IN THE DOCUMENTS. THE TRIB UNAL SET ASIDE THE ORDER OF THE COMMISSIONER (APPEALS) PERTAINING TO THE ASSESSMENT YEAR 2008-09 HOLDING T HAT THE ACTION UNDER SECTION 153C OF THE ACT WAS BAD IN LAW . ON APPEAL : HELD , DISMISSING THE APPEAL, THAT THE FINDING THAT SECTION 153C WAS NOT ATTRACTED AND ITS INVOCATION W AS BAD IN LAW WAS NOT BASED JUST ON INTERPRETATION OF SECT ION 153C BUT AFTER HOLDING THAT THE INGREDIENTS THEREOF WERE NOT SATISFIED IN THE PRESENT CASE. THAT WAS AN EXERCISE CARRIED OUT BY THE TRIBUNAL AS THE LAST FACT FINDING AUTHOR ITY. 15 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. THEREFORE, THE FINDING WAS A MIXED ONE. THERE WAS N O SUBSTANTIAL QUESTION OF LAW ARISING FROM SUCH AN OR DER WHICH ALTERNATIVELY CONSIDERED THE MERITS OF THE CA SE AS WELL. THE DELETION OF THE ADDITION WAS JUSTIFIED. 11. THE HONBLE MADRAS HIGH COURT IN THE CASE OF C IT VS. LATE J. CHANDRASEKAR (HUF) (2011) 338 ITR 61 (MAD.) HELD AS UNDER : ON THE SEARCH CONDUCTED IN THE CASE OF A AND GROUP ON NOVEMBER 25, 2003 , MATERIAL PERTAINING TO 'ON-MONEY' PAYMENT PAID TO THE ASSESSEE IN RESPECT OF PROPERTY PURCHAS ED FROM THE ASSESSEE WERE SEIZED. BASED ON THAT, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153C OF THE INCOME-TAX ACT, 1961, AND REWORKED THE CAPITAL GAINS. THE COMMISSIONER (A PPEALS) AND THE TRIBUNAL HELD THAT THE NOTICE UNDER SECTION 153 C WAS NOT VALID. ON APPEAL TO THE HIGH COURT : HELD, DISMISSING THE APPEALS, THAT THE ASSESSING OF FICER DID NOT HAVE THE BENEFIT OF THE SEIZED MATERIAL WHILE I SSUING THE NOTICE UNDER SECTION 153C. IN THE LIGHT OF THE FACT THAT T HE REVENUE DID NOT PRODUCE ANY MATERIAL TO SHOW THAT THE MATERIALS WERE AVAILABLE AT THE HANDS OF THE ASSESSING OFFICER AT THE TIME OF 16 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. ISSUING NOTICE, THE TRIBUNAL RIGHTLY CAME TO THE CO NCLUSION THAT HE ASSUMPTION OF JURISDICTION UNDER SECTION 153C WAS N OT VALID. 12.. THE ITAT, AGRA BENCH IN THE CASE OF ACIT, CIR CLE-I, GWALIOR VS. GLOBAL ESTATE (2013) 142 ITD 740 (AGRA) HELD AS UNDER : THE ASSESSEE HAD A CASE FOR QUASHING OF PROCEEDINGS UNDER SECTION 153C. NO MATERIAL IS PRODUCED TO PROVE THAT THE ASSESSING OFFICER IN THE CASE OF PERSON SEARCHED WA S SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THINGS OR BOOKS OF ACCOUNT OR D OCUMENTS SEIZED OR REQUISITIONED BELONGS TO OR BELONG TO A P ERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. NO MATERIAL IS PRODUCED BEFORE TO SHOW IF ANY SATIS FACTION WAS RECORDED BY THE ASSESSING OFFICER IN THAT CASE THAT THE MATERIAL BELONGS TO ANY PERSON OTHER THAN THE PERSO N WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132. DEPARTMENT DID NOT PRODUCE ANY MATERIAL TO SHOW IF ANY SUCH SATISFACTION AS REQUIRED UNDER SECTION 153C WA S RECORDED BY THE ASSESSING OFFICER IN THE CASE OF PE RSON 17 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. SEARCHED. NO MATERIAL IS PRODUCED IN REFERENCE TO A BOVE REQUIREMENT. NO MATERIAL IS ALSO PRODUCED BEFORE TO SHOW THAT BO OKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED HAD BEEN HAND ED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION O VER SUCH OTHER PERSON. IN THE ABSENCE OF ANY ADEQUATE MATERI AL PRODUCED BY THE DEPARTMENT CONTENTION OF THE ASSESS EE WAS JUSTIFIED THAT IN THIS CASE, THE ASSESSING OFFICER HAD NOT RECORDED ANY SATISFACTION THAT ANY SEIZED DOCUMENT OR MATERIAL BELONGS TO ANY PERSON OTHER PERSON SEARCHE D. SINCE THE REVENUE IS IN APPEAL, THEREFORE, BURDEN W AS UPON THEM TO PROVE THAT NECESSARY INGREDIENTS OF SECTION 153C HAVE BEEN COMPLIED WITH IN THIS CASE BEFORE INVOKIN G JURISDICTION UNDER SECTION 153C. IT IS ADDED FURTHER HERE THAT THE ASSESSING OFFICER HAS NOT REFERRED TO ANY SEIZED DOCUMENT OR MATERIAL IN THE ASSESSMENT ORDERS ON THE BASIS OF WHICH, ADDITIONS ON MERIT HAVE BEEN MADE. THEREFORE, THE CONDITIONS OF SECTIO N 153C AS NOTED ABOVE ARE ALSO NOT SATISFIED IN THIS CASE. THEREFORE, 18 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. THERE IS NO INFIRMITY IN THE ORDER OF THE COMMISSIO NER (APPEALS) IN QUASHING THE PROCEEDINGS UNDER SECTION 153C. 13. IN THE PRESENT CASE, IS AN ADMITTED FACT THAT NO RECOVERY HAS BEEN MADE FROM THE POSSESSION OF THE ASSESSEE-C OMPANY. THE DEPARTMENTS BELIEF IS THAT SOME MATERIAL FOUND DUR ING THE COURSE OF SEARCH IN ARYAN SAINIK GROUP OF CASES. THE A.O. ON EXAMINING THE BOOKS OF ACCOUNT OF THE ASSESSEE-COMPANY FOUND THAT ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY OF RS.1.25 CRORES IN ASSESSMENT YEAR UNDER APPEAL WHICH WERE ALREADY DISCLOSED TO T HE REVENUE DEPARTMENT PRIOR TO THE DATE OF SEARCH. THEREFORE, ITS BOOKS OF ACCOUNT COULD NOT BE TREATED AS INCRIMINATING MATER IAL AGAINST THE ASSESSEE-COMPANY. NO EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH THAT ANY MONEY (CASH CREDIT) BELONGS TO THE ASSESSEE- COMPANY. NO EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH OR OTHERWISE TO PROVE THAT ASSESSEE-COMPANY HAS RECEIV ED ANY ACCOMMODATION ENTRY. THE A.O. HAS NOT REFERRED TO A NY SEIZED DOCUMENT OR MATERIAL IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH, ADDITION ON MERIT HAVE BEEN MADE. THEREFORE, THE CO NDITIONS OF SECTION 153C ARE NOT SATISFIED IN THIS CASE. THEREF ORE, THERE WERE NO 19 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. JUSTIFICATION FOR THE A.O. TO MAKE ADDITION OF RS.1 .25 CRORES AGAINST THE ASSESSEE IN PROCEEDING UNDER SECTION 153C OF TH E I.T. ACT, 1961. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHOR ITIES BELOW AND QUASH THE PROCEEDINGS UNDER SECTION 153C OF THE I.T . ACT. SINCE, WE QUASH THE PROCEEDINGS UNDER SECTION 153C OF THE ACT , THEREFORE, THERE IS NO NEED TO DECIDE THE ADDITION ON MERIT, WHICH H AVE ALREADY DELETED BY THE LD. CIT(A). 14. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AND DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 1 ST JANUARY, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH 6. GUARD FILE 20 ITA.NO.448/DEL./2016 & CO.NO.183/DEL./2016 M/S. S3B BUILDERS PVT. LTD., NEW DELHI. //BY ORDER// ASST. REGISTRAR : ITAT : DELHI BENCHES : DELHI.