M/s. Ridgeview Construction Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 72/DEL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4361 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 20-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Invalid notice; Search and seizure; Document seized; Documents seized
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D.AGRAWAL, HONBLE VICE PRESIDENT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-3595/DEL/2015 ( ASSESSMENT YEAR: 2004-05) DCIT CENTRAL CIRCLE-18, ROOM NO. 327, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI VS RIDGEVIEW CONSTRUCTION PVT. LTD. H-69, UGF, CONNAUGHT PLACE NEW DELHI PAN : AABCR7683Q C.O. NO.-71/DEL/2016 (ITA NO. 3595/DEL/2015) ( ASSESSMENT YEAR: 2004-05) RIDGEVIEW CONSTRUCTION PVT. LTD. H-69, UGF, CONNAUGHT PLACE NEW DELHI PAN : AABCR7683Q VS DCIT CENTRAL CIRCLE-18, ROOM NO. 327, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI ITA NO. 3596/DEL/201 5 (ASSESSMENT YEAR : 2005 -06) DCIT CENTRAL CIRCLE-18, ROOM NO. 327, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI VS RIDGEVIEW CONSTRUCTION PVT. LTD. H-69, UGF, CONNAUGHT PLACE NEW DELHI PAN : AABCR7683Q C.O. NO. 72/DEL/2016 (ITA NO. 3596/DEL/2015) (ASSESSMENT YEAR : 2005- 06) 2 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) RIDGEVIEW CONSTRUCTION PVT. LTD. H-69, UGF, CONNAUGHT PLACE NEW DELHI PAN : AABCR7683Q VS DCIT CENTRAL CIRCLE-18, ROOM NO. 327, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI APPELLANT RESPONDENT ASSESSEE BY : SH. GAUTAM JAIN, ADV. & SH. PIYUS H KUMAR KAMAL, ADV. REVENUE BY : SMT. APARNA KARAN, CIT(DR) ORDER PER SUDHANSHU SRIVASTAVA, JM: ITA NO. 3595/DEL/2015 HAS BEEN PREFERRED BY THE DEP ARTMENT AGAINST THE ORDER DATED 27.3.2015 PASSED BY THE LD. CIT (APPEALS) - 29, NEW DELHI FOR AY 2004-05. ITA NO. 3596/DEL/2015 HAS ALSO BEEN PREFERRED BY THE DEPARTMENT AGAINST THE ORDER DATED 30.3.2015 PASSED BY THE LD. CIT (APPEALS)- 29, NEW DELHI FOR AY 2005-06. CO NOS. 71/DEL/2016 AND 72/DEL/2016 ARE THE CROSS OBJE CTIONS PREFERRED BY THE ASSESSEE FOR AY 2004-05 AND 2005-0 6 RESPECTIVELY. BOTH THE APPEALS AND THE CROSS OBJECTIONS WERE HEAR D TOGETHER AND THEY ARE BEING DISPOSED OF THROUGH THIS COMMON ORDE R FOR THE SAKE OF CONVENIENCE. 2.0 THE BRIEF FACTS FOR AY 04-05 ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (IN S HORT THE ACT) WAS DATE OF HEARING 08.10.2018 DATE OF PRONOUNCEMENT 31.10.2018 3 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) CARRIED OUT ON 5.1.2009 IN M/S TANEJA-PURI GROUP OF CASES IN VARIOUS PREMISES. DURING THE COURSE OF SEARCH, SOME DOCUME NTS BEARING THE NAME OF THE ASSESSEE WERE FOUND FROM THE PREMISES C OVERED U/S 132(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS CENT RALIZED IN CENTRAL CIRCLE-18, DELHI ALONG WITH SOME OTHER GROUP CASES. NOTICE U/S 153C WAS ISSUED TO THE ASSESSEE ON 26.10.2010. IN RESPO NSE TO THIS NOTICE, RETURN DECLARING TOTAL INCOME AT RS NIL WAS FILED O N 19.11.2010. ORIGINAL RETURN IN THIS CASE WAS FILED ON 4.2.2005 DECLARING TOTAL INCOME AT RS. NIL. AS PER INFORMATION FURNISHED, TH E ASSESSEE COMPANY WAS INCORPORATED ON 3.4.1998 AND IT WAS PRO MOTED TO CARRY ON THE BUSINESS OF DEVELOPMENT OF REAL ESTATE. THE ASSESSEE COMPANY HAD DECLARED TO HAVE RECEIVED AN AMOUNT OF RS. 3,81 ,50,000/- FROM M/S CUBIC COMMERCIAL RESOURCES LTD. AND RS. 2,30,00 ,000/- FROM M/S OPTIMUM CREDITS (P) LTD. DURING THE YEAR. THES E AMOUNTS WERE SHOWN AS OUTSTANDING LIABILITY IN THE FORM OF ADVAN CES RECEIVED. THUS, TOTAL AMOUNT RECEIVED FROM THESE TWO COMPANIE S DURING THE YEAR WAS RS. 6,11,50,000/-. THE ASSESSMENT WAS COM PLETED VIDE ORDER DATED 31.12.2010 U/S 153C/143(3) OF THE ACT AT A TOTAL INCOME OF RS. 6,11,50,000/- AFTER MAKING AN ADDITION OF RS . 6,11,50,000/- U/S 68 OF THE ACT. 4 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 2.1 THE ASSESSEE-COMPANY CHALLENGED THE AFORESAID ADDIT ION BEFORE LD. CIT (A) AS WELL AS CHALLENGED THE ASSUMP TION OF JURISDICTION UNDER SECTION 153C OF THE I.T. ACT. BEFORE THE LD. CIT (A), THE ASSESSEE-COMPANY SUBMITTED THAT NO VALID SATISFACTI ON HAS BEEN RECORDED PRIOR TO THE INITIATION OF PROCEEDINGS U/S 153C OF THE ACT. THE ASSESSEE- COMPANY RELIED UPON SEVERAL DECISIONS OF THE TRIBUNAL/ HIGH COURT IN SUPPORT OF ITS CONTENTION. THE LD. C IT (A) AFTER CONSIDERING THE SATISFACTION NOTE, MATERIAL ON RECO RD AS WELL AS THE SUBMISSIONS OF THE ASSESSEE-COMPANY AND THE VARIOUS JUDGMENTS OF THE HON'BLE DELHI HIGH COURT HELD THAT THE ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT WAS NOT VALID AND ACCORDING LY, QUASHED THE SAME. THE RESULTANT ADDITIONS WERE ACCORDINGLY, DEL ETED. 2.2 AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE US IN ITA NO. 3595/DEL/2015 AND THE GROUNDS RAISED BY THE REVENUE RAISED ARE AS UNDER: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING TH E PROCEEDINGS U/S 153C OF THE I.T. ACT, 1961 AS INVALID. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS BY HOLDING PR OCEEDINGS INITIATED U/S 153C OF THE I.T. ACT, 1961 AS INVALID ON THE GROUND THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH PERTAINING THE YEARS IN WHICH THE ADDITION HAS BEEN MADE. 5 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 3. THE ORDER OF THE CIT (A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 2.3 IN AY 2005-06, THE ASSSESSEE HAD FILED RETURN DECLARING INCOME AT RS. NIL AND THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED AT AN INCOME OF RS. 65,19,000/- AFTER MAK ING CERTAIN ADDITIONS. THEREAFTER, SUBSEQUENT TO THE SEARCH THE ASSESSMENT WAS COMPLETED U/S 153C OF THE ACT AT AN INCOME OF RS. 6 ,29,65,510/- AFTER MAKING ADDITIONS U/S 68. THE ASSESSEES APPEA L AGAINST THIS ASSESSMENT WAS ALSO ALLOWED BY THE LD. CIT (A) ON I DENTICAL FINDING THAT IN ABSENCE OF A VALID SATISFACTION, THE 153C P ROCEEDINGS WERE TO BE QUASHED. ITA NO. 3596/DEL/2015 IS THE DEPARTMENT S APPEAL FOR ASSESSMENT YEAR 2005-06 AND THE GROUNDS RAISED BY T HE REVENUE ARE IDENTICAL TO GROUNDS RAISED IN THE APPEAL FOR ASSES SMENT YEAR 2004-05 AS THE ISSUE IS ALSO IDENTICAL. 2.4 THE CROSS-OBJECTIONS FILED BY THE ASSESSEE FOR BOTH THE YEARS SUPPORT THE ORDER OF THE LD. CIT (A). 3.0 THE LD. CIT DR RELIED UPON THE ORDER OF THE A. O. AND SUBMITTED THAT PROCEEDINGS UNDER SECTION 153C CANNO T BE INVALIDATED 6 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) MERELY BECAUSE THE A.O. OF THE SEARCHED PERSON WHO WAS ALSO THE AO OF THE ASSESSEE, DID NOT RECORD A SEPARATE SATISFAC TION. IT WAS SUBMITTED THAT THE LD. CIT (A) CANNOT DECLARE THE S ATISFACTION AS INVALID ON HYPER TECHNICAL GROUND OF INCORRECT TERM INOLOGY USED IN THE NOTE. THE LD. CIT DR ALSO RELIED UPON THE FOLLOWING DECISIONS: 1. 346 ITR 177 (DEL) IN SSP AVIATION LTD. VS. DCIT 2. 76 TAXMANN.COM 311 (GUJ) IN RAJESH SUNDERDAS VAS WANI V. ACIT 3. 393 ITR 597 (DEL) IN PCIT V. SUMER MALLS (P) LTD . 4.0 THE LEARNED AR RELIED ON THE JUDGMENT OF THE H ONBLE APEX COURT IN THE CASE OF CIT VS. SINGHAD TECHNICAL EDUC ATION SOCIETY REPORTED IN 397 ITR 344 AND THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PR. CIT V. INDEX SECURITIES (P ) LTD. IN ITA NOS. 566/2017, 567/2017, 568/2017, 569/2017, 270/2017 AN D 571/2017 REPORTED IN 157 DTR 20 AND, WHILE SUPPORTI NG THE ORDERS OF THE LD. CIT (A), VEHEMENTLY ARGUED THAT THE LD. CIT (A) HAD RIGHTLY QUASHED THE PROCEEDINGS INITIATED U/S 153C OF THE A CT. 5.0 WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. IN THE INSTANT CASE, THE PROCEEDINGS WERE INITIATED UNDER SECTION 153C OF TH E ACT BY RECORDING A SATISFACTION NOTE WHICH READS AS UNDER: 7 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) SATISFACTION NOTE U/S 153C OF THE I.T. ACT, 1961 I N THE CASE OF M/S RIDGEVIEW CONSTRUCTION (P) LTD PAN NO. AAABCR7683Q A.Y. 2003-04 TO 2008-09 26.10.2010 A SEARCH & SEIZURE OPERATION U/S 132(1) OF THE INCOME TAX ACT WAS CARRIED OUT ON 5.1.2009 AT VARIO US BUSINESS AND RESIDENTIAL PREMISES OF M/S TANEJA-PURI GROUP O F CASES. DURING THE COURSE OF SEARCH AT 9, K. G. MARG, NEW D ELHI THE RESIDENCE OF SHRI RAVINDER KUMAR TANEJA AND VARIOUS OFFICES PREMISES OF TDI GROUP OF COMPANIES, CERTAIN INCRIMI NATING DOCUMENTS WERE FOUND AND SEIZED. THESE DOCUMENTS A LSO INCLUDED A COPY OF PROVISIONAL BALANCE SHEET AS ON 30.9.2005 OF M/S RIDGEVIEW DEVELOPERS PVT. LTD. MARKED AS PAGES 75 TO 77, ANNEXURE A-2 OF PARTY A-2. THE COMPANY M/S RIDGEVI EW CONSTRUCTION PVT. LTD. IS CLOSELY ASSOCIATED WITH T HE TANEJA-PURI GROUP OF CASES AS THE DIRECTORS/SHARE HOLDERS OF TH IS COMPANY ARE CLOSELY RELATED TO THE DIRECTORS/SHAREHOLDERS OF TH E SEIZED DOCUMENTS MARKED AS PAGES 75 TO 77, ANNEXURE A-2 OF PARTY A-2 BELONG TO M/S RIDGEVIEW CONSTRUCTIONS PVT. LTD. IN VIEW OF THE ABOVE FACTS, I AM SATISFIED THAT THE BOOKS OF ACCOUNTS AND DOCUMENTS BELONGING TO THE ASSESSEE CO MPANY HAVE BEEN FOUND AND SEIZED DURING THE COURSE OF SEARCH U /S 132(1) OF THE INCOME TAX ACT, 1961 CARRIED OUT AT 9, K. G. MA RG, NEW DELHI, THE RESIDENCE OF SHRI RAVINDER KUMAR TANEJA AND OFF ICE PREMISES OF VARIOUS TDI GROUP OF COMPANIES IN THE LIGHT OF THE ABOVE, I AM SATISFIED THAT THE ABOVE CASE IS A FIT CASE FOR ISSUING NOTICE U/S 153C OF THE INCOME TAX ACT, 1961 AS THE SEIZED DOCUMENTS MENTIONED ABOVE BELONG TO M/S RIDGEVIEW 8 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) CONSTRUCTIONS PVT. LTD. BEING A PERSON OTHER THAN A PERSON IN WHOSE CASE THE SEARCH HAS BEEN INITIATED. (GAGAN SOOD) DCIT, CC-18, NEW DLEHI 5.1 A PERUSAL OF THE IMPUGNED ORDER FOR AY 04-05 S HOWS THAT THE WRITTEN SUBMISSIONS OF THE ASSESSEE-COMPANY CHA LLENGING THE ABOVE ISSUE IS REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSESSEE-COMPANY HAS SUBMITTED THAT NO VALID SATISF ACTION HAS BEEN RECORDED PRIOR TO THE INITIATION OF PROCEEDINGS U/S 153C OF THE ACT. THE ASSESSEE-COMPANY, BEFORE THE LD. CIT (A), HAD R ELIED UPON SEVERAL DECISIONS OF THE TRIBUNAL/ HONBLE HIGH COURT IN SU PPORT OF ITS CONTENTION. IT WAS SUBMITTED BEFORE THE LD. CIT (A ) THAT THE A.O. HAD NOT REFERRED TO ANY MATERIAL, MUCH LESS COGENT MATE RIAL, TO ASSUME AND CONCLUDE, WITH THE DOCUMENTS SEIZED FROM THE PR EMISES OF THE SEARCHED PERSON, THAT SUCH DOCUMENTS BELONGED TO TH E ASSESSEE COMPANY AND DID NOT BELONG TO THE SEARCHED PERSON. IT WAS SUBMITTED BEFORE THE LD. CIT (A) THAT IN THE ABSENCE OF SUCH A BURDEN HAVING BEEN DISCHARGED BY THE SEARCHED PERSON, INVOCATION OF THE PROVISIONS OF SECTION 153C OF THE ACT WAS NOT IN ACCORDANCE WI TH LAW. THE ASSESSEE-COMPANY RELIED UPON THE DECISIONS OF HON'B LE DELHI HIGH COURT IN THE CASE OF PEPSI FOODS (P) LTD. VS. ACIT REPORTED IN 367 ITR 9 ITA N O. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 112 AND PEPSI CO. INDIA HOLDING PVT. LTD., 370 ITR 295. IT WAS SUBMITTED BEFORE THE LD. CIT (A) THAT SINCE THE FOU NDATIONAL PRE- CONDITION HAS NOT BEEN SATISFIED, THEREFORE, THE A. O. HAD ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION UNDER SECTION 153C OF THE ACT. IT WAS FURTHER SUBMITTED THAT IT WAS AN ADMITTED PO SITION THAT ALL THE DOCUMENTS ADMITTEDLY WERE NOT BELONGING TO THE ASSE SSEE-COMPANY. THERE WAS NO MATERIAL MUCH LESS ANY TANGIBLE AND RE LEVANT MATERIAL TO SHOW THAT THE A.O. OF THE SEARCHED PERSON WAS SA TISFIED THAT THE SEIZED DOCUMENTS DID NOT BELONG TO THE SEARCHED PER SON, SO AS TO REBUT THE PRESUMPTION UNDER SECTION 292C OF THE ACT . IT WAS ALSO CONTENDED BEFORE THE LD. CIT (A) THAT THERE WAS NO DISCLAIMER ON THE PART OF THE SEARCHED PERSON IN SO FAR AS THE SEIZED DOCUMENTS WERE CONCERNED AND FURTHER THE PHOTO COPY OF THE DOCUMEN TS WOULD NOT NECESSARILY MEAN AND IMPLY THAT THEY BELONGED TO TH E PERSON WHO HELD THEM ORIGINALLY AND FURTHER THAT UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION DID NOT BELONG TO THE SEARCHE D PERSON, INVOCATION OF SECTION 153C OF THE ACT WAS NOT VALID . 5.2 THE LD. CIT (A) AFTER DULY CONSIDERING THE SAT ISFACTION NOTE (REPRODUCED ABOVE), MATERIAL ON RECORD AND THE SUBM ISSIONS OF THE ASSESSEE-COMPANY HELD THAT THE ISSUE OF NOTICE UNDE R SECTION 153C OF THE ACT WAS NOT VALID AND, ACCORDINGLY, QUASHED THE SAME. THE 10 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) FINDINGS OF THE LD. CIT (A) IN PARA 6 TO 7 OF THE O RDER ARE REPRODUCED AS UNDER: 6.5 APPLYING THE ABOVE JUDGMENTS TO THE FACTS OF T HE APPELLANT, IT IS EVIDENT HERE THAT THE ASSESSING OFFICER HAS NOT OBSERVED THAT TANEJA-PURI GROUP OF CASE OR ITS DIRECTORS HAVE DIS CLOSED THE OWNERSHIP OF THE SAID PAPERS FOUND FROM THEIR PREMI SES SO AS TO REBUT THE APPLICABILITY OF PRESUMPTION UNDER SECTIO N 292C MADE APPLICABLE BY THE HONBLE HIGH COURT. FURTHERMORE T HE DOCUMENT REFERRED IN THE SATISFACTION NOTE IS MARKED AS PAGE 75 TO 77 OF ANNEXURE A-2 WHICH IS A COPY OF UNSIGNED PROVISIONA L BALANCE SHEET OF APPELLANT COMPANY AS ON 30.9.2005. THUS AP PARENTLY THE SAID PAPER BELONGS TO FINANCIAL YEAR 2005-06 RELEVA NT TO ASSESSMENT YEAR 2006-07. IN THE INSTANT CASE NO ADD ITION HAS BEEN MADE IN THE ORDER OF ASSESSMENT UNDER SECTION 153C OF THE ACT FOR ASSESSMENT YEAR 2006-07. FURTHER EVEN ORIGI NAL ASSESSMENT YEAR FOR ASSESSMENT YEAR 2006-07 HAD BEE N FRAMED UNDER SECTION 153(3) OF THE ACT WHEREIN TOO RETURNE D INCOME HAD BEEN ACCEPTED. THUS, IN THE ABSENCE OF INCRIMINATIN G MATERIAL FOUND AS A RESULT OF SEARCH ON THE SEARCHED PERSON NOTICE UNDER SECTION 153C IS BAD IN LAW AND WITHOUT JURISDICTION . 6.6 IN THE CASE OF ACIT V. THERAPEUTIC INDIA PVT. L TD. THE CIT (A) HAS HELD THAT PAGE-WISE ANALYSIS OF THE DOCUMENTS F OUND WOULD SHOW THAT THESE ARE PART OF THE RETURNS OF INCOME F ILED BY THE APPELLANT AS WELL AS REQUIRED BOOKS OF ACCOUNTS AND COPY OF ACKNOWLEDGEMENT OF RETURNS AND HENCE, THESE DOCUMEN TS CANNOT BE TREATED AS INCRIMINATING DOCUMENTS TO SUGGEST AN Y UNDISCLOSED INCOME OF THE APPELLANT. IT WAS HELD THAT ALL THESE DOCUMENTS EVEN 11 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) WHILE BELONGING TO THE APPELLANT REFLECTED ITSELF A UDITED ACCOUNTS BASED ON WHICH, RETURNS HAVE BEEN FILED BY THE APPE LLANT ON EARLIER OCCASIONS. IT WAS THUS OBSERVED THAT THERE IS NOTHING INCRIMIN ATING IN THIS DOCUMENTS WHICH CAN LEAD TO THE FRAMING OF STRICT A CTION OF THE PART OF THE ASSESSING OFFICER TO INITIATE PROCEEDIN GS UNDER SECTION 153C OF THE ACT. IT WAS HELD THAT THERE IS IMPLICIT INHERENT REQUIREMENT THAT THERE MUST BE EXISTENCE OF PRIMA F ACIE UNRECORDED TRANSACTIONS BELONGING TO THE ASSESSEE B EFORE PROVISION UNDER SECTION 153C OF THE ACT, CAN BE INV OKED AND THUS, ON SUCH GROUND, INITIATION OF PROCEEDINGS WAS HELD TO BE BAD IN LAW. IN THE SAID DECISION THE ITAT HAS HELD AS UNDER: 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABL E ON RECORD. WE FIND THAT LD. CIT (A) AFTER GOING THROUG H THE SUBMISSIONS OF ASSESSEE HAS HELD THAT THE DOCUMENTS SEIZED FROM THE PREMISES OF ANOTHER PERSON WERE COPIES OF ACKNOWLEDGEMENT OF RETURN AND COPIES OF FINAL ACCOU NTS OF THE ASSESSEE COMPANY. THE LD. DR HAS NOT BROUGHT AN YTHING CONTRARY TO THE FINDINGS OF LD. CIT (A) AND HAS NOT BROUGHT ANY FACT WHICH COULD SUBSTANTIATE THAT THERE WERE O THER INCRIMINATING DOCUMENTS UPON WHICH THE ASSESSING OF FICER HAD RELIED TO ESTIMATE THE TURNOVER OF THE COMPANY. IN OUR CONSIDERED VIEW, IF THE SEIZED DOCUMENTS CONTAIN ON LY SUCH DOCUMENTS WHICH LD CIT(A) HAS NARRATED THEN THESE C ANNOT BE SAID TO BE INCRIMINATING UNLESS SOME DIFFERENCE ARE POINTED OUT BY THE ASSESSING OFFICER IN THE DOCUMEN TS SEIZED AND THOSE IN THE DEPARTMENTS POSSESSION IN THE FOR M OF PART OF IT RETURNS. IN THE ABOVE CIRCUMSTANCES, WE DO NO T SEE ANY INFIRMITY IN THE ORDER OF LD. CIT (A). 12 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 6.7 IT WAS HELD THAT SINCE NO INCRIMINATING DOCUMEN TS WERE FOUND THE SEARCHED PERSON TO MAKE THE IMPUGNED ADDI TIONS, THE INITIATION OF PROCEEDINGS WERE NOT IN ACCORDANCE WI TH LAW. IN THE SAID CASE, THERE WAS A SEARCH CONDUCTED ON THE GOPA L GROUP OF COMPANY AND CERTAIN DOCUMENTS BELONGING TO THE ASSE SSEE COMPANY WERE FOUND AND SEIZED AND AS SUCH, ACTION U NDER SECTION 153C OF THE ACT WAS INITIATED. PURSUANT TO THE PROCEEDINGS, THE ASSESSING OFFICER ENHANCED THE TUR NOVER AND MADE ADDITIONS TO THE DECLARED INCOME. 6.8 FURTHER DELHI BENCH OF TRIBUNAL IN THE CASE OF DSL PROPERTIES LTD. V. DCIT ITA NO. 1344/D/2012 ASSESSMENT YEAR 20 04-05 HAS ALSO HELD AS UNDER: 17. AT THE TIME OF HEARING BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS VEHEMENTLY CONTENDED THAT THE PHOT OCOPY OF THE AUDITED PROFIT & LOSS ACCOUNT AND BALANCE SH EET WAS BELONGING TO THE SHAREHOLDER/DIRECTOR FROM WHOM THE SAME WAS FOUND AND NOT TO THE ASSESSEE. WE AGREE WITH TH IS CONTENTION OF THE LEARNED COUNSEL. WHEN A COMPANY S UPPLIES PHOTOCOPY OF ITS PROFIT & LOSS ACCOUNT AND BALANCE SHEET TO ITS SHAREHOLDERS/DIRECTORS, SUCH PHOTOCOPY OF THE P ROFIT & LOSS ACCOUNT AND BALANCE SHEET BELONGS TO SUCH SHAREHOLDER/DIRECTOR AND NOT TO THE ASSESSEE COMPAN Y. IF THE ARGUMENT OF THE REVENUE IS ACCEPTED, THEN, IF, DURING THE COURSE OF SEARCH OF ANY PERSON THE PHOTOCOPY OF THE PROFIT & LOSS ACCOUNT/BALANCE SHEET OF ANY LISTED COMPANY, S AY, RELIANCE INDUSTRIES, TATA MOTORS OR BAJAJ AUTO IS F OUND, THEN, AS PER THE INTERPRETATION OF SECTION 153C BY THE DE PARTMENT, THE ASSESSING OFFICER WOULD BE ENTITLED TO TAKE ACT ION UNDER SECTION 153C IN THE CASE OF SUCH LISTED COMPANY. TH AT INTERPRETATION WOULD LEAD TO ABSURD RESULTS. THEREF ORE, WE HOLD THAT THE UNDERLYING CONDITION FOR INVOKING THE JURISDICTION UNDER SECTION 153C IS NOT SATISFIED IN THE CASE OF THE ASSESSEE. 13 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 6.9 RECENTLY DELHI BENCH OF TRIBUNAL IN THE CASE OF DCIT V. QUALITRON COMMODITIES (P) LTD. ITA NO. 4666/D/2012 ASSESSMENT YEAR 2004-05 IT WAS HELD AS UNDER: 15. SIMILAR ARE THE FACTS OF THE PRESENT CASE BEFOR E US. THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AND SE IZURE PROCEEDINGS FROM THE RAJDARBAR GROUP HAVE BEEN REFE RRED AS 'RELATING TO' THE ASSESSEE, IN THE SATISFACTION NOT E RECORDED BY THE AO WHILE INITIATING THE PROCEEDINGS U/S 153C OF THE ACT AGAINST THE ASSESSEE. FINDING A REFERENCE IN TH E SATISFACTION NOTE RECORDED BY THE AO FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT AGAINST THE ASSESSE E ARE CERTIFICATE OF INCORPORATION, E-FILING RECEIPT, FOR M NO.-18, FORM NO.-35. IN VIEW OF THE RATIO LAID DOWN IN THE ABOVE DISCUSSED DECISIONS OF HON'BLE HIGH COURT IN THE CASES OF PEP SICO INDIA HOLDINGS PVT. LTD. (CITED SUPRA) AND PEPSI FOODS PV T. LTD. (CITED SUPRA) THE SATISFACTION OF THE AO THAT THE S AID DOCUMENTS 'BELONG TO' THE ASSESSEE IS CONDITION PRE CEDENT TO INITIATE PROCEEDINGS U/S 153C OF THE ACT. IN ABSENC E OF SUCH FINDING BY THE AO, THE NOTICE ISSUED U/S 153C IN TH E PRESENT CASE IS HELD INVALID. BESIDES THERE WAS NO INCRIMIN ATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE ASSESSMENT WAS NOT PENDING OR ABATED TO JUSTIFY THE ASSESSMENT FRAMED U/S 193A R.W.S 153C AS WELL AS SE CTION 143(3) OF THE ACT AGAINST THE ASSESSEE. THIS VIEW I S SUPPORTED WITH THE DECISIONS CITED IN PARA NO.-11 HEREINABOVE. THE ASSESSMENT IN THE QUESTION FRAMED IN FURTHERANCE TO THE SAID INVALID NOTICE AND IN ABSEN CE OF INCRIMINATING MATERIAL IS THUS HELD AS VOID AND THE SAME IS QUASHED AS SUCH. THE ISSUE RAISED IN OBJECTIONS NOS . 1 & 1.1 OF THE 10 I.T.A .NO. 4666/DEL/2012 & C.O. NO.- 447/DEL/2012 CROSS-OBJECTION IS THUS DECIDED IN FAV OUR OF THE ASSESSEE. THESE OBJECTIONS ARE THUS ALLOWED. 6.10 HAVING REGARD TO THE ABOVE, IT WAS NOT A COINC IDENCE THAT THE TANJA GROUP WHO HAD MADE DISCLOSED INVESTMENT IN TH E APPELLANT COMPANY WERE IN POSSESSION OF THE UNSIGNED PROVISIO NAL BALANCE 14 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) OF THE APPELLANT COMPANY. IN VIEW OF THE AFORESAID REASONS AND ALSO CONSIDERING THE FACT THAT THE DOCUMENT MENTION ED IN THE SATISFACTION NOTE ARE PROVISIONAL BALANCE SHEET FOR THE ASSESSMENT YEAR 2006-07 AND IN THIS ASSESSMENT YEAR NO ADDITIO N IS BEING MADE BY THE AO, EVEN OTHERWISE UNDER SECTION 153C/1 43(3), THEREFORE IN MY HUMBLE VIEW, IN THE FACTS OF THE PR ESENT CASE NO INCRIMINATING MATERIAL WAS AVAILABLE BELONGING TO THE APPELLANT ON THE STRENGTH OF WHICH PROCEEDING UNDER SECTION 1 53C COULD BE INITIATED. HENCE, THE ASSESSMENT FRAMED IN FURTHERA NCE TO THE SAID INVALID NOTICE IS ALSO NOT VALID. AS HELD ABOVE, THAT ASSESSMENT IS NOT VALID THEREFO RE, THUS THERE IS NO NEED TO DECIDE THIS ISSUES OF ADDITION OF RS. 6,11,50,000 ON MERIT. ACCORDINGLY, THE OTHER GROUND RELATING TO TH E ISSUE OF ADDITIONS MADE BECOME REDUNDANT AND IN FRUCTUOUS. 5.3 HAVING REGARD TO THE AFORESAID SATISFACTION NO TE, THE LEARNED CIT (A) HAS HELD THAT THE SATISFACTION NOTE REFERS TO AN ANNEXURE A-2 (PAGE 75-77) WHICH IS A COPY OF UNSIGN ED PROVISIONAL BALANCE SHEET OF THE ASSESSEE COMPANY. THE SAID PAP ER, AS SEIZED, PERTAINS TO ASSESSMENT YEAR 2006-07 AND NOT TO ASSE SSMENT YEARS 2004-05 AND 2005-06. ALSO, IT IS UNDISPUTED THAT NO ADDITION HAS BEEN MADE IN THE CASE OF THE ASSESSEE IN THE ASSESS MENT FRAMED UNDER SECTION 143(3) OF THE ACT OR ASSESSMENT FRAME D UNDER SECTION 153C OF THE ACT FOR ASSESSMENT YEAR 2006-07. 15 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 5.4 THE HONBLE APEX COURT IN THE CASE OF CIT VS. SINGHAD TECHNICAL EDUCATION SOCIETY REPORTED IN 397 ITR 344 (SC) HAS HELD THAT IF THE DOCUMENTS SEIZED DOES NOT ESTABLISH ANY CO-RELATION WITH THE ASSESSMENT YEARS UNDER CONSIDERATION, THEN THER E WAS NO VALID ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF TH E ACT. IT HAS BEEN HELD IN PARA 18 OF THE JUDGMENT AS UNDER: 18. THE ITAT PERMITTED THIS ADDITIONAL GROUND BY G IVING A REASON THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FACTS ALREADY ON THE RECORD AND, THEREFORE, COULD BE RAIS ED. IN THIS BEHALF, IT WAS NOTED BY THE ITAT THAT AS PER THE PR OVISIONS OF SECTION 153C OF THE ACT, INCRIMINATING MATERIAL WHI CH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT YEARS IN QUESTION AND IT IS AN UNDISPUTED FACT THAT THE DOCUMENTS WHICH WERE SEIZE D DID NOT ESTABLISH ANY CO-RELATION, DOCUMENT-WISE, WITH THES E FOUR ASSESSMENT YEARS. SINCE THIS REQUIREMENT UNDER SECT ION 153C OF THE ACT IS ESSENTIAL FOR ASSESSMENT UNDER THAT PROV ISION, IT BECOMES A JURISDICTIONAL FACT. WE FIND THIS REASONI NG TO BE LOGICAL AND VALID, HAVING REGARD TO THE PROVISIONS OF SECTI ON 153C OF THE ACT. PARA 9 OF THE ORDER OF THE ITAT REVEALS THAT T HE ITAT HAD SCANNED THROUGH THE SATISFACTION NOTE AND THE MATER IAL WHICH WAS DISCLOSED THEREIN WAS CULLED OUT AND IT SHOWED THAT THE SAME BELONGS TO ASSESSMENT YEAR 2004-05 OR THEREAFTER. A FTER TAKING NOTE OF THE MATERIAL IN PARA 9 OF THE ORDER, THE PO SITION THAT EMERGES THERE FROM IS DISCUSSED IN PARA 10. IT WAS SPECIFICALLY RECORDED THAT THE COUNSEL FOR THE DEPARTMENT COULD NOT POINT OUT TO THE CONTRARY. IT IS FOR THIS REASON THE HIGH COURT HAS ALSO GIVEN ITS 16 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) IMPRIMATUR TO THE AFORESAID APPROACH OF THE TRIBUNA L. THAT APART, LEARNED SENIOR COUNSEL APPEARING FOR THE RESPONDENT , ARGUED THAT NOTICE IN RESPECT OF ASSESSMENT YEARS 2000-01 AND 2 001-02 WAS EVEN TIME BARRED. 5.5 FOLLOWING THE AFORESAID JUDGMENT, THE JURISDIC TIONAL HIGH COURT IN THE CASE OF PR. CIT VS. INDEX SECURITIES ( P) LTD. IN ITA NOS. 566/2017, 567/2017, 568/2017, 569/2017, 270/2017 AN D 571/2017 REPORTED IN 157 DTR 20 HELD IN P ARA 28.3 TO 30 AS UNDER: 28.3 FROM A READING OF THE ABOVE TWO PARAGRAPHS, I T IS PLAIN THAT THE SUPREME COURT (I) AGREED WITH THE ITAT THAT THE DOCUMENTS SEIZED HAD TO RELATE TO THE AYS WHOSE ASSESSMENTS W ERE REOPENED AND THAT THIS WAS AN ESSENTIAL JURISDICTIO NAL FACT AND (II) UPHELD THE DECISION OF THE ITAT TO PERMIT THE ADDIT IONAL GROUND TO BE RAISED BEFORE IT FOR THE FIRST TIME. 28.4 THE SUPREME COURT ALSO AGREED WITH THE DECISIO N OF THE GUJARAT HIGH COURT IN KAMLESHBHAI DHARAMSHIBHAI PAT EL (SUPRA) TO THE EXTENT IT HELD THAT 'IT IS AN ESSENTIAL COND ITION PRECEDENT THAT ANY MONEY, BULLION OR JEWELLERY OR OTHER VALUABLE A RTICLES OR THING OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISI TIONED SHOULD BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A OF THE ACT.' THE SUPREME COURT OBSERVED: 'THIS PROPOSITION OF LAW LAID DOWN BY THE HIGH COURT IS CORRECT, WHIC H IS STATED BY THE BOMBAY HIGH COURT IN THE IMPUGNED JUDGMENT AS W ELL.' 17 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 28.5 THE ABOVE CATEGORICAL PRONOUNCEMENT OF THE SUP REME COURT CANNOT, BY ANY STRETCH OF IMAGINATION, BE TERMED AS OBITER AS HAS BEEN SUGGESTED BY MR. MANCHANDA. EVEN THE OBITER DI CTA OF THE SUPREME COURT IS BINDING ON THIS COURT. 29. THE SEARCH IN THE CASE BEFORE THE SUPREME COURT WAS PRIOR TO 1ST JUNE 2015. APART FROM THE FACT THE SUPREME COUR T APPROVED THE ABOVE DECISION OF THE GUJARAT HIGH COURT HOLDIN G THAT THE SEIZED DOCUMENTS SHOULD 'BELONG' TO THE OTHER PERSO N, THE LEGAL POSITION IN THIS REGARD WHERE THE SEARCH HAS TAKEN PLACE PRIOR TO 1ST JUNE 2015 HAS BEEN SETTLED BY THE DECISION OF T HIS COURT IN PEPSICO INDIA HOLDINGS (P.) LTD. (SUPRA). IN VI NITA CHAURASIA (SUPRA), THIS COURT REITERATED THE ABOVE LEGAL POSITION AFTER DISCUSSING THE DECISIONS IN SUPER MALLS (P.) LTD. (SUPRA) AND NAU NIDH OVERSEAS (P.) LTD. (SUPRA). THE ESSEN TIAL JURISDICTIONAL REQUIREMENT FOR ASSUMPTION OF JURISD ICTION UNDER SECTION 153 C OF THE ACT (AS IT STOOD PRIOR TO ITS AMENDMENT WITH EFFECT FROM 1ST JUNE 2015) QUA THE 'OTHER PERSON' ( IN THIS CASE THE ASSESSEES) IS THAT THE SEIZED DOCUMENTS FORMING THE BASIS OF THE SATISFACTION NOTE MUST NOT MERELY 'PERTAIN' TO THE OTHER PERSON BUT MUST BELONG TO THE 'OTHER PERSON'. 30. IN THE PRESENT CASE, THE DOCUMENTS SEIZED WERE THE TRIAL BALANCE AND BALANCE SHEETS OF THE TWO ASSESSEES FOR THE PERIOD 1ST APRIL TO 13TH SEPTEMBER 2010 (FOR ISRPL) AND 1S T APRIL TO 4TH SEPTEMBER 2010 (FOR VSIPL). BOTH SETS OF DOCUMENTS WERE SEIZED NOT FROM THE RESPECTIVE ASSESSEES BUT FROM THE SEAR CHED PERSON I.E. JAGAT AGRO COMMODITIES (P) LTD. IN OTHER WORDS , ALTHOUGH THE SAID DOCUMENTS MIGHT 'PERTAIN' TO THE ASSESSEES, TH EY DID NOT BELONG TO THEM. THEREFORE, ONE ESSENTIAL JURISDICTI ONAL REQUIREMENT 18 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) TO JUSTIFY THE ASSUMPTION OF JURISDICTION UNDER SEC TION 153 C OF THE ACT WAS NOT MET IN THE CASE OF THE TWO ASSESSEES. 5.6 THUS, RESPECTFULLY FOLLOWING THE AFORESAID BIN DING PRECEDENT/S AND HAVING REGARD TO THE UNDISPUTED FAC T THAT THE SEIZED DOCUMENTS, ADMITTEDLY, DO NOT PERTAIN TO THE YEAR U NDER CONSIDERATION, THE FINDINGS OF THE LD. CIT (A) TO Q UASH THE NOTICE ISSUED UNDER SECTION 153C OF THE ACT IS UPHELD AND, THEREFORE, THE GROUNDS RAISED BY THE REVENUE ARE THEREFORE DISMISS ED AND APPEAL FILED BY THE REVENUE IS REJECTED. THUS, ITA NO. 3 595/DEL/2015 IS DISMISSED. 5.7 WE HAVE ALREADY UPHELD THE FINDINGS OF THE LD. CIT (A) IN AY 2004-05 QUASHING THE NOTICE ISSUED UNDER SECTION 153C OF THE ACT AND, ON IDENTICAL FACTS AND REASONING, THE GROUNDS RAISED BY THE REVENUE IN ASSESSMENT YEAR 2005-06 ARE ALSO DISMISS ED AND APPEAL FILED BY THE REVENUE IS REJECTED. THUS, ITA NO. 3 596/DEL/2015 IS ALSO DISMISSED. 5.8 SINCE THE APPEALS FILED BY THE REVENUE ARE DIS MISSED, THE CROSS OBJECTIONS FILED BY THE ASSESSEE BECOME IN FRUCTUOUS . THEREFORE, THE SAME ARE ALSO DISMISSED. 19 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) 6.0 IN THE FINAL RESULT, THE APPEALS FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2018 SD/- SD/- (G.D.AGRAWAL) (SUDHANSHU SR IVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DATED: 31.10.2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 30.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 30.10.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 30.10.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 31.10.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 31.10.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 31.10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT 20 ITA NO. 3595, 3696/DEL/2015 CO N O. 71,72/DEL/2016 (RIDGEVIEW CONSTRUCTION PVT. LTD.) REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER