Saraya Industries Ltd., New Delhi V. DCIT, New Delhi

ITA 1312/DEL/2012

• Counselvise Citation: 131220114 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 27-04-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 16-03-2012

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH :G: NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTAN T MEMEBR ITA NOS. 4561, 1564, 1563/DEL/2012 ASSTT. YEARS: 2006-07, 20 05-06, 2004-05 ACIT VS . M/S. SARAYA INDUSTRIES LTD. CENTRAL CIRCLE 19, 308, D-2, ROOM NO. 319, ARA CENTRE, DDA DISTT. CENTRE, SAKET E-2, JHANDELWALAN EXTN. NEW DELHI-110 017. NEW DELHI (PAN AAACS0205Q) (APPELLANT) ( RESPONDENT) AND ITA NOS. 1310,1311,1312,153 7,1538, 1539,4692/DEL/2012 ASSTT. YEARS:2000-01, 2001-02, 2002-03, 2003-04, 2004 -05, 2005-06, 2006-07 M/S. SARAYA INDUSTRIES LTD. VS. DCIT 309, D-2, SOUTHERN PARK, CENTRAL CIRCLE-19, SAKET PLACE, NEW DELHI-110 017 A RA CENTRE, (PAN AAACS0205Q) JHANDEWALAN EXTN. NEW DELHI. (APPELLANT) ( RESPONDENT) APPELLANT BY : SHRI RAMESH CH ANDRA, CIT DR RESPONDENT BY : SHRI R.S. SINGHV I , ADVOCATE ORDER PER I.C. SUDHIR, JUDICIAL MEMBER IN THESE APPEALS THE ASSESSEE HAS QUEST IONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 2 1. THE ORDER PASSED BY CIT(A) XXXIII I S BAD IN LAW AND VOID AB- INITIO BASED ENTIRELY ON SURMISES A ND CONJECTURES. 2. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THERE IS NO MATERIAL TO SUPPORT THAT THE ALL EGATION THAT THE DOCUMENTS IN QUESTION BELONGED TO THE APPELLANT AS REQUIRED U/S 153C OF THE ACT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER IS VITIATED FOR THE REASON THAT THE AO FAILED TO APPRECIATE THAT ENTRIES MADE IN THE DOCUME NTS FOUND IN POSSESSION OF A THIRD PARTY CAN NOT BE USED AGA INST THE ASSESSEE TO PROVE ITS UNDISCLOSED INCOME IN THE ABS ENCE OF ANY CORROBORATIVE EVIDENCE. 4. THAT ON THE FACTS AND CIRCUMSTANC ES OF THE CASE, THERE IS NOT EVEN AN IOTA OF EVIDENCE TO PROVE THE ALLEGATION THAT THE ASSESSEE EARNED ANY UNDISCLOSED INC OME OR ANY EXPENDITURE WAS INCURRED BY HIM OR ON HIS BEHALF OU TSIDE THE BOOKS OF ACCOUNTS AS ALLEGED. 5. THAT LD. AO HAS ERRED BY PASSING H IS ORDERS USING THE POWERS VESTED UNDER S.153A AND 153C WHEN THE REQUISITES OF THE SECTION ARE NOT FULFILLED IN THE CASE OF THE ASSESSEE. THE SATISFACTION AS RECORDED IS NO SATI SFACTION IN THE EYES OF LAW AND THE PROCEEDINGS INITIATED ON THE BA SIS OF THIS SATISFACTION IS VOID AB-INITIO AND THE ASSESSMENT O RDER MADE SUFFERS FROM THE INCURABLE DEFECT. THE DOCUMENTS SEI ZED DURING SURVEY CANNOT BE USED AGAINST THE ASSESSEE AS THEY D O NOT BELONG TO THE ASSESSEE A PRE REQUISITE U/S 153C FOR M AKING AN ADDITION UNDER THIS SECTION AND THEREFORE VOID AB-I NITIO, ILLEGAL AND LIABLE TO BE QUASHED. 6. THAT THE LD. AO HAS ERRED BY RELYING ON DOCUMENTS AND STATEMENTS OF THIRD PARTIES MR. R.K. MIGLANI AND M/S. RADICO KHAITAN, WITHOUT OPPORTUNITY TO CRO SS-EXAMINE, AND ON SURMISES AND REMISES TOTALLY ALIEN TO ANY C OGENT PROOF AND IN ABSENCE OF PROOF OF SOURCE OF THE GENERATI ON OF FUNDS, AND THEIR ABSENCE EITHER THE IDENTITY OF THE S O CALLED BENEFICIARY OFFICIALS AND POLITICIANS AND WITHOUT STATI NG ANY REASON AS TO WHY SUCH PAYMENTS WERE BEING MADE. ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 3 7. THE LD. AO HAS ERRED BY RELYING OF DUMB DOCUMENTS, LOOSE SHEETS, DIARIES AND JOTTINGS OF THIRD PARTIES EVEN THOUGH THEY COULD NOT BE RELIED UPON TO MAK E ANY ADDITIONS IN THE CASE OF THE ASSESSEE AND STATING THAT THE ASSESSEE WAS PART OF THE SO CALLED CORE-COMMITTEE THAT IS FACT UALLY INCORRECT. 8. THE LD. AO HAS ERRED BY RELYING ON THE DISCLOSURE MADE BY M/S. RADICO KHAITAN BEFORE THE ITSC, REVISED RETURN OF M/S. BALRAMPUR CHINI MILLS LTD. AND INF ORMATION FROM LAPTOP OF SHRI AJAY AGARWAL OF M/S. RADICO KHITAN . 9. THE LD. AO HAS ERRED BY STATING THA T THE GENERATION OF FUNDS TO MAKE THE ILLEGAL PAYMENTS WAS DO NE BY INFLATING THE TRANSPORT CHARGES DEBITING BOGUS BILLS AND RECEIVING MONEY BACK FROM COUNTRY LIQUOR OPERATIONS @ RS. 3 PER BL. THESE ARE MERE PRESUMPTIONS AND ARE NO T IN ANY MANNER REFLECTED IN THE DOCUMENTS SEIZED OR FROM THE RECORDS OF THE ASSESSEE, THE LD. AO HAS PRESUMED CERTAI N THINGS WHICH ARE TOTALLY CONTRARY TO ANY FACTS ON RECORD OR IN PUBLIC DOMAIN. THE AO HAS DECIPHERED A COMPLEX FACTOR FORMULA IN ORDER TO SHOW THAT THE ASSESSEE WAS MAKING PAYMENTS FOR THE COUNTRY LIQUOR OPERATIONS BASED ON THIS FORMULA THAT IS UNTENABLE IN LAW AND ON FACTS. 10. THE LD. AO HAS ERRED BY RELYING ON THE DOCUMENTS SEIZED DURING THE COURSE OF ACTION U/ S 133A FROM THE ASSESSEES PREMISES DO NOT IN ANY MAN NER DEMONSTRATE THAT THE PAYMENTS AS ALLEGED WERE MADE AND DO NOT TALLY WITH THE DOCUMENTS SEIZED FROM EITHER SHRI R.K. MIGLANI, UPDA OR M/S. RADICO KHAITAN. BESIDES, THE ASSESSEE HAS ALSO QUESTIONED THE ADDIT IONS SUSTAINED BY THE LD. CIT(A) ON ACCOUNT OF EXPENDITURE OUT OF UNDISCL OSED SOURCES, EXPENDITURE IN ADDITION TO THE PAYMENT MADE TO UPDA FROM UNEXPLAINED SOURCES, IRRECONCILABLE DIFFERENCE AND ON ACCOUNT O F NON-GENUINENESS OF EXPENSES CLAIMED IN THE ASSESSMENT YEARS EXCEPT 200 0-01. ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 4 2. THE ASSESSEE HAS BASICALLY QUESTIONED VALI DITY OF ASSESSMENT FRAMED U/S 153C READ WITH SECTION 153A OF THE ACT ON SEVE RAL GROUNDS. 3. THE REVENUE ON THE OTHER HANDS IN THEIR A PPEALS HAS QUESTIONED THE RELIEF GIVEN TO THE ASSESSEE BY THE LD. CIT(A) BY D ELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT FRA MED FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. 4. SINCE THE APPEALS PREFERRED BY THE ASSESS EE INVOLVE A LEGAL ISSUE REGARDING VALIDITY OF JURISDICTION ASSUMED BY THE A O UNDER SECTION 153C TO FRAME THE ASSESSMENT U/S 153C TO FRAME THE ASSESSME NT U/S 153C READ WITH SECTION 153A IN THE CONTEXT OF SATISFACTION RE CORDED, WHICH GOES TO THE ROOT OF THE MATTER, WE PREFERRED TO ADJUDICATE THE SAME FIRST. 5. THE FACTS IN BRIEF ARE THAT THE ASSESSEE CO MPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF INDUSTRIAL ALCO HOL, IMFL, COUNTRY LIQUOR, SUGAR, MOLASSES ETC. SEARCH AND SEIZURE ACT ION U/S 132 OF THE ACT WAS TAKEN IN THE CASE OF M/S. RADICO KHAITAN GROUP OF CASES. ALONG-WITH THEM SEARCH WAS ALSO CONDUCTED AT THE RESIDENCE OF SHRI R.K. MIGLANI, SECRETARY GENERAL UP DISTILLERY ASSOCIATION (IN SHO RT UPDA) AND AT THE PREMISES OF UPDA ON 14.2.2006. ACTION U/S 133A OF T HE ACT WAS ALSO TAKEN AT THE PREMISES OF THE ASSESSEE ON 14.2.2006. VARIO US INCRIMINATING ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 5 DOCUMENTS WERE FOUND AND SEIZED. STATEMENTS OF VARI OUS PERSONS INCLUDING SHRI R.K. MIGLANI WERE ALSO RECORDED U/S 132(4)/133 A OF THE ACT. 6. M/S. UPDA IS A REGISTERED SOCIETY FORMED B Y ALL THE DISTILLERIES OF UP FOR ITS WELFARE TO JOINTLY TAKE UP THEIR CAUSE WITH VARIOUS AUTHORITIES ON DIFFERENT ISSUES. DURING THE COURSE OF SEARCH AND S URVEY, LARGE NUMBER OF DOCUMENTS WERE FOUND AND SEIZED FROM VARIOUS PREMIS ES INCLUDING THAT OF M/S. RADICO KHAITAN OFFICE OF UPDA, RESIDENCE OF R. K. MIGLANI AND OFFICE OF M/S. SARAYA INDUSTRIES LTD. I.E. THE ASSESSEE. THE MAIN ALLEGATION WAS THAT UPDA WAS COLLECTING HUGE SUM FROM ITS MEMBERS WHICH REPRESENTED THEIR UNACCOUNTED INCOME AND THEN THROUGH UPDA UTILIZING THESE SUMS FOR THE PAYMENTS TO VARIOUS AUTHORITIES INCLUDING POLITICIA NS TO FURTHER THE BUSINESS CAUSE OF ITS MEMBERS. THE DOCUMENTS SEIZED FROM MI GLANIS RESIDENCE AND FROM THE OFFICE OF UPDA WERE REGULAR ACCOUNTS OF MO NEY RECEIVED DATEWISE FROM THE MEMBER DISTILLERIES FROM THE FINANCIAL YEA R 2002-03 TILL THE DATE OF SEARCH I.E. 14.2.2006 AND CONTAINED BASIS OF DETERM INATION OF THIS CONTRIBUTION AND MANNER OF SPENDING THIS MONEY. 7. WHILE EXAMINING THE SEIZED DOCUMENT THE A CIT CENTRAL CIRCLE WAS THE AO OF THE PERSONS SEARCHED VIZ. M/S. RADICO KHA ITAN LTD. SHRI R.K. MIGLANI, SECRETARY GENERAL UPDA AND M/S. UPDA FOUND THAT THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH COUPLED WITH THE CONTENTS OF THE ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 6 STATEMENTS OF SHRI R.K. MIGLANI REVEALED THAT ILLE GAL PAYMENTS WERE MADE BY VARIOUS DISTILLERIES INCLUDING THE ASSESSEE TO V ARIOUS PUBLIC SERVANTS INCLUDING THE POLITICIANS. IT WAS FURTHER INFERRED THAT THE UPDA ACTED AS NODAL AGENCY FOR MAKING THESE ILLEGAL PAYMENTS FOR AND ON BEHALF OF THEIR MEMBER DISTILLERIES. THE DETAILS OF SUCH ILLEGAL / UNACCOUNTED PAYMENTS ON THE BASIS OF THESE DOCUMENTS COUPLED WITH VARIOUS O THER DETAILS/INFORMATION WHICH WERE NOT ALLOWABLE AS EXPENDITURE UNDER THE L AW AS UNDER :- S.NO. NAME OF THE DISTILLERY 2002-03 2003-04 2004-05 2005-06 TOTAL (IN LAKHS) 1. SARAYA 945 1045 527.5 690 (SARAYA + BALRAMPUR 3207.5 2. UNNAO 804 1134 636.9 889.6 3464.5 3. NIC (NATIONAL) 327 359 242.4 348.6 1277 4. NARANG 61 153 105.1 235.7 554.8 5. & 6 PIKHANI & SHAMLI 214.4 333.1 185 214 947.0 7. MODI 21 125 149.7 308.8 604.5 8. SUPERIOR/ITRC 6 46 34.7 233.6 320.3 9. SIMBHOLI 298 472 278.5 583.1 1631.6 10. COOPERATIVE 150 182 99.8 194.8 626.6 11. KESAR(BAHERI) 419 317 176.3 245 1157.3 12. DAURALA(DCM) 374 453 310.2 448.6 1585.8 13. RAMPUR 752 945 599.4 705.6 3002 14. SSL(MANSURPUR) 463 607 374.8 591 2035.8 15. M. MEAKINS 202 334 204.2 275.6 1015.6 16. LORDS(D.K. MODI) 582 616 404.9 486.9 2089.8 17. BALRAMPUR 298 328 244.5 870.5 18. CENTRAL (UNITED SPIRITS LD.) 22 44 32.4 98.4 19. MAJHOLA 72.5 72.5 ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 7 8. IT WAS THUS ALLEGED THAT THE ASSESSEE HAS PAID A SUM OF RS. 32007.5 LAC DURING THE FINANCE YEARS 2002-03, 2003-04, 2004 -05, 2005-06 RELEVANT TO THE ASSESSMENT YEARS 2003-04, 2004-05, 2005-06 A ND 2006-07. 9. THE AO OF THE PERSONS SEARCHED RECORDED A SATISFACTION U/S 153A ON 1.12.2006 THAT AS THE ASSESSEE HAS INCURRED ILLEGAL / UNACCOUNTED EXPENDITURE AS STATED ABOVE, AND ACTION U/S 153C O F THE ACT WAS CALLED FOR. HE DELIVERED THE SATISFACTION NOTE ALOGNWITH CERTIF IED PHOTOCOPIES OF THE SEIZED DOCUMENTS TO THE LD. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE WHO WAS THE AO OF THE ASSESSEE BEING THE PER SONS OTHER THAN THE PERSON SEARCHED. 10. ON RECEIPT OF THE ABOVE RECORDS THE SAME W ERE EXAMINED AND THE SATISFACTION WAS RECORDED ON 11.12.2006 THAT PROVIS IONS U/S 153C OF THE ACT ARE APPLICABLE IN THE PRESENT CASE. ACCORDINGLY NOT ICES U/S 153A READ WITH SECTION 153C OF THE ACT TO THE ASSESSEE WERE ISSUED ON 11.12.2006 REQUIRING THE ASSESSEE TO FILE THE RETURNS FOR THE BLOCK ASSESSMENT YEARS 2000-01 TO 2005-06 WITHIN 15 DAYS OF THE SERVICE OF THE SAID NOTICE. COPIES OF SATISFACTION RECORDED AND COPIES OF SEIZED DOCUM ENTS ALONGWITH STATEMENT OF SHRI R.K. MIGLANI WERE SUPPLIED TO THE ASSESSEE ON 12.9.2007 WHEREAS COPIES OF DOCUMENTS FOUND AND IMPOUNDED FRO M THE PREMISES OF THE ASSESSEE DURING THE COURSE OF ACTION U/S 133A O F THE ACT WERE SUPPLIED ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 8 TO THE ASSESSEE ON 8.2.2007. IN RESPONSE TO THE QUE STIONNAIRE ISSUED THE ASSESSEE CONTENDED THAT THE PAGES FOUND AND SEIZED FROM THE RESIDENCE OF SHRI R.K. MIGLANI ARE COMPUTER GENERATED HAVING NO EVIDENTIARY VALUE UNLESS THE SAME WAS CO-RELATED TO SOME POSITIVE EVIDENCE / MATERIAL. IT WAS CONTENDED FURTHER THAT THE SAID PAGES FOUND AND SEI ZED FROM THE PREMISES OF SHRI R.K. MIGLANI DO NOT BELONG TO THE ASSESSEE NOR THESE SEIZED DOCUMENTS IN ANY MANNER WHATSOEVER ARE CONNECTED TO THE ASSESSEE. SIMPLY BECAUSE NAME OF THE ASSESSEE IS ALSO APPEARI NG ON THE SAID PAGES DOES NOT MEAN THAT THESE BELONG TO THE ASSESSEE. TH E AO DID NOT CONCUR WITH THE EXPLANATION OF THE ASSESSEE AND MADE THE F OLLOWING ADDITIONS :- FINANCIAL YEAR ASSESSMENT YEAR AMOUNT 2002-03 2003-04 RS. 8,25,79,200/- 2003-04 2004-05 RS.10,79,16,400/- 2004-05 2005-06 RS. 5,17,62,721/- 2005-06 2006-07 RS. 7,39,59,500/- 11. WE WILL NOW DEAL WITH THE ISSUES RAISED IN THE APPEALS PREFERRED BY THE PARTIES HEREUNDER. 12. AT THE OUTSET OF HEARING THE LD. AR POINT ED OUT THAT ASSESSMENT YEAR 2000-01 IS THE FIRST YEAR WHEREIN PROCEEDINGS HAVE BEEN INITIATED U/S 153C OF T HE ACT WITHOUT RECORDING SATISFACTION FO R THE ASSTT. YEAR 2000-01. THUS THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2 000-01 IN ABSENCE OF ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 9 SATISFACTION NOTE IS WITHOUT JURISDICTION. HE POINT ED OUT THAT SIMILAR IS THE POSITION FOR THE ASSESSMENT YEARS 2001-02 AND 2002- 03. HE SUBMITTED THAT IN THE ASSESSMENT YEAR 2000-01 THE RETURN WAS ACCEP TED AND NO ADDITION WAS MADE. THE LD. AR SUBMITTED FURTHER THAT NO INCR IMINATING MATERIAL WAS FOUND AGAINST THE ASSESSEE HENCE ASSESSMENT U/S 153 C OF THE ACT CANNOT BE FRAMED AGAINST THE ASSESSEE. IN SUPPORT HE PLACE D RELIANCE ON THE FOLLOWING DECISIONS :- - ACIT VS. ASHA KATARIA ITA NOS. 3105, 31 06 & 3107/DEL/2011 (ASSTT. YEARS 2002-03, 2003-04 & 2006-07 ) ORDER DATED 20.5.2013 - AL CARGO GLOBAL LOGISTICS LTD. VS. DCIT , 137 ITD 287 (SB) - DINESH TOBACCO INDUSTRIES VS. DCIT (201 3) 88 DTR (JD) (TRIB) 329 -SHRI VIKRAM KHANDELWAL VS. DCIT, ITA NOS. 1976 ORS ./MUMBAI/2009 (ASSTT. YEARS 2001-02, 2002-03, 2004-05) ORDER DATED 18.1.2013 - DSL PROPERTIES (P) LTD. VS. DCIT, ITA N O. 1344/DEL/2012 (ASSTT. YEAR 2004-05) ORDER DATED 22.3.2 013 13. THE LD. AR SUBMITTED THAT THE ISSUE OF VAL IDITY OF JURISDICTION ACQUIRED U/S 153C OF THE ACT ON THE BASIS OF SIMILA R SATISFACTION RECORDED BY THE AO HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR O F THE SIMILARLY PLACED ASSESSEES IN RESPECT OF 12 CASES OUT OF 19 PARTIES BY THE TRIBUNAL IN THE FOLLOWING CASES :- M/S. NATIONAL INDUSTRIAL CORPORATION LTD. VS. DY. C IT AND ORS. ITA NOS. 1658/DELHI/2010 AND ORS. (ASSTT. YEARS 20 00-01 TO 2006-07) ORDER DATED 23.11.2012 ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 10 14. HE SUBMITTED THAT PROCEEDINGS U/S 153 C OF THE ACT WERE INITIATED IN THE ASSESSMENT YEARS 2000-01 TO 2005-06 ON THE B ASIS OF SATISFACTION NOTE RECORDED BY ACIT CENTRAL CIRCLE 4, NEW DELHI ON 11.2.2006 DURING THE SEARCH PROCEEDINGS IN THE CASE OF UPDA AND SHRI R.K MIGLANI. IN SUPPORT HE REFERRED CONTENTS OF PARA NO. 5.4 OF THE ASSESSM ENT ORDER FOR THE ASSESSMENT YEAR 2000-01 TO 2002-03 AND PARA NO. 2.2 OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06. HE SUBMITTED THAT THE COMMON SATISFACTION WAS RECORDED IN RESPECT OF 19 P ARTIES AND IN THE CONTEXT OF SAME SATISFACTION NOTE THE BANGALORE BEN CH OF THE TRIBUNAL HAS PASSED ORDER IN THE CASE OF DCIT VS. CENTRAL DIST ILLERY LTD. (UNITED SPIRITS LTD.). ITA NOS. 1375 TO 1378/BANG/2010 DATED 13.01. 2012. THE SAME ORDER OF THE BANGALORE BENCH OF THE TRIBUNAL ON AN IDENT ICAL ISSUE HAS BEEN FOLLOWED BY THE DELHI BENCH OF THE TRIBUNAL IN THE CASES OF NATIONAL INDUSTRIES CORPORATION (NIC), KESAR ENTERPRISES LTD. , SIR SHADILAL ENTERPRISES, MOHAN MEAKINS LTD. AND LORD DISTILLERY LTD. (SUPRA) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. LD. A R SUBMITTED FURTHER THAT NO SATISFACTION WAS RECORDED FOR THE ASSESSMENT YEA RS 2000-01 AND 2001- 02. ADDITION MADE IN THE ASSESSMENT YEAR 2002-03 IS NOT BASED ON THE SATISFACTION NOTE. THUS THE ASSESSMENT ORDER FOR TH ESE THREE ASSESSMENT YEARS HAS BEEN PASSED BY THE AO WITHOUT ITS ACQUISI TION OF JURISDICTION. THE LD. AR SUBMITTED FURTHER THAT FOR ALL THESE YEARS U NDER CONSIDERATION IN THE ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 11 APPEALS, NO INCREMENTING DOCUMENTS WAS FOUND TO JUS TIFY THE ADDITIONS MADE IN THE ASSESSMENT FRAMED U/S 153C READ WITH SE CTION 153A OF THE ACT. IN SUPPORT HE PLACED RELIANCE ON THE ABOVE CITED DE CISIONS. 15. THE LD. DR ON THE CONTRARY SUBMITTED THA T EVEN IF THERE IS NO MATERIAL FOR ALL THE SIX YEARS ASSESSMENT U/S 153A OR 153C CAN BE MADE. HE SUBMITTED THAT PROVISIONS LAID DOWN U/S 153C OF THE ACT BE READ WITH THE PROVISIONS LAID DOWN U/S 153A OF THE ACT. THESE PRO VISIONS ARE DIFFERENT FROM THE PROVISIONS LAID DOWN U/S 158BB OF THE ACT. IN SUPPORT HE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- SHIVNATH RAI HARNARAIN (INDIA) LTD. VS. DCIT 117 I TD 74 (DELHI) SSP AVIATION LTD. VS. DCIT (2012) 346 ITR 177 (DELH I) ORISSA STATE CIVIL SUPPLIES CORPORATION LTD. VS. DC IT 259 ITR 20 (CUTTACK) 16. LD. DR POINTED OUT FURTHER THAT THE DOCU MENTS FOUND IN SEARCH BELONGING TO THE PRESENT ASSESSEE. IN THE ABOVE CIT ED CONNECTED CASES RELIED UPON BY THE LD. AR AND DECIDED BY THE BANGAL ORE AND DELHI BENCHES OF THE TRIBUNAL, THERE MAY NOT BE MATERIAL AGAINST THESE ASSESSEES. HENCE IT WAS DECIDED IN FAVOUR OF THE ASSESSEE. HE REFERR ED CONTENTS OF PARA NO. 4.2 AND 4.3 AT PAGE NO. 2 TO 4 OF THE WRITTEN SUBMI SSION FILED ON BEHALF OF THE DEPARTMENT THAT THERE ARE GOOD NUMBER OF DOCUME NTS BELONGING TO THE PRESENT ASSESSEE. HE SUBMITTED FURTHER THAT THE DOC UMENTS HAVE NOT BEEN ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 12 CONSIDERED IN THE CASE OF SHRI MIGLANI FROM WHOSE C USTODY THESE DOCUMENTS WERE FOUND. LD. DR SUBMITTED THAT THE ANNEXURES AR E PART OF THE RECORDS AND FAX MESSAGE ALSO BELONG TO THE ASSESSEE. IN THI S REGARD, HE REFERRED PAGE NO. 66 OF THE PAPER BOOK FILED ON BEHALF OF TH E ASSESSEE WHICH IS THE ANNEXURE TO THE ASSESSMENT ORDER. HE SUBMITTED THA T FOR FRAMING ASSESSMENT U/S 153C OF THE ACT IT IS NOT NECESSARY THAT SOME INCRIMINATING MATERIAL MUST BE FOUND DURING THE COURSE OF SEARCH. THE REQUIREMENT FOR INITIATION OF PROCEEDINGS UNDER THE SAID PROVISIONS IS THAT SOME DOCUMENTS MUST BE THERE FOUND DURING THE COURSE OF SEARCH. 17. THE LD. DR SUBMITTED THAT THERE IS NO DISPUTE T HAT THE SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER QUA THE DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF THE SEARCH. ONLY DISPUTE IS WH ETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE BOOKS OF ACCOUNT OR T HE DOCUMENTS SEIZED CAN BE SAID TO BE BELONGING TO THE ASSESSEE OR NOT. CAREFUL PERUSAL OF THE PROVISIONS WOULD SHOW THAT BY NECESSARY IMPLICATION THE DOCUMENT SHOULD BELONG TO SOMEONE OTHER THAN THE PERSON SEARCHED U/ S 132 OF THE ACT. IT IS QUITE POSSIBLE THAT A DOCUMENT MAY BELONG TO MORE T HAN ONE PERSON IN WHICH SITUATION AO TO MEET THE REQUIREMENTS OF THE LAW AFTER RECORDING THE SATISFACTION MAY PART WITH THE TRUE COPIES OF THE S AID DOCUMENT BY HANDING THEM OVER TO OTHER ASSESSING OFFICERS. ONE SUCH ILL USTRATION IS THE CASE DECIDED ON 7.11.2011 BY THE MUMBAI BENCH OF THE TRI BUNAL IN THE CASE OF ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 13 GURUPRERNA ENTERPRISES V. ACIT (ITA NO. 255,256,257/ MUM/211 ITA NO. 255, 256,257/MUM/211) WHERE A DOCUMENT BEING THE JO INT VENTURE AGREEMENT FOUND FROM THE PREMISES OF A 3 RD PERSON (OTHER THAN THE ONE IN WHOSE CASE ACTION U/S 153C WAS TAKEN TO WHICH EVEN THE ASSESSEE WAS A PARTY) WAS HELD TO BE BELONGING TO, AMONG OTHERS, A SSESSEE (GURUPRERNA ENTERPRISES) ALSO. 18. THE RELEVANT EXTRACT OF THE WRITTEN SUBMISS ION FILED ON BEHALF OF THE DEPARTMENT ARE REPRODUCED HEREUNDER : - THERE IS NO DISPUTE THAT THE SATISFACTION WAS RECO RDED BY THE ASSESSING OFFICER QU A THE DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF THE SEARCH . ONLY DISPUTE IS WHETHER IN TH E FACTS AND CIRCUMSTANCES OF THE CASE THE BOOKS OF ACCOUNT OR T HE DOCUMENTS SEIZED CAN BE SAID T O BE BELONGING TO SARAYA INDUSTRIES OR NOT. INCOME TAX ACT DOES NOT DEFINE THE WORDS/PHRAS E 'BELONGING TO' . CAREFUL PERUSAL OF THE PROVISIONS WOULD SHOW THAT BY NECESSARY IMPL ICATION TH E DOCUMENT SHOULD BELONG TO SOMEONE OTHER THAN THE PE RSON SEARCHED U/ S 132 OF THE ACT. I T I S QUITE POSSIBLE THAT A DOCUMENT MAY BELONG TO MORE THAN ONE PERSONS IN WHICH SITUATION AO T O MEET THE REQUIREMENTS OF THE LAW AFTER RECORDING THE SATISFACTION MAY PAR T WITH THE TRUE COPI ES OF THE SAID DOCUMENT BY HANDING THEM OVER TO OTHER ASSESSING OFFICERS. ONE SUCH ILLUSTRATION IS THE CASE DECIDED ON 0 7 -11-2011 B Y THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF GUR UPR E R NA ENTERPRISES V. ACIT ( I TA NO.255, 256,257/MUM/211 ITA 0 . 255,256,257 /MUM/211 ) WH ERE A D OCUM E NT B E IN G TH E J O INT V E NTURE A G R EE M E NT FOUND FROM THE PREMIS E S OF A 3 RD PERSON (O T HER THAN THE ON E IN WHOS E CASE ACTION U/ S 153C WAS T A KEN TO WHICH EV E N THE ASSESSEE WAS A P AR T Y ) WAS HELD TO BE BELONGING TO, AMONG OTHERS, ASSESSEE (GURUPRERNA ENTERPRISES) ALSO. 4.1 IN THE LIGHT OF THE AFORESAID DISCUSSION IN TH E CONTEXT OF THE SPECIFIC FACTS OF THE PR E S ENT APPEALS QU E STIONS WHICH ARISE ARE ; (A) IS THERE AN Y BOOKS OF ACCOUNTS OR THE DOCUMENTS FOUND & SEIZED IN ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 14 THE SEARCH WHICH CAN B E EXCLUSIVEL Y BE SAID TO BE BELONGING TO SARAYA INDUSTRIES? (B) IS THERE ANY BOOKS OF ACCOUNTS OR THE DOCUMENTS FOUND & SEIZED IN THE SEARCH WHICH CAN B E SAID TO BE BELONGING TO MORE THAN ONE PERSONS INTER ALIA IN C LUDING THE SARAYA INDUSTRIES. IF ANSW E R TO EITHER OF THE AFORESAID TWO SITUATIONS IS IN P OSITIVE THEN ACTION U/ S 153C WOULD B E MAINTAINABLE OTHERWISE NOT . 4.2 HERE, IT IS IMPORTANT TO NOTE THAT THE ACT EVEN INDIRECTL Y DOES NOT INDICATE AS TO WH AT SHOULD BE THE NATUR E OF THE DOCUMENT SEIZED . EVEN IF PRIMA F A CIE THE DOCUMENT IS NOT OF T H E INCRIMINATING NATURE STILL IT CAN BE USED TO INVOKE PROVISIONS OF SECTION 153C OF THE ACT B E CAU SE WHETHER TH E DOCUMENT IS OF INCRIMINATING NATURE OR NOT CAN ONL Y B E ASCERTAINED IN THE ENQU IRY THAT FOLLOWS TH E ISSUANCE OF NOTIC E U/S 153C . IN THIS CONNECTION READY REFERENCE CAN BE MAD E OF THE JUDGMENT DT . 29-03-2012 OF THE JURISDI C TIONAL DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD V. DEPUTY COMMISSIONER OF INCOME TAX R EPORTED IN 20 TAXMANN.COM 214 (DELHI) WHER E - I N PARA 15- IT HAS BEEN HELD THAT THERE IS NO REQUIREMENT IN SECTION 153C(1) THAT THE ASS E SSIN G OFFICER SHOULD ALS O BE SATISFIED THAT SUCH VALUABLE ARTICLE OR BOOKS OF ACCOUNT OR DOCUM E NT S BELONGING TO THE OTHER PERSON MUST BE SHOWN TO CONCLUSIVELY REFLECT OR DISCLOSE AN Y UNDIS C LOSED INCOME. IN PARA 17 OF THE DECISION, THE HIGH COURT HAS HELD THAT RECORDIN G OF SATISFACTION IS ONL Y A F IR ST STEP TO THE E NQUIR Y WHIC H IS T O F OLLOW. T H E A O W H O H A S R E ACH E D THE SATISFACTION THAT THE DOCUMENT RELATES TO A PER SO N OTHER THAN T H E SEA R C H ED PE RS O N CA N D O N OTHING EXCE PT T O FO R WA R D THE DOCUMENT TO THE AO H AVING J U R I S DI CTIO N OVE R THE OT H E R PE R SON TO FOLLOW THE P R OCE D URE PRESCRIBED BY SEC . 153A IN AN ATTE MPT T O E N S U RE T HA T THE INCO M E R EFLECTED BY T H E DOC UMENT H AS BEEN ACCO U N T ED FO R BY S U C H OT H E R PE RS O N . IN PA R A 1 8 TH E HIG H C OUR T FU RT HER H E LD TH A T IT I S N O T NECESSARY FOR TH E A O T O A L SO R EAC H A FIR M CO N CL U SIO N / OPI N IO N THA T THE DOC UM E NT S H OWS UN DIS C LOSED IN C O M E BELONGING T O S U C H OT H ER PERSON AND THA T I S A M A T TER OF E N Q U IRY WHIC H IS TO BE CO N D U CTED IN THE MANNER PRESCRIBED BY SEC . 153 C. 4.3 TO FIND OUT TH E A N SWE R T O TH E AFO RES A ID POS E D T WO Q U E STI O N S (RE F ER R ED IN P A R A 4. 1 A B OVE) I T WI LL B E R E L EVA NT T O GO THR O U G H TH E D OC UMENT S REF ERR E D TO IN THE S A TI SF A C TI O N REC ORD E D B Y THE ASSESSING OFFI CE R WHEREBY H E VIEWE D THAT TH E DOC UM E NTS R EFE RR E D T O TH E R EIN BE LON G T O PE RSON S REFERRE D T O I N TH E NOTE O TH ER TH A N TH E P E R SO N ACT U A LL Y SEARC H ED U / S 132 OF TH E AC T . I N THI S CO NT EX T , IT WO UL D B E RE L EVAN T T O GO T H RO U G H TH E FO LL OW IN G DOC UM EN T S REFE R RED ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 15 T O I N TH E SA T ISFAC TI O N NO T E. TH E DOC UM E NT S A R E E N C LOS E D HE REW ITH AS ANNEXURE A-2 T O THIS S UBM I SS I ON S . SN OF A-2 DOCUMENT NO. DESCRIPTION OF THE DOCUMENT 1. A-2/72 THO U G H UNSIGNED AND BLANK BUT C LEARLY BELONGS TO 5 PERSONS I.E . S ARAYA INDUSTRIES, LORDS, NICL , RAMPUR 2. A-2/67 IT GIVES DETAILS OF 5 LEAD DISTILLERIES AND ATTACHED DISTILLERIES OF S ARAYA INDUSTRIES, LORDS, NICL, RAMP U R. CLEARLY DOCUMENT BELONGS TO FIVE PERSONS INCLUD I NG THE ASSESSEE UNDER CONSIDERATION I . E . SARA Y A INDUSTRIES. 3. A-2/66 THO U G H UNSIGNED AND BLANK BUT C LEARLY BELONGS TO 5 PERSONS I.E . S ARAYA INDUSTRIES, LORDS, NICL , RAMPUR 4-8 A-2/60-64 CONTAINING LIST OF DISTILLERS AND OTHER CONNECTED DETAILS OF 16 PERSO N S INCLUDING SARAYA I . E . THE ASSESSEE UNDER CONSIDERATION HENCE BELO N GS TO ALL INCLUDI N G TH E ASSESSEE. 9 & 10. A-2/58 & 59 E MAIL MESSAGE (PAGE 59) FROM ONE KP SINGH OF RADICO TO S.S. MAJITHIA OF SARAYA WITH COPY TO 3 OTHER PERSONS. DOCUMENT IS SPECIFICALLY ADDRESSED TO THE ASSESSEE. THUS, CLEARLY THE DOCUMENTS BELONG TO ASSESSEE UNDER CONSIDERATION I . E . SARAYA INDUSTRIES 11-14 A-2/54-57 E MAIL MESSAGE (PAGE 57) FROM ONE KP SINGH OF RAD I CO TO S.S . MAJITHIA OF SARAYA WITH COPY TO 3 OTHER PERSON S . DOCUMENT IS SPECIFICALLY ADDRESSED TO THE ASSESSEE. THUS, C LEARLY THE DOCUMENTS BELONG TO ASSESSEE UNDER CONSIDERATION I . E . SARA Y A INDUSTRIES 15-16 A-2/39-40 LIST OF DI S TIL L ERIES MANUFACTURIN G COUNTR Y LIQUOR CON T AINING N A M ES OF THE PRESENT ASSESSEE & ITS KE Y FUNCTIONARIES . TH U S , THE DOC U ME NT S I N TE R AL I A ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 16 BELONGS TO THE ASSESSEE UN DER CO N SI D ERATIO N . 17. A-2/36 SHOWS DETAILS OF DAURALA SUGAR WORKS , DAURALA, A DISTILLERY ATTACHED WITH THE A S SE S SEE. THE DOCUMENT CLEARLY BELONGS TO SARA Y A INDU S T R IES. 18. A-2/35 CO U NTR Y LIQUOR D IS P ATC H S CHE DUL E FOR D ECEMBER, 2 00 5 . THE DOCUMENTS BELONG T O 19 PERSO N S IN C LU D IN G T H E PRESE N T ASSESSEE SARAYA IN D S 19. A-2/25 C . L . DISPATCH F I G U RES U P T O 7 TH OF TH E MO NTH . DO C UM ENT BE L O N GS T O 19 PE R SO N S IN C LUDING THE P RESE NT ASSESSEE . 20. A-2/26 EXCESS AND S HOR TA GE O F C O UNTR Y L IQ UO R FO R T H E M ONTH OF JA NU A R Y, 20 06. THE D OC U MEN T BE L O N G S T O 1 9 P ERSO N S IN C LUD I N G TH E P RESE NT ASSESSEE SA RAYA . 21. A-2/27 CO U NTR Y LI QU OR D IS P A T C H SC H E D ULE FOR FEBR U AR Y , 2 006 . T H E DO C UMENT BELO N GS TO 19 PERSO N S I NC LU DING THE PR ESE NT A S SES S EE SARAYA I ND S . 22-23. A-2/14 & 15 (-) EXCESS ( + ) SH O RT AGE OF C O UNT RY L I QU OR ( PA GE 1 5) A ND D ES PAT C H FOR NOVE MB E R , 20 0 5 ( PA GE 1 4). D O CUM E NT S B E LONG S T O 1 9 P E R SO N S IN C LUD I N G SAR AYA IND S. 24-26. A-1/25,27,29 D E T AI L S O F TO T A L EX C E S S OF DI S TILL E R IES IN C LUD I N G T H E ASSES S EE'S DIST ILL E RI ES D OC UM E NT S BELO N G T O P E R SO N S M E NTI O N ED THEREI N IN C L U DING TH E ASSESS E E. 27. A-1/66 FAX MESSAGE OF SARAYA INDUSTRIES SHOWING SARAYA'S POSITION. THE DOCUMENT EXCLUSIVELY BELONGS TO SARAYA INDUSTRIES. 28. A-1/114 TOTAL AJC UPTO DATE (UPTO FEB 05) DULY SIGNED B Y R . K . MIGLANI OF UPDA VISHAL SRIVASTAVA & ATUL K . SINGH OF LORDS, & H.R . WADHWA OF SARAYA . CLEARLY THE DOCUMENT JOINTLY BELONGS TO 4 PARTIES INCLUDING THE ASSESSEE, SARAYA INDUSTRIES. THIS DOCUMENT IS SIMILAR TO THE DOCUMENT ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 17 (A JOINT VENTURE AGREEMENT SIGNED BY T H REE PARTIES) CONSIDERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE C ASE OF GURUPRERNA ENTERPRISES V . ACIT {IT A NOS. 256, 257, 258/MUM/2010) 29. A-1/129 DOCUMENT BEARING 'SARAYA 2003-04' CLEARLY SHOW S THAT THI S DOCUMENT EXCLUSIVELY BELONGS TO SARAYA INDUSTRIE S 30. !-1/130 STAT E M E N T OF D U E , PAID AND B A L A N C E STATEM E NT O F 1 7 P E RSON S WHICH M EAN T H AT JO IN TL Y T H E DOC UM EN T B E L O N GS T O ALL 1 7 PARTIES WHICH I N C L U DE SARAYA I . E . TH E AS S E S SEE A L SO. 31-32 A-1/14 & 15 (-)EXCESS (+) SHORTAGE OF BALRAMPUR DISTILLERY WHICH IS OF SARAYA INDS. CLEARLY THESE TWO DOCUMENTS BELONG EXCLUSI V ELY TO SARAYA INDUSTRIES 33-34 A-4/47 & 48 R K MIGLANI IN HIS STATEMENT RECORDED UFS 132(4) ON * 14 - 02-2006 IN ANSWER TO QUESTION NO 19 HAS CLARIFIED THAT THE PAGE 47 CONTAINS THE CASH AFC FOR THE MONTH OF OCT . 2 TO 3 OF EXPENSES ATTRIBUTABLE TO V ARIOUS MEMBERS OF UPDA AND THAT THIS AJC HAS BEEN GIVEN BY SHRI WADHWA OF MIS SARAYA DISTILLERIES ON 11/12/2003. PAGE 48 IS EXPLAINED TO CONTAIN THE RECORDS OF BALANCES OUTSTANDING IN RESPECT OF V ARIOUS MEMBERS OF UPDA . NATURALLY SARAYA INDUSTRIES WOULD HAND OVER ITS OWN DOCUMENTS . IF THE DOCUMENTS WERE BELONGING TO UPDA, MR. MIGLANI WOULD NOT HAVE ATTRIBUTED THESE DOCUMENTS TO SARAYA IND U S T R I ES ESPECIALLY WHEN HE KNEW THAT SARAYA INDUSTRIES CONTROLS IT BECAUSE IT IS ONE OF THOSE FIVE CORE DISTILLERY MEMBER S. * ENCLOSED AS ANNEXURE A-3 TO THIS SUBMISSION HEARING PAGE NO. 35 TO 37 AT THE BOTTOM ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 18 ON T H E BASIS OF THE AB OVE DISC U SSION TH E RE IS N O D O UBT L E F T T H A T PRESENT IS A CASE WHEREI N TH E R E \ WE R E M AN Y DOC UM E NT S FO U ND AND SEIZE D B ELONGI N G TO T HE ASSESSEE AND H ENCE P R OCEEDI N GS WE R E RIG HTL Y I N I TI A T ED BY TH E A O U/S 15 3 C OF T H E AC T . 4. 4 N OW TH E QU ES TI O N TH A T MA Y C R O P UP IS W H E THER THER E CA N B E AN Y P O SSIBILIT Y T O H O LD THAT TH E D OC UM E NT S B E L O N G T O U PD A OR M I G L A N I. S I N CE I N M I G L A N I ' S CASE ( F RO M W H O S E R ES ID E N CE TH E S E W E RE FO UN D & S E I Z E D) T H ESE HAV E N OT BEEN CO NS I D E R E D C L EA RL Y A O V I EWED TH A T TH ES E DOC UM E NT DID N O T AS SUC H BE L O N G T O M R . MIGLANI . IN THI S C O NT EX T , IT N EEDS T O B E APPRE C IA T ED T HA T UP D A I S ME R EL Y A BOD Y FO RM ED B Y T H E DIS T I L LE R IES FO R T H E WE L F AR E OF I T S ME MB ERS . U NA CCO UNT ED PA Y M E NT S TO TH E POL IT ICIA N S AND TH E G OVE R NME N T O F FICIA L S WA S T O B E M ADE B Y T H E M E MB E R D IS TI LLE R IES . U P D A WAS J U ST T O FACILI T A T E T HESE PA Y ME NT FO R AND BE H A L F OF THE ME M BER D I S TI LLE RI ES . WHEN I T IS SO THE DOCUMENTS LIKELY TO BE FOUND AT THE PREMISES OF UPDA OR AT TH E RESIDENCE OF RK MIGLANI, GM OF UPDA WERE NOT GOING TO SHOW UNDISCLO SED INCOME/RECEIPTS OF UPDA BUT OF ITS MEMBER S. LOOKING FROM THIS ANGLE UNDER NO CIRCUMSTANCES THE DOCUMENTS WOULD HAVE SHO W N - ANY INCOME DISCUSSED THEREIN PERTAINING TO UPDA . THE DOCUMENTS SO FOUND WOULD HAVE SHOWN INCOME ONLY OF ITS MEMBERS A ND WHEN IT WAS SO THE DOCUMENTS HAVE TO BE HELD TO BE BELONGIN G TO THE MEMBER DISTILLERIES AND NOT TO UPDA . SINCE, THE PAYMENTS ROUTED THROUGH THE UPDA THESE HAVE PARTLY BEEN CONSIDERED IN THE HAND S OF UPDA FOLLOWING THE DOUBLE ENTRY SYSTEM. MERELY BECA USE IN THE HANDS OF THE UPDA ALSO THESE DOCUMENTS HAVE BEEN CONSIDER ED IT DOES NOT MEAN THAT THESE DOCUMENTS CEASE TO BELONG TO MEMBER S OF THE ASSOCIATION INCLUDING SARAYA INDUSTRIES. 5 . 1 NOW THE QUESTION THAT ARISES IS AS TO WHETHER THE PRESENT CASE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CAS E OF NATIONAL INDUSTRIAL CORPORATION LTD & OTHERS DECIDED BY THE ITAT VIDE ORDER DATED 23-11-2012 AS HAS BEEN CONTENDED BY THE APPEL LANT . IN THIS CONNECTION, IT IS SUBMITTED THAT NONE OF THE ABOVE DOCUMENTS FIND MENTION IN THE ORDER OF THE TRIBUNAL WHICH GOES TO SHOW THAT AS SUCH THIS DECISION DOES NOT APPLY. IN THE PRESENT CASE W E HAVE GOOD NUMBER OF DOCUMENTS WHICH ARE CLEARLY AND EXCLUSIVE LY BELONGING TO THE SARAYA INDUSTRIES. PROBABLY, IN THE APPEALS DEC IDED BY THE BENCH ON 23-11-2012 THERE WERE NO DOCUMENTS POINTED OUT W HICH CAN BE SAID TO BE BELONGING TO THOSE ASSESSES CONCERNED. 5 . 2 THUS, THE PRESENT APPEALS HAVE TO BE DECIDED ON S TAND ALONE BASIS IN THE CONTEXT OF THE SPECIFIC ACTS AND CIRCU MSTANCES OF THIS PARTICULAR CASE. EVEN IF FOR ARGUMENT SAKE IT IS PR ESUMED THAT THESE DOCUMENTS WERE CONSIDERED BY THE CO-ORDINATE BENCH STILL IT IS SEEN THAT THE ORDER DOES NOT SPECIFICALLY REFER THESE DO CUMENTS WHICH GOES ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 19 TO SHOW THAT THEY WERE NOT CONSIDERED AND IF AT ALL CONSIDERED THEY WERE NOT NOT CONSIDERED IN PROPER PERSPECTIVE. IN T HIS RESPECT KIND ATTENTION IS DRAWN TO THE DECISION OF THE SUPREME C OURT REPORTED IN 155 ITR 120 IN DISTRIBUTORS (BARODA)P. LTD. CASE WH ICH WAS REFERRED/RELIED BY THE CUTTAK BENCH OF THE TRIBUNAL {259 ITR 29 CUTTACK} WHEREIN IT WAS HELD THAT IN THE MOST DESER VING CASE HAVING COGENT REASONS, TRIBUNAL CAN APPLY MIND AFRESH TO T HE MATTER, IRRESPECTIVE OF DECISION IN EARLIER YEARS IN A'S OW N CASE AND EVEN ON THE SAME SET OF FACTS FOR THE CAUSE OF SUBSTANTIAL JUSTICE. FOR THE CAUSE OF SUBSTANTIAL JUSTICE IT IS PRAYED TO KINDLY CONSIDER THE MATTER IN PROPER PROSPECTIVE . 6. WITHOUT PREJUDICE TO THE ABOVE, IN ANNEXURE A-I TO THIS SUBMISSION ENCLOSED THE OPERATING PORTION OF THE TRIBUNAL HAS BEEN EXTRACTED ALONG WITH THE REASONS TO SHOW AS TO HOW THESE FIND INGS/OBSERVATIONS OF THE TRIBUNAL ARE IN - APPLICABLE IN THE CONTEXT OF THE PRESENT APPEAL . 19. LD. DR REFERRED PARA NO. 14 OF THE ORDER OF THE TRIBUNAL BANGALORE BENCH WHEREIN IT WAS OBSERVED THAT NEITHER BOOKS OF ACCOUNTS NOR DOCUMENT (S) BELONGING TO THE ASSESSEE WERE DISCOVE RED DURING THE SEARCH AT MIGLANIS HOUSE. BANGALORE BENCH QUOTED THE PROV ISIONS OF SECTION 153C OF THE ACT AND THEREAFTER IN PARA 8.12 OBSERVED THA T BOOKS / DOCUMENTS BELONGING TO THE ASSESSEE FROM MIGLANIS HOUSE WERE SEIZED NOR WERE THEY HANDED OVER TO THE AO OF CBDL, BANGALORE BY THE AO CC-19, DELHI AND HENCE HELD THAT THE AO WAS NOT JUSTIFIED IN TAKING ACTION U/S 153C OF THE ACT. HE SUBMITTED THAT IN PARA NO. 8/13, THE BANGAL ORE BENCH HAS DISCUSSED THE DECISION IN THE CASE OF P SRINIVAS NAIK VS. ACI T 114 TTJ (BANG) 856 WHERE THE DOCUMENTS / BOOKS (SEIZED FROM REDDYS H OUSE) SHOWED THAT ALL THE TRANSACTIONS BELONGING TO THE ASSESSEE. THERE (NAIKS CASE) VIEWED THAT BELONGING TO CONNOTES BOTH THE COMPLETE OWNE RSHIP AND OWNERSHIP ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 20 WHICH IS LESS THAN PERFECT LEGAL TITLE. IT VIEWED T HAT THERE SHOULD BE SOME LIMITED OWNERSHIP OF INTEREST TO SAY THAT THEY BELO NG TO THE ASSESSEE. IN THIS REGARD SUPPORT HAS BEEN TAKEN ALSO FROM THE DE CISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N CHAND RANI VS. ACIT 231 CTR 474 (GUJ). THUS IT WOULD BE NOTICED THAT THE BANGAL ORE BENCH FOR DECIDING THE MATTER PLACED RELIANCE ON ITS DECISION IN THE C ASE OF P. SRINIVAS NAIK AND ALSO DREW SUPPORT FROM VIJAYBHAI N CHANDRRANI CASE. FACTS OF THESE TWO CASES WERE ENTIRELY DIFFERENT. THE FACTS OF T EH PR ESENT CASE ARE SIMILAR TO THE FACTS IN THE CASE OF GURU PRERNA ENTERPRISES (SU PRA) WHEREIN THE TRIBUNAL HAS HELD / OBSERVED THAT IT HAS GONE THROU GH SEIZED MATERIAL AVAILABLE IN PAPER BOOK OF THE ASSESSEE AND SPECIFI CALLY ASSESSEES PAPER BOOK (PAGE NO. 105 TO 190) OF KESSAAR ENTERPRISES F OR ASSTT. YEAR 2003-04 . THE TRIBUNAL REMARKED THAT NO DOUBT EVEN POSSESSION OF ANY INTEREST LESS THAN OF FULL OWNERSHIP COULD BE SIGNED BY THAT WORD . THE LD. DR AGAIN REFERRED CONTENTS OF PARA NO. 18 OF THE ORDERS OF T HE TRIBUNAL IN THE CASE OF NICL AND OTHERS (SUPRA) WITH THIS SUBMISSION THAT THE TRIBUNAL TOOK NOTE OF THE EXPRESSION DOCUMENT AS BEING DEFINED IN TH E EVIDENCE ACT TO MEAN ANY MATER EXPRESSED OR DESCRIBED UPON ANY SUBSTANCE BY MEANS INTENDED TO BE USED FOR THE PURPOSE OF RECORDING THAT MATTER . IT ALSO NOTICED THAT THERE IS NO DISPUTE THAT DOCUMENTS WERE IN THE HAND WRITING OF SHRI MIGLANI WHO IS NOT AN EMPLOYEE OF ANY ASSESSEE. THE TRIBUNA L VIEWED THAT ACCORDING TO ITS UNDERSTANDING PRESUMPTION OF OWNER SHIP OF DOCUMENTS ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 21 COULD BE ATTACHED WITH THE PERSON WHO AUTHORED IT O R WITH WHOM IT WAS FOUND I.E. THE PERSON WHO POSSESSED IT. IT ALSO OBS ERVED THAT ALL THE DOCUMENTS RELIED UPON BY THE REVENUE WERE NOT EMANA TING FROM THE BOOKS OF ASSESSEE OR IN THE HANDWRITING OF ANY EMPLOYEE O F THE ASSESSEE. ON THE ABOVE FINDING OF THE TRIBUNAL THE LD. DR SUBMITTED THAT THE DOCUMENTS EMANATING FROM THE BOOKS OF THE MEMBERS OF THE UPDA AND MORE SO FROM THE MEMBERS OF THE CORE COMMITTEE WHICH IS CLEAR FR OM THE FAX MESSAGE SHOWING THEIR TELEPHONE NUMBERS AND EVEN NAMES ( A -1/66, A-2/54-57 & A-2/58 & 59). THE FACT THAT THE CORE MEMBERS ONLY C OMPLIED AND SENT THE DATA AND THAT THEY EMANATED FROM THEIR BOOKS BECOME S CLEAR FROM THE VERY FACT THAT THE FAX MESSAGES ARE ALWAYS TO SHRI R.K. MIGLANI AND GENERALLY NOT THE OTHER WAY ROUND WHICH GO TO SHOWN THAT THEY WER E NOT PREPARED BY UPDA OR SHRI R.K. MIGLANI. HE SUBMITTED THAT TOTAL MONTHWISE / YEARWISE DISPATCH OF CL IN AL FOUND IN THE SEIZED DOCUMENTS FOUND 100% TALLIED WITH THE REGULAR BOOKS OF CORE COMMITTEE MEMBERS / OTHER MEMBERS OF THE UPDA WHICH ONLY GOES TO SHOW THAT THEY EMANATED FRO M THE BOOKS OF MEMBERS ONLY, WHICH MAKE DOCUMENTS SEIZED FROM MI GLANIS HOUSE TO BE BELONGING TO THE MEMBERS OF THE UPDA ONLY. ON THE O BSERVATIONS OF THE TRIBUNAL THAT IT COULD HAVE APPRECIATED THE CASE OF THE REVENUE IF IT WAS ABLE TO LAY ITS HANDS ON ANY FORWARDING LETTER I.E. CHIT ETC. WRITTEN BY THE ASSESSEE WHILE HANDING OVER MONEY TO UPDA, LD. DR D REW OUR ATTENTION TOWARDS THE FACT THAT DURING THE COURSE OF SURVEY A T THE OFFICE OF THE ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 22 PRESENT ASSESSEE DOCUMENTS WERE FOUND AND IMPOUNDED AND PAGE NO. 13 OF THE ANNEXURE A-2 (PARTY A-9) REVEALS THAT THE AS SESSEE PAID A SUM OF RS. 75 LACS TO UPDA IN JULY 2005. THIS PAYMENT IS VERIF IABLE EVEN FROM THE AMOUNT SHOWN AS RECEIVED BY UPDA AS APPEARING ON PA GE NO. 69 OF A-2 SEIZED FROM THE RESIDENCE OF SHRI R.K. MIGLANI, WHI CH SHOWS THE PAYMENT RECEIVED AT RS. 74.98 LACS WHICH ALMOST TALLIES. TH US THERE IS A DIRECT EVIDENCE TO SUPPORT THAT DOCUMENT FOUND IN MIGLANI S HOUSE BELONGS TO THE ASSESSEE. ON THE FINDING OF THE TRIBUNAL IN THE CAS E OF NICL AND OTHERS THAT IN ABSENCE OF ANY FAX MESSAGE ANY E-MAIL OR ANY AUD IO MESSAGE RECORDED FROM TELEPHONE CONVERSATION IT COULD NOT BE SAID TH AT THE DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND , THE LD. DR S UBMITTED THAT THE FINDING WAS BASED UPON ITS UNDERSTANDING THAT PROBA BLY IN THIS CASE THERE WAS NO FAX MESSAGE OR ANY E-MAIL OR ANY AUDIO MESSA GE WERE THERE, WHEREAS IN THE CASE OF PRESENT ASSESSEE THERE ARE G OOD NUMBER OF DOCUMENTS WHICH HAVE EMANATED FROM THE ASSESSEE ALO NE. IN THIS REGARD LD. DR INVITED OUR ATTENTION TO THE DOCUMENTS MARKE D AS A-2/54-57 AND A- 1/66 WHICH ARE E-MAILS WHICH GO TO SHOW THAT THESE DOCUMENTS BELONG TO THE ASSESSEE ONLY. ON THE OBSERVATION OF THE TRIBUN AL IN PARA NO. 19 IN THE CASE OF NICL & OTHERS THAT THE UPDA IS A SOCIETY WH ERE ALL THE ASSESSES ARE MEMBERS AND THAT ITS MEMORANDUM OF ASSOCIATION DOES NOT PROVIDE THAT EXCESS OF INCOME SHALL BE TRANSFERRED TO MEMBERS OF THE SOCIETY AND THAT ANYTHING BELONGING TO THE SOCIETY CANNOT BE SAID TO BE BELONGING TO ITS ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 23 MEMBERS AS ALL THESE AMOUNTS HAVE BEEN TAXED IN THE HANDS OF UPDA ALSO, LD. DR SUBMITTED THAT THIS OBSERVATION OF THE TRIB UNAL REQUIRES TO BE REVISITED AGAIN IN THE LIGHT OF THE FACTS SPECIFICA LLY POINTED OUT IN THE SUBMISSION OF THE REVENUE. THE TRIBUNAL HAS TO APPR ECIATE THAT THE DOCUMENTS WERE NOT BELONGING TO UPDA AND THOSE DOCU MENTS WERE BASICALLY BELONGING TO ALL THE MEMBERS. THE PRODUCT ION AND PAYMENTS WERE BELONGING TO MEMBERS AND NOT TO THE UPDA AND WHEN I T IS SO THE DOCUMENTS SHOWN DETAILS OF PRODUCTION, DISPATCHES, COLLECTION AND PAYMENTS TOO HAVE TO BE HELD TO BE BELONGING TO TH E MEMBERS WHOM THOSE CONCERNED. ON THE OBSERVATION OF THE TRIBUNAL IN TH E CASE OF NICL THAT ALL THE DOCUMENTS HAVE BEEN TAXED IN THE HANDS OF THE U PDA ALSO, THE LD. DR SUBMITTED THAT IT DOES NOT CONCLUDE THAT REVENUE / AO HAD VIEWED THAT THESE DOCUMENTS BELONG TO UPDA ONLY. IN FACT SINCE THE PAYMENT WAS GIVEN TO UPDA FOR BEING DISBURSED TO POLITICIANS OR OFFIC IALS, IT WAS REQUIRED TO BE ACCOUNTED FOR IN THE BOOKS OF UPDA ALSO THAT IS WHY THESE WERE BROUGHT TO TAX THERE. DESPITE ITS CONSIDERATION IN THE HANDS O F UPDA AS PER THE DOUBLE ENTRY SYSTEM ITS EFFECT WAS NECESSARILY TO BE TAKEN INTO ACCOUNT IN THE HANDS OF THOSE WHO PAID THOSE SUMS. THUS MERELY BEC AUSE THESE DOCUMENTS HAVE BEEN CONSIDERED IN THE HANDS OF UPDA DOES NOT MEAN THAT THESE DOCUMENTS CEASE TO BE BELONGING TO OTHER NECE SSARY PARTIES. FURTHER THE BOOKS OF ACCOUNTS OF UPDA DOES NOT REFLECT THE TYPE OF TRANSACTIONS REFLECTED BY THESE DOCUMENTS SEIZED FROM SHRI MIGLA NIS HOUSE WHICH ONLY ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 24 GOES TO MEAN THAT THESE DOCUMENTS WERE NOT AS SUCH BELONGING TO UPDA. SINCE IT ACTED AS FACILITATOR ON BEHALF OF THE MEMB ER DISTILLERIES THESE ON PROTECTIVE SIDE WERE CONSIDERED IN THE HANDS OF UPD A ALSO. 20. IN THE REJOINDER THE LD. AR SUBMITTED THAT T HE ONLY ISSUE IN DISPUTE IS VALIDITY OF PROCEEDINGS U/S 153C OF THE ACT IN THE CONTEXT OF SATISFACTION RECORDED BY ACIT CENTRAL CIRCLE IV NEW DELHI. THE COMMON SATISFACTION NOTE WAS RECORDED IN THE CASE OF 19 PARTIES WHICH A LSO INCLUDED THE ASSESSEE, SARAYA INDUSTRIES LTD. . THE TRIBUNAL QU ASHED THE ASSESSMENT PROCEEDINGS IN CASE OF NUMBER OF ASSESSES WHO WERE COMMON TO SAME SATISFACTION NOTE ON THE GROUND THAT VARIOUS DOCUME NTS REFERRED TO IN THE SATISFACTION NOTE DO NOT BELONG TO THE PERSONS REFE RRED TO IN THE SATISFACTION NOTE. IN THE SATISFACTION NOTE REFERENCE WAS MADE T O VARIOUS PAGES OF ANNEXURE A 1 TO A 10 AND ALL THESE PAGES WERE T AKEN INTO CONSIDERATION BY THE TRIBUNAL IN THE CASE OF NICL AND OTHERS (SU PRA). 21. IN THE CONTEXT OF VARIOUS ANNEXURES FORMING PART OF SATISFACTION NOTE, THE TRIBUNAL VIDE PARA 8 OF ITS ORDER TOOK N OTE OF CONTENTION OF THE PARTIES THAT THESE ANNEXURES WERE NOT IN THE HANDWR ITING OF DIRECTORS OR ANY OFFICIALS OF THE CONCERNED COMPANIES AND THERE IS N O CORROBORATIVE EVIDENCE REGARDING CONTENTS OF THESE ANNEXURES. HE ALSO REFE RRED CONTENTS OF PARA NOS. 18, 19 AND 20 OF THE ORDER OF THE TRIBUNAL REG ARDING FINDING AND ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 25 CONCLUSION IN THE CONTEXT OF THE COMMON SATISFACTIO N NOTE IN TERMS OF PROVISIONS OF SECTION 153C. THE FINDING OF THE TRIB UNAL IN THESE PARAGRAPHS IS SELF EVIDENT THAT ALL THE RELEVANT ANNEXURES FO RMING PART OF SATISFACTION NOTE WERE CONSIDERED BY THE TRIBUNAL. 22. THE LD. AR SUBMITTED FURTHER THAT LD. DR HAS ENCLOSED VARIOUS DOCUMENTS AS PART OF THE WRITTEN SUBMISSION ALONGWI TH VARIOUS ANNEXURES IT WAS PROPOSED THAT ORDER OF THE TRIBUNAL WAS NOT IN CORRECT PERSPECTIVE AND APPEALS IN THE PRESENT CASE ARE REQUIRED TO BE CONSIDERED INDEPENDENTLY AND ON STAND ALONE BASIS. OPPOSING T HIS SUBMISSION OF THE LD. DR THE LD. AR SUBMITTED THAT THE ISSUE IN DISPU TE IS REGARDING VALIDITY OF THE PROCEEDINGS U/S 153C IN THE CONTEXT OF COMMON S ATISFACTION NOTE RECORDED BY ACIT, CENTRAL CIRCLE-4. THE SAID NOTE A LONGWITH VARIOUS ANNEXURES WERE EXAMINED BY THE TRIBUNAL AND PROCEED INGS U/S 153C HAVE BEEN QUASHED AS PER CONCLUSION RECORDED IN PARA 18, 19 AND 20 OF THE ORDER. AS THE PROCEEDINGS IN THE CASE OF ASSESSEE A RE ON THE BASIS OF SAME SATISFACTION NOTE, APPEALS OF THE ASSESSEE ARE FULL Y COVERED AS PER CONSOLIDATED ORDER OF THE TRIBUNAL, DELHI BENCH AND BANGALORE BENCH. THERE IS NO DISPUTE THAT VARIOUS ANNEXURES BEING PART OF SATISFACTION NOTE AND PROPOSED TO BE FILED NOW WERE FOUND FROM OFFICE AND RESIDENCE OF UPDA AND SHRI R.K. MIGLANI AND ASSESSEE HAS NO LINK OR CONNE CTION WITH THESE ANNEXURES AS THESE ANNEXURES HAVE NEITHER BEEN EXEC UTED OR AUTHENTICATED ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 26 BY THE ASSESSEE. HE SUBMITTED THAT VARIOUS ANNEXURE S BEING FURNISHED NOW ARE ONLY PHOTOCOPIES AND IN THE ABSENCE OF ORIGINAL DOCUMENTS, THESE ANNEXURES HAVE NO EVIDENCE VALUE. THE SOURCE AND AU THENTICITY OF THESE PHOTOCOPY DOCUMENTS ARE NOT KNOWN AS THESE DOCUMENT S WERE NOT CERTIFIED EITHER BY ACIT, CENTRAL CIRCLE-9, NEW DELHI WHO PA SSED THE ASSESSMENT ORDER U/S 153C. HE SUBMITTED THAT EVEN OTHERWISE I T IS NOT A CASE OF REVENUE THAT THESE ANNEXURES WERE FOUND FROM THE PO SSESSION OF ASSESSEE OR WERE IN THE HANDWRITING OF THE DIRECTORS OR EMPL OYEES OF THE ASSESSEE. MOREOVER THE CONTENTS OF ALL THESE ANNEXURES WERE O F COMMON NATURE AND CONCLUSION OF THE TRIBUNAL IN CONSOLIDATED ORDER IN THE CASE OF NICL & ORS. (SUPRA) IS FULLY RELEVANT AND APPLICABLE. HE SUBMI TTED FURTHER THAT THE LD. DR HAS ENCLOSED THESE ANNEXURES WITHOUT POINTING OU T HOW AND IN WHAT MANNER THESE WERE CONSIDERED BY AO. IN ANY CASE THE SE ANNEXURES ARE IN THE NATURE OF ADDITIONAL EVIDENCES AND NOT ADMISSIB LE AS PER RULE 29 OF THE ITAT RULES. IN SUPPORT THE LD. AR PLACED RELIANCE O N THE DECISION IN THE CASE OF DCIT VS. ROHTAS PROJECTS LTD. 282 ITR (AT) 42 (TM). 23. LD. AR FURTHER SUBMITTED THAT THE TRIBUN AL IS NOT AN INVESTIGATING AGENCY AND HAS ONLY APPELLATE JURISDICTION AND AS SUCH TRIBUNAL CANNOT GO BEYOND THE GROUNDS AND EVIDENCES ON RECORD. HE SUB MITTED FURTHER THAT THE LD. DR HAS MERELY FURNISHED VARIOUS DOCUMENTS AND HAS MADE ONLY HYPOTHETICAL ARGUMENTS WITHOUT POINTING OUT WHAT IS THE UNDISCLOSED INCOME ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 27 OF THE ASSESSEE ON THE BASIS OF THESE ANNEXURES AND WHETHER ANY SUCH ADDITION IS EMANATING FROM THESE ANNEXURES. THESE D OCUMENTS ARE IRRELEVANT AND OUT OF CONTEXT AS NO ADDITION HAS BE EN MADE ON THE BASIS OF THESE DOCUMENTS. THE LD. AR SUBMITTED FURTHER THAT IN CONFORMITY WITH THE SATISFACTION NOTE EVEN THE AO HAS MADE NO ADDITION FOR THE ASSESSMENT YEARS 2000-01, 2001-02 AND 2002-03. THE TRIBUNAL CA NNOT GO BEYOND SATISFACTION NOTE AS ISSUE OF JURISDICTION IS RELAT ED TO PROVISIONS OF SECTION 153C. THE LIMITED ISSUE BEFORE THE TRIBUNAL IS WHET HER ANNEXURE REFERRED TO IN THE SATISFACTION NOTE BELONGING TO THE ASSESSEE. IN SUPPORT HE PLACED RELIANCE ON THE LATEST DECISION OF THE TRIBUNAL IN THE CASE OF DSL PROPERTIES (PVT.) LTD. VS. DCIT (SUPRA) HOLDING THAT IN THE AB SENCE OF SATISFACTION U/S 153C, THE CONSEQUENTIAL ASSESSMENT PROCEEDINGS ARE ILLEGAL AND WITHOUT JURISDICTION. 24. THE LD. AR SUBMITTED THAT NO DOCUMENT AT A LL WAS FOUND FOR THE ABOVE 6 YEARS UNDER CONSIDERATION, TO INITIATE PROC EEDINGS U/S 153C OF THE ACT SECTION 153A IS ONLY A MISSIONARY PROVISION. SA TISFACTION IS TO BE RECORDED PERTAINING TO SPECIFIC ASSESSMENT YEAR TO INITIATE THE PROCEEDINGS. THE TRIBUNAL IN THE ABOVE CITED CONNECTED CASES HAS HELD THAT THE DOCUMENT DOES NOT BELONG TO THE ASSESSEE. HE SUBMIT TED THAT THE DECISIONS CITED BY THE LD. DR ARE ON THE PROVISIONS OF SECTIO N 153A AND NOT ON SECTION 153C OF THE ACT. THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 28 SSP AVIATION LTD. VS. DCIT (2012) 346 ITR 177 (DELH I)(SUPRA) IS A SATISFACTION WHICH SUPPORT THE CASE OF ASSESSEE. IN THE PRESENT CASE THE AO HAS NOT REFERRED THESE DOCUMENTS IN THE SATISFACTIO N NOTE TO JUSTIFY INITIATION OF PROCEEDINGS U/S 153C OF THE ACT. THERE IS NO DIS PUTE THAT DOCUMENTS WERE NOT FOUND FROM THE POSSESSION OF THE ASSESSEE NOR THESE WERE WRITTEN BY THE ASSESSEE. THE ISSUE REGARDING THE VALIDITY O F INITIATION OF PROCEEDINGS U/S 153C WITHOUT ACQUISITION OF VALID JURISDICTION UNDER THOSE PROVISIONS HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE CONNE CTED CASE OF DSL PROPERTIES (P) LTD. VS DCIT ITA 1344/DEL/2012. HE POINTED OUT FURTHER THAT THE DECISION OF THIRD MEMBER OF THE TRIBUNAL I N THE CASE OF DCIT VS. ROHTAS PROJECT LTD. (SUPRA) IS AGAIN ON IDENTICAL I SSUE WHICH ALSO SUPPORTS THE CASE OF THE ASSESSEE IN THIS REGARD. 25. CONSIDERING THE ABOVE SUBMISSION WE FIND THA T THE COMMON SATISFACTION WAS RECORDED BY THE AO FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT IN RESPECT OF FOLLOWING 19 PARTIES:- S.NO. NAME OF THE DISTILLERY 2002-03 2003-04 2004-05 2005-06 TOTAL (IN LAKHS) 1. SARAYA 945 1045 527.5 690 (SARAYA + BALRAMPUR 3207.5 2. UNNAO 804 1134 636.9 889.6 3464.5 3. NIC (NATIONAL) 327 359 242.4 348.6 1277 4. NARANG 61 153 105.1 235.7 554.8 5. & PIKHANI & 214.4 333.1 185 214 947.0 ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 29 6 SHAMLI 7. MODI 21 125 149.7 308.8 604.5 8. SUPERIOR/ITRC 6 46 34.7 233.6 320.3 9. SIMBHOLI 298 472 278.5 583.1 1631.6 10. COOPERATIVE 150 182 99.8 194.8 626.6 11. KESAR(BAHERI) 419 317 176.3 245 1157.3 12. DAURALA(DCM) 374 453 310.2 448.6 1585.8 13. RAMPUR 752 945 599.4 705.6 3002 14. SSL(MANSURPUR) 463 607 374.8 591 2035.8 15. M. MEAKINS 202 334 204.2 275.6 1015.6 16. LORDS(D.K. MODI) 582 616 404.9 486.9 2089.8 17. BALRAMPUR 298 328 244.5 870.5 18. CENTRAL (UNITED SPIRITS LD.) 22 44 32.4 98.4 19. MAJHOLA 72.5 72.5 26. OUT OF THE ABOVE 19 PARTIES WHEREIN SIMIL AR PROCEEDINGS U/S 153C WERE INITIATED ARISING OUT OF THE SAME SEARCH, THE DELHI BENCH OF THE TRIBUNAL IN 12 CASES HAS DECIDED THE ISSUE IN FAVOU R OF THE ASSESSEE. IN THE CASES OF NATIONAL INDUSTRIES CORPORATION, KESAR ENTE RPRISES LTD., SIR SHADILAL ENTERPRISES, MOHAN MEAKINS LTD. AND LORD DISTILLERY LTD. (SUPRA) THE DELHI BENCH OF THE TRIBUNAL HAS DECIDED AN IDENTICAL ISSU E IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF COORDINATE BENCH OF BANGALORE IN THE CASE OF CENTRAL DISTILLERY LTD. (UNITED SPIRITS LTD .) (SUPRA). THE BASIC CONTENTION OF THE LD. AR ON THE VALIDITY OF INITIAT ION OF PROCEEDINGS U/S 153C OF THE ACT REMAINED THAT NO INCRIMINATING DOCUMENTS RELATING TO THE ASSESSEE WAS FOUND FROM THE POSSESSION OF MR. MIGLA NI NOR THOSE DOCUMENTS WERE WRITTEN IN THE HANDWRITING OF THE AS SESSEE OR ITS ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 30 EMPLOYEES. HIS FURTHER CONTENTION REMAINED THAT THE SE DOCUMENTS WERE ALSO NOT FOUND FROM THE POSSESSION OF THE ASSESSEE AND IN THE ASSESSMENT YEARS 2000-01, 2001-02 AND 2002-03 NO SATISFACTION HAS BEEN RECORDED IN THE ASSESSMENT YEARS 2000-01 TO 2001-02 AND ADDITIO N MADE IN THE ASSESSMENT YEAR 2002-03 IS NOT BASED UPON THE SATIS FACTION NOTE. THE RELEVANT FACTS ARE THAT SEARCH AND SEIZURE ACTION U /S 132 OF THE ACT WAS CONDUCTED IN THE CASE OF M/S. RADICO KHAITAN ( A LE ADING DISTILLERY PRIMARILY BASED IN UP) GROUP OF CASES. ALONGWITH THEM SEARCH WAS ALSO CONDUCTED AT THE RESIDENCE OF SHRI R.K. MIGLANI, SECRETARY GENER AL UPDA AND AT THE PREMISES OF UPDA. ACTION U/S 133A OF THE ACT WAS AL SO TAKEN AT THE PREMISES OF THE ASSESSEE ON THE SAME DATE. VARIOUS DOCUMENTS WERE FOUND AND SEIZED . STATEMENTS OF VARIOUS PERSONS IN CLUDING SHRI R.K. MIGLANI WERE ALSO RECORDED U/S 132(4) / 133A OF THE ACT. UP DA IS A REGISTERED SOCIETY FORMED BY THE DISTILLERIES OF UP FOR ITS W ELFARE TO JOINTLY TAKE UP THEIR CAUSE WITH VARIOUS AUTHORITIES ON DIFFERENT ISSUES. THE ASSESSEE WAS ONE OF THE ACTIVE MEMBERS OF THE ASSOCIATION. THESE DOCUME NTS SEIZED FROM MIGLANIS RESIDENCE AND FROM THE OFFICE OF UPDA WER E REGULAR ACCOUNTS OF MONEY RECEIVED DATEWISE FROM THE FINANCIAL YEAR 200 2-03 TILL THE DATE OF SEARCH I.E. 14.2.2006 AND CONTAINED BASIS OF DETERM INATION OF THIS CONTRIBUTION AND MANNER OF SPENDING THE MONEY. ON T HE BASIS OF THESE DOCUMENTS AND STATEMENTS OF SHRI MIGLANI THE REVENU E CAME TO THE CONCLUSION THAT CONTRIBUTION OF EACH MEMBER WAS FIX ED ON THE BASIS OF ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 31 COUNTRY LIQUOR PRODUCED BY EACH DISTILLERY. THESE COLLECTIONS WERE ON REGULAR BASIS AND WERE GIVEN TO VARIOUS OFFICIALS A ND POLITICIANS WHICH BASICALLY REPRESENTED ILLEGAL PAYMENTS. THE WHOLE A CTIVITIES WERE COORDINATED THROUGH SELECT COMMITTEE KNOWN AS CORE COMMITTEE AND SHRI MIGLANI AS SECRETARY GENERAL MAINTAINED THE REGULAR ACCOUNTS. THE REVENUE ALSO OBSERVED THAT THE ASSESSEE HAS PAID A SUM OF R S. 3207.5 LAC DURING THE FINANCIAL YEARS 2002-03 TO 2005-06 RELEVANT TO THE ASSESSMENT YEARS 2003- 04, 2004-05, 2004-05, 2005-06 AND 2006-07. 27. WHILE EXAMINING THE SEIZED DOCUMENTS THE ACIT CENTRAL CIRCLE 4, NEW DELHI WHO WAS THE AO OF THE PERSONS SEARCHED V IZ. M/S. RADICO KHAITAN, SHRI R.K. MIGLANI, SECRETARY GENERAL UPDA AND UPDA, FOUND THAT THESE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH COUPLED WITH THE CONTENTS OF THE STATEMENTS OF SHRI R.K. MIGLANI REV EALED THAT PAYMENTS WERE MADE BY VARIOUS DISTILLERIES INCLUDING THE ASS ESSEE TO VARIOUS PUBLIC SERVANTS INCLUDING THE POLITICIANS. THE ACIT CENTRA L CIRCLE 4, NEW DELHI RECORDED SATISFACTION AS PER THE PROVISIONS OF SECT ION 153A ON 1.12.2006 THAT ACTION U/S 153C OF THE ACT WAS CALLED FOR IN T HE PRESENT CASE OF THE ASSESSEE AS THE PRESENT ASSESSEE HAS INCURRED ILLEG AL / UNACCOUNTED EXPENDITURE AS MENTIONED ABOVE. HE DELIVERED THE SA TISFACTION NOTE ALONGWITH CERTIFIED PHOTOCOPIES OF THE SEIZED DOCUM ENTS TO DCIT CENTRAL CIRCLE 14, NEW DELHI WHO IS THE AO OF THE ASSESSEE BEING THE PERSON OTHER ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 32 THAN THE PERSONS SEARCHED. ON RECEIPT OF THE ABOVE RECORDS SATISFACTION WAS RECORDED ON 11.12.2006 THAT ACTION U/S 153C IS APPL ICABLE IN THE PRESENT CASE. ACCORDINGLY NOTICES U/S 153A READ WITH SECTIO N 153C OF THE ACT WERE ISSUED ON 11.12.2006 REQUIRING THE ASSESSEE TO FILE ITS RETURN FOR THE BLOCK ASSESSMENT YEARS 2000-01 TO 2005-06 WITHIN THE PRES CRIBED TIME LIMIT. 28. THERE IS NO DOUBT WHEN A PRELIMINARY OBJ ECTION IS RAISED AGAINST THE VALIDITY OF INITIATION OF PROCEEDING U/S 153C O F THE ACT IN THE CONTEXT OF SATISFACTION RECORDED BY THE ACIT, CENTRAL CIRCLE-4 , NEW DELHI TO ACQUIRE JURISDICTION AGAINST THE ASSESSEE TO FRAME ASSESSME NT UNDER THOSE PROVISIONS READ WITH SECTION 153A OF THE ACT, WE HA VE TO EXAMINE AND DECIDE THIS ISSUE FIRST KEEPING IN MIND THE MATERIA L AVAILABLE ON RECORD AS ON THE DATE WHEN SATISFACTION WAS RECORDED. 29. A COMMON SATISFACTION NOTE WAS RECORDE D IN CASE OF 19 PARTIES INCLUDING THE PRESENT ASSESEE BEFORE US. A COPY OF SATISFACTION NOTE RECORDED IN THE CASE OF THE ASSESSEE ( A COPY OF WH ICH HAS BEEN MADE AVAILABLE AT PAGE NO. 2 TO 5 IN THE PAPER BOOK (APB ) FILED ON 28.5.2013) IS REPRODUCED HEREUNDER : IT HAS COME TO MY KNOWLEDGE THAT YOU EXERCISE JURIS DICTION OVER THE CASE OF M/S. SARAYA INDUSTRIES LIMITED. SEARCH AND SEIZURE ACTIONS UNDER SECTI ON 132 OF I.T. ACT, 1961 WERE TAKEN ON M/S. RADICO KHAITAN LIMITED GROUP OF CASES AND A LSO AT THE RESIDENCE OF SHRI R.L. MIGLANI, SECRETARY GENERAL OF UPDA ON 14.2.200 6. SIMULTANEOUSLY A SURVEY U/S 133A OF THE I.T. ACT, 1961 WAS CARRIED OUT AT THE O FFICE OF THE UPDA (UTTAR PRADESH DISTILLERY ASSOCIATION). VARIOUS INCRIMINATING DOCU MENTS WERE FOUND AND SEIZED THEREFROM. ACTION U/S 153A HAS BEEN INITIATED AGAIN ST, VARIOUS PERSONS INCLUDING M/S. RADICO KHAITAN LTD, AND SHRI R.K. MIGLANI. DUR ING THE COURSE OF SEARCH VARIOUS ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 33 DOCUMENTS WERE SEIZED / IMPOUNDED AND STATEMENTS U/ S 132(4) / 133 A WERE RECORDED INCLUDING THOSE OF SHRI R.K. MIGLANI. THE SCRUTINY OF INCRIMINATING DOCUMENTS FOUND AT THE RESIDENCE OF SHRI MIGLANI AND ALSO FROM THE OFFICE OF UPDA REVEALS TH AT ILLEGAL PAYMENTS WERE MADE BY VARIOUS DISTILLERIES TO VARIOUS PUBLIC SERVANTS. THE UPDA ACTED AS THE NODAL AGENCY FOR MAKING THESE ILLEGAL PAYMENT. THE TOTAL OF SUCH ILLEGAL PAYMENTS WHICH ARE INADMISSIBLE EXPENDITURES WORKS OUT TO RS. 246 CRORE AS PER DETAILS GIVEN HEREUNDER {AS UNDERSTOOD FROM ANNEXURE A-1 & A-2 SE IZED FROM THE RESIDENTIAL PREMISES OF SHRI R.K. MIGLANI} :- S.NO. NAME OF THE DISTILLERY 2002-03 2003-04 2004-05 2005-06(TILL TOTAL (IN JAN.) LAKHS) 1. SARAYA 945 1 045 527.5 *690(SARAYA + 3207.5 BALRAMPUR 3. RAMPUR 752 945 599.4 705.6 3002 4. SSL(MANURPUR) 463 607 374.8 591 2035.8 5. LORDS (D.K. MODI) 582 61 6 404.9 486.9 2089.8 6. DAURALA (DCM) 374 45 3 310.2 448.6 1585.8 7. KESAR (BAHERI) 419 317 176.3 245 1157. 3 8. NIC (NATIONAL) 327 3 59 242.4 348.6 1277 9. SIMBHOLI 298 472 278.5 583.1 1631 .6 10. BALRAMPUR 298 3 28 244.5 870 .5 11. NARANG 61 153 105.1 235.7 554. 8 12. **PIKHANI 162 339 185.3 213.6 899.9 13. **SHAMLI 93 93 14. COOPERATIVE 150 182 99.3 194.8 626.6 15. ***M. MEAKINS 202 33 4 204.2 275.6 1015.8 16. CENTRAL 22 44 32.4 98.4 17. MODI 21 125 149.7 308.8 6 04.5 18. SUPERIOR/ITRC 6 46 34.7 233.6 320 .3 19. ****MAJHOLA 72.5 72.5 TOTAL 59.80CR. 7 5 CR. 46.10 CR. 65.23 CR. 246.076 CR. ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 34 SO, FROM THE ABOVE CHART, THE TOTAL OF SUCH ILLEGAL PAYMENTS IN RESPECT OF M/S. SARAYA INDUSTRIES LIMITED, B-2, B-3, SURYA PLAZA, N EW FRIENDS COLONY, NEW DELHI, WHICH ARE INADMISSIBLE EXPENDITURE WORKS OUT TO RS. 3207.5 LAKH AS PER DETAILS GIVEN HEREUNDER :- S. NAME OF THE DISTILLERY 2002-03 2003-04 2004-05 2005-06 TOTAL(IN NO. (TILL JAN.) LAKHS 1. SARAYA INDUSTRIES LIMITED 945 1045 527.5 *690 (SARAYA 3207.5 +BALRAMPUR M.S. SARAYA INDUSTRIES LTD. HAS TAKEN OVER THE COU NTRY LIQUOR DIVISION OF M/S. BALRAMPUR CHINI MILLS LTD. FOR THE F.Y. 2005-0 6 SO THERE ARE NO ILLEGAL PAYMENTS BY M.S. BALRAMPUR CHINI MILLS LTD. IN THIS YEAR. **PILKHANI AND SHAMLI DISTILLERIES ARE OWNE D BY THE SAME SIR SHADI LAL GROUP. SO TILL A PART OF F.Y. 2003-04, THE ILLEGAL PAYMENT AMOUNT HAS BEEN CALCULATED SEPARATELY BUT THEREAFTER IT HAS BEEN CLUBBED. ***FOR M/S. MOHAN MEAKINS GROUP ALSO THE LUC KNOW AND GHAZIABAD DISTILLERIES ARE CLUBBED, THOUGH THE MAJOR PRODUCTI ON / ILLEGAL PAYMENTS COME FROM LUCKNOW DISTILLERY OPERATIONS. ****M/S. MAJHOLA DISTILLERY STARATED MAKING ILLEGAL PAYMENTS IN THE F.Y. 2005- 06. THESE ILLEGAL PAYMENTS TO PUBLIC SERVANTS ARE FIXED ON THE BASIS OF MONTHLY PRODUCTION / SALES OF DIFFERENT DISTILLERIES. THE T OTAL ILLEGAL PAYMENT AMOUNT IS SETTLED WITH THE PUBLIC SERVANTS AND THEN THIS AMOU NT IS DIVIDED PROPORTIONATELY ON THE BASIS OF PRODUCTION / SALES OF DIFFERENT DISTI LLERIES. THESE FIGURES OF PRODUCTION / SALES REFLECTED IN THE PAPERS IMPOUNDED / SEIZED FROM UPDA HEADQUARTERS AND THE RESIDENCE OF ITS SECRETARY GENERAL SHRI R.K. MI GLANI, IN FACT, TALLIES WITH THE ACTUAL PRODUCTION / SALES SHOWN BY DIFFERENT DISTIL LERIES IN THEIR BOOKS OF A/C, WHICH, IN A WAY INDICATE THAT THESE PAPERS DEPICT THE ILLE GAL PAYMENTS MADE AND ARE NOT IMAGINARY PAPERS. THESE DISTILLERIES HAVE ADOPTED DIFFERENT METHODS FOR SIPHONING OFF / GENERATION OF THIS ILLEGAL PAYMENT AMOUNTS. SOME OF THE INSTANCES NOTICED ARE AS UNDER :- (A) M/S. NATIONAL INDUSTRIAL CORPORATION LTD. ( NICL) HAS PAID MORE THAN RS. 10 CRORES IN F.Y. 2002-03 AND 2003-04 TO M/S. ANEJA & CO. AS COMMISSION / SUPERVISION CHARGES. M/S. ANEJA & CO. EVEN AFTER IN CLUDING THESE AMOUNTS DID NOT HAVE TO PAY ANY TAX. ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 35 (B) M/S. UNMAO DISTILLERY HAS PAID MORE THAN RS. 30 CRORES AS DEPOT CHARGES / EXPENSES TO TWO DELHI BASED PARTIES, WHO HAVE PAID NEGLIGIBLE TAXES ON THIS AMOUNT. SUCH CHARGES WERE NOT PAID TILL F.Y. 2001-2 002. MANY DISTILLERIES STARTED PAYING COMMISSIO N ON SALES, EXPENSES ON SALES, SALES INCENTIVES ETC. FROM F.Y. 2002-03 ONWARDS, WH EN THESE TYPES OF PAYMENTS DO NOT RESULT INTO CORRESPONDING INCIDENCE OF TAX IN T HE HANDS OF THE RECIPIENTS. SOMETIMES THESE PAYMENTS ARE MADE TO BUSINESS CONCE RNS IN NON-RELATED BUSINESS . SHAMLI AND PILKHANI DISTILLERIES, DAURALA DISTILL ERY, M/S. LORDS DISTILLERY HAVE MADE SUCH TYPES OF PAYMENTS. (D) IN MOST CASES, EXPENSES ON EMPTY BOTTLES HAVE INCREASED DISPROPORTIONATELY SINCE F.Y. 2002-2003. (E) SOME OF THE DISTILLERIES LIKE SARAYA ARE PAYING INFLATED TRANSPORTATION CHARGES IF COMPARED WITH OTHER DISTILLERIES. IN VIEW OF THE ABOVE FACTS BASED ON SEIZED DO CUMENTS AND COUPLED WITH THE STATEMENTS OF SHRI R.K. MIGLANI, SECRETARY GENERAL OF UPDA, I AM SATISFIED THAT THE DOCUMENTS SEIZED FROM THE RESIDENCE OF SHRI R.K. MI GLANI BELONG TO THE ABOVE MENTIONED PERSONS ALSO. HENCE, ACTION U/S 153C OF I NCOME TAX ACT, 1961 IS CALLED FOR IN THE CASE OF ABOVE NOTED PERSON WHO HAS INCUR RED ILLEGAL EXPENDITURE AS MENTIONED ABOVE. PHOTOCOPIES OF ANNEXURES A-1 TO A-10 SEIZ ED FROM THE RESIDENCE OF SHRI R.K. MIGLANI AND ANNEXURES A-1 TO A-8 IMPOUNDED FRO M THE OFFICE OF UPDA ARE BEING ENCLOSED. ANNEXURE A-9 IMPOUNDED FROM THE OFF ICE OF UPDA IS A HARD DISC. ASSESSING OFFICERS REQUIRING COPIES THEREOF MAY OBT AIN IT FROM THE UNDERSIGNED. ALSO FIND ENCLOSED STATEMENT OF SHRI R.K. MIGLANI, SECRETARY GENERAL UPDA RECORDED U/S 132 (4) AND U/S 133A ON 14.2.2006. 30. FROM THE PERUSAL OF THE ABOVE SATISFACTI ON NOTE WHICH IS COMMON FOR 19 PARTIES INCLUDING THE PRESENT ASSESSEE, IT A PPEARS THAT THE VERY BASIS FOR INITIATION OF THE PROCEEDINGS U/S 153C AGAINST THESE PARTIES REMAINED THE ALLEGED INCRIMINATING DOCUMENTS FOUND AT THE RESIDE NCE OF SHRI MIGLANI AND ALSO FROM THE OFFICE OF UPDA. THESE DOCUMENTS MENTI ONED IN THE SATISFACTION NOTE ARE ANNEXURE A-1, A-2, IN COMMON AND B-2, B-3 IN THE CASE OF THE ASSESSEE. ON PERUSAL OF THESE DOCUMENTS , WE FAILED TO ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 36 UNDERSTAND AS TO HOW THE CASE OF THE PRESENT ASSES SEE STANDS ON DIFFERENT FOOTING THAN THE OTHER 18 ASSESSEES IN THE CASES OF MOST OF WHOM THE TRIBUNAL ON THE BASIS OF THE SAME SATISFACTION NOTE HAS HELD THE PROCEEDING INITIATED IN THOSE CASE U/S 153C AS INVALID. IN THO SE CASES ALSO ANNEXURES A- 1 TO A-10 WERE THE SUBJECT MATTER, ON CONSIDERATION OF WHICH THE TRIBUNAL CAME TO THE CONCLUSION THAT INVOCATION OF SECTION 1 53C WAS NOT VALID AS NO INCRIMINATING DOCUMENTS BELONGING TO THE ASSESEE WE RE FOUND. RELEVANT PARA NOS. 18, 19 AND 20 OF THE ORDER OF THE TRIBUNA L IN THE CASE OF M/S. NICL VS. DCIT AND OTHERS (SUPRA) ARE BEING REPRODUC ED HEREUNDER FOR A READY REFERENCE :- 18. ACCORDING TO THE REVENUE, IF ALL THE ANNEXUR ES A-1 TO A-10 ARE LOOKED INTO IN THE LIGHT OF THE STATEMENT GIVEN BY THEIR A UTHOR SHRI MIGLANI, THEN IT REVEALS THAT DAY TO DAY TRANSACTION NOTED ON THESE PAGES ARE DIRECTLY RELATED TO THE BUSINESS OF THE ASSESSEE AND MEMBERS OF THE UPDA. THEREFORE, THERE DOCUMENTS WERE BELONGED TO THE ASS ESSEE. PRIMA FACIE, IT APPEARS TO BE VERY SIMPLE VERSION. IT BECOMES MORE SIMPLE IF WE CONCEIVE THESE FACTS AS A LAYMAN ON THE BASIS OF OUR EXPERIE NCE, WE GATHER FROM THE SOCIETY, RATHER THAT IMPRESSION MAKES OUR TASK MORE DIFFICULT AND GIVE RISE TO CONFLICT OF THOUGHTS AND BELIEFS. THE EXPRESSION DO CUMENT HAS BEEN DEFINED IN THE INDIAN EVIDENCE ACT, TO MEAN ANY MATTER EXPRE SSED OR DESCRIBED UPON ANY SUBSTANCE BY MEANS OF LETTER, FIGURE, MARK S OR BY MORE THAN ONE OF THESE MEANS INTENDED TO BE USED FOR THE PURPOSE OF RECORDING THAT MATTER. THERE IS NO DISPUTE THAT DOCUMENTS IN THESE APPEALS WERE IN THE HANDWRITING OF MR. MIGLANI. HE IS NOT THE EMPLOYEE OF ANY OF THE ASSESSEE. ACCORDING TO OUR UNDERSTANDING, THE PRESUMPTION OF OWNERSHIP OF DOCUMENT COULD BE ATTACHED WITH THE PERSON WHO AUTHORED IT O R WITH WHOM IT WAS FOUND I.E. THE PERSON WHO POSSESSED IT. ALL THE DOC UMENTS RELIED UPON BY THE REVENUE WERE NOT EMANATING FROM THE BOOKS OF TH E ASSESSEE OR IN THE HANDWRITING OF ANY EMPLOYEE OF THE ASSESSEE. WE COU LD APPRECIATE THE CASE OF THE REVENUE IF IT WAS ABLE TO LAY ITS HANDS ON A NY FORWARDING LETTER I.E. CHIT ETC. WRITTEN BY THE ASSESSEE WHILE HANDING OVE R THE MONEY TO UPDA. ANY FAX MESSAGE, ANY E-MAIL OR ANY AUDIO MESSAGE RE CORDED FROM THE TELEPHONE CONVERSATION. HAD ANY SUCH MATERIAL WAS F OUND THEN IT COULD BE ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 37 SAID THE DOCUMENTS BELONGING TO THE ASSESSEE WERE F OUND. THE MATERIAL EMANATING FROM THE ALLEGED COMPILATION OF DETAILS F ROM MR. MIGLANI CAN BE AN INFORMATION PERTAINING TO THE ASSESSEE DISCLOSIN G THE DETAILS OF INCOME OR EXPENDITURE BUT THAT CANNOT BE A DOCUMENT BELONG ING TO THE ASSESSEE. IT CAN BE EXPLAINED WITH A SIMPLE EXAMPLE SUPPOSE AN E X EMPLOYEE OF A CONCERN WHO HAS A KNOWLEDGE OF ACCOUNT MAKES EXTRA POLATION OF THE ACCOUNTS ON THE BASIS OF HIS EXPERIENCE AND THAT PE RSON WAS SEARCHED, CAN THE DOCUMENT BE CONSIDERED AS BELONGING TO THE ASS ESSEE. IT MAY GIVE INFORMATION TO THE INCOME TAX DEPARTMENT FOR INVEST IGATION. IT LEAD TO REOPENING OF ASSESSMENT BUT THOSE DETAILS CANNOT BE A GOSPEL TRUTH AND CANNOT BE CONSIDERED AS DOCUMENTS BELONGING TO THE ERSTWHILE EMPLOYER. 19. DURING THE COURSE OF HEARING, A QUERY STRU CK TO OUR MIND THAT UPDA IS A SOCIETY WHERE ALL T HE ASSESSEE ARE MEMBERS. A CCORDING TO THE PRINCIPLE OF MUTUALLY, WHY THE DETAILS PREPARED BY THE SECRET ARY OF THE SOCIETY BE NOT CONSTRUED AS BELONGING TO ALL THE MEMBERS OF THE SO CIETY. TO THIS QUERY, IT WAS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESS EE THAT UPDA IS AN INDEPENDENT TAXABLE ENTITY. IT IS NOT A MEMBERS CLU B AND NOT A MUTUAL BENEFIT SOCIETY. IT IS CONSTITUTED UNDER A SEPARATE MEMORANDUM OF ASSOCIATION. THE MEMORANDUM OF ASSOCIATION DOES NOT PROVIDE THAT EXCESS OF THE INCOME SHALL BE PAID OR TRANSFERRED DIRECTLY OR INDIRECTLY TO THE MEMBERS OF THE SOCIETY. IT ALSO DOES NOT PROVIDE TH AT ON DISSOLUTION OF THE SOCIETY, ASSETS OF THE SOCIETY SHALL BE DISTRIBUTED AMONG THE MEMBERS OF THE SOCIETY. ANYTHING BELONG TO THE SOCIETY CANNOT BE S AID TO BE BELONGED TO THE MEMBERS. 20. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FI ND ANY REASON TO DIFFER WITH THE DECISION OF THE CO-ORDINATE BENCH AND MAKE A REFERENCE FOR THE CONSTITUTION OF A LARGER BENCH. RESPECTFULLY FOLLOW ING THE ORDER OF THE ITAT, BANGALORE, WE ALLOW THE PRELIMINARY GROUNDS RAISED BY THE ASSESSEE THAT NO DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND AND, THEREFORE, NO ASSESSMENT UNDER SECTION 153C OF THE ACT CAN BE FRA MED IN THEIR CASES. CONSEQUENTLY, ALL THE ASSESSMENT ORDERS ARE QUASHED . 31. WHEN WE EXAMINE THE DOCUMENTS (ON WHICH THE LD. DR HAS SOUGHT OUR ATTENTION TO SUPPORT HIS CONTENTION THAT THESE WERE SUFFICIENT MATERIAL TO ARRIVE AT A SATISFACTION THAT THESE DOCUMENTS WERE BELONGING TO THE ASSESEE TO INITIATE THE PROCEEDINGS U/S 153C OF THE ACT) , WE FIND THAT THE DOCUMENTS IN THE ABOVE CITED (DR) TABLE AT PAGE NO. 14 TO 17 WERE ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 38 ADMITTEDLY NOT FOUND FROM THE POSSESSION OF THE PRE SENT ASSESEE NOR THESE ARE IN THE HANDWRITING OF THE ASSESSEE OR ITS EMPLO YEE(S). THESE WERE FOUND FROM THE POSSESSION OF SHRI R.K. MIGLANI AND UPDA A BOUT WHICH IN CASE OF SIMILARLY PLACED ASSESSES CITED ABOVE (I.E. NICL & ORS.) THE TRIBUNAL HAS HELD THAT THERE IS NO EVIDENCE OF ANY RECEIPT OR PA YMENT OF CASH IN RESPECT OF WHICH ADDITION WAS MADE. IN THOSE DECISIONS THE TRIBUNAL HAS ALSO EXAMINED AND CONSIDERED THE CONCEPT OF BELONGING IN THE CONTEXT OF PROVISIONS OF SECTION 153C TO WHICH WE CONCUR WITH . THE WORD BELONGING MAY BE UNDERSTOOD IN THE SENSE OF OWNERSHIP OR SOME THING LITTLE LESSER THAN OWNERSHIP BUT OF COURSE MORE THAN MERE REFERENCE OF ASSESEE ON A DOCUMENTS FOUND AND SEIZED FROM THE POSSESSION OF O THERS WITHOUT ANY CORROBORATION. THESE DOCUMENTS NOTED IN SATISFACTIO N TO PROCEED U/S 153C DO NOT MAKE REFERENCE TO ANY RECEIPT OR PAYMENT OF CASH AND ARE NOT OF ANY INCRIMINATING NATURE. MUCH EMPHASIS HAS BEEN PU T BY THE LD. DR ON THE SEIZED MATERIAL MARKED AS ANNEXURE A1/114 ALLEGING THAT IT IS TOTAL ACCOUNT UPTODATE (UPTO FEB 05) DULY SIGNED BY R.K. MIGLANI OF UPDA, VISHAL SRIVASTAVE & ATUL K SINGH OF WORDS AND H.R. WADHWA AN EMPLOYEE OF SARAYA CLEARLY JOINTLY BELONGING TO 4 PARTIES INCLU DING THE ASSESSEE, SARAYA INDUSTRIES. HE ARGUED THAT THIS DOCUMENT IS SIMILAR TO THE DOCUMENT ( A JOINT VENTURE AGREEMENT SIGNED BY THESE PARTIES) CO NSIDERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF GURUPRENA ENTER PRISES VS. ACIT (SUPRA). PERUSAL OF THIS DOCUMENT SHOWS THAT THERE IS NO REFERENCE TO ANY ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 39 AMOUNT PAID OR RECEIVED AND AS SUCH THE DOCUMENT I S NOT RELEVANT EVEN IN THE CONTEXT OF SATISFACTION NOTE RECORDED BY THE AS SESSING OFFICER. FURTHER THE SAID DOCUMENT WAS ALSO CONSIDERED BY THE ASSESS ING OFFICER IN THE CASE OF M/S. LORDS DISTILLERY LTD. AS THEIR PERSON HAS A LSO BEEN ALLEGED TO HAVE SIGNED THIS DOCUMENT AND THE TRIBUNAL AFTER DETAILE D DISCUSSION OF THE CASE HAS FOUND THE DOCUMENT NOT BELONGING TO M/S. LORDS DISTILLERY (SUPRA). SIMILAR IS THE CASE OF THE PRESENT ASSESSEE. 32. LIKEWISE E MAIL MESSAGE FROM ONE SHRI K.P. SINGH OF RADICO TO MAJITHIA OF THE ASSESSEE WITH COPY TO THREE OTHER P ERSONS (ANNEXURE A-2/58 AND 59) AND E.MAIL MESSAGE (ANNEXURE A-2/54-57) FROM ONE SHRI K.P. SINGH OF RADICO TO ASSESS WITH COPY TO THREE OTHER PERSON S ARE THE DOCUMENTS ADMITTEDLY ADDRESSED TO THE ASSESSEE. HAD THESE DOC UMENTS BEEN FAXED OR MAILED BY THE ASSESSEE, THESE COULD HAVE BEEN MARKE D AS BELONGING TO THE ASSESSEE. SIMILARLY THE DOCUMENTS BEARING SARAYA 2 003-04 (MARKED AS ANNEXURE A-1/129) CONTAINS ADDRESS OF MOHAN MEAKINS AND OTHERS AND THERE IS NO REFERENCE TO ANY FINANCIAL TRANSACTIONS OF THE ASSESSEE. THE DOCUMENTS MARKED AS ANNEXURE A-1/14 & 15 IS RELATIN G TO BALRAMPUR DISTILLERIES WHICH AS PER THE LD. AR IS AN INDEPEND ENT COMPANY AND THE SAID DOCUMENT IS NOT RELEVANT TO THE CASE OF THE ASSESSE E. THE DOCUMENT MARKED AS A-4/47 AND 48 IS THE STATEMENT RECORDED U /S 132 (4) ON 14.2.2006 OF SHRI R.K. MIGLANI WHERE HE HAS MADE CL ARIFICATION IN ANSWER TO ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 40 QUESTION NO. 19 THAT THE PAGE 47 CONTAINS THE CASH ACCOUNT FOR THE MONTH OF OCTOBER 2 TO 3 OF EXPENSES ATTRIBUTABLE TO VARIO US MEMBERS OF UPDA AND THAT THIS ACCOUNT HAS BEEN GIVEN TO BY SHRI WADHWA OF THE ASSESSEE ON 11.12.2013 AND PAGE 48 IS EXPLAINED TO CONTAIN RECO RDS OF BALANCES OUTSTANDING IN RESPECT OF VARIOUS MEMBERS OF UPDA. REGARDING THESE DOCUMENTS THE CONTENTION OF LD. DR REMAINED THAT IT IS NATURAL THAT THE ASSESSEE WOULD HAND OVER ITS OWN DOCUMENTS AND IF T HE DOCUMENTS WERE BELONGING TO UPDA, SHRI MIGLANI WOULD NOT HAVE ATTR IBUTED THESE DOCUMENTS TO ASSESSEE ESPECIALLY WHEN HE KNEW THAT ASSESSEE C ONTROLS IT BECAUSE IT IS ONE OF THOSE 5 CORE DISTILLERIES MEMBERS. WE FIND T HAT THE PAGES 47 AND 48 OF THE ANNEXURE ARE PHOTOCOPY OF TWO SHEETS OF PAPE R ALLEGED TO BE CASH ACCOUNT RELATED TO VARIOUS PARTIES IN RESPECT OF WH ICH SATISFACTION WAS RECORDED U/S 153C OF THE ACT. THESE DOCUMENTS WERE CONFRONTED TO SHRI R.K. MIGLANI IN HIS STATEMENT U/S 132 (4) ON 14.2.2 006. THE STATEMENT OF SHRI R.K. MIGLANI HAS BEEN CONSIDERED BY THE TRIBUN AL WHILE DISPOSING THE APPEALS OF VARIOUS OTHER PARTIES REFERRED TO IN THE SE DOCUMENTS AND THE TRIBUNAL HAS SPECIFICALLY OBSERVED THAT THESE DOCUM ENTS DO NOT BELONG TO VARIOUS PARTIES REFERRED TO IN THE SAID DOCUMENT. W E DO NOT FIND REASON TO DEVIATE FROM THE DECISION OF TRIBUNAL IN THOSE SIMI LAR CASES OF NICL & ORS. (SUPRA) RELIED UPON BY THE LD. AR. UNDISPUTEDLY THE SE DOCUMENTS WERE NOT FOUND FROM THE POSSESSION OF THE ASSESEE NOR THESE DOCUMENTS ARE IN THE HANDWRITING OF THE ASSESSEE OR ITS EMPLOYEES. WE TH US FOLLOWING THE ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 41 DECISION OF TRIBUNAL IN THE CASE OF SIMILARLY PLACE D ASSESSEES IN THE CASES OF NATIONAL INDUSTRIES CORPORATION LTD. VS. DCIT & OTH ERS (SUPRA) HOLD THAT THE ABOVE MENTIONED DOCUMENTS MARKED AS ANNEXURE A-1, A -2, B-2 AND B-3, THE SUBJECT MATTER OF THE SATISFACTION RECORDED BY THE AO TO INITIATE PROCEEDINGS U/S 153C AGAINST THE PRESENT ASSESSEE D O NOT BELONG TO THE ASSESSEE TO JUSTIFY INITIATION OF PROCEEDINGS U/S 1 53C OF THE ACT AGAINST THE ASSESSEE. 33. AND ABOVE ALL THE UPDA, AN INDEPENDENT ASS ESSEE IN ITS OWN RIGHT AND CAPACITY HAS ALREADY BEEN ASSESSED WITH THE SIM ILAR INCOME ON WHICH THE REVENUE ALSO INTENDS TO MAKE THE ASSESSMENT IN QUESTION IN THE HANDS OF THE ASSESSEE. THE ISSUE ON THE VALIDITY OF THE I NITIATION OF PROCEEDINGS U/S 153C OF THE ACT AGAINST THE ASSESSEE IN THE CONTEXT OF THE SATISFACTION RECORDED IS THUS DECIDED IN FAVOUR OF THE ASSESSEE AS AN IDENTICAL ISSUE UNDER SIMILAR FACTS HAS ALREADY BEEN DECIDED AS SU CH IN THE CASE OF SIMILARLY PLACED ASSESSESS IN A CONSOLIDATED ORDER IN THE CASE OF M/S NATIONAL INDUSTRIAL CORPORATION LTD. VS. DCIT & OTH ERS (SUPRA) RELIED UPON BY THE LD. AR. THE RELATED GROUNDS INVOLVING THE IS SUE ARE THUS ALLOWED. IN CONSEQUENCE WE HOLD THAT THE AO IN THE PRESENT CASE WAS HAVING NO JURISDICTION TO PROCEED AGAINST THE ASSESSEE UNDER SECTION 153C OF THE ACT FOR THE ASSESSMENT YEARS IN CONSIDERATION AND THE A SSESSMENT FRAMED IN FURTHERANCE TO THE SAID NOTICE ISSUED U/S 153C OF T HE ACT ARE THUS ALSO HELD ITA NOS. 1310, 1311, 1312, 1537, 1538, 1539 , 4692,4561,1564, 1563/DEL/2012 42 AS NULL & VOID AND ACCORDINGLY QUASHED. IN VIEW OF THIS FINDING THE GROUNDS IN THE APPEALS PREFERRED BY THE ASSESSEE AND THE RE VENUE IN THE DIFFERENT ASSESSMENT YEARS UNDER CONSIDERATION ON THE MERITS OF ADDITIONS HAVE BECOME INFRUCTUOUS AND THESE GROUNDS ARE REJECTED A S SUCH. 34. THE APPEALS PREFERRED BY THE ASSESSEE A RE THUS ALLOWED AND THOSE PREFERRED BY THE REVENUE ARE REJECTED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER, 2013. SD/- SD/- (B.C. MEENA) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 6 TH DECEMBER 2013 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT