DCIT, Bangalore V. M/s. Bheemaneni Builders (I) Pvt. Ltd., Bangalore

ITA 1362/BANG/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95396 (ITAT-BANGALORE)
• Duration Of Justice: 5 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 02-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A SHANKAR
• Keywords: Document seized; Documents seized
• Section: 153A

Judgement Text

ITA.1362 &1363/BANG/2010 PAGE - 1 CO.5 &6/BANG/2011 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER I.T.A NOS.1362 & 1363/BANG/2010 (ASSESSMENT YEAR : 2005-06 & 2006-07) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -2(2), BANGALORE .. APPELLANT V. M/S. BHEEMANENI BUILDERS (I) P. LTD, [NOW KNOWN AS M/S. BBIPL INFRASTRUCTURE (P) LTD, NO.2/2, 3 RD BLOCK, RAJAJINAGAR, DR. RAJKUMAR ROAD, BANGALORE 560 010 .. RESPONDE NT PAN : AACCB1418N CROSS OBJECTION NOS.5 & 6/BANG/2011 (IN I.T.A NOS.1362 & 1363/BANG/2010) (ASSESSMENT YEAR : 2005-06 & 2006-07) ASSESSEE BY : SHRI. A. SHANKAR, ADVOCATE REVENUE BY : SHRI. M. VIJAY KUMAR, ASST. CIT HEARD ON : 26.11.2015 PRONOUNCED ON : 11.12.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS AND CROSS OBJECTIONS OF THE REVE NUE AND ASSESSEE RESPECTIVELY DIRECTED AGAINST COMMON ORDER DT.29.09 .2010, OF CIT (A) VI, BENGALURU, FOR THE IMPUGNED ASSESSMENT YEARS. ITA.1362 &1363/BANG/2010 PAGE - 2 CO.5 &6/BANG/2011 02. REVENUE IN ITS APPEALS IS AGGRIEVED THAT CIT (A ) HELD THE MATERIALS AND DOCUMENTS RELIED UPON BY THE AO FOR INITIATING PROCEEDINGS U/S.153C OF THE INCOME-TAX ACT, 1061 (THE ACT IN SHORT), NOT BELONGING TO THE ASSESSEE, BUT ONLY REFERRED TO THE ASSESSEE. 03. FACTS APROPOS ARE THAT THERE WAS A SEARCH AND S EIZURE OPERATION IN THE PREMISES OF A GROUP CALLED DIVYASHREE GROUP, ON 01. 03.2007. DURING THE COURSE OF SEARCH PROCEEDINGS CERTAIN DOCUMENTS WERE FOUND AND SEIZED WHICH AS PER THE AO BELONGED TO THE ASSESSEE. SAID DOCUMENTS AS PER THE ASSESSMENT ORDER WERE AS UNDER : B/SPCL/2 -- PAGES 92-93 B/SCPL/10 -- PAGES 120-128, 201-209 A/D/SCPL/1 -- PAGES 124-130 AO INITIATED PROCEEDINGS U/S.153C OF THE ACT, PURSU ANT TO WHICH ASSESSEE FILED RETURN DECLARING INCOME OF RS.1,44,09,671/- F OR A. Y. 2005-06 AND RS.5,52,35,420/- FOR A. Y. 2006-07. THEREAFTER HEA RINGS WERE CONDUCTED ON VARIOUS DATES AND ASSESSMENTS WERE COMPLETED MAK ING VARIOUS ADDITIONS. TOTAL INCOME FOR A. Y. 2005-06 CAME TO RS.8,55,92,670/- AND FOR A. Y. 2006-07, CAME TO RS.8,11,91,510/-. ITA.1362 &1363/BANG/2010 PAGE - 3 CO.5 &6/BANG/2011 04. AGGRIEVED BY THE ABOVE ASSESSEE MOVED IN APPEAL BEFORE THE CIT (A). ONE OF THE GROUNDS TAKEN UP BEFORE THE CIT (A ) APART FROM THOSE RAISED ON MERITS, WAS ON JURISDICTION OF THE AO TO ISSUE NOTICE U/S.153C OF THE ACT. AS PER THE ASSESSEE, SATISFACTION FOR ISS UE OF NOTICE U/S.153C OF THE ACT, MENTIONED BY THE AO IN THE FACING SHEET OF THE ASSESSMENT ORDER WERE RELATED TO THREE DOCUMENTS MENTIONED IN THE EARLIE R PARAGRAPH. CLAIM OF THE ASSESSEE WAS THAT THESE DOCUMENTS SEIZED DURING THE SEARCH OF DIVYASHREE GROUP DID NOT BELONG TO THE ASSESSEE. A S PER THE ASSESSEE, PAGES 124 TO 130, DOCUMENT NO. A/D/SCPL/1, WAS AN A GREEMENT ENTERED BY ONE M/S. SHYAMARAJU & CO. PVT LTD, WITH THE ASSESSE E FOR EXECUTION OF CERTAIN CIVIL CONTRACTS. SEIZED MATERIAL PAGES 92 & 93 OF B/SCPL/2, AS PER ASSESSEE WAS A WORK ORDER PLACED BY ONE M/S. CHATHU R REALTORS PVT LTD ON THE ASSESSEE FOR EXECUTION OF CERTAIN WORKS RELATIN G TO A PROJECT CALLED DIVYASHREE TECHNOPOLIS. PAGES 120 TO 128 OF SEIZED MATER NO.B/SCPL/10, AS PER THE ASSESSEE WAS AN ARTICLES OF AGREEMENT BE TWEEN ONE M/S. BHEEMANENIS EDUCATIONAL SYSTEM TRUST AND THE ASSES SEE FOR CARRYING OUT CERTAIN CIVIL WORKS FOR A PROJECT CALLED REVA INSTI TUTE FOR ENGINEERING & TECHNOLOGY STUDIES AT JALAHALLI. AS FOR PAGES 201 TO 209 OF SEIZED RECORD B/SCPL/10 CLAIM OF THE ASSESSEE WAS THAT THESE WERE MERE INTER- OFFICE NOTE AND LEDGER ACCOUNTS OF THE ASSESSEE COMPANY AN D ONE SHRI. DAMODAR ITA.1362 &1363/BANG/2010 PAGE - 4 CO.5 &6/BANG/2011 IN THE BOOKS OF REVA INSTITUTE FOR ENGINEERING & TE CHNOLOGY STUDIES. AS PER THE ASSESSEE, NONE OF THESE DOCUMENTS BELONGED TO IT. THEY ALL BELONGED TO DIVYASHREE GROUP WHOSE PREMISES WERE SE ARCHED. AS PER THE ASSESSEE, AO WITHOUT ANY BASIS CONCLUDED THAT THESE DOCUMENTS BELONGED TO THE ASSESSEE. RELIANCE WAS PLACED ON HONBLE GU JARAT HIGH COURT DECISION IN THE CASE OF VIJAYABAI N. CHANDRANI V. A CIT [333 ITR 436] AND THAT OF COORDINATE BENCH IN THE CASE OF P. SRINIVAS NAIK V. ACIT [117 ITD 201]. 05. CIT (A) WAS APPRECIATIVE OF THESE CONTENTIONS. ACCORDING TO HIM, PAGES 124 TO 130 OF SEIZED RECORD A/D/SCPL/1 WAS AN AGREEMENT ENTERED BY SHYAMARAJU & CO WITH THE ASSESSEE. AS PER THE C IT (A), PAGE 124 AND 125 OF THIS SEIZED DOCUMENT, GAVE DETAILS OF PROJEC TWISE REVENUE AND COST FOR THE YEAR 2004-05 IN RESPECT OF DIVYASHREE HOLDI NGS P. LTD AND IN RESPECT OF SHYAMARAJU & CO.P. LTD. CIT (A) NOTED T HAT NOTHING WHAT SO EVER REGARDING ASSESSEE WAS MENTIONED IN THESE PAGE S. CIT (A) NOTED THAT PAGES 126 TO 130 OF THE VERY SAME SEIZED MATERIAL W AS THE WORK CONTRACT AGREEMENT BETWEEN SHYAMARAJU & CO.P. LTD, AND THE A SSESSEE. AS PER THE CIT (A) TERMS OF THE SAID AGREEMENT GAVE POWERS TO SHYAMARAJU & CO., TO ENFORCE THE CONDITIONS MENTIONED THERE IN. SAID AG REEMENT, AS PER THE CIT ITA.1362 &1363/BANG/2010 PAGE - 5 CO.5 &6/BANG/2011 (A) DID NOT BELONG TO THE ASSESSEE. FURTHER AS PER THE CIT (A), PAGES 92 & 93 OF SEIZED MATERIAL B/ SCPL/2 WAS A WORK ORDER GI VEN BY M/S. CHATHUR REALTORS (P) LTD, A COMPANY IN THE GROUP OF DIVYASH REE CONCERNS WHICH WAS SEARCHED. AS PER THE CIT (A), WORK ORDER BELON GED TO M/S. CHATHUR REALTORS P. LTD AND THEY HAD KEPT SUCH WORK ORDER W ITH THEM FOR ENFORCING THE AGREEMENT TERMS. CIT (A) FURTHER NOTED THAT PA GES 120 TO 128 AND 201 TO 203 OF SEIZED MATERIAL NO.B/SCPL/10, BELONGED TO REWA INSTITUTE FOR ENGINEERING & TECHNOLOGY STUDIES FOR CIVIL WORK AND THE SAID INSTITUTION WAS ALSO A PART OF DIVYASHREE GROUP. PAGES 204 TO 209 OF SEIZED MATERIAL OF B/SCPL/10, AS PER THE CIT (A) WAS PRINT OUT OF A CCOUNTS OF ASSESSEE IN THE BOOKS OF REWA INSTITUTE FOR ENGINEERING & TECHN OLOGY STUDIES, BANGALORE AND BHEEMANENIS EDUCATIONAL SYSTEM TRUST . NONE OF THESE DOCUMENTS, WHICH WERE RELIED ON BY THE AO FOR INITI ATING PROCEEDINGS U/S.153C OF THE ACT, BELONGED TO THE ASSESSEE, AS P ER THE CIT (A). LD. CIT (A) ALSO NOTED THAT SECTION 132(4A) R.W.S.292C OF T HE ACT, GAVE RISE TO AN AUTOMATIC PRESUMPTION THAT THE SEIZED DOCUMENTS BEL ONGED TO VARIOUS COMPANIES OF DIVYASHREE GROUP. FURTHER AS PER THE CIT (A), HONBLE APEX COURT IN THE CASE OF CWT V. BISWANATH CHATTERJEE [1 03 ITR 536] HAD HELD THAT THE EXPRESSION BELONGED MEANT PROPERTY OF A PERSON WHICH IS IN HIS POSSESSION AS OF RIGHT. RELYING ON THE JUDGMENT OF HONBLE GUJARAT HIGH ITA.1362 &1363/BANG/2010 PAGE - 6 CO.5 &6/BANG/2011 COURT IN THE CASE OF VIJAYABAI N. CHANDRANI (SUPRA ), COORDINATE BENCH IN THE CASE OF SRINIVAS NAIK (SUPRA) AND THAT OF AHMAD ABAD BENCH OF THIS TRIBUNAL IN THE CASE OF MEGHMANI ORGANICS LTD V. DC IT [(2010) 36 DTR 0187], HE HELD THAT NONE OF THE DOCUMENTS BELONGED TO THE ASSESSEES. THUS ACCORDING TO HIM, THE PRIMARY CONDITION FOR ISSUE O F NOTICE U/S.153C OF THE ACT WAS NOT SATISFIED. HE QUASHED THE ASSESSMENTS. SINCE HE HELD THAT JURISDICTION OF THE AO WAS OUTSTED AT THRESHOLD, OT HER ISSUES WERE NOT CONSIDERED. 06. NOW BEFORE US LD. DR STRONGLY ASSAILING THE ORD ER OF CIT (A), SUBMITTED THAT THE SEIZED RECORDS WERE AGREEMENTS E NTERED BY THE ASSESSEE WITH VARIOUS CONCERNS OF DIVYASHREE GROUP. AGREEM ENTS ALL RELATED TO CIVIL WORKS THAT WERE TO BE DONE BY THE ASSESSEE FOR SUCH CONCERNS. NOT ONLY THE CONCERNS OF DIVYASHREE GROUP, BUT ALSO ASSESSEE HAD CERTAIN RIGHTS ARISING OUT OF SUCH AGREEMENT. AS PER THE LD. DR, THEREFOR E, AGREEMENTS ALSO RELATED AND BELONGED TO THE ASSESSEE. ASSESSEE COU LD ENFORCE THE CONDITIONS MENTIONED IN THE AGREEMENT JUST LIKE OTH ER PARTY. HENCE ACCORDING TO HIM, CIT (A) ERRED IN HOLDING THAT THE DOCUMENTS BELONGED TO DIVYASHREE GROUP OF CONCERNS AND NOT THE ASSESSEE. LD. DR SUBMITTED THAT BELONGINGNESS DID NOT MEAN PHYSICAL POSSESSION ALON E. ACCORDING TO HIM IT ITA.1362 &1363/BANG/2010 PAGE - 7 CO.5 &6/BANG/2011 INCLUDED A LEGAL RIGHT TO ENFORCE A CONDITION IN A CONTRACT. AS FOR THE RELIANCE PLACED BY THE CIT (A) ON THE JUDGMENT OF H ONBLE GUJARAT HIGH COURT IN THE CASE OF VIJABHAI N. CHANDRANI (SUPRA), LD. DR SUBMITTED THAT WHAT WAS FOUND AT THE TIME OF SEARCH IN THE SAID CA SE WAS ONLY A LIST CONTAINING NAMES WHICH INTER ALIA INCLUDED THE NAME OF THE ASSESSEE THEREIN. AS FOR THE DECISION OF AHMEDABAD BENCH IN THE CASE OF MEGHMANI ORGANICS LTD (SUPRA), LD. DR SUBMITTED THAT WHAT W AS SEIZED THERE WAS ONLY AN ESTIMATE FOR THE PROPOSED WORK AND NOT AN A GREEMENT. AS FOR THE CASE OF COORDINATE BENCH IN THE CASE OF SRINIVAS NA IK (SUPRA), LD. DR SUBMITTED THAT THE DECISION ACTUALLY WENT IN FAVOUR OF THE REVENUE. ACCORDING TO HIM THE BENCH HAD TAKEN A VIEW THAT NO TION OF CONTINUITY IF AVAILABLE IN THE SEIZED RECORD WOULD ESTABLISH AN I NTIMATE CONNECTION WITH THE PERSON CONCERNED OVER A PERIOD OF TIME. 07. PER CONTRA, LD. AR STRONGLY SUPPORTING THE ORDE R OF CIT (A), PLACED SPECIFIC RELIANCE ON A JUDGMENT OF HONBLE DELHI HI GH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS P. LTD V. ACIT [(2015) 370 I TR 295]. ACCORDING TO HIM, A DOCUMENT WHICH BELONGED TO ONE PERSON CAN NOT SIMULTANEOUSLY BELONG TO ANOTHER PERSON ALSO. AS PER THE LD. AR, UNLESS AND UNTIL IT WAS ESTABLISHED THAT THE SEIZED DOCUMENTS DID NOT BELON G TO THE SEARCHED ITA.1362 &1363/BANG/2010 PAGE - 8 CO.5 &6/BANG/2011 PERSON, PROVISION OF SECTION 153C OF THE ACT WOULD NOT GET ATTRACTED. LD. AR ALSO POINTED OUT THAT SECTION 153C OF THE ACT WA S SUBSTITUTED THROUGH FINANCE ACT, 2015, WITH EFFECT FROM 01.04.2015. AC CORDING TO HIM, THE PROVISION AS IT STOOD PRIOR TO ITS SUBSTITUTION DID NOT TAKE WITHIN ITS AMBIT BOOKS OR DOCUMENTS WHICH PERTAINED TO A PERSON OTHE R THAN THE SEARCHED PERSON FOR INITIATING PROCEEDINGS U/S.153C OF THE A CT. THEREFORE ACCORDING TO HIM, PRIOR TO 01.04.2015, IT WAS IMPERATIVE FOR THE REVENUE TO ESTABLISH THAT THE SEIZED DOCUMENTS DID NOT BELONG TO THE SEA RCHED PERSON, BEFORE PROCEEDING AGAINST A PARTY OTHER THAN THE ONE WHO W AS SEARCHED. 08. AD LIBITUM REPLY OF THE DR WAS THAT THE SUBSTIT UTION OF SECTION 153C OF FINANCE ACT, 2015 RELIED ON BY THE LD. AR WAS EX PLANATORY AND CLARIFICATORY IN NATURE AND THEREFORE APPLIED RETRO SPECTIVELY. 09. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. DESCRIPTION OF VARIOUS DOCUMENTS WHICH WERE SEIZED AS IT APPEAR IN THE ASSESSMENT ORDER AND AS IT APPEAR IN CIT (A)S ORDE R, HAS BEEN DESCRIBED BY US AT PARA FIVE ABOVE. WHAT WE FIND IS THAT THESE DOCUMENTS WERE EITHER CONTRACTS OR AGREEMENTS ENTERED BY THE ASSESSEE WIT H VARIOUS CONCERNS, WHICH WERE PART OF DIVYASHREE GROUP WHO WERE SUBJEC TED TO THE SEARCH. CIT (A) HELD THAT SUCH DOCUMENTS GAVE RIGHTS TO THE CONCERNS OF ITA.1362 &1363/BANG/2010 PAGE - 9 CO.5 &6/BANG/2011 DIVYASHREE GROUP FOR GETTING THE WORK DONE BY THE A SSESSEE AND HENCE BELONGED TO SUCH CONCERNS AND NOT TO THE ASSESSEE. AS AGAINST THIS, ARGUMENT TAKEN BY THE LD. DR BEFORE US IS THAT THES E DOCUMENTS GAVE CERTAIN RIGHTS TO THE ASSESSEE ALSO WHEREBY IT COUL D LEGALLY ENFORCE THE OBLIGATIONS OF THE OTHER PARTY VIZ., CONCERNS BELON GING TO DIVYASHREE GROUP. THEREFORE ACCORDING TO THE LD. DR THE DOCUM ENTS BELONGED TO THE ASSESSEE AS WELL. IN OUR OPINION LD. DR IS RIGHT I N HIS ARGUMENT THAT THE AGREEMENTS AND WORK ORDERS WOULD HAVE GIVEN CERTAIN LEGALLY ENFORCEABLE RIGHTS TO THE ASSESSEE ALSO. HOWEVER THE QUESTION IS WHETHER BY VIRTUE OF SUCH RIGHT ENSUING TO THE ASSESSEE, THESE AGREEMEN TS, WHICH WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH OF DIVYASHRE E GROUP, COULD BE CONSIDERED AS BELONGING TO THE ASSESSEE. MEANING O F THE TERM BELONG AS IT APPEARS IN SECTION 153C OF THE ACT, WAS THE SUBJECT MATTER BEFORE THE HONBLE DELHI HIGH COURT IN THE CASE OF PEPSICO IND IA HOLDINGS P. LTD (SUPRA). IN THE SAID CASE THERE WAS A SEARCH AND S EIZURE OPERATION IN JAIPURIA GROUP. SEIZED MATERIAL WHICH WAS CONSIDE RED AS BELONGING TO THE ASSESSEE THEREIN, NAMELY, PEPSICO INDIA HOLDINGS P. LTD (SUPRA) WERE AS UNDER : ITA.1362 &1363/BANG/2010 PAGE - 10 CO.5 &6/BANG/2011 PARTY/ANNX./PAGE NO. DESCRIPTION OF ANNEXURE B -2/A-11/34-35 THESE TWO PAGES ARE THE 10 YEARS CUMULATIVE REDEEMABLE PREFERENCE SHARES OF RUPEES 10 EACH, PURCHASED BY M/S. PEPSICO INDIA HOLDING LTD. FROM M/S. TRIPTY DRINKS LTD. AND 10 YEARS CUMULATIVE REDEEMABLE PREFERENCE SHARES OF RUPEES 10 EACH, PURCHASED BY M/S. PEPSICO INDIA HOLDING LTD. FROM M/S. SMV BEVERAGES LTD. B -2/A-14/60 THIS IS A CHEQUE OF RS. 1,66,84002 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. NEETAR BEVERAGES PVT. LTD. ON JUNE 30, 2012. B -2/A-14/61 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S .NEETAR BEVERAGES PVT. LTD. ON MAY 31, 2011. B -2/A-14/62 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. NEETAR BEVERAGES PVT. LTD. ON MAY 31, 2010. B -2/A-14/63 THIS IS THE CHEQUE OF RS. 6,00,00,000 I N FAVOU R OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. NEETAR BEVERAGES PVT. LTD. ON MAY 31, 2009. B -2/A-14/64 THIS IS A CHEQUE OF RS. 5,46,91,818 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. ON JUNE 30, 2012. B -2/A-14/65 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. ON MAY 31, 2012. B -2/A-14/66 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. ON APRIL 30, 2012. B -2/A-14/67 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR ITA.1362 &1363/BANG/2010 PAGE - 11 CO.5 &6/BANG/2011 OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. ON JUNE 30, 2011. B -2/A-14/68 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. DATED : APRIL 30, 2011. B -2/A-14/69 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. DATED : JUNE 30, 2010. B -2/A-14/70 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. DATED : APRIL 30, 2010. B -2/A-14/71 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S. SMV AGENCIES PVT. LTD. DATED : APRIL 30, 2009. B -2/A-14/72 THIS IS THE CHEQUE OF RS. 6,00,00,000 IN FAVOUR OF PEPSICO INDIA HOLDING PVT. LTD. ISSUED BY M/S SMV AGENCIES PVT. LTD. DATED : JUNE 30, 2009. C-2/A-1/101-115 THESE PAGES RELATES TO SUPPLY AND LOAN AGREEMENT MADE BETWEEN PEARL DRINKS LTD. AND PEPSICO INDIA HOLDINGS PVT. LTD. ON OCTOBER 1, 2010. 10. THEIR LORDSHIP HELD THAT NONE OF THESE DOCUMENT S WERE DISCLAIMED BY JAIPURIA GROUP. IT WAS HELD THAT UNLESS AND UNT IL THE DOCUMENTS WERE ESTABLISHED AS NOT BELONGING TO THE SEARCHED PERSON , SECTION 153C OF THE ACT DID NOT GET ATTRACTED. RELEVANT PARAS 14 & 15 OF THE JUDGMENT IS REPRODUCED HEREUNDER : ITA.1362 &1363/BANG/2010 PAGE - 12 CO.5 &6/BANG/2011 14. FIRST OF ALL WE MAY POINT OUT, ONCE AGAIN, THA T IT IS NOBODY'S CASE THAT THE JAIPURIA GROUP HAD DISCLAIMED THESE D OCUMENTS AS BELONGING TO THEM. UNLESS AND UNTIL IT IS ESTABLISH ED THAT THE DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON, THE PROVISIONS OF SECTION 153C OF THE SAID ACT DO NOT GET ATTRACTED B ECAUSE THE VERY EXPRESSION USED IN SECTION 153C OF THE SAID ACT IS THAT 'WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERS ON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A . . .' IN VI EW OF THIS PHRASE, IT IS NECESSARY THAT BEFORE THE PROVISIONS OF SECTI ON 153C OF THE SAID ACT CAN BE INVOKED, THE ASSESSING OFFICER OF T HE SEARCHED PERSON MUST BE SATISFIED THAT THE SEIZED MATERIAL ( WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE PERSON REFERRED T O IN SECTION 153A (I.E., THE SEARCHED PERSON). IN THE SATISFACTI ON NOTE, WHICH IS THE SUBJECT MATTER OF THESE WRIT PETITIONS, THERE I S NOTHING THEREIN TO INDICATE THAT THE SEIZED DOCUMENTS DO NOT BELONG TO THE JAIPURIA GROUP. THIS IS EVEN APART FROM THE FACT THAT, AS WE HAVE NOTED ABOVE, THERE IS NO DISCLAIMER ON THE PART OF THE JA IPURIA GROUP IN SO FAR AS THESE DOCUMENTS ARE CONCERNED. 15. SECONDLY, WE MAY ALSO OBSERVE THAT THE FINDING OF PHOTOCOPIES IN THE POSSESSION OF A SEARCHED PERSON DOES NOT NEC ESSARILY MEAN AND IMPLY THAT THEY 'BELONG' TO THE PERSON WHO HOLD S THE ORIGINALS. POSSESSION OF DOCUMENTS AND POSSESSION O F PHOTOCOPIES OF DOCUMENTS ARE TWO SEPARATE THINGS. WHILE THE JAI PURIA GROUP MAY BE THE OWNER OF THE PHOTOCOPIES OF THE DOCUMENT S IT IS QUITE POSSIBLE THAT THE ORIGINALS MAY BE OWNED BY SOME OT HER PERSON. UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUES TION, WHETHER THEY BE PHOTOCOPIES OR ORIGINALS, DO NOT BELONG TO THE SEARCHED PERSON, THE QUESTION OF INVOKING SECTION 153C OF TH E SAID ACT DOES NOT ARISE. 11. IN THE CASE BEFORE US IT IS AN ADMITTED POSITIO N THAT THE DOCUMENTS WHICH WERE SEIZED ATLEAST PARTLY BELONGED TO VARIOU S CONCERNS OF ITA.1362 &1363/BANG/2010 PAGE - 13 CO.5 &6/BANG/2011 DIVYASHREE GROUP. SECTION 153C OF THE ACT AS IT ST OOD PRIOR TO THE SUBSTITUTION OF FINANCE ACT, 2015, W.E.F.01.04.2015 , READ AS UNDER : (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCO UNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISI TIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDI CTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCE ED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE P ROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFI ED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISI TIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS RE FERRED TO IN SUB-SECTION (1) OF SECTION 153A. 12. THE SECTION WOULD CLEARLY REQUIRE THE SATISFACT ION OF THE AO THAT THE SEIZED OR REQUISITIONED DOCUMENTS BELONGED TO A PER SON OTHER THAN THE PERSON REFERRED IN SECTION 153A OF THE ACT. THUS A SITUATION WHERE A PARTICULAR DOCUMENT COULD BELONG TO TWO PERSONS OF WHICH ONE ALONE IS THE SEARCHED PERSON WAS NOT CLEARLY ADDRESSED. THE LEG ISLATURE HAD INDEED CONSIDERED THIS ASPECT AND IN ORDER TO ADDRESS THIS DIFFICULTY SUBSTITUTED THE SECTION W.E.F.01.04.2015. SUBSTITUTED SECTION 153C (1) IS REPRODUCED HERE UNDER : ITA.1362 &1363/BANG/2010 PAGE - 14 CO.5 &6/BANG/2011 (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUIS ITIONED, PERTAINS OR PERTAIN TO OR ANY INFORMATION CONTAINED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESS ING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND IS SUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON I N ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSES SING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATIO N OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESS MENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153 A : 13. WHETHER THE ABOVE SUBSTITUTED SECTION WAS ONLY TO GIVE CLARITY TO THE SECTION OR TO ADDRESS A SITUATION WHERE A DOCUMENT WHICH GIVES CERTAIN RIGHTS TO A PARTY APART FROM THE SEARCHED PARTY IS NOT OUR CONCERN RIGHT NOW, SINCE THE SUBSTITUTED PROVISION CAME INTO EFFECT ON LY FROM 01.04.2015. HOWEVER CRUX OF THE JUDGMENT OF HONBLE DELHI HIGH COURT IN PEPSICO INDIA HOLDINGS P. LTD (SUPRA) IS THAT UNLESS THE S EARCHED PARTY DISOWNS THE ITA.1362 &1363/BANG/2010 PAGE - 15 CO.5 &6/BANG/2011 SEIZED RECORD, IT CANNOT BELONG TO ANOTHER. IT DOE S NOT MEAN THAT RIGHTS AND OBLIGATIONS ARISING TO ALL PARTIES OF A CONTRACT AN D WHERE PARTIES CAN SEEK ENFORCEMENT OF THEIR RESPECTIVE RIGHTS THROUGH A CO MPETENT LEGAL PROCEEDINGS, HAS TO BE IGNORED AND CONSIDERED AS BE LONGING EXCLUSIVELY TO THE SEARCHED PERSON FROM WHOSE PREMISES IT WAS FOUN D. THE QUESTION WHETHER THE SEARCHED PARTY HAD OWNED UP A DOCUMENT IS A PURE QUESTION OF FACT. NO DOUBT BY VIRTUE OF SECTION 132(4A) AND 29 2C OF THE ACT, A PRESUMPTION HAS TO BE TAKEN THAT DOCUMENTS SEIZED A RE THAT OF THE SEARCHED PARTY. HOWEVER THIS IS A REBUTTABLE ONE. THERE IS NOTHING ON RECORD TO SHOW WHETHER THE DIVYASHREE GROUP HAD DISOWNED THE DOCUMENTS MENTIONED AT PARA THREE AND HOW REVENUE HAD DEALT W ITH THESE DOCUMENTS IN THEIR HAND. LD. CIT (A) HAD GONE BY THE JUDGMEN T OF HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI (S UPRA) AND THAT OF COORDINATE BENCH IN THE CASE OF P. SRINIVASA NAIK ( SUPRA) AND THAT OF AHMEDABAD BENCH IN THE CASE OF MEGHMANI ORGANICS LT D (SUPRA). HOWEVER AS POINTED OUT BY LD. DR, THE DOCUMENTS SEI ZED IN ALL THESE CASES WERE NOT OF A TYPE WHICH GAVE RISE TO RIGHTS AND OB LIGATIONS TO THE SEARCHED PARTY AS WELL AS THE PARTY AGAINST WHOM PROCEEDINGS U/S.153C OF THE ACT WERE INITIATED. WE ARE OF THE OPINION THAT THIS PA RTICULAR ASPECT WHICH CAN HAVE A STRONG BEARING ON THE ISSUE REQUIRES A FRESH LOOK BY THE CIT (A), FOR ITA.1362 &1363/BANG/2010 PAGE - 16 CO.5 &6/BANG/2011 WHICH HE MIGHT REQUIRE INPUTS FROM THE AO AND VERIF ICATION OF ASSESSMENT AND APPEAL RECORDS RELATING TO DIVYASHREE GROUP. W E THEREFORE SET ASIDE THE ORDER OF THE CIT (A) AND REMIT THE ISSUE OF VALIDIT Y OF PROCEEDINGS U/S.153C OF THE ACT, BACK TO HIS FILE FOR CONSIDERATION AFRE SH IN ACCORDANCE WITH LAW. 14. ASSESSEE IN ITS CROSS OBJECTIONS IS AGGRIEVED T HAT GROUNDS APART FROM THOSE ASSAILING THE JURISDICTIONAL ISSUE WAS NOT AD JUDICATED BY THE CIT (A). 15. LD. CIT (A) HAD NOT ADJUDICATED OTHER GROUNDS R AISED BY THE ASSESSEE EXCEPT FOR THE JURISDICTIONAL ASPECT. WE THEREFORE DIRECT THE CIT (A) TO CONSIDER ALL THE GROUNDS TAKEN BY THE ASSESSEE AND DISPOSE IT OFF IN ACCORDANCE WITH LAW. 16. IN THE RESULT, BOTH APPEALS OF THE REVENUE AS W ELL AS CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED, FOR STATISTICAL PURPOS E. ORDER PRONOUNCED IN THE OPEN COURT IN 11 TH DAY OF DECEMBER, 2015. SD/- SD/- (VIJAYPAL RAO) (ABRAH AM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER MCN ITA.1362 &1363/BANG/2010 PAGE - 17 CO.5 &6/BANG/2011 COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR