ACIT, New Delhi V. M/s. Advantage Housing Pvt. Ltd., New Delhi

ITA 1451/DEL/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4179 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 12-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY GOEL
• Assessee Lawyers: M P RASTOGI SH DEEPAK MALIK
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 153A; 48; 153; 153C; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A NEW DELHI NEW DELHI NEW DELHI NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER, AND BHAVNESH SAINI, JUDICIAL MEMBER, AND BHAVNESH SAINI, JUDICIAL MEMBER, AND BHAVNESH SAINI, JUDICIAL MEMBER, AND SHRI SHRI SHRI SHRI R.K. PANDA, ACCOUNTANT MEMBER R.K. PANDA, ACCOUNTANT MEMBER R.K. PANDA, ACCOUNTANT MEMBER R.K. PANDA, ACCOUNTANT MEMBER ITA ITAITA ITA NO. NO. NO. NO.1451/DEL/2015 1451/DEL/2015 1451/DEL/2015 1451/DEL/2015 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2009 2009 2009 2009 - -- - 10 1010 10 ACIT - CC - 08, R.NO.333, ARA CENTRE, JHANDEWALAN EXTN, NEW DELHI VS. M/S ADVANTAGE HOUSING PVT. LTD. R/O-220, OKHLA INDUSTRIAL ESTATE, PHASE-III, NEW DELHI PAN:-AAFCA9591E AAFCA9591E AAFCA9591E AAFCA9591E (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) APPELLANT BY : SH. SANJAY GOEL, CIT - DR . RESPONDENT BY : SH. M.P. RASTOGI, ADVOCATE SH. DEEPAK MALIK, ADVOCATE DATE OF HEARING : 06/02/2020 DATE OF PRONOUNCEMENT : 27/02/2020 ORDER PER R.K. PANDA, AM THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 01/12/2014 OF THE LD. CIT(A)-31, NEW DELHI, R ELATING TO ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- I. THE ORDER OF THE CIT(A) IS NOT CORRECT IN LAW AND FACTS . II. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A ) HAS ERRED IN LAW IN TREATING THE ASSESSMENT ORDER IN VALID BY HOLDIN G DEFECT IN ASSUMPTION OF JURISDICTION U/S 153C BY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF PEP SI FOODS PVT. LTD. III. ON THE FACTS AND CIRCUMSTANCES IN THE CASE THE LD. CIT(A ) HAS ERRED IN LAW IN NOT DECIDING THE ISSUE ON MERITS OF THE CASE. ITA NO.1451/DEL/2015 2 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1 961 (HEREINAFTER THE ACT) WAS CONDUCTED ON K.S. DHINGRA & G.S. DHIN GRA AND OTHERS GROUP OF CASES ON 16/09/2011. DURING THE COURSE OF SAID SEARCH & SEIZURE OPERATION, CERTAIN DOCUMENTS/PAPERS BELONGING TO THE ASSESSEE I.E. M/S ADVANTAGE HOUSING PVT. LTD. WERE FOUND AND SE IZED. THE ASSESSING OFFICER ISSUED NOTICE UNDER 153C OF THE ACT ON 08/10/2013. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS PURCHASED A PROPERTY AT 58, S UNDER NAGAR, NEW DELHI FROM M/S ATMA RAM PROPERTIES (P.) LTD. ON 25/08/2008 AT THE COST OF RS.33 CRORES. HOWEVER, DURING THE COURSE OF SEA RCH A WRITING PAD WAS ALSO SEIZED FROM THE TABLE OF SH. NAVEEN CHAUDHARY , CFO M/S U.K. PAINTS INDIA PVT. LTD. THE VALUE OF THE PROPERTY REC ORDED AS RS.36.5 CRORES. REJECTING THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITION OF RS.3.5 CRORES TO THE T OTAL INCOME OF THE ASSESSEE BY RECORDING AS UNDER:- THE ASSESSEE HAS CONTENDED THAT THE SAID SEIZED DOCUME NT WAS NOT FOUND FROM THE PREMISES OF THE COMPANY. IN THIS REGARD IT IS PERTINENT TO NOTE THAT M/S U.K. PAINTS (INDIA) PVT. LTD. IS A SHARE HOLDER IN THE COMPANY. FURTHER, THE CFO OF M/S U.K. PAINTS (INDIA) P VT. LTD. SH. NAVEEN CHAUDHARY IS THE AUTHORIZED SIGNATORY OF THE ASS ESSEE COMPANY AND THE PROPERTY HAS BEEN PURCHASED THROUGH HI M. THE NOTE PAD HAS BEEN FOUND FROM HIS TABLE. HENCE, IF A D OCUMENT HAS BEEN FOUND FROM THE POSSESSION OF THE AUTHORIZED SIGNA TORY OF THE COMPANY IN WHOSE NAME THE SAID PROPERTY HAS BEEN PUR CHASED, IT CANNOT BE SAID THAT THE DOCUMENT IS NOT RELEVANT. THE OTHER NOTEWORTHY POINT IS THAT THE DOCUMENT CONTAINS DETAILS REGAR DING A NUMBER OF TRANSACTIONS PERTAINING TO THE PROPERTY AT 58, SUNDER NAGAR, NEW DELHI SUCH AS PAYMENT OF STAMP DUTY ETC. TH ESE TRANSACTIONS ARE DULY REFLECTED IN THE BOOKS OF A/C. ON LY THE ITA NO.1451/DEL/2015 3 TRANSACTION RELATING TO CASH PAYMENT OF RS. 3.5 CRORES IS NOT REFLECTED IN THE BOOKS OF A/C. WHEN A TRANSACTION IS A PART OF A SERIES OF TRANSACTIONS AND THE OTHER TRANSACTIONS ARE REFLECTED IN THE BOOKS, THEN WITH REGARD TO THE UNACCOUNTED TRANSACTION IT CANNO T BE ACCEPTED THAT THE TRANSACTION NEVER HAPPENED. HENCE, THE CONTENTION OF THE ASSESSEE THAT THE SAID PAYMENT IN CASH WAS NOT MA DE IS NOT ACCEPTABLE. 4. BEFORE THE CIT(A), IT WAS ARGUED THAT NOTING F OUND AT THE PAGE 3 OF THE ANNEXURE A-15, WHICH IS THE BASIS OF ADDITION WER E NEITHER WRITTEN BY THE ASSESSEE NOR BY ITS EMPLOYEES. THE CONTENTS OF THE SAI D PAGE ARE NOT BASED ON FACTS. IT WAS ARGUED THAT THE PURCHASE CO NSIDERATION OF SUNDER NAGAR PROPERTY WAS ONLY RS.33 CRORES AND NOT RS. 36.51 CRORES AND THERE IS NO EVIDENCE ON RECORD THAT ASSESSEE HAS PAID CASH OF RS.3.5 CRORES AS ALLEGED BY THE REVENUE. IT WAS FURTHER ARGUE D THAT THERE ARE CERTAIN FACTUAL INCONSISTENCY IN THE SAID NOTE SINCE AT ONE PLACE TOTAL CONSIDERATION IS MENTIONED RS.36.51 CRORES WHERE THE PA YMENT WORKED OUT ONLY RS.36 CRORES. 5. IT WAS ARGUED THAT IN ORDER TO INVOKE THE PROVISIO NS OF SECTION 153C OF THE ACT, THE ASSESSING OFFICER OF THE SEARCHED P ERSON MUST BE SATISFIED THAT ANY DOCUMENT SEIZED SHOULD BELONG TO A PERSON OTHER THAN THE PERSON WHO HAS BEEN SEARCHED. ONLY AFTER SUCH SATISFACTION IS ARRIVED AT THE DOCUMENTS SHOULD BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. IN THE IN STANT CASE, THE ASSESSING OFFICER HAS RECORDED HIS SATISFACTION ONLY ON THE BASIS OF TWO ANNEXURES I.E. ANNEXURE A-23 PAGES 34 TO 54 AND ANNEX URE AA-4 PAGES 62 TO 77. THE ASSESSING OFFICER HAS NOT TAKEN INTO CONSID ERATION THE ITA NO.1451/DEL/2015 4 NOTEPAD AS ALLEGED TO HAVE BEEN FOUND FROM THE TABLE OF MR. NAVEEN CHAUDHARY, CFO OF UK PAINTS AND MARKED AS ANNEXURE A -15, THEREFORE, THE ASSUMPTION OF JURISDICTION IS CONTRARY TO LAW. IT W AS FURTHER ARGUED THAT THE SO CALLED SEIZED DOCUMENTS ARE THE PHOTOCOPIE S OF SALE DEED DATED 25/08/2008 EXECUTED BETWEEN M/S ATMA RAM PROPE RTIES AND THE ASSESSEE. THE ORIGINAL COPY OF THE SALE DEED IS STILL AVA ILABLE WITH THE ASSESSEE. SIMILARLY, VARIOUS OTHER PAGES ARE THE PHOTOCOP IES OF THE POSSESSION LETTER AND INDEMNITY BOND EXECUTED BY THE VE NDORS IN FAVOUR OF THE ASSESSEE AND THE ORIGINALS ARE STILL AVAILABLE WIT H THE ASSESSEE. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS PVT. LTD. IN WRIT PETITION (C) NO.414/2014, IT WAS ARGUED THAT THE HONBLE HIGH COURT UNDER SIMILAR CIR CUMSTANCES, WHERE PHOTOCOPIES WERE RECOVERED AND SEIZED DURING THE COUR SE OF SEARCH HAS HELD THAT THE PROCEEDINGS INITIATED BY THE ASSESSING OFF ICER UNDER SECTION 153C OF THE ACT ARE NOT IN ACCORDANCE WITH L AW. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF M/S PEPSI FOODS PVT. LTD. VS ACIT IN WRIT PETITION (C) NO.415/2014 & CM 823/2014, IT WAS ARGUED THAT HONBLE HIGH COURT IN THE SAID DECISION H AS HELD THAT WHERE THE SATISFACTION NOTE OF THE ASSESSING OFFICER DOES NOT TH ROW ANY LIGHT ON HOW HE HAS COME TO THE CONCLUSION THAT THE DOCUMENT M ENTIONED IN THE SATISFACTION NOTE BELONG TO THE PARTY SEARCHED AND BEL ONG TO THE ASSESSEE, THEREFORE, THE MERE USE OF THE WORD SATISFIED WAS HELD TO BE NOT SUFFICIENT TO MEET THE REQUIREMENT OF LAW. IT WA S ACCORDINGLY ARGUED ITA NO.1451/DEL/2015 5 THAT THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFI CER UNDER SECTION 153C OF THE ACT IS NOT IN ACCORDANCE WITH LAW AND SHOULD BE QUASHED. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE L D. CIT(A) QUASHED THE 153 PROCEEDINGS BY OBSERVING AS UNDER:- 4.3.17. I HAVE CONSIDERED THE SUBMISSION OF THE AR AND THE ASSESSMENT ORDER. IN THE PRESENT CASE, THE AO HAS RECOR DED A SATISFACTION NOTE BEFORE ISSUING NOTICE U/S 153C. THE SAID SATISFAC TION NOTE IS REPRODUCED BELOW FOR READY REFERENCE: A SEARCH WAS CONDUCTED ON SHRI. K.S. DHINGRA AND SHR I G.S. DHINGRA ON 16.09.2011. THE SEARCH ACTION WAS CONDUCT ED U/S 132 OF' THE IT ACT 1961. DURING THE COURSE OF SUCH PROCEED INGS DOCUMENTS BELONGING M/S ADVANTAGE HOUSING PVT. LTD. WE RE FOUND AND SEIZED AT THE PREMISES OF CHAMBER OF SHRI. KULDEE P SINGH DHINGRA AND SHRI G.S. DHINGRA 19, DDA COMMERCIAL CO MPLEX, ZAMRUDPUR, KAILASH COLONY EXTENTION, GREATER KAILASH P ART-1, NEW DELHI INCLUDING 1ST FLOOR OF THIS BUILDING. THE DOCUM ENTS ARE DESCRIBED BELOW:- PAGE NO. 34-54, ANNEXURE A-23, PARTY KGO :- THESE PA GES SHOW THE SALE DEED AND OTHER DOCUMENTS LIKE INDEMNITY BOND, POSSESSION LETTER ETC. REGARDING SALE OF PROPERTY AT 58 , SUNDER NAGAR, NEW DELHI BY M/S ATMA RAM PROPERTIES PVT. LTD. TO M/S ADVANTAGE HOUSING PVT. LTD. FOR A CONSIDERATION OF RS. 33.00 CRORES ON 28.08.208 PAGE NO. 62-77, ANNEXURE AA-4, PARTY KGO:- THESE PAG ES SHOW THE AGREEMENT TO SELL MADE AT NEW DELHI ON 10.07.2008 BETWE EN ATMA RAM PROPERTIES PVT. LTD., THE VENDOR ON THE ONE PART AND M/S ADVANTAGE HOUSING PVT. LTD., AS VENDEE ON THE OTHER PART. THE VENDOR HAVE AGREED TO TRANSFER ASSIGN IN FAVOUR OF TH E VENDEE THE PROPERTY NO. 58, BLOCK 171, SUNDER NAGAR, NEW DELHI FOR CONSIDERATION OF RS. 33.00 CRORES. THUS, DOCUMENTS BELONGING TO M/S ADVANTAGE HOUSING PV T. LTD. HAVE BEEN FOUND AND SEIZED DURING THE COURSE OF SEAR CH U/S 132 OF THE INCOME-TAX ACT, 1961 ON SH. K.S. DHINGRA AND SH. G .S. DHINGRA. HENCE, I AM SATISFIED THAT IN ACCORDANCE WITH THE PROVIS IONS OF SECTION 153C OF THE INCOME TAX ACT, 1961 PROCEEDINGS TO ASSESS/REASSESS THE INCOME OF THE ASSESSEE FOR ASSESS MENT YEAR 2006-07 TO ASSESSMENT YEAR 2011-12 HAVE TO BE INITIATED . ITA NO.1451/DEL/2015 6 SINCE I AM ALSO THE ASSESSING OFFICER FOR ADVANTAGE H OUSING PVT. LTD. NOTICE U/S 153C R.W.S. 153A IS HEREBY ISSUED FOR THE ASSESSMENT YEAR 2006-07 TO 2011-12. 4.3.18. FROM THE ABOVE IT IS CLEAR THAT THE ASSESSING O FFICER HAS ONLY REFERRED TO PAGES 34 TO 54 OF ANNEXURE A-23 AND PAGES 62 TO 67 OF ANNEXURE AA-4. HE HAS, FOR SOME UNKNOWN REASONS, NO T MENTIONED PAGE 3 OF ANNEXURE A-15 WHICH CONTAIN THE INCRIMINATI NG FACTS AGAINST THE ASSESSEE AND ON THE BASIS OF WHICH THE ADDITION HAS BEEN MADE. 4.3.19. THE DOCUMENTS WHICH ARE MENTIONED IN THE SAT ISFACTION NOTE ARE PHOTOCOPIES OF THE SALE DEED AND AGREEMENT TO SELL ALONGWITH INDEMNITY BOND, POSSESSION LETTER ETC. IN RESPECT OF THE SUNDER NAGAR PROPERTY PURCHASED BY THE APPELLANT FROM M/S ATMA RAM P ROPERTIES (P) LTD. THESE DOCUMENTS HOWEVER, DO NOT GIVE ANY INDICATI ON THAT THE APPELLANT HAD PAID RS. 3.5 CRORES IN CASH OVER AND A BOVE RS. 33 CRORES AS RECORDED IN THE SALE DEED. FURTHER THESE ARE THE PHO TOCOPIES AND NOT THE ORIGINAL DEEDS OR ORIGINAL DOCUMENTS. 4.3.20. PAGES 34 TO 48 OF ANNEXURE A-23, ARE THE PHOTOCOPIES O F THE SALE DEED DATED 25.8.2008 FOR PURCHASE OF PROPERTY BY THE APPELLANT FROM M/S ATMA RAM PROPERTIES (P) LTD. THE AR HAS STAT ED THAT THE ORIGINAL COPY OF THE SALE DEED WAS VERY MUCH AVAILAB LE WITH THE APPELLANT. FURTHER PAGES 49 TO 53 OF THE SAME ANNEXURE ARE ONCE AGAIN PHOTOCOPIES OF POSSESSION LETTER AND INDEMNITY BO ND EXECUTED BY M/S ATMA RAM PROPERTIES (P) LTD. IN FAVOUR OF THE AP PELLANT. THE AR HAS SUBMITTED THAT THE ORIGINAL OF THOSE DOCUMENTS WERE S TILL AVAILABLE WITH THE APPELLANT. AS REGARDS PAGES 62 TO 67 OF ANNEX URE AA-4, THE SAME ARE ONCE AGAIN PHOTOCOPIES OF THE AGREEMENT TO SEL L DATED 10.07.2008 FOR THE SAME PROPERTY AND THEY ARE NOT ORIGI NAL DOCUMENTS. THE AR HAS SUBMITTED THAT ORIGINAL OF THESE DOCUMENTS W ERE STILL AVAILABLE WITH THE APPELLANT. 4.3.21. IN THE ABOVE BACKGROUND, IT IS NOTED THAT THE SATISFACTION NOTED BY THE A.O. DESCRIBES PHOTOCOPIES OF THE DOCUMENTS WHIC H DO CONTAIN NAME OF THE APPELLANT AS PURCHASER 6F THE PROPERTY CONC ERN. THESE ARE NOT THE ORIGINALS OF THE DOCUMENTS AND ONLY PHOTOCOPIES . THE AO HAS STATED IN THE SATISFACTION NOTE THAT DURING THE COURSE OF S EARCH AT THE PREMISES OF SH. K.S.DHINGRA & SH. G.S.DHINGRA, THE A BOVE SAID DOCUMENTS BELONGING TO THE APPELLANT WERE FOUND AND SEI ZED AND THAT HE WAS SATISFIED THAT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153C OF THE ACT, PROCEEDINGS TO ASSESS/RE-ASSESS THE INCOME OF THE ASSESSEE FOR A.Y. 2006-07 TO A.Y. 11-12 HAVE TO BE INITIATED. H OWEVER, THERE IS NO REASON OR JUSTIFICATION GIVEN IN THE NOTE AS TO WHY HE WAS COMING TO THE CONCLUSION THAT THE DOCUMENTS BELONGED TO THE APPELLAN T. 4.3.22. I HAVE CONSIDERED THE SATISFACTION NOTE OF THE AO. IT S UFFERS FROM DEFECTS DUE TO THE LAW AS PRONOUNCED BY THE HONB LE HIGH COURT OF DELHI. IN THE CASE OF PEPSI FOOD (P) LTD. (SUPRA), THE HONBLE HIGH COURT OF DELHI HAS HELD THAT MERE USE OR MENTION OF THE WORD SATISFACTION OR THE WORD I AM SATISFIED IN THE SATIS FACTION NOTE ITA NO.1451/DEL/2015 7 WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTI ON AS USED IN SECTION 153C OF THE ACT. IT HAS BEEN HELD THAT THE SATIS FACTION NOTE ITSELF MUST DISPLAY THE REASONS OR THE BASIS FOR THE CON CLUSION-THAT THE A.O. OF THE SEARCHED PERSON WAS SATISFIED THAT THE SEIZ ED DOCUMENTS BELONGED TO A PERSON OTHER THAN THE SEARCHED PERSON. IT HAS BEEN HELD IN THE SAME CASE THAT THE A.O. OF THE SEARCHED PERSON M UST FIRST ARRIVE AT A CLEAR SATISFACTION THAT A PARTICULAR DOCUMENTS SEIZED DID NOT BELONG TO THE PERSON FROM WHOM IT HAS BEEN SEIZED. TH EREAFTER, HE SHOULD FORM A SATISFACTION THAT THE SEIZED DOCUMENT BELO NGS TO SUCH AND SUCH OTHER PERSON. U/S 132(4A)(I), THERE IS A PRE SUMPTION THAT THE DOCUMENTS SEIZED FROM A PERSON BELONGED TO SUCH PERSO N. THERE IS ALSO PRESUMPTION U/S 292C(L)(I) THAT A DOCUMENT WHICH IS FOUND FROM A PERSON WHO WAS SEARCHED, WOULD BE BELONGING TO THAT P ERSON. THE HONBLE HIGH COURT HAS HELD THAT THE A.O. MUST AT THE FIRS T INSTANCE REBUT SUCH A PRESUMPTION PROVIDED IN THE ACT ITSELF AND ONLY THEREAFTER HE SHOULD COME TO THE CONCLUSION OR SATISFACTION THAT THE SEIZED DOCUMENT BELONGED TO SOMEONE ELSE. THERE MUST BE SOME COGENT MATERIAL AVAILABLE WITH THE A.O. BEFORE HE ARRIVES AT A SATISFACTION THAT THE SEIZED DOCUMENT DID NOT BELONG TO THE SEARCHED PER SON BUT TO SOMEBODY ELSE AND THAT SURMISES AND CONJECTURES CAN N OT TAKE THE PLACE OF SATISFACTION. 4.3.23. IN THE SUBSEQUENT CASE OF M/S PEPSI FOODS INDIA (P) LTD. VS ACIT (SUPRA) THE HONBLE JURISDICTIONAL OF HIGH COURT OF DELHI HAS FURTHER HELD THAT FINDING PHOTOCOPIES IN THE POSSESSION OF A SEARCHED PERSON WOULD NOT NECESSARILY MEAN THAT THEY BELONGED TO A PERSON WHO HOLDS THE ORIGINALS. THE POSSESSION OF DOCUMENTS AND POSSESSION OF PHOTOCOPIES OF DOCUMENTS WERE TWO SEPARATE THINGS. FU RTHER, IT HAS ALSO BEEN OBSERVED THAT ONE SHOULD NOT CONFUSE THE EXPR ESSION BELONGS TO WITH THE EXPRESSIONS RELATES TO OR REFE RS TO. A REGISTERED SALE DEED FOR EXAMPLE BELONGS TO, THE PUR CHASER OF THE PROPERTY BUT OBVIOUSLY RELATES TO OR REFERS TO A VEN DOR. 4.3.24. ON CONSIDERING THE RATIO OF THE TWO CASES NAMELY M/S PEPSI FOOD (P) LTD.(SUPRA), AND M/S PEPSICO INDIA HOLDING PVT. LTD. (SUPRA), IT IS SEEN THAT THE ASSUMPTION OF JURISDICTION BY THE A.O. U/S. 153C OF THE ACT IS BAD IN LAW. IN THE SATISFACTION, HE HAS MERELY STATED THAT DOCUMENTS BELONG TO THE APPELLANT WERE FOUND AND SEIZED . HE HAS NOT EXPRESSED ANY REASONS IN ARRIVING AT SUCH A CONCLUSI ON. HE DOES NOT SAY AS TO HOW HE HAS FELT THAT THE PHOTOCOPIES OF THE SALE DEED ETC. DID NOT BELONG TO THE PARTY WHO WAS SEARCHED AND THAT THE SA ME BELONGED TO THE APPELLANT. THE HONBLE HIGH COURT OF DELHI HAS H ELD THAT THE SAID SATISFACTION SHOULD BE VERY MUCH EMANATING FROM THE NO TE MADE BEFORE ISSUING NOTICE U/S 153C. THE RELEVANT PARA 11 & 12 OF THE ORDER OF HONBLE HIGH COURT OF DELHI IN THE CASE OF PEPSI F OODS PVT LTD VS ACIT (SUPRA) IS REPRODUCED BELOW FOR READY REFERENC E: 11. IT IS EVIDENT FROM THE ABOVE SATISFACTION NOTE THAT APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONER AND TH AT THE ITA NO.1451/DEL/2015 8 ASSESSING OFFICER IS SATISFIED THAT IT IS A FIT CASE FO R ISSUANCE OF A NOTICE UNDER SECTION 153C, THERE IS NOTHING WHICH WOUL D INDICATE AS TO HOW THE PRESUMPTIONS WHICH ARE TO BE NORMALLY RAI SED AS INDICATED ABOVE, HAVE BEEN REBUTTED BY THE ASSESSING O FFICER. MERE USE OR MENTION OF THE WORD SATISFACTION OR THE W ORDS 'I AM SATISFIED IN THE ORDER OR THE NOTE WOULD NOT MEET THE REQ UIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C OF THE SAID ACT. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSION THAT THE ASSESSING OFFICER OF THE SE ARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUMENTS BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. WE ARE AFRAID, THAT GOIN G THROUGH THE CONTENTS OF THE SATISFACTION NOTE, WE ARE UNABLE TO DI SCERN ANY SATISFACTION OF KIND REQUIRED UNDER SECTION 153C OF THE SAID ACT. 12. THIS BEING THE POSITION THE VERY FIRST STEP PRIOR TO THE ISSUANCE OF A NOTICE WIDER SECTION 153C OF THE SAID ACT HAS NOT BEEN FULFILLED. INASMUCH AS THIS CONDITION PRECEDENT HAS N OT BEEN MET, THE NOTICED UNDER SECTION 153C ARE LIABLE TO BE QUASHE D. IT IS ORDERED ACCORDINGLY. THE WRIT PETITION ARE ALLOWED AS ABOVE. THERE SHALL BE NO ORDER AS TO COSTS. 4.3.25 SINCE SUCH SATISFACTION IS NOT COMING OUT OF THE NOTE RECORDED BY THE A.O. BEFORE ISSUING NOTICE U/S 153C, THE ACTION OF THE A.O. IS BAD IN LAW AS PER THE ABOVE DECISIONS OF THE HIGH COURT. T HEREFORE, RESPECTFULLY FOLLOWING THE SAID RATIO OF THE HONBLE HI GH COURT DELHI IN THE CASE OF M/S PEPSI FOODS (P) LTD. (SUPRA), I HEREBY H OLD THAT THE ASSUMPTION OF JURISDICTION U/S 153C BY THE A.O. WAS BA D IN LAW IN AS SUCH AS HE HAS NOT STATED THE REASONS FOR HOLDING THAT THE DOC UMENTS MENTIONED IN THE SATISFACTION NOTE BELONGED TO THE APPELL ANT. 4.3.26 SINCE THE ORDER OF THE A.O. IS BEING HELD INVA LID DUE TO THE DEFECT IN ASSUMPTION OF JURISDICTION BY FOLLOWING THE DECISI ONS OF JURISDICTIONAL HIGH COURT OF DELHI, OTHER GROUNDS RAISED IN THE APPEA L DO NOT SURVIVE. 7. AGGRIEVED BY SUCH ORDER, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. THE LD. DR STRONGLY CHALLENGED THE ORDER OF THE L D. CIT(A). HE SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) IS NO T IN ACCORDANCE WITH LAW ESPECIALLY WHEN THE DOCUMENTS BELONGING TO T HE ASSESSEE WERE FOUND FROM THE PREMISES OF THE SEARCHED PERSON, THE ASSESSI NG OFFICER HAS RECORDED HIS SATISFACTION WHO INCIDENTALLY IS THE A SSESSING OFFICER OF ITA NO.1451/DEL/2015 9 BOTH THE SEARCHED PARTY AS WELL AS THE ASSESSEE. HE ALSO RE LIED UPON THE FOLLOWING DECISIONS:- I. PCIT VS SUPER MALLS PVT. LTD. [2016] 76 TAXMANN.COM 2 67 (DEL) 393 ITR 557 (DEL) II. GANPATI FINCAP SERVICES (P.) LTD. VS CIT [2017] 82 TA XMANN.COM 408(DEL.) III. RAJESH SUNDERDAS VASWANI VS ACIT [2016] 76 TAXMANN.COM 311 (GUJ.) IV. CIT VS CLASSIC ENTERPRISES (35 TAXMANN.COM 244), 358 ITR 465. 9. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND STR ONGLY SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTED THAT IN THIS CASE NO SATISFACTION NOTE WAS RECORDED IN THE CASE OF THE SEARCH ED PERSON BUT IT WAS RECORDED ONLY IN THE CASE OF ASSESSEE. THE SO CALLED DOCUMENTS WHICH ARE SEIZED FROM THE SEARCHED PARTY ARE NOTHING BUT PHOTOCOPIES OF THE SALE DEED AND AGREEMENT TO SALE AND POSSESSION LETTE R, ETC AND THE ORIGINAL DOCUMENTS ARE STILL AVAILABLE WITH THE ASSESSEE . HE SUBMITTED THAT BEFORE ISSUING NOTICE UNDER SECTION 153C OF THE A CT, IT IS A CONDITION PRECEDENT THAT THE SATISFACTION NOTE SHOULD ALSO BE REC ORDED IN THE CASE OF THE SEARCHED PERSON, EVEN THOUGH THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS THE SAME. SINCE, IN INSTANT CASE, NO SUCH SATISFACTION HAS BEEN RECORDED IN THE CASE OF THE SEARCHED ITA NO.1451/DEL/2015 10 PARTY, THEREFORE, THE ASSUMPTION OF JURISDICTION BY TH E ASSESSING OFFICER UNDER SECTION 153C IN THE CASE OF THE ASSESSEE IS BAD IN L AW. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PA PER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VAR IOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSING OFFICER ON THE BA SIS OF CERTAIN DOCUMENTS FOUND AND SEIZED FROM THE PREMISES OF SHRI K. S. DHINGRA & G. S. DHINGRA AND OTHER GROUP OF CASES DURING THE COURSE OF SEARCH AND SEIZURE OPERATION ON 16/09/2011 ISSUED NOTICED UNDER SE CTION 153C OF THE ACT TO THE ASSESSEE AFTER RECORDING HIS SATISFACTION N OTE IN THE CASE OF THE ASSESSEE THAT THE SAID SIZED DOCUMENTS WERE BELONGI NG TO THE ASSESSEE. WE FIND THE LD. CIT(A) QUASHED THE PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT, THE REASONS OF WHICH HA VE ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPHS. IT IS THE SUB MISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE DOCUMENTS SO SEIZED FROM THE PREMISES OF SHRI K.S. DHINGRA & G. S. DHINGRA DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT ON 16/09/2011 ARE NOTHING BUT XEROX COPY OF THE SALE DEED, AGREEMENT TO SALE AND PO SSESSION LETTER, ETC AND THE ORIGINAL DOCUMENTS ARE STILL AVAILABLE WI TH THE ASSESSEE. IT IS ALSO HIS SUBMISSIONS THAT NO SATISFACTION NOTE HAS BEEN RECO RDED IN THE CASE OF THE SEARCHED PERSON THAT THESE DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON BUT BELONG TO SOME OTHER PERSON I.E. TH E ASSESSEE IN THE INSTANT CASE. ITA NO.1451/DEL/2015 11 11. WE FIND THAT THE LD. CIT(A) WHILE ADJUDICATING THE ISSUE HAS GONE THROUGH THE DOCUMENTS WHICH ARE MENTIONED IN THE SATI SFACTION NOTE AND FOUND THAT THE DOCUMENTS SO FOUND OR SEIZED ARE PHOTOC OPY OF THE SALE DEED, AGREEMENT OF SALE ALONG WITH INDEMNITY BOND, P OSSESSION LETTER, ETC IN RESPECT OF SUNDER NAGAR PROPERTY PURCHASED BY THE ASSESSEE FROM M/S ATMA RAM PROPERTIES LTD. THESE DOCUMENTS DO NOT GIV E ANY INDICATION THAT THE ASSESSEE HAD PAID RS.3.5 CRORES IN CA SH OVER AND ABOVE OF RS.33 CRORES AS RECORDED IN THE SALE DEED. WE FIND THE LD. CIT(A) WHILE ADJUDICATING THE ISSUE HAS FOLLOWED THE D ECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDING PVT. LTD. (SUPRA) AND M/S PEPSI FOODS PVT. LTD. (SUPRA). THE LD. D R COULD NOT CONTROVERT THE FACTUAL FINDINGS GIVEN BY THE LD. CIT (A) IN HIS ORDER ON THIS ISSUE. WE FURTHER FIND THAT THERE IS NO SATISFACTION NO TE RECORDED IN THE CASE OF THE SEARCHED PERSON WHICH IS A CONDITION PRECED ENT FOR ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT ALTHOUGH THE AS SESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS THE SAME. IN VIEW OF THE ABOVE DISCUSSION AND DETAILED REASONING GIVEN BY THE LD . CIT(A) ON THIS ISSUE, WE FIND NO INFIRMITY IN HIS ORDER IN QUASHING TH E PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT BY THE ASSESSING OFFICER. THE VARIOUS DECISIONS RELIED UPON BY THE LD. DR ARE DISTING UISHABLE AND ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE ESPECI ALLY WHEN THE DOCUMENTS SEIZED ARE ONLY PHOTOCOPIES, THE ORIGINALS O F WHICH ARE ALREADY IN THE POSSESSION OF THE ASSESSEE AND THE ASSESSING OF FICER HAS ITA NO.1451/DEL/2015 12 NOT RECORDED HIS SATISFACTION IN THE CASE OF THE SEARCHE D PERSON THAT THE DOCUMENTS SO FOUND AND SEIZED FROM THE PREMISES OF THE SE ARCHED PERSON DO NOT BELONG TO THE SEARCHED PERSON BUT BELONG TO SOME OTHER PERSON. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDIN GLY DISMISSED. 12. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 27/02/2020. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - ( (( ( BHAVNESH SAINI BHAVNESH SAINI BHAVNESH SAINI BHAVNESH SAINI ) )) ) ( (( ( R.K. PANDA R.K. PANDA R.K. PANDA R.K. PANDA ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATED: 27 TH FEBRUARY, 2020 S.S. COPY FORWARDED TO: - 1. APPELLANT : ACIT-CC-08, R.NO.333, ARA CENTRE, JHANDEWALAN EXTN, NEW DELHI 2. RESPONDENT : M/S ADVANTAGE HOUSING PVT. LTD. R/O-220, OKHLA INDUSTRIAL ESTATE, PHASE-III, NEW DELHI 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR ITAT, DELHI