The Income tax Officer, Amritsar V. Sh. Arun Kumar Kapoor, Amritsar

ITA 147/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5720 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 17-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TARSEM LALD R
• Assessee Lawyers: PADAM BEHL
• Keywords: Capital asset; Search and seizure; Document seized; Opportunity of being heard; Assessment record; Block assessment; Documents seized
• Section: 143(3); 153A; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR. BEFORE SHRI H.L. KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER. I.T.A. NO.147(ASR)/2010. (ASSESSMENT YEAR: 2006-07) THE INCOME TAX OFFICER, SHRI ARUN KUMAR KAPOOR, WAD 1(1), AMRITSAR. PROP. M/S.VISHNU TEXTILES, RA M GALI, KATRA AHLUWALIA, AMRITSAR. (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI TARSEM LAL,D.R. RESPONDENT BY: SHRI PADAM BEHL, C.A. ORDER PER H.L. KARWA, VICE PRESIDENT. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A), AMRITSAR DATED 14-1-2010, RELATING TO THE A SSESSMENT YEAR 2006-07. 2. IN THIS APPEAL, THE REVENUE HAS TAKEN THE FOLLOW ING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL GROUND S OF APPEAL WITHOUT ACCORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES THE LEARNE D CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT PROCEEDINGS IN THIS CASE WERE INITIATED UNDER SECTION 148 ON THE BASIS OF TH E DCIT, CC- 22, NEW DELHI. IT IS NOT A CASE WHERE THE DCIT, CC -22, NEW DELHI, HAS RECORDED SATISFACTION REGARDING CERTAIN SEIZED DOCUMENTS BELONGS TO THE ASSESSE SHRI ARUN KUMAR KA POOR AND THE ORIGINAL SEIZED DOCUMENTS HAVE BEEN HANDED OVER TO ITO, WARD 1(1), AMRITSAR, HAVING JURISDICTION UPON SHRI ARUN 2 KUMAR KAPOOR, THE ASSESSEE TO PROCEED AGAINST HIM B Y ISSUE OF NOTICE UNDER SECTION 153C. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE ONLY REQUIREMENT FOR INITIATING PROCEEDINGS UNDER SECTIO N 148 WAS TO RECORD REASONS TO BELIEVE ON THE BASIS OF MATERIAL AVAILABLE BEFORE HIM IN THE FORM OF THE REPORT OF THE DCIT, C C-22, NEW DELHI, SUPPORTED BY OTHER DOCUMENTS. THIS REQUIREME NT HAS BEEN FULFILLED AND HAS BEEN UPHELD BY LEARNED CIT(A ), AMRITSAR, VIDE PARA 6 OF THE ORDER. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE SEIZED DOCUMENTS RELIED BY THE DCIT, CC-22, NEW DELHI, IN HIS REPORT FORWARDED TO ITO, WARD 1(1), AMRITSAR WHICH IS THE PLANK OF REASONS UNDER SECTION 148 WERE PERTAINING TO THE DE AL OF LAND BELONGING TO M/S.P.R. INFRASTRUCTURE LTD. BY SHRI ARUN KUMAR KAPOOR. THEREFORE, THE SEIZED DOCUMENTS AS REFERRED TO IN THE REPORT OF DCIT, CC-22, NEW DELHI WERE IN NO WAY CO NTAINING ANY DIRECT INFORMATION REGARDING TRANSFER OF SHARES OF THE ASSESSEE AND SUPPRESSION OF CAPITAL GAIN THEREON, I F ANY. PROCEEDINGS UNDER SECTION 153C; IF AT ALL WERE TO B E INITIATED ON THE BASIS OF THESE DOCUMENTS; THEN COULD HAVE BEEN IN THE CASE OF M/S.P.R. INFRASTRUCTURE LTD. ONLY AND NOT IN THE CASE OF THIS ASSESSEE SHRI ARUN KUMAR KAPOOR. 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,51,50,000/- MADE TO THE INCOME SHO WN BY THE ASSESSEE ON ACCOUNT OF UNDER-STATEMENT OF SALE VALU E OF THE SHARES OF M/S.P.R. INFRASTRUCTURE LTD. TO M/S.TODAY HOMES & INFRASTRUCTURE (P) LTD. 6. THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE VALUE PER SHARE COMPUTED BY THE ASSESSING OFFICER AT RS.1,52 5/- PER SHARE AS PER FACTS AND MATERIAL BROUGHT ON RECORD B Y HIM AGAINST THE VALUE OF RS.10/- ONLY PER SHARE SHOWN BY THE AS SESSEE. 3 7. THAT ORDER PASSED BY LEARNED CIT(A) IS PRAYED TO BE SET-ASIDE AND ADDITION OF RS.1,51,50,000/- COMPUTED BY THE AS SESSING OFFICER MAY KINDLY BE RESTORED. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HARD AND DISPOSED OF. 3. AS REGARDS GROUND NOS.1 TO 4 OF THE APPEAL, THE FACTS AVAILABLE ON RECORD ARE THAT THE RETURN OF INCOME FOR THE ASSESS MENT YEAR 2006-07 WAS FILED ON 31-10-2006 DECLARING AN INCOME OF RS.3,74, 510/-, WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX AC T, 1961 (IN SHORT, THE ACT). SUBSEQUENTLY, THE AO RECEIVED INFORMATION F ROM DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-22, NEW DELHI, VIDE LETTER DATED 19-2-2008 WHEREIN IT WAS REPORTED THAT A SEAR CH AND SEIZURE ACTION U/S.132 WAS CARRIED OUT IN THE CASE OF M/S.TODAY HO MES AND INFRASTRUCTURE PVT. LTD., 8 TH FLOOR, STATESMAN HOUSE, CONNAUGHT PLACE, NEW DELHI ON 28-3-2006 IN WHICH CERTAIN INCRIMINATING DOCUMENTS RELATING TO THE ASSESSEE AND M/S.P.R. INFRASTRUCTURE LTD. WERE SEIZED. ON THE BASIS OF EVIDENCE SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF M /S.TODAY HOME AND INFRASTRUCTURE (P) LTD. AND SUBSEQUENT ASSESSMENT P ROCEEDINGS IN ITS CASE, THE COST PRICE OF EACH SHARE OF M/S.P.R. INFRASTRUC TURE LTD. WAS DETERMINED AT RS.2041/- AS AGAINST THE TRANSFER PRICE AT FACE VALUE OF RS.10/- BY THE DIRECTORS OF M/S.P.R. INFRASTRUCTURE LTD. IN THE REPORT OF DCIT, CENTRAL CIRCLE-22, NEW DELHI, IT WAS STATED THAT M/S.P.R. I NFRASTRUCTURE LTD. HAD TRANSFERRED THE SHARE HOLDING OF THE DIRECTORS ALON GWITH MANAGEMENT OF THE COMPANY TO M/S.TODAY HOME AND INFRASTRUCTURE (P) LT D. FOR A TOTAL CONSIDERATION OF RS.12.25 CRORES. THE A.O., THERE FORE, RECORDED THE REASON AND ISSUED NOTICE U/S.148 WHICH WAS SERVED ON THE A SSESSEE ON 24-2-2008. 4 THE ASSESSEE WAS ONE OF THE DIRECTORS IN M/S.P.R. INFRASTRUCTURE LTD. HOLDING 10000 SHARES. THIS COMPANY WAS INCORPORATE D ON 5-4-2005 AND PURCHASED AN AGRICULTURAL LAND MEASURING 10618 SQ. YARDS AT BATALA ROAD, AMRITSAR FOR A TOTAL CONSIDERATION OF RS.79,63,350/ - ON 14-7-2005. THE ASSESSEE SOLD 10000 SHARES OF M/S.P.R. INFRASTRUCUR E LTD., AN UNLISTED COMPANY A THE FACE VALUE OF RS.10/- EACH TO M/S.TOD AY HOMES AND INFRASTRUCTURE PVT. LTD. FOR A TOTAL CONSIDERATION OF RS.1,00,000/- ON 6-9- 2005. THESE SHARES HAD BEEN ACQUIRED EARLIER BY TH E ASSESSEE AT THE FACE VALUE ONLY. AS PER THE REPORT OF DCIT, CENTRAL CI RCLE-22, NEW DELHI, M/S.P.R. INFRASTRUCTURE LTD. HAS TRANSFERRED ITS TO TAL SHARE HOLDING OF 60000 SHARES AT THE FACE VALUE OF RS.10/- TO M/S. TODAY H OMES & INFRASTRUCTURE LTD. AND ITS GROUP FAMILY MEMBERS AND THE COMPANY W AS TAKEN OVER BY M/S.TODAY HOMES & INFRASTRUCTURE PVT. LTD. FOR RS.6 .00 LACS ONLY THOUGH THE VALUE OF LAND OWNED BY THE COMPANY WAS OF RS.12 ,25 CRORES AS PER PAPERS SEIZED DURING SEARCH AND SEIZURE ACTION. TH US, THE MARKET VALUE OF M/S.P.R. INFRASTRUCTURE LTD. WAS WORKED OUT AT RS.2 041/- PER SHARE. THE CONTROL AND MANAGEMENT OF THE COMPANY WAS TAKEN OVE R BY M/S.TODAY HOMES & INFRASTRUCTURE PVT. LTD. THROUGH TRANSFER O F SHARES. IN THE ASSESSMENT, THE A.O., HOWEVER, WORKED OUT THE VALUE OF EACH SHARE AT RS.1525/- BY BREAKUP VALUE METHOD CONSIDERING THE A SSETS AND LIABILITIES OF M/S.P.R. INFRASTRUCTURE LTD. AND THEREBY MADE ADDI TION OF RS.1,51,50,000/- IN THE HANDS OF THE ASSESSEE AS SHORT TERM CAPITAL GAIN ON SALE OF SHARES. 4. ON APPEAL, THE CIT(A) QUASHED THE ASSESSMENT ORD ER HOLDING THAT THE PROCEEDINGS INITIATED BY THE A.O. UNDER SECTION 148 ARE ILLEGAL AND VOID AB INITIO. THE RELEVANT OBSERVATIONS OF THE CIT(A) AR E AS UNDER:- 6. I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED CO UNSEL FOR THE APPELLANT AND GONE THROUGH THE MATERIAL PLACED BEFO RE ME INCLUDING 5 THE ASSESSMENT ORDER AND JUDICIAL RULINGS RELIED ON BY THE APPELLANT. THE LEARNED COUNSEL HAS VEHEMENTLY ARGUED THAT THE ASSESSMENT ORDER PASSED BY THE AO UNDER SECTION 143(3) R.W.S. 147 OF THE ACT IS ILLEGAL AND VOID AB INITIO AS THE ORDER OUGHT TO HAVE BEEN PASSED UNDER SECTION 153C OF THE ACT. THE CBDT IN PARA 65.9 OF C IRCULAR NO.7 OF 2003 HAS EXPLAINED THE PROVISION OF SECTION 153C A S UNDER:- THE NEW SECTION 153C PROVIDES THAT WHERE AN ASSESS ING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWEL LERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED OR REQUISITIONED BELONG OR BELONGS TO A PERS ON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BO OKS OF ACCOUNT, OR DOCUMENTS OR ASSETS SEIZED OR REQUISIT IONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDI CTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST SUCH OTHER PERSON AND ISSUE SUCH OTHER PERS ON NOTICE AN ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN A CCORDANCE WITH THE PROVISIONS OF SECTION 153A. SECTION 153C IN FACT CORRESPONDS TO EARLIER SECTION 158BD RELATING TO ASSETS, DOCUMENTS ETC. OF ANY OTHER PERSON FOUND DU RING SEARCH OR REQUISITION AS PER CHAPTER XIVB. IN SUCH A CASE, B OOKS, DOCUMENTS ETC. HAVE TO BE HANDED OVER TO THE ASSESSING OFFICE R HAVING JURISDICTION OVER SUCH THIRD PERSON WHO WILL INITIA TE AND ISSUE A NOTICE TO SUCH A PERSON U/S.153C OF THE ACT. IN THE CASE OF JINDAL STAINLESS LTD. REPORTED AT 122 TTJ (DEL) 902, IT WAS HELD TH AT WHERE THE PROCEDURE LAID DOWN U/S.153C HAS NOT BEEN FOLLOWED, THE ASSESSMENT WOULD NOT BE VALID AND SUCH DEFECT WAS JURISDICTIO NAL IN NATURE AND WOULD NOT BE CURED BY S.292B OF INCOME TAX ACT. TH E HONBLE SUPREME COURT IN THIS CASE OF MANISH MAHESHWARI REP ORTED IN 2389 ITR 341, HAS HELD THAT IF PROCEDURE LAID OWN IN SEC .158BD IS NOT FOLLOWED, THE BLOCK ASSESSMENT PROCEEDINGS WOULD BE ILLEGAL. THE PROVISIONS OF SECTION 153C ARE EXACTLY SIMILAR TO T HE PROVISIONS OF SECTION 158BD UNDER BLOCK ASSESSMENT PROCEEDINGS. AS SUCH THE DECISION OF THE SUPREME COURT REFERRED TO ABOVE SHA LL APPLY MUTATIS MUTANDIS TO THE PROVISIONS OF SECTION 153C OF THE A CT AS WELL. KEEPING IN VIEW OF THE DECISION OF SUPREME COURT IN THE CASE OF MANISH MAHESHWARI AND OF ITAT DELHI BENCH (SUPRA) T HE ASSESSMENT ORDER PASSED BY THE AO BY RESORTING TO T HE PROVISIONS OF SECTION 148 OF THE ACT IS INVALID AND WITHOUT JURIS DICTION. THE AO HAS 6 GROSSLY ERRED IN NOT ISSUING NOTICE U/S.153C AND IN NOT MAKING ASSESSMENT U/S.153C READ WITH SECTION 153A OF THE A CT. THE PROVISIONS OF SECTION 153C SPECIFICALLY EXCLUDE THE APPLICABILITY OF PROVISIONS OF SECTION 148 OF THE ACT. ACCORDINGLY , THE ORDER PASSED BY AO IS QUASHED. THE ADDITIONAL GROUND TAKEN UP B Y THE APPELLANT ON THE ISSUE OF NOT INITIATING THE PROCEEDINGS UNDE R SECTION 153C OF THE ACT IS ALLOWED. AS REGARDS THE GROUND OF REASONS RECORDED BY THE AO , IT IS CORRECT THAT REASONS HAVE BEEN RECORDED ON THE BASI S OF REPORT OF DCIT, CENTRAL CIRCLE-22, NEW DELHI. THE MENTION RE GARDING THE SALE CONSIDERATION OF PROPERTY, TRANSACTION OF MONEY AND TRANSFER OF LAND IN THE REASONS WAS TO SUBSTANTIATE AT THAT STAGE THE F ACT THAT SHARES BY THE APPELLANT WERE TRANSFERRED AT A PRICE HIGHER THAN T HE RECORDED AMOUNTS. SINCE, THE ULTIMATE CONCLUSION FROM THE REPORT WAS THAT HE SHARES WERE TRANSFERRED BY THE APPELLANT, FOR WHICH THE REASONS WERE RECORDED APPROPRIATELY. I DO NOT FIND ANY INFIRMITY IN THE R EASONS RECORDED BY THE AO. HENCE, THIS GROUND OF APPEAL IS DISMISSED. 5. BEFORE US, SHRI TARSEM LAL, THE LEARNED D.R. SUB MITTED THAT THE LEARNED CIT(A)DID NOT APPRECIATE THAT THE SEARCH DO CUMENTS, WHICH WERE FOUND AT THE PREMISES OF M/S.TODAY HOME & INFRASTRU CTURE P. LTD. PERTAINED TO M/S.P.R. INFRASTRUCTURE LTD. AND NOT TO THE ASSE SSEE. ACTION UNDER SECTION 153C, IF ANY, COULD ONLY BE TAKEN IN THE CASE OF M/ S.P.R. INFRASTRUCTURE LTD. AND NOT IN THE CASE OF THE ASSESSEE. HE FURTHER SU BMITTED THAT THE PROCEEDINGS UNDER SECTION 147 WERE INITIATED BY THE AO IN THE CASE OF THE ASSESSEE ON THE BASIS OF INFORMATION RECEIVED BY HI M FROM THE DCIT, CENTRAL CIRCLE II, NEW DELHI AND IT IS HIGHLY PERTINENT TO MENTION HERE THAT THE AO WAS NOT LED BY THE INFORMATION SUPPLIED BY THE DCIT , CENTRAL CIRCLE II, NEW DELHI BUT HAD REACHED AN INDEPENDENT DECISION, AS I S CLEAR FROM PARA 3.1.4 AT PAGE 2 OF THE ASSESSMENT ORDER, WHICH READS AS UNDE R:- I HAVE CONSIDERED ALL THE MATERIAL/EVIDENCES AND H AVE REASONS TO BELIEVE THAT ON ACCOUNT OF ASSESSEES FAILURE TO FU RNISH COMPLETE AND CORRECT PARTICULARS OF INCOME, INCOME TO THE EXTENT OF RS.1,02,10,000/- 7 CHARGED TO INCOME TAX HAS BEEN UNDER ASSESSED FOR THE ASSESSMENT YEAR 2006-07. 5.1 SHRI TARSEM LAL, THE LEARNED D.R. POINTED OUT T HAT THERE IS CLEAR APPLICATION OF MIND BY THE A.O. WHILE INITIATING PR OCEEDINGS UNDER SECTION 147 AND AS SUCH THE SAME IS FOOL-PROOF. HE ALSO SUBMITTED THAT THIS BENCH OF THE TRIBUNAL HAD CONFIRMED THE MAKING OF ASSESSM ENT IN THE CASES OF DR.POONAM SINIGH, DR. BALWINDER SINGH AND SMT. SARO J RANI GUPTA, VIDE ITS ORDER IN ITA NOS.380, 381 & 382(ASR)/2009 DATED 31- 12-2009 RESPECTIVELY IN WHICH CASES ASSESSMENT PROCEEDINGS WERE INITIATE D ON THE BASIS OF THE INFORMATION RECEIVED FROM DCIT, CENTRAL CIRCLE II, NEW DELHI. HE, THEREFORE, SUBMITTED THAT QUASHING OF THE ASSESSMEN T IS PERVERSE. IT WAS ALSO SUBMITTED BY SHRI TARSEM LAL, THE LEARNED D.R. THAT IN THE CASE OF DR. BALWINDER SINGH, RELIEF HAD BEEN ALLOWED BY THE TRI BUNAL IN ITA NO.381(ASR)/2007 QUA BEING A SHARE HOLDER AND NOT A DIRECTOR. IT SKIPPED THE NOTICE OF THE TRIBUNAL THAT DR. BALWINDER SINGH IS A DIRECTOR. THEREFORE, THE RATIO OF THE TRIBUNALS ORDER IN THE CASE OF DR . BALWINDER SINGH CANNOT BE APPLIED TO THE CASE OF THE ASSESSEE. 6. SHRI PADAM BEHL, C.A., THE LEARNED COUNSEL FOR T HE ASSESSEE, REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE RELEVANT MATERIAL AVAILABLE ON RECORD. 7.1 THE CONTENTION OF THE LEARNED D.R. IS CONTRARY TO THE FACTS NARRATED IN THE ASSESSMENT RECORDS. FROM PARAS 2.1, 3.1.1 (A) AND (B) AND 3.1.3 OF THE ASSESSMENT ORDER, IT IS CRYSTAL CLEAR THAT INCRIMI NATING DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND DURING THE COURSE OF SEARCH . PARAS 2.1, 3.1.1(A) AND (B) AND 3.1.3 READ AS UNDER:- 8 2.1 ON THE BASIS OF EVIDENCE FOUND DURING THE COU RSE OF SEARCH AND ASSESSMENT PROCEEDINGS, THE COST PRICE OF EACH SHAR E M/S.P.R. INFRASTRUCTURE LTD. WAS DETERMINE AT RS.2041/- AS AGAINST THE TRANSFER COST PRICE AT FACE VALUE OF RS.10/- BY THE DIRECTORS OF THAT COMPANY. IN THE REPORT, IT WAS ELABORATED THA T M/S.P.R. INFRASTRUCTURE LTD. HAD TRANSFERRED THE SHARE HOLDI NG OF THE DIRECTORS ALONGWITH MANAGEMENT OF THE COMPANIES TO M/.TODAY HOME AND INFRASTRUCTURE (P) LTD. FOR A TOTAL CONSID ERATION OF RS.12.25 CRORE. 3.1.1 DURING THE COURSE OF SEARCH AND SEIZURE CONDU CTED ON M/S.TODAY HOMES & MANUFACTURING (P) LTD. CERTAIN DO CUMENTS WERE SEIZED & IT IS FOUND THAT: A) RECEIPT DATED 03-8-2005 ISSUED & SIGNED BY SH. A RUN KAPOOR DIRECTOR OF M/S.P.R. INFRASTRUCTURE LTD. SHOWN THAT THEY HAVE RECEIVED RS.51 LACS BY CHEQUE AND RS.7 LACS IN CASH FROM M/S.TODAY HOMES & INFRASTRUCTURE (P) LTD. AS PART P AYMENT ON ACCOUNT OF SALE CONSIDERATION OF LAND AT RS.12.25 C RORE. B) AS PER UNDERTAKING/AFFIDAVIT SIGNED BY SH. ARUN KAPOOR DIRECTOR OF M/S.P.R. INFRASTRUCTURE LTD. ON14-8-20 05. IT WAS FURTHER FOUND THAT M/S.P.R. INFRASTRUCTURE LTD. HAS RECEIVED FURTHER SUM OF RS.42 LACS FROM M/S.TODAY HOMES & INFRASTRUCTURE (P) LTD. TOWARDS THE PART PAYMENT OF SALE CONSIDERATION OF RS.12.25 CRORE. THUS, TILL 14-8-20 05, SH. ARUN KAPOOR HAD RECEIVED RSW.1 CRORE IN CHEQUE AND IN CA SH AS PART PAYMENT OF TOTAL SALE CONSIDERATION OF LAND AT RS.1 2.25 CRORE. 3.1.3 SH. ARUN KAPOOR HAD TRANSFERRED 10000 SHARES OF M/S.P.R. INFRASTRUCTURE LTD. OWNED BY HIM AT FACE VALUE OF R S.10/- WHEREAS MARKET VALUE OF EACH SHARE WAS DETERMINED A T RS.2041/-. ASSESSEE HAS NOT SHOWN ANY CAPITAL GAIN ON ACCOUNT OF TRANSFER OF SHARES IN HIS RETURN OF INCOME FOR A SSESSMENT. AS SUCH INCOME TO THE TUNE O RS.2,02,10,000/- (204100 000 SALE PRICE 100000 COST PRICE) HAS THUS ESCAPED ASSESSM ENT FOR THE A.Y. 2006-07. 9 IN VIEW OF THE ABOVE, WE REJECT THE CONTENTION OF T HE LEARNED D.R. THAT NO INCRIMINATING DOCUMENTS RELATING TO THE ASSESSEE WE RE FOUND DURING THE COURSE OF SEARCH. 7.2 THE UNDISPUTED FACTS ARE THAT A SEARCH WAS CON DUCTED UNDER SECTION 132 OF THE ACT IN THE CASE OF M/S.TODAY HOMES & INF RASTRUCTURE PVT. LTD. ON 28-3-2006, DURING THE COURSE OF WHICH CERTAIN INCRI MINATING DOCUMENTS WERE ALLEGEDLY SEIZED. IT IS ALSO A MATTER OF RECORD TH AT THE DCIT, CENTRAL CIRCLE- 22, NEW DELHI INTIMATED THE AO OF THE ASSESSEE ABO UT SEIZURE OF CERTAIN DOCUMENTS PERTAINING TO THE ASSESSEE DURING SEARCH AND ENCLOSED COPY OF THOSE DOCUMENTS REQUESTING HIM TO TAKE APPROPRIATE ACTION UNDER SECTION 153C/148 OF THE ACT. IT IS AFTER THAT DURING THE C OURSE OF APPELLATE PROCEEDINGS BEFORE THE CIT(A) THE ASSESSEE TOOK AN ADDITIONAL GROUND OF APPEAL TO THE EFFECT THAT THE REASSESSMENT PROCEEDI NGS INITIATED BY THE AO U/S.148 ARE ILLEGAL AND VOID AB INITIO. IN THE IN STANT CASE, THE LEARNED CIT(A) HAS CORRECTLY OBSERVED THAT THE A.O. SHOULD HAVE IS SUED NOTICE UNDER SECTION 153C OF THE ACT AND SHOULD HAVE FRAMED THE ASSESSME NT UNDER SECTION 153C READ WITH SECTION 153 OF THE ACT. SECTION 153C OF THE ACT READS AS UNDER:- 153C. NOTWITHSTANDING ANYTHING CONTAINED IN SECTIO N 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY M ONEY, BULLION 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, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL B E HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH S UCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR RE ASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. 8. ON A PERUSAL OF THE ABOVE PROVISIONS, IT WOULD B E CLEAR THAT THE PROVISIONS OF SECTION 153C OF THE ACT WERE APPLICAB LE, WHICH SUPERSEDES THE 10 APPLICABILITY OF PROVISIONS OF SECTIONS 147 AND 148 OF THE ACT. AS WE HAVE ALREADY NOTED HEREINABOVE THAT THE DOCUMENTS WERE S EIZED DURING THE SEARCH UNDER SECTION 132 OF THE ACT AND THE SAME WAS SENT TO THE ASSESSEES A.O. AT AMRITSAR BY THE OFFICER AT DELHI. IN OUR VIEW, THE LEARNED CIT(A) HAS CORRECTLY OBSERVED THAT ONLY THE PROVISIONS IN WHIC H ANY ASSESSMENT COULD BE MADE AGAINST THE ASSESSEE IN THE INCOME TAX ACT WAS SECTION 153C READ WITH SECTION 153 OF THE ACT. IT IS ALSO APPARENT FROM TH E RECORD THAT THE OFFICER AT DELHI HAS MENTIONED IN HIS LETTER THAT THE NECESSAR Y ACTION MAY BE TAKEN AS PER LAW UNDER SECTION 153C/148 OF THE ACT. HENCE, N OTICE ISSUED UNDER SECTION 148 OF THE ACT AND PROCEEDINGS UNDER SECTIO N 147 OF THE ACT BY THE AO ARE ILLEGAL AND VOID AB INITIO. IN VIEW OF THE PROVISIONS OF SECTION 153C OF THE ACT, SECTION 147/148 STAND OUSTED. IN THE I NSTANT CASE, THE PROCEDURE LAID DOWN UNDER SECTION 153C HAS NOT BEEN FOLLOWED BY THE A.O. AND, THEREFORE, ASSESSMENT HAS BECOME INVALID. WE ALSO OBSERVE THAT THE CIT(A) WAS JUSTIFIED IN FOLLOWING THE RATIO LAID DOWN BY T HE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT AND ANOTH ER, REPORTED IN (2007) 289 ITR 341, WHEREIN IT HAS BEEN HELD THAT IF THE P ROCEDURE LAID DOWN IN SECTION 158BD IS NOT FOLLOWED, BLOCK ASSESSMENT PRO CEEDINGS WOULD BE ILLEGAL. THE CIT(A) HAS CORRECTLY OBSERVED THAT THE PROVISIONS OF SECTION 153C ARE EXACTLY SIMILAR TO THE PROVISIONS OF SECTI ON 158BD OF THE ACT IN BLOCK ASSESSMENT PROCEEDINGS. THUS, CONSIDERING TH E ENTIRE FACTS AND THE CIRCUMSTANCES OF THE PRESENT CASE, WE HOLD THAT THE CIT(A) WAS FULLY JUSTIFIED IN QUASHING THE REASSESSMENT ORDER. WE A LSO DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LEARNED DR THAT DURING TH E COURSE OF SEARCH, IT WAS FOUND AT PREMISES OF M/S.TODAY HOMES & INFRASTRUCTU RE PVT. LTD. PERTAINING TO M/S.P.R. INFRASTRUCTURE LTD. AND NOT THE ASSESSE E. IN THIS REGARD, WE MAY POINT OUT THAT THE CONTENTION RAISED BY THE LEARNED D.R. IS FACTUALLY INCORRECT 11 AND CONTRARY TO THE AVAILABLE RECORDS OF SEIZED DOC UMENTS SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER DATED 30-12-2008. IN VIEW OF THE ABOVE FACTUAL DISCUSSION, WE DO NOT FIND ANY MERIT AND SU BSTANCE IN THE CONTENTION OF THE LEARNED D.R. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUND NOS.1 TO 4 OF THE APPEAL. 9. SINCE WE HAVE UPHELD THE ORDER OF THE CIT(A) IN QUASHING THE REASSESSMENT ORDER AND, THEREFORE, WE DO NOT THINK IT NECESSARY TO GO INTO THE MERITS OF THE CASE. 10. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JUNE, 2011. SD/- SD/- (MEHAR SINGH) (H.L. KARWA) ACCOUNTANT MEMBER. VICE PRESIDENT. DATED: 21 ST UNE, 2011. KC/- COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: SHRI ARUN KUMAR KAPOOR, R/O 521, BASA NT AVENUE, OLD JAIL ROAD, AMRITSAR. (2) THE ITO, WARD 1(1), ASR (3) THE CIT, ASR. (4) THE CIT(A), ASR. (5) THE SR.D.R., ITAT, ASR. TRUE COPY BY ORDER ASSTT. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, AMRITSAR.