M/s. Dalmia Consolidated Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 2753/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6636 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Loose papers; Document seized; Validity of assessment; Assessment record; Documents seized
• Section: 142(1); 153A; 131; 68; 132; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 2753/DEL/2017 ASSESSMENT YEAR: 2008-09 M/S DALMIA CONSOLIDATED PVT. LTD., VS. DCIT, CIRC LE 7(1), (FORMERLY KNOWN AS DALMIA INFRASTRUCTURE NEW DELHI PVT. LTD.) A-218, GROUND FLOOR, OKHLA INDUSTRIAL ESTATE, PHASE-I, DELHI 110 020 (PAN : AACCD7702P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. HIREN MEHTA, CA DEPARTMENT BY : MS. RACHNA SINGH, CIT(DR) ORDER PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THE APPEAL AGAINST THE IMPU GNED ORDER DATED 22.3.2017 OF LD. CIT(A)-37, NEW DELHI PERTAINING TO ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY LD. CIT(A)-37, NEW DELHI I S BAD IN LAW AND CONTRARY TO FACTS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE VALIDITY OF ASSESSMENT ORDER PASSED UNDER SECTION 153C143(3) OF THE INCOME TAX ACT, 1961, REJECTING THE ARGUMENT OF THE APPELLANT THAT ISSUANCE OF NOTICE U/S 153C IS ILLEG AL AND BAD IN LAW, IN AS MUCH AS, THE INGREDIENTS OF SECTI ON 153C HAVE NOT BEEN FULFILLED AND THEREFORE THE ASSESSMEN T ORDER IS NULL AND VOID SINCE THE ASSESSING OFFICER CATEGO RICALLY FAILED TO RECORD A REASONABLE SATISFACTION THAT THE DOCUMENTS REFERRED TO IN THE SATISFACTION NOTE (BEL ONG TO THE APPELLANT COMPANY) BY COMPLETELY OVERLOOKING AN D DISREGARDING THE PROPOSITION OF LAW LAID DOWN BY TH E JURISDICTIONAL COURT IN THE CASE OF PEPSICO INDIA H OLDINGS PVT. LTD. VS. ACIT 370 ITR 295(DEL). 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE VALIDITY OF ASSESSMENT ORDER PASSED UNDER SECTION 153C/143(3) O F THE INCOME TAX ACT, 1961, REJECTING THE ARGUMENT OF THE 2 APPELLANT THAT SATISFACTION NOTE RECORDED IS VITIAT ED IN LAW SINCE AS EXPRESSLY HELD BY THE JURISDICTIONAL COUR T IN THE CASE OF CIT VS. RADHEY SHYAM BANSAL 337 ITR 217(DEL ), THE SATISFACTION NOTE DOES NOT HIGHLIGHT THE SATISF ACTION OF THE ASSESSING OFFICER THAT THE DOCUMENTS SEIZED REP RESENT 'UNDISCLOSED INCOME'. 4. THAT WITHOUT PREJUDICE TO THE GENERALITY OF THE PRE VIOUS GROUND OF APPEAL ABOVE, THE LD. CIT(A) ERRED IN UPH OLDING THE VALIDITY OF ASSESSMENT ORDER PASSED UNDER SECTI ON 153C143(3) OF THE INCOME TAX ACT, 1961, REJECTING T HE ARGUMENT OF THE APPELLANT THAT ADDITION MADE IN THE ASSESSMENT ORDER WAS NOT BASED ON ANY SEIZED MATERI AL DISCUSSED IN THE SATISFACTION NOTE. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE VALIDITY OF ASSESSMENT ORDER PASSED UNDER SECTION 153C/143(3) O F THE INCOME TAX ACT, 1961, REJECTING THE CONTENTION OF THE APPELLANT THAT THE ASSESSING OFFICER HAD GROSSLY ER RED IN NOT DISPOSING OFF THE OBJECTIONS RAISED BY THE APPE LLANT WITH REGARD TO THE ISSUANCE OF THE NOTICES AND INIT IATION OF ASSESSMENT UNDER SECTION 153C OF THE ACT. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS. 3,00,00,000/- TREATING THE SHARE CAPITAL RECEIVED A S UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT BY REJEC TING THE CONTENTION OF THE APPELLANT THAT AS PER SETTLED PRO POSITION OF LAW NO ADDITION CAN BE MADE IN A NON-ABATED ASSESSMENT YEAR WHERE NO INCRIMINATING MATERIAL IS FOUND DURING THE SEARCH. 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS. 3,00,00,000/- TREATING THE SHARE CAPITAL RECEIVED F ROM 9 COMPANIES AS UNEXPLAINED CASH CREDIT U/S. 68 OF TH E ACT. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTE R OR MODIFY ANY OF THE GROUNDS OF APPEAL PRIOR TO OR AT THE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE ACTION U/S. 132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED AS THE ACT) WAS CONDUCTED IN DALMIA GROUP OF CASES ON 20.1.2012, 27 .1.2012 AND 28.1.2012 BY THE INVESTIGATION WING, UNIT-VI(1), NE W DELHI INCLUDING THE PREMISES OF SH. PARAG DALMIA AT 4, BHIKAJI KAMA PLA CE, NEW DELHI. AS A CONSEQUENCE OF THE SEARCH AND SEIZURE ACTION ON TH E ABOVE PREMISES, INCRIMINATING DOCUMENTS WERE SEIZED WHICH RELATE TO M/S DALMIA INFRASTRUCTURE PVT. LTD. (FORMERLY KNOWN AS M/S DAL MIA EQUITIES PVT. LTD.). IN CONSEQUENCE TO THE AFORESAID SEARCH AND SEIZURE ACTION, A PROPOSAL FOR 3 INITIATION OF ASSESSMENT PROCEEDINGS U/S. 153C OF T HE ACT IN THE CASE OF DALMIA INFRASTRCUTURE PVT. LTD. (FORMERLY KNOWN AS DALMIA EQUITIES PVT. LTD.) (PAN AACCD7702P) WAS RECEIVED FROM THE DCIT, CENTRAL CIRCLE -2, NEW DELHI DATED 21.3.2014 ALONGWITH SATISFACTION NO TE. SUBSEQUENTLY, PROCEEDING U/S. 153C OF THE ACT WAS INITIATED IN TH IS CASE. NOTICE U/S. 153C READ WITH SECTION 153A OF THE ACT WAS ISSUED O N 21.3.2014. NOTICE U/S. 143(2) READ WITH SECTION 142(1) OF THE ACT WAS ISSUED ON 6.6.2014. IN RESPONSE TO THE AFORESAID NOTICE, ITR ALGONWITH TAX AUDIT REPORT WAS SUBMITTED. IN THE ITR FOR AY 2008-09, THE ASSESSEE COMPANY HAS SHOWN NIL INCOME AND IN RESPONSE TO ABOVE NOTICES ISSUED, THE AR OF THE ASSESSEE ATTENDED HE PROCEEDINGS FROM TIME TO TIME AND FILED THE REQUIRED DETAILS AND INFORMATION. ON PERUSAL OF THE BALANCE SHEET AS ON 31.3.2008, AO FOUND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS RAISED SHARE CAPITAL OF RS. 1,00,00,000/- AND S HARE PREMIUM OF RS. 2,75,00,000/- FROM 13 ENTITIES (AS MENTIONED IN ASS ESSMENT ORDER AT PAGE NO. 2). AO FURTHER FOUND THAT 4 ENTITIES THAT ARE GROUP CONCERNS OF THE ASSESSEE COMPANY HOLD 75% SHARE HOLDING WITHOUT PAY ING ANY SHARE PREMIUM. HOWEVER, THE OTHER SHARE HOLDER COMPANIES HOLD ONLY 25% SHARE I.E. 2,50,000 SHARES AFTER PAYING SHARE PREMI UM OF RS. 2,75,00,000/- (@ RS. 110/- PER SHARE). VIDE SUMMON S U/S. 131 OF THE ACT DATED 5.2.2015, THE ASSESSEE WAS ASKED TO ENSURE TH E PERSON DEPOSITION OF THE DIRECTORS OF 09 COMPANIES (AS MENTIONED AT PAGE NO. 3 OF THE ASSESSMENT ORDER). AO OBSERVED THAT ASSESSEE FAIL ED TO ENSURE THE PERSONAL DEPOSITION OF THE DIRECTORS OF THESE COMPA NIES. FURTHER, THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICE DATED 11.3.20 15 WHEREIN IT WAS REQUIRED TO SHOW CAUSE WHY THE FUNDS AMOUNTING TO R S. 3.00 CRORES RECEIVED FROM THESE 9 COMPANIES IN THE FORM OF SHAR E CAPITAL AND SHARE 4 PREMIUM MAY NOT BE CONSIDERED AS ITS OWN FUND WHICH HAS BEEN ROUTED THROUGH THESE SHELL COMPANIES. THE ASSESSEE COMPANY HAS NOT FURNISHED ANY BONAFIDE SUBMISSION IN THIS REGARD. THEREFORE, AO OBSERVED THAT THE GENUINENESS OF THE TRANSACTIONS ENTERED WITH AND CR EDITWORTHINESS OF M/S REETS PLASTICS PVT. LTD., M/S TOP-TECH CABLES PVT. LTD., M/S SEARS EXIM PVT. LTD., M/S RAJ K MERCANTILE CORPORATION LTD., M /S MGI GLASS INDUSTRIES LTD., M/S CANYON FINANCIAL SERVICES LTD., HAS NOT B EEN SATISFACTORY EXPLAINED BY THE ASSESSEE IN TERMS OF SECTION 68 OF THE ACT. HENCE, TOTAL AMOUNT OF RS. 3.00 CRORES CREDITED IN THE BOOKS OF ASSESSEE AS SHARE CAPITAL / SHARE PREMIUM WAS BEING DISALLOWED U/S. 68 OF THE ACT AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AND ACCORDINGLY, THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 3,00,00, 000/- VIDE ORDER DATED 24.3.2015 PASSED U/S. 153C READ WITH SECTION 153A/143(3) OF THE ACT. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE APP EALED BEFORE THE LD. CIT(A), WHO VIDE HER IMPUGNED ORDER DATED 22.3.201 7 HAS DISMISSED THE APPEAL OF THE ASSESSEE. 3. AGAINST THE IMPUGNED ORDER DATED 22.3.2017, ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 124 IN WHICH HE HA S ATTACHED THE COPY OF LETTER DATED 27.9.2017 ADDRESSED TO DCIT, CIRCLE-26 SEEKING COPY OF SATISFACTION NOTE; COPY OF COVERING LETTER DATED 15 .3.2018 ADDRESSED BY DCIT, CIRLCE7(1), DELHI; COPY OF SATISFACTION NOTE DATED 21.3.2014 RECORDED BY DCIT, CENTRAL CIRCLE-2, NEW DELHI; COPY OF SATIS FACTION NOTE DATED 21.3.2014 RECORDED BY DCIT, CIRCLE 10(1), NEW DELHI ; COPY OF SEIZED MATERIAL REFERRED TO IN SATISFACTION NOTE; PAGE WIS E EXPLANATION FOR SEIZED MATERIAL REFERRED TO IN SATISFACTION NOTE; COPY OF CERTIFICATE OF INCORPORATION 5 PURSUANT TO CHANGE IN NAME FROM DALMIA INFRASTRUCTU RE (P) LTD. TO DALMIA CONSOLIDATED (P) LTD.; COPY OF WRITTEN SUBMISSION D ATED MAY 12, 2016 FILED BEFORE CIT(A)-37; COPY OF WRITTEN STATEMENT DATED 1 7.2.2017 FILED BEFORE CIT(A); COPY OF WRITTEN SUBMISSION DATED 22.2.2.017 ; COPY OF ORDER PASSED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT-3 V S. SINHGAD TECHNICAL EDUCATION SOCIETY 250 TAXMANN.COM 225 (SC). AND COP Y OF ORDER PASSED BY THE HONBLE HIGH COURT OF DELHI IN THE CASE OF P R. CIT CENTRAL-2 VS. INDEX SECURITIES PVT. LTD. 86 TAXMANN.COM 84 (DELHI ). HE STATED THAT THAT IN THE PRESENT CASE JURISDICTION HAS BEEN WRONGLY I NVOKED AND THE ASSESSMENT ORDER IS VOID-AB-INITIO SINCE THE ESSENT IAL JURISDICTIONAL REQUIREMENT VIZ., THAT THE SEIZED DOCUMENTS MUST BE INCRIMINATING AND MUST RELATE TO THE AY'S WHOSE ASSESSMENTS ARE SOUGH T TO BE REOPENED HAS NOT BEEN MET. IT WAS SUBMITTED THAT NONE OF THE DOC UMENTS REFERRED TO IN THE SATISFACTION NOTE ARE INCRIMINATING AND NONE OF THESE DOCUMENTS RELATE TO AY 2008-09. HENCE, THE ISSUE RELATING TO AFORESA ID JURISDICTIONAL REQUIREMENT HAS BEEN SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY 84 TAX MANN.COM 290 (SC). THIS VIEW HAS ALSO BEEN TAKEN BY THE JURISDICTIONAL HIGH COURT IN FOLLOWING CASES:- - PR.CIT VS. INDEX SECURITIES PVT. LTD. 86 TAXMANN. COM 84(DEL) - CIT VS. RRJ SECURITIES LTD. 62 TAXMANN.COM 391 (D EL) - ARN INFRASTRUCTURE INDIA LTD. VS. ACIT 81 TAXMANN .COM 260 (DEL) 5. LD. COUNSEL OF THE ASSESSEE FURTHER STATED THAT ANOTHER JURISDICTIONAL REQUIREMENT THAT THE SEIZED DOCUMENT MUST 'BELONG T O' THE PERSON OTHER THAN SEARCHED PERSON I.E. DALMIA CONSOLIDATED PVT. LTD. HAS NOT BEEN MET AS NO SATISFACTION IN THIS REGARD HAS BEEN RECORDED , WHICH IS AGAINST THE 6 PROPOSITION OF LAW SETTLED BY THE HONBLE DELHI HIG H COURT IN THE CASE OF PEPSICO HOLDINGS INDIA PVT. LTD. VS. ACIT 370 ITR 2 95 (DEL). IT WAS FURTHER CONTENTED THAT THE SATISFACTION NOTE DATED 21.03.20 14 RECORDED BY DCIT, CIRCLE-10(1), NEW DELHI MAKES A REFERENCE TO CERTAI N SEIZED DOCUMENTS WHICH ARE OF INNOCUOUS NATURE AND NOT AT ALL INCRIM INATING. THIS ASSERTION OF THE ASSESSEE COMPANY IS VALIDATED BY THE FACT TH AT NO ADDITION IN RESPECT OF THE DOCUMENTS REFERRED IN THE SATISFACTI ON NOTE HAS BEEN MADE IN THE ASSESSMENT ORDER PASSED U/S 153C READ WITH S ECTION 153A/ 143(3). THEREFORE, THERE IS NO RATIONAL OR NEXUS BETWEEN TH E SEIZED MATERIAL AND THE SATISFACTION THAT A THIRD PERSON (I.E. ASSESSEE COMPANY) HAS 'UNDISCLOSED INCOME'. HE FURTHER STATED THAT IT MAY BE PERTINENT TO NOTE THAT THE SAID SATISFACTION NOTE DOES NOT EVEN MENTI ON THE EXISTENCE OF ANY 'UNDISCLOSED INCOME' BELONGING TO THE ASSESSEE COMP ANY. THUS, THE VERY BASIS FOR FORMATION OF BELIEF ABOUT EXISTENCE OF UN DISCLOSED INCOME IS NOT FOUND ON COGENT MATERIAL. THEREFORE, THE INVOCATION OF JURISDICTION IS VITIATED IN LAW AND WOULD RENDER THE ASSESSMENT VOI D-AB-INITIO. HE FURTHER STATED THAT LD. CIT(A) HAS ERRED IN UPHOLDING THE V ALIDITY OF ASSESSMENT ORDER PASSED UNDER SECTION 153C/143(3) OF THE INCOM E TAX ACT, 1961 BY REJECTING THE ARGUMENT OF THE ASSESSEE THAT ADDITIO N MADE IN THE ASSESSMENT ORDER WAS NOT BASED ON ANY SEIZED MATERI AL DISCUSSED IN THE SATISFACTION NOTE. IT WAS FURTHER STATED THAT THE A SSESSMENT ORDER IS CONTRARY TO LAW IN AS MUCH AS THE ADDITION U/S 68 O F THE ACT HAS BEEN MADE IN THE ABSENCE OF ANY INCRIMINATING DOCUMENTAT ION UNEARTHED DURING THE COURSE OF SEARCH. IT WAS FURTHER CONTENTED THAT IT IS AN UNCONTROVERTED POSITION THAT IN RESPECT OF THE 9 COMPANIES DISCUSS ED AND REPRODUCED IN THE ASSESSMENT ORDER WHICH IS FORMING BASIS FOR PRE SENT ADDITION, NO MATERIAL MUCH LESS INCRIMINATING MATERIAL SUGGESTIN G EXISTENCE OF ANY 7 UNDISCLOSED INCOME OF THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. HE FURTHER STATED THAT IN THE APPELLAT E PROCEEDINGS THE ASSESSEE RELIED UPON THE DECISION OF THE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT V. KABUL CHAWLA (201S) 380 ITR S73 (DEL HI), WHEREIN, THE HON'BLE HIGH COURT HELD THAT COMPLETED ASSESSMENT C ANNOT BE INFERRED BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 15 3A OF THE ACT, IF NO DOCUMENTATION INCRIMINATING IN NATURE IS UNEARTHED DURING THE COURSE OF SEARCH PROCEEDINGS. THE COMMISSIONER OF INCOME TAX (APPEALS)-37 HAS DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE ASSESSING OFFICER HAS NOT ERRED IN MAKING ADDITION OF RS.3,00 ,00,000/- U/S 68 OF THE INCOME TAX ACT WITHOUT MEETING THE ABOVE ARGUMENT R AISED BY THE ASSESSEE. 6. ON THE CONTRARY, LD. CIT(DR) RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW AND STATED THAT LOWER AUTHORITIES HAVE PASSED WELL- REASONED ORDERS WHICH DO NOT NEED ANY INTERFERENCE. SHE STATED THAT A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE DALMIA GROUP OF CASES ON 20.1.2012, 27.1.2012 A ND 28.1.2012 INCLUDING THE PREMISES OF SH. PARAG DALMIA. AS A CO NSEQUENCE OF THE SEARCH INCRIMINATING DOCUMENTS WERE FOUND AT THE VA RIOUS PREMISES THAT WERE RELEVANT TO THE CASE OF THE ASSESSEE CONCERN. IT WAS FURTHER STATED THAT DCIT, CC-2, NEW DELHI (AO OF SEARCHED PERSON) RECORDED SATISFACTION ON THE BASIS OF SEIZED DOCUMENTS AND FORWARDED A C OPY OF THE PROPOSAL AS WELL AS SATISFACTION NOTE TO THE AO OF THE ASSESSEE CONCERN. LD. CIT(DR) DURING THE HEARING HAS PRODUCED THE COPY OF ASSESSM ENT RECORDS AS WELL AS SATISFACTION NOTE IN THE INSTANT CASE RECORDED B Y THE AO/DCIT, CC- 10(1)) BASED ON WHICH THE AO HAS ISSUED NOTICE U/S. 153C OF THE ACT TO THE ASSESSEE, WHICH READ AS UNDER:- 8 SATISFACTION NOTE M/S DALMIA INFRASTRUCTURE PVT. LTD. A LETTER F.NO. DCIT/CC-02/2013-14/2065 DATED 21.3.2014 OF THE DCIT, CENTRAL CIRCLE-2, NEW DELHI HAS BEEN RECEIVED IN THIS OFFICE ON 21.3.2014. THIS LETTER C ONTAINS CERTIFIED COPY OF SEIZED MATERIAL PERTAINING TO M/S DALMIA INFRASTRUCTURE PRIVATE LIMITED (AACCD7702D) AND SAT ISFACTION NOTE FOR INITIATING ASSESSMENT PROCEEDINGS UNDER SE CTION 153C OF THE INCOME TAX ACT, 1961 IN THIS CASE FOR ASSESS MENT YEARS 2006-07 TO 2011-12. A SEARCH & SEIZURE ORATION WAS CARRIED OUT IN THE C ASE OF M/S DALMIA GROUP OF CASES ON 20.1.2012, 27.1.201 2 AND 23.1.2012 BY THE INVESTIGATION WING, UNIT-VI(1), NE W DELHI. DURING THE COURSE OF SEARCH ON SH. PARAG DALMIA, 11 3- 114, MOHTA BUILDING, 4, BHIKAJI KAMA PLACE, NEW DEL HI, CERTAIN DOCUMENTS WERE FOUND AND SEIZED AS PER ANNE XURE A- 4 AND A-5. THE APPRAISAL REPORT OF THE GROUP AS WEL L AS THE SEIZED MATERIAL HAS BEEN EXAMINED SO FAR AND IT REV EALS THAT THE FOLLOWING DOCUMENTS BELONG TO M/S DALMIA INFRAS TRUCTURE PRIVATE LIMITED. ANNEXURE PAGE NOS. PARTY DESCRIPTION OF DOCUMENTS A - 4 41/DB - 8 THIS PAGE ON LETTER HEAD OF DALMIA INFRASTRUCTURE (P) LTD. IS CERTIFIED TRUE COPY OF THE RESOLUTION PASSED IN THE BOARD OF DIRECTORS MEETING OF THE COMPANY. A - 4 93, 98, 100 - 106/DB-8 THESE PAGES ARE LETTERS FROM DALMIA INFRASTRUCTURE (P) LTD. ADDRESSED TO 9 PURVANCHAL CONSTRUCTION WORKS (P) LTD. REGARDING SURRENDERING OF FLATS. A - 5 3 - 5/DB - 8 THESE PAGES CONTAIN THE DETAILS OF TRIAL BALANCE OF DALMIA INFRASTRUCTURE (P) LTD. FOR THE PERIOD 1.4.2010 TO 31.3.2011 A - 5 6 - 9/DB - 8 THESE PAGES CONTAIN THE DETAILS OF TRIAL BALANCE OF DALMIA INFRASTRUCTURE (P) LTD. FOR THE PERIOD 1.4.2011 TO 23.1.2012 I HAVE EXAMINED THE DOCUMENTS AND I AM SATISFIED THAT THE ABOVE SEIZED MATERIAL BELONGS TO M/S DALMI A INFRASTRUCTURE (P) LTD.(FORMERLY KNOWN AS DALMIA EQ UITIES PVT. LTD.). HENCE NOTICE UNDER SECTION 153C MAY BE ISSUED IN THE CASE OF M/S DALMIA INFRASTRUCTURE (P) LTD. A CCORDINGLY FOR THE AYS 2006-07 TO 2011-12. SD/- (ASTHA LAKSHMI) DCIT, CIRCLE 10(1), NEW DELHI 6.1 LD. CIT(DR) FURTHER STATED THAT AO HAS RIGHTLY OBSERVED THAT ASSESSEE FAILED TO ENSURE THE PERSONAL DEPOSITION O F THE DIRECTORS OF THESE COMPANIES AND ALSO OBSERVED THAT GENUINENESS OF THE TRANSACTIONS ENTERED WITH AND CREDITWORTHINESS OF M/S REETS PLASTICS PVT . LTD., M/S TOP-TECH CABLES PVT. LTD., M/S SEARS EXIM PVT. LTD., M/S RAJ K MERCANTILE CORPORATION LTD., M/S MGI GLASS INDUSTRIES LTD., M/ S CANYON FINANCIAL SERVICES LTD., HAS NOT BEEN SATISFACTORY EXPLAINED BY THE ASSESSEE IN TERMS 10 OF SECTION 68 OF THE ACT. HENCE, TOTAL AMOUNT OF RS . 3.00 CRORES CREDITED IN THE BOOKS OF ASSESSEE AS SHARE CAPITAL / SHARE PREM IUM WAS RIGHTLY DISALLOWED U/S. 68 OF THE ACT AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE, WHICH ACTION THE LD. CIT(A) HAS UPHELD. HENCE, SHE REQUESTED THAT THE APPEAL FILED BY THE ASSESSEE MAY BE DISMIS SED. FURTHER, IN SUPPORT OF HER CONTENTION, SHE FILED A PAPER BOOK C ONTAINING PAGES 1 TO 89 IN WHICH SHE HAS ATTACHED THE COPY OF VARIOUS FOLLO WING DECISIONS WHEREIN IT HAS BEEN HELD THAT MERELY ESTABLISHING IDENTITY OF CREDITORS IS NOT ENOUGH:- - CIT VS. PRECISION FINANCE (P) LTD. 208 ITR 465 (C AL.) - CIT VS. UNITED COMMERCIAL & INDUSTRIES CO. (P) LT D. 187 ITR 596 (CAL.) - CIT VS. NIPUN BUILDERS & DEVELOPERS (P) LTD. 350 ITR 407 (DELHI) - CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. 342 IT R 169 (DELHI) - MUKESH SHAW VS. ITO 204 TAXMAN 615 (JHARKHAND). - NR PORTFOLIO (P) LTD. VS. CIT 29 TAXMANN.COM 291 (DELHI). - CIT VS. EMPIRE BUILDTECH (P) LTD. 366 ITR 110 (DE LHI) - CIT VS. FOCUS EXPORTS (P) LTD. 229 TAXMAN 8 (DELH I). - CIT VS. MAF ACADEMY (P) LTD. 361 ITR 258 (DELHI) - NAVODAYA CASTLE (P) LTD. VS CIT 56 TAXMANN.COM 18 (SC) - SUDHIR KUMAR SHARMA (HUF) VS. CIT 69 TAXMANN.COM 219 (SC). 7. ON THE ISSUE OF VALIDITY OF ASSESSMENT ORDER PAS SED U/S. 153C/143(3) OF THE ACT, LD. CIT(DR) HAS STATED THAT ACCORDING TO PROVISIONS OF SECTION 153A & 153C OF THE ACT, IT I S CLEAR THAT THE BASIC PRE- REQUISITE TO ISSUE NOTICE UNDER SECTION 153C IS THA T THE AO IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY, OR OTHER VALUABLE AR TICLE OR THING OR BOOKS OF 11 ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG S OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. IF THE AO IS SO SATISFIED HE SHALL ASSESS AND REASSESS SUCH INCOME ACCORDING TO THE PROVISIONS OF SECTION 153A. IN SUCH A CASE THE AO S HALL ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH IS CONDUCTED OR REQUISITION MADE. IN SUPPORT OF HER CO NTENTION, SHE RELIED UPON THE FOLLOWING CASE LAWS:- - GANPATI FINCAP SERVICES (P) LTD. VS. CIT (2017) 8 2 TAXMANN.COM 408 (DELHI). - PCIT VS. SUPER MALLS PVT. LTD. (2016) 76 TAXMANN. COM 267 (DELHI) - PCIT VS. NAU NIDH OVERSEAS PVT. LTD. (ITA NO. 58/2017). - PCIT VS. INSTRONICS LTD. (2017) 82 TAXMANN.COM 35 7 (DELHI) - SSP AVIATION LTD. 20 TAXMANN.COM 214 (DELHI HIGH COURT) - DR. KM MEHBOOB VS. DCIT (2012) 211 TAXMAN 52 (KER ) - RAJESH SUNDERDAS VASWANI VS. ACIT (2016) 76 TAXMANN.COM 311 (GUJARAT) - CIT VS. CLASSIC ENTERPRISES (35 TAXMANN.COM 244) - SAVESH KUMAR AGARWAL VS. UOI (35 TAXMANN.COM 85) 8. IN REJOINDER THE LD. COUNSEL OF THE ASSESSEE SUB MITTED THAT CITATIONS REFERRED TO BY THE LD. DR WITH REFERENCE TO VALIDIT Y OF ASSESSMENT U/S 153C OF THE IT ACT HAVE ALL BEEN DEALT WITH BY THE DELHI HIGH COURT IN LATER DECISIONS RELIED UPON BY HIM IN HIS SUBMISSIONS AND THERE ARE OF NO CONSEQUENCE. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), PAPER BOOKS FILED BY BOTH 12 THE PARTIES AND THE CASE LAWS RELIED UPON BY THEM A S WELL AS THE SATISFACTION NOTES DATED 21.3.2014 RECORDED BY THE DCIT, CC-2, NEW DELHI & ANOTHER SATISFACTION NOTE RECORDED BY THE DCIT, C IRCLE 10(1), NEW DELHI, AND THE ASSESSMENT RECORDS PRODUCED BY THE LD. CIT (DR) AND THE REPLY OF THE ASSESSEE. 9.1 FOR THE SAKE OF CLARITY, WE ARE REPRODUCING HER EWITH THE SATISFACTION NOTE DATED 21.3.2014 PREPARED BY THE AO OF THE SE ARCHED PERSON (SH. PARAG DALMIA) I.E DCIT CENTRAL CIRCLE-2, NEW DELHI (PAGE 5) OF THE PAPER BOOK AND THE ONE PREPARED BY THE AO OF THE PERSON O THER THAN SEARCHED PERSON (DALMIA CONSOLIDATED PVT. LTD. ) I.E. DCIT, CIRCLE 10(1), NEW DELHI (PAGE 6) OF PAPER BOOK AND THE NOTE ON THE SATISFA CTION SUBMITTED BY THE ASSESSEE FILED WITH THE PAPER BOOK AT PAGE NO. 26-2 9. 21.03.2014 SATISFACTION NOTE A SEARCH & SEIZURE OPERATION WAS CARRIED OUT IN THE CASE OF M/S DALMIA GROUP OF CASES ON 20.01.2012, 27.01.2012 & 28.01.2012 BY THE INVESTIGATION WING UNIT-VI(1), N EW DELHI. DURING THE COURSE OF SEARCH ON SH. PARAG DALMIA, 11 3-114, MOHTA BUILDING, 4, BHIKAJI CAMA PLACE, NEW DELHI, C ERTAIN DOCUMENTS WERE FOUND AND SEIZED AS PER ANNEXURE A-1 , CONTAINING PAGES 1 TO 170. THE APPRAISAL REPORT OF THE GROUP AS WELL AS THE SEIZED MATERIAL HAS BEEN EXAMI NED SO FAR AND IT REVEALS THAT THE FOLLOWING COMPANIES SUB SCRIBED FOR SHARES OF M/S DALMIA INFRASTRUCTURE PVT. LTD. ( FORMERLY KNOWN AS DALMIA EQUITIES PVT. LTD.) (AACCD7702P). ANNEXURE PAGE NOS./ PARTY DESCRIPTION OF DOCUMENTS 13 A - 4 41/DB - 8 THIS PAGE ON LETTER HEAD OF DALMIA INFRASTRUCTURE PVT. LTD. IS CERTIFIED TRUE COPY OF THE RESOLUTION PASSED IN THE BOARD OF DIRECTORS MEETING OF THE COMPANY. A - 4 96, 98 100- 106/DB-8 THESE PAGES ARE LETTERS FROM DALMIA INFRASTRUCTURE PVT. LTD. ADDRESSED TO PURVANCHAL CONSTRUCTION WORKS PVT. LTD. REGARDING SURRENDERING OF FLATS. A - 5 3 - 5/DB - 8 THESE PAGES CONTAIN THE DETAILS OF TRIAL BALANCE OF DALMIA INFRASTRUCTURE PVT. LTD. FOR THE PERIOD 01.04.2010 TO 31.03.2011 A - 5 8 - 9/DB - 8 THESE PAGES CONTAIN THE DETAILS OF TRIAL BALANCE OF DALMIA INFRASTRUCTURE PVT. LTD. FOR THE PERIOD 01.04.2011 TO 23.01.2012 I HAVE EXAMINED THE DOCUMENTS AND I AM SATISFIED TH AT THE ABOVE SEIZED MATERIAL BELONGS TO M/S DALMIA INFRAST RUCTURE PVT. LTD. (FORMERLY KNOWN AS DALMIA EQUITIES PVT. L TD.). HENCE, NOTICE U/S 153C MAY BE ISSUED IN THE CASE OF /S DALMIA INFRASTRUCTURE PVT. LTD. (FORMERLY KNOWN AS DALMIA EQUITIES PVT. LTD.) ACCORDINGLY FOR THE AYS 2006-07 TO 2011-12. (G.P. SINGH) DCIT, CENTRAL CIRCLE-2, NEW DELHI SATISFACTION NOTE 14 A LETTER F.NO. DCIT/CC-02/2013-14/2065 DATED 21.3.2014 OF THE DCIT, CENTRAL CIRCLE-2, NEW DELHI HAS BEEN RECEIVED IN THIS OFFICE ON 21.3.2014. THIS LETTER C ONTAINS CERTIFIED COPY OF SEIZED MATERIAL PERTAINING TO M/S DALMIA INFRASTRUCTURE PRIVATE LIMITED (AACCD7702D) AND SAT ISFACTION NOTE FOR INITIATING ASSESSMENT PROCEEDINGS UNDER SE CTION 153C OF THE INCOME TAX ACT, 1961 IN THIS CASE FOR ASSESS MENT YEARS 2006-07 TO 2011-12. A SEARCH & SEIZURE ORATION WAS CARRIED OUT IN THE C ASE OF M/S DALMIA GROUP OF CASES ON 20.1.2012, 27.1.201 2 AND 23.1.2012 BY THE INVESTIGATION WING, UNIT-VI(1), NE W DELHI. DURING THE COURSE OF SEARCH ON SH. PARAG DALMIA, 11 3- 114, MOHTA BUILDING, 4, BHIKAJI KAMA PLACE, NEW DEL HI, CERTAIN DOCUMENTS WERE FOUND AND SEIZED AS PER ANNE XURE A- 4 AND A-5. THE APPRAISAL REPORT OF THE GROUP AS WEL L AS THE SEIZED MATERIAL HAS BEEN EXAMINED SO FAR AND IT REV EALS THAT THE FOLLOWING DOCUMENTS BELONG TO M/S DALMIA INFRAS TRUCTURE PRIVATE LIMITED. ANNEXURE PAGE NOS. PARTY DESCRIPTION OF DOCUMENTS A - 4 41/DB - 8 THIS PAGE ON LETTER HEAD OF DALMIA INFRASTRUCTURE (P) LTD. IS CERTIFIED TRUE COPY OF THE RESOLUTION PASSED IN THE BOARD OF DIRECTORS MEETING OF THE COMPANY. A - 4 93, 98, 100 - 106/DB-8 THESE PAGES ARE LETTERS FROM DALMIA INFRASTRUCTURE (P) LTD. ADDRESSED TO PURVANCHAL CONSTRUCTION WORKS (P) LTD. REGARDING 15 SURRENDERING OF FLATS. A - 5 3 - 5/DB - 8 THESE PAGES CONTAIN THE DETAILS OF TRIAL BALANCE OF DALMIA INFRASTRUCTURE (P) LTD. FOR THE PERIOD 1.4.2010 TO 31.3.2011 A - 5 6 - 9/DB - 8 THESE PAGES CONTAIN THE DETAILS OF TRIAL BALANCE OF DALMIA INFRASTRUCTURE (P) LTD. FOR THE PERIOD 1.4.2011 TO 23.1.2012 I HAVE EXAMINED THE DOCUMENTS AND I AM SATISFIED THAT THE ABOVE SEIZED MATERIAL BELONGS TO M/S DALMI A INFRASTRUCTURE (P) LTD.(FORMERLY KNOWN AS DALMIA EQ UITIES PVT. LTD.). HENCE NOTICE UNDER SECTION 153C MAY BE ISSUED IN THE CASE OF M/S DALMIA INFRASTRUCTURE (P) LTD. A CCORDINGLY FOR THE AYS 2006-07 TO 2011-12. SD/- (ASTHA LAKSHMI) DCIT, CIRCLE 10(1), NEW DELHI DALMIA INFRASTRUCTURE PVT. LTD. EXPLANATION OF THE ASSESSEE ON DOCUMENTS REFERED TO IN THE SATISFACTION NOTE NOTES ON SEIZED MATERIAL S.NO. PARTICULARS 1. ANNEXURE A - 4 (PAGES 41/DB - 8) EXPLANATION CERTIFIED TRUE COPY OF THE BOARD RESOLUTION ON 23.3 .2011 AT THE REGI STERED OFFICE OF THE COMPANY, RESOLVING THE APPROVAL ON THE SUIT AGAINST MVL LTD. AND AUTHORIZI NG SH. PARAG DALMIA. THIS IS SELF EXPLANATORY. 16 2. ANNEXURE A - 4 (PAGES 96, 98, 100 - 106/DB - 8) EXPLANATION LETTERS TO M/S PURVANCHAL CONSTRUCTION WORKS PVT. L TD . FOR SURRENDERING THE FOLLOWING APARTMENTS AT THEIR PROJECT VIZ., PURVANCHAL HEIGHTS AT GR. NOIDA, FO R THEIR BUY BACK AT COST. I) A-1/201 (PAGE 100) II) A-1/204 (PAGE 98 & 106) III) A-2/103 (PAGE 96 & 104) IV) A-2/207 (PAGE 102) COPIES OF PURCHASE DEEDS, SURRENDER LE TTERS AND BANK STATEMENTS ARE ENCLOSED. 3. ANNEXURE A - 45(PAGES 305/DB - 8) EXPLANATION WORKING PAPERS ON TRIAL BALANCE FOR THE PERIOD FROM 1.4.2010 TO 31.3.2011. 4. ANNEXURE A - 4 (PAGES 6 - 9/DB - 8) EXPLANATION WORKING PAPERS ON TRIAL BALANCE FOR THE PERI OD FROM 1.4.2011 TO 23.1.2012. NOTE ON SURRENDER OF FLATS TO M/S. PURVANCHAL CONSTRUCTION WORKS PVT LTD. 1 THE SEIZED DOCUMENTS RELATE TO FOUR APARTMENTS B OOKED BY THE ASSESSEE - DALMIA INFRASTRUCTURE PVT. LTD. (DIP L) VIDE AGREEMENTS DATED 9TH JANUARY 2009 (ASSESSMENT YEAR 2009-10) IN THE PROJECT PURVANCHAL HEIGHT, PLOT NO. GH-02, ZETA -OL, GREATER NOIDA, U.P. 2. COPIES OF ALL FOUR PURCHASE AGREEMENTS ARE ENCLO SED HEREWITH AS ANNEXURE A AND THE SAME WERE DULY RECORDED IN TH E BOOKS OF ACCOUNTS OF THE ASSESSEE FOR THE RELEVANT FINANCIAL YEAR. 3. AS AGAINST EXPECTATION, THE WHOLE PROJECT GOT IN TROUBLE BECAUSE OF AGITATION OF FARMERS AGAINST ARBITRARY A CQUISITION OF LANDS BY GREATER NOIDA AUTHORITY AND THE FUTURE OF THE IN VESTMENT TURNED GLOOMY. MULTIPLE SUITS WERE FILED AND FARMERS START ED FIERCE AGITATION ON ROADS. (EVERYTHING IS PART OF NATIONAL NEWS PAPE RS AND WHOLE 17 NATION IS AWARE OF IT, HOWEVER, A COPY OF ONE NEWS ITEM IS ENCLOSED FOR PERUSAL AS ANNEXURE B) 4. DUE TO THE ABOVE SENTIMENTS, AND SENSING THAT AS SESEES INVESTMENTS FACING RISK OF GETTING ZERO AS SEVERAL ACQUISITIONS BY GREATER NOIDA AUTHORITY WERE SET ASIDE BY ALLAHABAD HIGH COURT, THE ASSESSEE STARTED EVALUATING VARIOUS POSSIBILITIES OF EXITING FROM THE PROJECT. 5. IN THE MEANTIME THE BUILDER HAD SENT A LETTER DA TED 24 TH AUGUST, 2011 (COPY ENCLOSED AS ANNEXURE C ASKING TO TAKE POSSESSION AND PAY THE STAMP DUTY AND CLEAR THE BAL ANCE OUTSTANDING, THEREBY, INCREASING THE COST OF EACH A PARTMENT BY APPROX. RS. 150/- PER SQ.FT. 6. IN CASE DESPERATE SITUATION, THE BUILDER WAS PRE SSED UPON TO ACCEPT SURRENDER OF THE SAME FOR WHICH THE BUILDER AGREED. COPIES OF SURRENDER DOCUMENTS ARE ENCLOSED AS ANNEXURE D. 7. THE INVESTMENT WAS SHOWN UNDER LOANS AND ADVANC ES (BEING BOOKING AMOUNT OF THE FLATS) IN THE BOOKS OF ACCOU NTS OF ASSESSEE. COPY OF THE BALANCE SHEET AS AT 31.3.2011 IS ENCLOS ED AS ANNEXURE E (SCHEDULE VII- CURRENT ASSETS- - C LOANS AND ADVA NCES, WHICH REFLECTS THE TOTAL FIGURE OF INVESTMENT AT RS. 5,4 1,09,000 AS LOANS AND ADVANCE). 8. AS THE BALANCE SHEET IS SHOWING A FIGURE OF RS. 9,03,87,251.64, A COPY OF LEDGER OF THE LOAN AND AD VANCES IS ENCLOSED AS ANNEXURE F, EXPLAINING THE COMPONENTS T HEREOF. 9. THESE 4 FLATS WERE SURRENDERED TO THE BUILDER ( COPY OF THE SURRENDER LETTER ALREADY ENCLOSED AS ANNEXURE D, TH E FOLLOWING PAYMENTS WERE RECEIVED- FLAT NO. A-1/201 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460964 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460965 30.11.2011 VIJAY BANK 30,06,900 30.11.2011 C. 460966 30.12.2011 VIJAY BANK 30,06,911 30.12.2011 FLAT NO. A-1/204 18 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460967 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460968 30.11.2011 VIJAY BANK 30,06,9 00 30.11.2011 C. 460969 30.12.2011 VIJAY BANK 30,06,911 30.12.2011 FLAT NO. A-2/103 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460970 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460971 30.11.2011 VIJAY BANK 25,26 ,305 30.11.2011 C. 460972 30.12.2011 VIJAY BANK 25,26,300 30.12.2011 FLAT NO. A-2/207 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460973 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460974 30.11.2011 VIJAY BANK 24, 98,907 30.11.2011 C. 460975 30.12.2011 VIJAY BANK 24,98,907 30.12.2011 THE ABOVE PAYMENTS ARE DULY REFLECTED IN THE BOOKS OF ACCOUNTS. A COPY OF THE BANK STATEMENT OF THE ROYAL BANK OF SCO TLAND IS ENCLOSED AS ANNEXURE G. 10.A COPY OF THE BALANCE SHEET AS AT 31.3.2012 IS E NCLOSED IN WHICH THE OPENING BALANCE OF NON-CURRENT INVESTMENTS AS PER N OTE NO. 9, IS REDUCED RS. 5,41,09,000.00 WHICH REPRESENT THE AMO UNT RECEIVED FROM SURRENDER OF ABOVE FLATS. 9.2 ONE OF THE CONTENTIONS RAISED BY THE LD. DR AT THE TIME OF HEARING WAS THAT ASSUMPTION OF JURISDICTION WAS TO BE TESTE D BY EXAMINING THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON I.E. DCIT, CENTRAL CIRCLE-2, NEW DELHI AND NOT THAT OF THE ASSESSING OFFICER WHO HAS PASSED THE ASSESSMENT ORDER U/S 153C/143(3) . IT HAS BEEN NOTED BY US THAT IN THE PRESENT CASE THE ASSESSING OFFICE R OF PERSON OTHER THAN 19 THE SEARCHED PERSON IS DIFFERENT FROM THE ASSESSING OFFICER OF THE SEARCHED PERSON. UPON CAREFUL EXAMINATION OF BOTH THE SATISF ACTION NOTES REPRODUCED ABOVE IT HAS ALSO BEEN NOTED BY US THAT THERE IS A VERY SUBTLE BUT IMPORTANT DIFFERENCE BETWEEN THE TWO. THE SATIS FACTION NOTE RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON MEN TIONS THE FOLLOWING :- DURING THE COURSE OF SEACH O SH. PARAG DALMIA, 11 3-114, MOHTA BUILDING, 4, BHIKAJI KAMA PLACE, NEW DELHI, CERTAIN DOCUMENTS WERE FOUND AND SEIZED AS PER ANNEXURE A-1, CONTAINING PA GES 1 TO 170. THE APPRAISAL REPORT OF THE GROUP AS WELL AS THE SE IZED MATERIAL HAS BEEN EXAMINED SO FAR AND REVEALS THAT THE FOLLOWING COMPANIES SUBSCRIBED FOR SHARES OF M/S DALMIA INFRASTRUCTURE PVT. LTD. (FORMERLY KNOWN AS DALMIA EQUITIES PVT. LTD.)(AACCD 7702P). 9.3 HOWEVER, THEREAFTER THE SATISFACTION NOTE IS CO MPLETELY SILENT ON THE NAMES OF THE SUBSCRIBING COMPANIES OR THE SPECIFIC SEIZED MATERIAL WHICH ACCORDING TO THE AO WAS INCRIMINATING. THE ONLY DIF FERENCE BETWEEN THE 2 SATISFACTION NOTES IS THE REFERENCE TO THE SUBSCRIP TION OF SHARE CAPITAL REPRODUCED ABOVE. THE CONTENTION RAISED BY THE LD. DR THEREFORE, WAS TO TAKE A BROADER VIEW AND TEST THE ASSUMPTION OF JURI SDICTION BASED ON THE SATISFACTION NOTE RECORDED BY DCIT, CENTRAL CIRCLE- 2, NEW DELHI I.E. ASSESSING OFFICER OF THE SEARCHED PERSON. HENCE, TH E FIRST ISSUE TO BE EXAMINED IS WHETHER ASSUMPTION OF JURISDICTION U /S 153C OF THE ACT IS TO BE EXAMINED ON THE BASIS OF SATISFACTION RECORDED B Y THE ASSESSING OFFICER OF THE PERSON OTHER THAN SEARCHED PERSON OR THE ASS ESSING OFFICER OF THE SEARCHED PERSON. 9.4 IT WOULD BE IMPORTANT TO REFER TO THE PROVISION S OF SECTION 153C OF THE ACT AS APPLICABLE TO THE FACTS OF THE PRESENT C ASE AS UNDER :- 20 ASSESSMENT OF INCOME OF ANY OTHER PERSON SECTION 153C (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 1 39, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT IS DO CUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DO CUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND IS SUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A. THE HIGHLIGHTED PORTION OF ABOVE REPRODUCED SECTION 153C(1) OF THE ACT WAS FURTHER AMENDED W.E.F 1-10-2014 BY SUBSTITUTING IT WITH THE FOLLOWING :- AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF AC COUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON TH E DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON. 9.5 THE ABOVE SUBSTITUTION HAS THE EFFECT OF NOW MA KING IT MANDATORY FOR THE AO OF THE OTHER PERSON ALSO TO RECORD SAT ISFACTION THAT THE BOOKS OF ACCOUNT OR DOCUMENTS, ETC., HAVE A BEARING ON TH E DETERMINATION OF THE TOTAL INCOME OF SUCH 'OTHER PERSON' BEFORE EMBARKIN G UPON THE EXERCISE OF HIS ASSESSMENT OR REASSESSMENT. HOWEVER, AS PER SET TLED LAW,WE FIND THAT EVEN IN THE PRE-SUBSTITUTION ERA OF THE RELEVANT PA RT OF SUB-SECTION (1) OF SECTION 153C COVERING THE PERIOD UNDER CONSIDERATIO N, RECORDING OF 21 SATISFACTION BY THE ASSESSING OFFICER WAS A SINE QU A NON SO AS TO ENABLE THE AO OF THE OTHER PERSON TO START WITH THE PROC EEDINGS FOR MAKING ASSESSMENT OR REASSESSMENT. 9.6 IN THE CASE OF PR. CIT CENTRAL-2 VS. INDEX SECU RITIES PVT. LTD. 86 TAXMANN.COM 84 (DELHI) A SEARCH ACTION TOOK PLACE O N 14.09.2010 ON THE JAGAT GROUP AND ITS DIRECTORS. ASSUMPTION OF JURISD ICTION U/S 153C OF THE ACT WAS HELD TO BE INVALID BY THE ITAT AGAINST WHIC H THE REVENUE FILED AN APPEAL BEFORE THE DELHI HIGH COURT. THE ORDER OF TH E ITAT WAS UPHELD BY THE DELHI HIGH COURT. IN PARA 31 OF THE SAID ORDER IT WAS HELD BY THE COURT THAT SATISFACTION NOTE FORMS THE BASIS FOR INITIATI NG THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. THE RELEVANT PORTION OF TH E ORDER IS REPRODUCED BELOW :- 31. AS REGARDS THE SECOND JURISDICTIONAL REQUIREME NT VIZ., THAT THE SEIZED DOCUMENTS MUST BE INCRIMINATING AND MUST RELATE TO THE AYS WHOSE ASSESSMENTS ARE SOUGHT TO BE REOPENED, TH E DECISION OF THE SUPREME COURT IN SINHGAD TECHNICAL EDUCATION SO CIETY (SUPRA) SETTLES THE ISSUE AND HOLDS THIS TO BE AN ESSENTIAL REQUIREMENT. THE DECISIONS OF THIS COURT IN RRJ SECURITIES AND ARN I NFRASTRUCTURE INDIA LTD. V. ASSTT. CIT [2017] 394 ITR 569/81 TAXM ANN.COM 260 (DELHI) ALSO HOLD THAT IN ORDER TO JUSTIFY THE ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE ACT THE DOCU MENTS SEIZED MUST BE INCRIMINATING AND MUST RELATE TO EACH OF TH E AYS WHOSE ASSESSMENTS ARE SOUGHT TO BE REOPENED. SINCE THE SATISFACTION NOTE FORMS THE BASIS FOR INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT, IT IS FUTILE FOR MR. MANCH ANDA TO CONTEND THAT THIS REQUIREMENT NEED NOT BE MET FOR I NITIATION OF THE PROCEEDINGS BUT ONLY DURING THE SUBSEQUENT ASSESSMENT . 22 9.7 IN THE CASE OF CIT VS. RRJ SECURITIES LTD. 62 T AXMANN.COM 391 (DELHI) SEARCH AND SEIZURE OPERATION WERE UNDERTAKE N UNDER SECTION 132 OF THE ACT IN THE CASE OF SH. B.K.DHINGRA, SMT. POO NAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD. ON 20.10.2008 ON THE BASIS OF WHICH PROCEEDINGS UNDER SECTION 153C OF THE ACT WERE INIT IATED IN THE CASE OF RRJ SECURITIES LTD. ASSUMPTION OF JURISDICTION U/S 153C OF THE ACT WAS HELD TO BE INVALID BY THE ITAT AGAINST WHICH THE REVENUE FI LED AN APPEAL BEFORE THE DELHI HIGH COURT. THE ORDER OF THE ITAT WAS UPHELD BY THE DELHI HIGH COURT. IN PARA 18 TO 20 OF THE ORDER AFTER REFERRIN G TO DECISIONS OF OTHER HIGH COURTS ON THE TOPIC THE COURT CONCLUDED THAT R ECORDING OF SATISFACTION IS SINE QUA NON TO COMMENCE PROCEEDINGS UNDER SECTI ON 153C OF THE ACT IN RESPECT OF SUCH OTHER PERSON. THE RELEVANT PARA 18 TO 20 OF THE ORDER ARE AS UNDER :- 18. IT, PLAINLY, FOLLOWS THAT THE RECORDING OF A S ATISFACTION THAT THE ASSETS/DOCUMENTS SEIZED BELONG TO A PERSON OTHER TH AN THE PERSON SEARCHED IS NECESSARILY THE FIRST STEP TOWARDS INIT IATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT. IN THE C ASE WHERE THE AO OF THE SEARCHED PERSON AS WELL AS THE OTHER PERS ON IS ONE AND THE SAME, THE DATE ON WHICH SUCH SATISFACTION IS RE CORDED WOULD BE THE DATE ON WHICH THE AO ASSUMES POSSESSION OF THE SEIZED ASSETS/DOCUMENTS IN HIS CAPACITY AS AN AO OF THE PE RSON OTHER THAN THE ONE SEARCHED. 19. THE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. GOPI APARTMENTS [2014] 365 ITR 411/46 TAXMANN.COM 280 HAS EXPRESSED A SIMILAR VIEW IN THE FOLLOWING WORDS:- 25. A BARE PERUSAL OF THE PROVISION CONTAINED IN S ECTION 153C OF THE I.T. ACT LEAVES NO DOUBT THAT, AS IS PROVIDED U NDER SECTION 158BD, WHERE THE ASSESSING OFFICER, WHILE PROCEEDIN G UNDER SECTION 153A AGAINST A PERSON WHO HAS BEEN SUBJECTE D TO SEARCH AND SEIZURE UNDER SECTION 132(1) OR HAS BEEN PROCEE DED UNDER 23 SECTION 132A, IS SATISFIED THAT ANY MONEY, BULLION, 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, 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 PROVISI ONS OF SECTION 153A. THUS, THERE ARE TWO STAGES: THE FIRST STAGE COMPRISES OF A SEARCH AND SEIZURE O PERATION UNDER SECTION 132 OR PROCEEDING UNDER SECTION 132A AGAINS T A PERSON, WHO MAY BE REFERRED AS THE SEARCHED PERSON. BASED ON SUCH SEARCH AND SEIZURE, ASSESSMENT PROCEEDINGS ARE INIT IATED AGAINST THE SEARCHED PERSON UNDER SECTION 153A. AT THE TI ME OF INITIATION OF SUCH PROCEEDINGS AGAINST THE SEARCHED PERSON O R DURING THE ASSESSMENT PROCEEDINGS AGAINST HIM OR EVEN AFTER TH E COMPLETION OF THE ASSESSMENT PROCEEDINGS AGAINST HIM, THE ASSE SSING OFFICER OF SUCH A SEARCHED PERSON, MAY, IF HE IS SATISFIE D, THAT ANY MONEY, DOCUMENT ETC. BELONGS TO A PERSON OTHER THAN THE SE ARCHED PERSON, THEN SUCH MONEY, DOCUMENTS ETC. ARE TO BE HANDED OV ER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OT HER PERSON. THE SECOND STAGE COMMENCES FROM THE RECORDING OF SU CH SATISFACTION BY THE ASSESSING OFFICER OF THE SEARC HED PERSON FOLLOWED BY HANDING OVER OF ALL THE REQUISITE DOCUM ENTS ETC. TO THE ASSESSING OFFICER OF SUCH OTHER PERSON, THEREAFTE R FOLLOWED BY ISSUANCE OF THE NOTICE OF THE PROCEEDINGS UNDER SEC TION 153C READ WITH SECTION 153A AGAINST SUCH OTHER PERSON. THE INITIATION OF PROCEEDINGS AGAINST SUCH OTHER P ERSON ARE DEPENDENT UPON A SATISFACTION BEING RECORDED. SUCH SATISFACTION MAY BE DURING THE SEARCH OR AT THE TIME OF INITIATI ON OF ASSESSMENT 24 PROCEEDINGS AGAINST THE SEARCHED PERSON, OR EVEN DURING THE ASSESSMENT PROCEEDINGS AGAINST HIM OR EVEN AFTER CO MPLETION OF THE SAME, BUT BEFORE ISSUANCE OF NOTICE TO THE SUC H OTHER PERSON UNDER SECTION 153C. 26. EVEN IN A CASE, WHERE THE ASSESSING OFFICER OF BOTH THE PERSONS IS THE SAME AND ASSUMING THAT NO HANDING OVER OF DO CUMENTS IS REQUIRED, THE RECORDING OF SATISFACTION IS A MUST , AS, THAT IS THE FOUNDATION, UPON WHICH THE SUBSEQUENT PROCEEDINGS A GAINST THE OTHER PERSON ARE INITIATED. THE HANDING OVER OF D OCUMENTS ETC. IN SUCH A CASE MAY OR MAY NOT BE OF MUCH RELEVANCE BUT THE RECORDING OF SATISFACTION IS STILL REQUIRED AND IN FACT IT IS MANDATORY. 20. MENTION MAY ALSO BE MADE TO THE DECISION OF THE MADHYA PRADESH HIGH COURT IN CIT V. MECHMEN 11-C [2015] 60 TAXMANN.COM 484/233 TAXMAN 540. IN THAT CASE, THE COURT HAD EXPLAINED THAT THE FACT THAT INCIDENTALLY THE AO IS COMMON AT BOTH STAGES WOULD NOT EXTRICATE HIM FROM RECORDING SATIS FACTION AT THE RESPECTIVE STAGES. IT WAS EXPLAINED THAT SINCE THE SATISFACTION OF THE AO OF A SEARCHED PERSON THAT ASSETS/DOCUMENTS SEIZE D BELONG TO SOME OTHER PERSON IS SINE QUA NON TO COMMENCING PRO CEEDINGS UNDER SECTION 153C OF THE ACT IN RESPECT OF SUCH OT HER PERSON, THE AO COULD NOT ASSUME JURISDICTION AND TRANSMIT THE I TEMS TO ANOTHER FILE CONCERNING THE PERSON (OTHER THAN THE ONE SEAR CHED) PENDING BEFORE HIM, BEFORE BEING SATISFIED THAT THE SEIZED ASSETS/DOCUMENTS BELONGED TO THE OTHER PERSON. 9.8 THERE HAS BEEN A CATENA OF DECISIONS OF VARIOUS HIGH COURTS WHERE IT HAS BEEN HELD THAT ASSUMPTION OF JURISDICTION U/ S 153C OF THE ACT WAS INVALID WHERE THE SEIZED DOCUMENTS DID NOT RELATE T O THE RELEVANT ASSESSMENT YEAR AND WERE NOT INCRIMINATING. THIS PR OPOSITION OF LAW HAS BEEN UPHELD BY THE DELHI HIGH COURT IN THE CASE OF PR. CIT CENTRAL-2 VS. INDEX SECURITIES PVT. LTD. 86 TAXMANN.COM 84 (DELHI ), CIT VS. RRJ 25 SECURITIES LTD. 62 TAXMANN.COM 391 (DELHI), ARN INF RASTRUCTURE INDIA LTD. VS. ACIT 81 TAXMANN.COM 260 (DELHI) AND BY THE SUPREME COURT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOC IETY 84 TAXMANN.COM 290 (SC). IF THE REQUIREMENT IN LAW WAS RESTRICTED TO RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCH ED PERSON THAT THE BOOKS OF ACCOUNTS OR DOCUMENTS ETC. BELONG TO PERSON OTHE R THAN SEARCHED PERSON AND THEREAFTER THE ASSESSING OFFICER OF THE OTHER PERSON WAS NOT REQUIRED TO RECORD ANY SATISFACTION PRIOR TO 1-10-2 014, BEFORE PROCEEDING FURTHER U/S 153C THERE WAS NO REASON FOR THE COURTS TO HAVE SETTLED THE ABOVE PROPOSITION. THEREFORE, IT HAS TO BE HELD THA T EVEN IN THE PRE- SUBSTITUTION ERA OF THE RELEVANT PART OF SUB-SECTIO N (1) OF SECTION 153C COVERING THE PERIOD UNDER CONSIDERATION, RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE OTHER PERSON WAS A SINE QUA NON SO AS TO ENABLE THE AO OF THE OTHER PERSON TO START WITH THE PROC EEDINGS FOR MAKING ASSESSMENT OR REASSESSMENT, IN THOSE CASES WHERE TH E ASSESSING OFFICER OF THE SEARCHED PERSON AND OTHER PERSON WERE NOT SAME. 9.9 THE NEXT ISSUE TO BE DETERMINED IS THAT ASSUMPT ION OF JURISDICTION U/S 153C OF THE ACT IS TO BE EXAMINED BASED ON SATI SFACTION RECORDED BY THE ASSESSING OFFICER OF THE OTHER PERSON OR THE ASSESSING OFFICER OF THE SEARCHED PERSON. THIS ISSUE HAS BEEN SETTLED BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. RRJ SECURITIES LTD. 62 TAXMANN.COM 391 (DEL) WHERE IT HAS BEEN HELD AS UNDER :- 32. SECTION 153C OF THE ACT MERELY REQUIRES T HE AO OF A SEARCHED PERSON TO HANDOVER THE ASSETS AND DOCUMENT S SEIZED, WHICH BELONG TO ANOTHER PERSON, TO THE AO O F THAT PERSON . THE AO OF A SEARCHED PERSON IS NOT REQUIRED TO EXAMINE WHETHER SUCH DOCUMENTS COULD PROVIDE A CLUE 26 FOR DISCOVERY OF UNDISCLOSED INCOME OF THE PERSON T O WHOM THE DOCUMENT SO BELONGS . THIS COURT IN SSP AVIATION LTD.(SUPRA) HAD OBSERVED AS UNDER: AT THE TIME WHEN THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON REACHES THE SATISFACTION THAT THE DOCUMENT BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON, IT IS NOT NECESSARY FOR HIM TO ALSO REACH A FIRM CONCLUSION/OPINION THAT TH E DOCUMENT SHOWS UNDISCLOSED INCOME BELONGING TO SUCH OTHER PERSON. THAT IS A MATTER FOR ENQUIRY, WH ICH IS TO BE CONDUCTED IN THE MANNER PRESCRIBED BY SECT ION 153C. 33. THE RECORD SLIP BELONGS TO THE ASSESSEE AND, T HEREFORE, THE ACTION OF THE AO OF THE SEARCHED PERSONS RECORD ING THAT THE SAME BELONGS TO THE ASSESSEE CANNOT BE FAULTED. HOWEVER, THE QUESTION THEN ARISES IS WHETHER THE AO OF THE ASSESSEE WAS JUSTIFIED IN TAKING FURTHER STEPS FOR REASSESSING THE INCOME OF THE ASSESSEE IN RESPECT OF THE ASSESS MENT YEARS FOR WHICH THE ASSESSMENTS WERE CONCLUDED AND IN RESPECT OF WHICH THE SEIZED DOCUMENT HAD NO BEARING . IN OUR VIEW, THE SAME WOULD BE CLEARLY IMPERMISSIBLE AS TH E SEIZED MATERIAL NOW AVAILABLE WITH THE AO, ADMITTEDLY, HAD NO NEXUS WITH THOSE ASSESSMENTS AND WAS WHOLLY IRRELEV ANT FOR THE PURPOSE OF ASSESSING THE INCOME OF THE ASSESSEE FOR THE YEARS IN QUESTION. MERELY BECAUSE A VALUABLE ARTICL E OR DOCUMENT BELONGING TO AN ASSESSEE IS SEIZED FROM TH E POSSESSION OF A PERSON SEARCHED UNDER SECTION 132 O F THE ACT, DOES NOT MEAN THAT THE CONCLUDED ASSESSMENTS O F THE ASSESSEE ARE NECESSARILY TO BE RE-OPENED UNDER SECT ION 153C OF THE ACT. IN OUR VIEW, THE CONCLUDED ASSESSM ENTS CANNOT BE INTERFERED WITH MECHANICALLY AND SOLELY F OR THE REASON THAT A DOCUMENT BELONGING TO THE ASSESSEE, W HICH HAS NO BEARING ON THE ASSESSMENTS OF THE ASSESSEE F OR THE YEARS PRECEDING THE SEARCH, WAS SEIZED FROM THE PO SSESSION OF THE SEARCHED PERSONS. 27 34. IN SSP AVIATION (SUPRA), THIS COURT HAD NOTED THE DIFFERENCE BETWEEN THE PROVISIONS OF SECTION 158BD OF THE ACT AND THE PROVISIONS OF SECTION 153C. WHEREAS SEC TION 158BD REFERRED TO THE SATISFACTION OF AN AO WITH RE GARD TO ANY UNDISCLOSED INCOME BELONGING TO A PERSON OTHE R THAN THE SEARCHED PERSON, SECTION 153C(1) OF THE ACT IN CONTRAST REFERRED MERELY TO THE AO BEING SATISFIED THAT ASSETS/DOCUMENTS SEIZED DURING A SEARCH BELONGED TO A PERSON OTHER THAN ONE SEARCHED. IT IS, THUS, CLEAR THAT IT WAS NOT NECESSARY FOR THE AO, AT THE STAGE OF RECORDING THE SATISFACTION UNDER SECTION 153C TO COME TO A CONCLU SION THAT SEIZED ASSETS WHICH BELONG TO ANOTHER PERSON REPRES ENT ANY UNDISCLOSED INCOME. IF THE AO OF A SEARCHED PERSON IS SATISFIED THAT AN ASSET/DOCUMENTS SEIZED BELONG TO ANOTHER PERSON, HE HAS A DUTY TO FORWARD THE DOCUMENTS OR THE VALUABLE ASSETS SEIZED TO THE AO O F THE PERSON CONCERNED; APART FROM DOING SO, THE AO C AN DO NOTHING MORE. 35. THE AO OF THE PERSON OTHER THAN THE ONE SEARCHE D ALSO, IS NOT, AT THE STAGE OF ISSUING NOTICE UNDER SECTIO N 153C/153A OF THE ACT, REQUIRED TO CONCLUDE THAT THE ASSETS/DOCUMENTS HANDED OVER TO HIM BY THE AO OF TH E SEARCHED PERSON REPRESENT OR INDICATE ANY UNDISCLOS ED INCOME OF THE ASSESSEE UNDER HIS JURISDICTION. AS E XPLAINED IN SSP AVIATION (SUPRA), SECTION 153C ONLY ENABLES THE AO OF A PERSON OTHER THAN THE ONE SEARCHED, TO INVESTIGATE INTO THE DOCUMENTS SEIZED AND/OR THE ASSETS SEIZED AND ASCER TAIN THAT THE SAME DO NOT REFLECT ANY UNDISCLOSED INCOME OF THE ASSESSEE (I.E A PERSON OTHER THAN THE ONE SEARCHED) FOR THE RELEVANT ASSESSMENT YEARS. IF THE SEIZED MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING SEIZED AS HANDED OVER TO THE AO OF THE ASSESSEE, ARE DULY DISCLOSED AND REFLECTED IN THE RETURNS FILED BY THE ASSESSEE, NO FURTHER INTERFERENCE WOULD BE CALLED FOR. SIMILARLY, IF THE BOOKS OF ACCOUNTS/DOCUMENTS SEIZED DO NOT REFLECT ANY UNDISC LOSED INCOME, THE ASSESSMENTS ALREADY MADE CANNOT BE INTE RFERED 28 WITH. MERELY BECAUSE VALUABLE ARTICLES AND/OR DOCUMENTS BELONGING TO THE ASSESSEE HAVE BEEN SEIZED AND HANDED OVER TO THE AO OF THE ASSESSEE WOULD NOT NECESSARILY REQUIRE THE AO TO REOPEN THE CONCLUDED ASSESSMENTS AND REASSESS THE INCOME OF TH E ASSESSEE. 36. THE DECISION IN SSP AVIATION (SUPRA) CANNOT BE UNDERSTOOD TO MEAN THAT THE AO HAS THE JURISDICTION TO MAKE A RE-ASSESSMENT IN EVERY CASE, WHERE SEIZED ASSETS OR DOCUMENTS ARE HANDED OVER TO THE AO. THE QUESTION W HETHER THE DOCUMENTS/ASSETS SEIZED COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOME HAS TO BE CONSIDERED BY THE AO A FTER EXAMINING THE SEIZED ASSETS/DOCUMENTS HANDED OVER T O HIM. IT IS ONLY IN CASES WHERE THE SEIZED DOCUMENTS/ASSE TS COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOME OF THE ASSE SSEE FOR THE RELEVANT ASSESSMENT YEARS, THAT FURTHER ENQUIRY WOULD BE WARRANTED IN RESPECT OF THOSE YEARS. WHILST, IT IS NOT NECESSARY FOR THE AO TO BE SATISFIED THAT THE ASSETS/DOCUMENTS SEIZED DURING SEARCH OF ANOTHER PERSON REFLECT UNDISCLOSED INCOME OF AN ASSESSEE BEFORE COMMENCING AN ENQUIRY UNDER SECTION 153C OF THE ACT, IT WOULD BE IMPERMISSIBLE FOR HIM TO COMMENCE SUCH ENQUIRY IF IT IS APPARENT THAT THE DOCUMENTS/ASSETS IN QUESTION HAVE NO BEARING ON THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS. 37. AS EXPRESSLY INDICATED UNDER SECTION 153C OF TH E ACT THE ASSESSMENT OR REASSESSMENT OF INCOME OF A PERSON OT HER THAN A SEARCHED PERSON WOULD PROCEED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE ACT. THE CON CLUDED ASSESSMENTS CANNOT BE INTERFERED WITH UNDER SECTIO N 153A OF THE ACT UNLESS THE INCRIMINATING MATERIAL BELONG ING TO THE ASSESSEE HAS BEEN SEIZED. 38. AS INDICATED ABOVE, IN THE PRESENT CASE, THE DO CUMENTS SEIZED HAD NO RELEVANCE OR BEARING ON THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS AND COUL D NOT 29 POSSIBLY REFLECT ANY UNDISCLOSED INCOME. THIS BEING THE UNDISPUTED POSITION, NO INVESTIGATION WAS NECESSARY . THUS, THE PROVISIONS OF SECTION 153C, WHICH ARE TO ENABLE AN INVESTIGATION IN RESPECT OF THE SEIZED ASSET, COULD NOT BE RESORTED TO; THE AO HAD NO JURISDICTION TO MAKE TH E REASSESSMENT UNDER SECTION 153C OF THE ACT. 39. IN VIEW OF THE ABOVE, THE THIRD QUESTION FRAMED , WHETHER THE PROCEEDINGS UNDER SECTION 153C OF THE ACT COULD BE INITIATED AGAINST THE ASSESSEE, IS ANSWERED IN FAV OUR OF THE ASSESSEE AND AGAINST THE REVENUE. 40. IN VIEW OF THE ABOVE, IT IS NOT NECESSARY FOR U S TO EXAMINE THE OTHER QUESTIONS. THE APPEALS ARE, ACCO RDINGLY, DISMISSED. IN THE CIRCUMSTANCES, THE PARTIES ARE L EFT TO BEAR THEIR OWN COSTS. 9.10 IN THE CASE OF CIT, HYD. VS. SHETTYS PHARMACEU TICALS & BIOLOGICALS LTD. 57 TAXMANN.COM 282 (AP) WHILE EXAMINING THE VA LIDITY OF ASSUMPTION OF JURISDICTION U/S 153C IT WAS HELD AS UNDER :- 6. IT IS THEREFORE CLEAR THAT FIRSTLY SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER WHO CONDUCTED SEA RCH, THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABL E ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. THER EAFTER, THE ASSESSING OFFICER HAVING JURISDICTION OVER THIR D PARTY ON RECEIPT OF THE SEIZED MATERIAL OR BOOKS OF ACCOUNTS OR DOCUMENT BEING HANDED OVER TO HIM SHALL RECORD HIS OWN SATISFACTION AFTER EXAMINING THE SAME INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE SATISFACTION OF THE SEIZING OFFICER. IN OTHER WORDS IT IS NOT AN AUTOMATIC ACTION. WE FIND SATISFACTION OF TWO OFFICERS IS MISSING. IN THIS CO NNECTION WE SET OUT THE TEXT OF THE ORDER OF THE ASSESSING OFFI CER WHICH IS AS FOLLOWS : 30 A SEARCH AND SEIZURE OPERATION U/S 132 WAS CARRIED OUT IN THE GROUP CASE OF DR. T. YADHAIAH GOUD AND OTHERS ON 25 .3.2010. DURING THE COURSE OF SEARCH OPERATION DOCUMENTS BEL ONGING TO SHETTY PHARMACEUTICALS & BIOLOGICAL LTD., HAS BEEN SEIZED. HENCE IT IS CONSIDERED TO INITIATE PROCEEDINGS U/S 153C OF THE I.T. ACT. 7. THE AFORESAID SECTION MANDATES RECORDING OF SATI SFACTION OF THE ASSESSING OFFICER(S) IS A PRECONDITION FOR INVO KING JURISDICTION AND IT IS NOT A MERE FORMALITY BECAUSE RECORDING OF SATISFACTION POSTULATES APPLICATION OF MIND CONSCIOUSLY AS THE D OCUMENTS SEIZED MUST BE BELONGING TO THE ANY OTHER PERSON OTHER THA N THE PERSON REFERRED TO IN SECTION 153-A OF THE ACT. IT IS CONT ENDED THAT THE SAME ASSESSING OFFICER IS INVOLVED IN THE MATTER. T HIS FACT DOES NOT DISPENSE WITH ABOVE REQUIREMENT. IT IS SETTLED POSI TION OF LAW THAT WHEN A THING IS TO BE DONE IN ONE PARTICULAR MANNER UNDER LAW THIS HAS TO BE DONE IN THAT MANNER ALONE AND NOT OTHER W AY (SEE NAZIR AHMED V. KING EMPEROR). WE THINK THE LEARNED TRIBUN AL HAS CORRECTLY FOLLOWED THE PRINCIPLE. WE DO NOT FIND AN Y ELEMENT OF LAW TO BE DECIDED. 9.11 FROM THE ABOVE REPRODUCED PORTION OF THE ORDER S OF DELHI HIGH COURT AND AP HIGH COURT IT IS APPARENT THAT WHEN THE QUES TION REGARDING VALIDITY OF ASSUMPTION OF JURISDICTION IS TO BE DECIDED, THE SATISFACTION NOTE OF THE AO OF OTHER PERSON WOULD BE RELEVANT. THIS IS ALS O LOGICAL SINCE APPLICATION OF MIND MUST BE OF THE AO WHO IS ASSUMI NG JURISDICTION U/S 153C OF THE ACT. THE AO OF OTHER PERSON CANNOT AS SUME JURISDICTION IN A MECHANICAL MANNER BASED ON SATISFACTION RECORDED BY THE AO OF THE SEARCHED PERSON, WHERE BOTH THE ASSESSING OFFICERS ARE DIFFERENT. THEREFORE, WE ARE OF THE VIEW THAT IT IS FUTILE FOR THE LD. DR TO ARGUE THAT VALIDITY OF ASSUMPTION OF JURISDICTION HAS TO BE EX AMINED ON THE BASIS OF SATISFACTION RECORDED BY THE AO OF SEARCHED PERSON. 31 9.12 AFTER PERUSING THE SATISFACTION NOTE RECORDED BY THE AO OF OTHER PERSON AS WELL AS NOTE ON THE SATISFACTION SUBMITT ED BY THE ASSESSEE ALONGWITH ITS ENCLOSURES, AS DISCUSSED ABOVE, WE FIND THAT THE SEIZED DOCUMENTS DO NOT RELATE TO THE ASSESSMENT YEAR UNDE R CONSIDERATION I.E. AY 2008-09 AND NONE OF THE DOCUMENTS REFERRED TO IN THE SATISFACTION NOTE ARE INCRIMINATING. THIS IS FURTHER VALIDATED BY THE FACT THAT NO ADDITION ON THE BASIS OF THESE DOCUMENTS HAS BEEN MADE IN THE A SSESSMENT ORDER. THE ASSESSMENT ORDER DOES NOT REFER TO ANY SEIZED DOCUM ENT. EXPLANATION FURNISHED BY THE ASSESSEE WITH REGARD TO THE SEIZED DOCUMENTS REFERRED IN THE SATISFACTION NOTE IS AS UNDER :- S.NO. PARTICULARS 1. ANNEXURE A - 4 (PAGES 41/DB - 8) EXPLANATION CERTIFIED TRUE COPY OF THE BOARD RESOLUTION ON 23.3 .2011 AT THE REGISTERED OF FICE OF THE COMPANY, RESOLVING THE APPROVAL ON THE SUIT AGAINST MVL LTD. AND AUTHORIZI NG SH. PARAG DALMIA. THIS IS SELF EXPLANATORY. 2. ANNEXURE A - 4 (PAGES 96, 98, 100 - 106/DB - 8) EXPLANATION LETTERS TO M/S PURVANCHAL CONSTRUCTION WORKS PVT. L TD. FOR SUR RENDERING THE FOLLOWING APARTMENTS AT THEIR PROJECT VIZ., PURVANCHAL HEIGHTS AT GR. NOIDA, FO R THEIR BUY BACK AT COST. I) A-1/201 (PAGE 100) II) A-1/204 (PAGE 98 & 106) III) A-2/103 (PAGE 96 & 104) IV) A-2/207 (PAGE 102) COPIES OF PURCHASE DEEDS, SURRENDER LETTERS AND BANK STATEMENTS ARE ENCLOSED. 3. ANNEXURE A - 45(PAGES 305/DB - 8) EXPLANATION 32 WORKING PAPERS ON TRIAL BALANCE FOR THE PERIOD FROM 1.4.2010 TO 31.3.2011. 4. ANNEXURE A - 4 (PAGES 6 - 9/DB - 8) EXPLANATION WORKING PAPERS ON TRIAL BALANCE FOR THE PERIOD FROM 1.4.2011 TO 23.1.2012. 9.13 THE LD. DR COULD NOT CONTROVERT THE EXPLANATIO N OF THE ASSESSEE REGARDING THE ABOVE DOCUMENTS AT THE TIME OF HEARIN G. EVEN OTHERWISE THE AO HAS NOT MADE ANY ADDITION WITH REGARD TO THE ABO VE DOCUMENTS REFERRED TO IN THE SATISFACTION NOTE IN THE ASSESSM ENT ORDER FOR AY 2008-09 OR OTHER ASSESSMENT YEARS CONFIRMING THE FACT THAT THESE ARE NOT INCRIMINATING. COPIES OF THE ABOVE REFERRED DOCUMEN TS ARE ANNEXED IN THE PAPER BOOK FILED BY THE ASSESSEE AND A PERUSAL OF T HE SAME ALSO CONFIRMS THAT NONE OF THESE DOCUMENTS RELATE TO ASSESSMENT Y EAR UNDER CONSIDERATION I.E. AY 2008-09. 9.14 AS REGARDS DOCUMENTS AT SL. NO. 2 OF THE ABOVE TABLE IT WAS NOTED THAT THE SEIZED DOCUMENTS RELATE TO FOUR APARTMENTS BOOKED BY THE ASSESSEE - DALMIA INFRASTRUCTURE PVT. LTD. VIDE AGR EEMENTS DATED 9TH JANUARY 2009 IN THE PROJECT PURVANCHAL HEIGHT, PLOT NO. GH-02, ZETA-01, GREATER NOIDA, U.P. AND THE COPIES OF ALL FOUR PURC HASE AGREEMENTS AS APPENDED AS ANNEXURE A WERE DULY RECORDED IN THE BO OKS OF ACCOUNTS OF THE ASSESSEE FOR THE RELEVANT FINANCIAL YEAR. IT WA S FURTHER NOTED THAT AGAINST EXPECTATION, THE WHOLE PROJECT GOT IN TROUB LE BECAUSE OF AGITATION OF FARMERS AGAINST ARBITRARY ACQUISITION OF LANDS B Y GREATER NOIDA AUTHORITY AND THE FUTURE OF THE INVESTMENT TURNED GLOOMY. IT WAS FURTHER NOTED THAT IN VIEW OF ABOVE, ASSESEES INVESTMENTS FACING RISK OF GETTING ZERO AS SEVERAL ACQUISITIONS BY GREATER NOIDA AUTHORITY WER E SET ASIDE BY HONBLE 33 ALLAHABAD HIGH COURT, THE ASSESSEE STARTED EVALUAT ING VARIOUS POSSIBILITIES OF EXITING FROM THE PROJECT. HOWEVER, IN THE MEANT IME THE BUILDER HAD SENT A LETTER DATED 24 TH AUGUST, 2011 ASKING TO TAKE POSSESSION AND PAY THE STAMP DUTY AND CLEAR THE BALANCE OUTSTANDING, T HEREBY, INCREASING THE COST OF EACH APARTMENT BY APPROX. RS. 150/- PER SQ. FT. IN CASE DESPERATE SITUATION, THE BUILDER WAS PRESSED UPON T O ACCEPT SURRENDER OF THE SAME FOR WHICH THE BUILDER AGREED. COPIES OF SU RRENDER DOCUMENTS ARE PLACED ON RECORD. THE INVESTMENT WAS SHOWN UNDER LO ANS AND ADVANCES (BEING BOOKING AMOUNT OF THE FLATS) IN THE BOOKS O F ACCOUNTS OF ASSESSEE. COPY OF THE BALANCE SHEET AS AT 31.3.2011 IS ON REC ORD (SCHEDULE VII- CURRENT ASSETS- - C LOANS AND ADVANCES, WHICH REFLE CTS THE TOTAL FIGURE OF INVESTMENT AT RS. 5,41,09,000 AS LOANS AND ADVANCE ).AS THE BALANCE SHEET IS SHOWING A FIGURE OF RS. 9,03,87,251.64, A COPY OF LEDGER OF THE LOAN AND ADVANCES IS ON RECORD, EXPLAINING THE COMP ONENTS THEREOF. THESE 4 FLATS WERE SURRENDERED TO THE BUILDER (COPY OF T HE SURRENDER LETTER ALREADY ON RECORD, THE FOLLOWING PAYMENTS WERE RECE IVED- FLAT NO. A-1/201 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460964 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460965 30.11.2011 VIJAY BANK 30,06,900 30.11.2011 C. 4 60966 30.12.2011 VIJAY BANK 30,06,911 30.12.2011 FLAT NO. A-1/204 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460967 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460968 30.11.2011 VIJAY BANK 30,06,900 30.11.2011 C. 460969 30.12.2011 VIJAY BANK 30,06,911 30.12.2011 34 FLAT NO. A-2/103 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460970 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460971 30.11.2011 VIJAY BANK 25,26,305 30.11.2011 C. 460972 30.12.2011 VIJAY BANK 25,26,300 30.12.2011 FLAT NO. A-2/207 S.NO. CHEQUE NO. CHEQUE DATE DRAWN ON BANK CHEQUE AMOUNT CLEARING DATE A. 460973 19.10.2011 VIJAY BANK 5,00,000 25.10.2011 B. 460974 30.11.2011 VIJAY BANK 24,98,907 30.11.201 1 C. 460975 30.12.2011 VIJAY BANK 24,98,907 30.12.2011 9.15 THE ABOVE PAYMENTS ARE DULY REFLECTED IN THE B OOKS OF ACCOUNTS. A COPY OF THE BANK STATEMENT OF THE ROYAL BANK OF SCO TLAND IS ON RECORD. A COPY OF THE BALANCE SHEET AS AT 31.3.2012 IS ALSO O N RECORD IN WHICH THE OPENING BALANCE OF NON-CURRENT INVESTMENTS AS PER N OTE NO. 9, IS REDUCED RS. 5,41,09,000.00 WHICH REPRESENT THE AMOUNT RECE IVED FROM SURRENDER OF ABOVE FLATS. 9.16 IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT IN THE PRESENT CASE JURISDICTION HAS BEEN WRONGLY INVOKED AND THE ASSES SMENT ORDER WAS VOID- AB-INITIO SINCE THE ESSENTIAL JURISDICTIONAL REQUIR EMENT VIZ., THAT THE SEIZED DOCUMENTS MUST BE INCRIMINATING AND MUST RELATE TO THE AY'S WHOSE ASSESSMENTS ARE SOUGHT TO BE REOPENED HAS NOT BEEN MET. IT WAS NOTED THAT NONE OF THE DOCUMENTS REFERRED TO IN THE SATI SFACTION NOTE OF THE AO OF OTHER PERSON ARE INCRIMINATING AND NONE OF THE SE DOCUMENTS RELATE TO AY 2008-09. THEREFORE, THIS ISSUE OF JURISDICTIONAL REQUIREMENT HAS ALREADY BEEN SETTLED BY THE HONBLE SUPREME COURT IN THE CA SE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY 84 TAXMANN.COM 290 (SC) WHEREIN, THE HONBLE SUPREME COURT HAS OBSERVED AS UNDER:- SECTION 153C OF THE INCOME TAX ACT, 1961 SEARCH AND SEIZURE - ASSESSMENT OF INCOME OF ANY OTHER PERSON (VALIDITY OF NOTICE) ASSESSMENT YEARS 2000-01 TO 2003-04 WHETHER AS PER PROVISIONS OF SECTION 153C, INCRIMINATING MA TERIAL WHICH WAS SEIZED HAD TO PERTAIN TO ASSESSMENT YEARS IN 35 QUESTION - HELD, YES WHETHER WHERE LOOSE PAPERS FOUND AND SEIZED FROM RESIDENCE OF PRESIDENT OF ASSESSEE, AN EDUCATIONAL INSTITUTION, INDICATING CAPITATION FEES RECEIVED BY VARIOUS INSTITUTIONS RUN BY ASSESEE DID NOT ESTABLI SH CO- RELATION DOCUMENT WISE WITH ASSESSMENT YEARS IN QUE STION, NOTICE ISSUED UNDER SECTION 153C HAD RIGHTLY BEEN Q UASHED AND SET ASIDE. (HEAD NOTES ONLY). 9.17 WE FURTHER FIND THIS VIEW HAS ALSO BEEN TAKEN BY THE JURISDICTIONAL HIGH COURT IN FOLLOWING CASES:- -PR.CIT VS. INDEX SECURITIES PVT. LTD. 86 TAXMANN.C OM 84(DEL) - CIT VS. RRJ SECURITIES LTD. 62 TAXMANN.COM 391 (D EL) -ARN INFRASTRUCTURE INDIA LTD. VS. ACIT 81 TAXMANN. COM 260 (DEL) 9.18 IN THE CASE OF PR.CIT VS. INDEX SECURITIES PVT . LTD. 86 TAXMANN.COM 84(DEL) THE COURT HELD AS UNDER :- 32. IN THE PRESENT CASE, THE TWO SEIZED DOCUMENTS REFE RRED TO IN THE SATISFACTION NOTE IN THE CASE OF EACH ASSESSEE ARE THE TRIAL BALANCE AND BALANCE SHEET FOR A PERIOD OF FIVE MONT HS IN 2010. IN THE FIRST PLACE, THEY DO NOT RELATE TO THE AYS FOR WHICH THE ASSESSMENTS WERE REOPENED IN THE CASE OF BOTH ASSES SEES. SECONDLY, THEY CANNOT BE SAID TO BE INCRIMINATING. EVEN FOR THE AY TO WHICH THEY RELATED, I.E. AY 2011-12, THE AO FINA LISED THE ASSESSMENT AT THE RETURNED INCOME QUA EACH ASSESSEE WITHOUT MAKING ANY ADDITIONS ON THE BASIS OF THOSE DOCUMENT S. CONSEQUENTLY EVEN THE SECOND ESSENTIAL REQUIREMENT FOR ASSUMPTION OF JURISDICTION UNDER SECTION 153 C OF THE ACT WAS NOT MET IN THE CASE OF THE TWO ASSESSEES. 9.19 WE FURTHER FIND THAT LD. DR DID NOT PRODUCE AN Y CONTRARY RECORD AND DECISION TO THE RECORD AND DECISIONS RELIED UPO N BY THE LD. COUNSEL OF THE ASSESSEE. HOWEVER, THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. SINGHAD TECHNICAL EDUC ATION SOCIETY (SUPRA) AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RRJ SECURITIES LTD. 62 TAXMANN.COM 391 (DEL) AN D PR.CIT VS. INDEX SECURITIES PVT. LTD. 86 TAXMANN.COM 84(DEL), ARE SQ UARELY APPLICABLE IN THE PRESENT CASE. HOWEVER, THE CASE LAWS R ELIED UPON BY THE LD. CIT(DR) ARE OF LOWER COURTS AND DISTINGUISHABLE ON FACTS, THEREFORE, THEY ARE NOT APPLICABLE IN THE PRESENT CASE. THE DECISIO NS IN THE CASE OF PCIT VS. SUPER MALLS PVT. LTD. (2016) 76 TAXMANN.COM 267 (DELHI) AND PCIT VS. NAU NIDH OVERSEAS PVT. LTD. (ITA NO. 58/2017) H AVE BEEN CONSIDERED 36 BY THE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. I NDEX SECURITIES PVT. LTD. 86 TAXMANN.COM 84(DEL) DECIDED AGAINST THE REVENUE ON THE VALIDITY OF ASSUMPTION OF JURISDICTION U/S 153C OF THE ACT. THE DECISION IN THE CASE OF GANPATI FINCAP SERVICES (P) LTD. VS. CIT (2017) 82 TAXMANN.COM 408 (DELHI) AND PCIT VS. INSTRONICS LTD. (2017) 82 TAXM ANN.COM 357 (DELHI) MERELY HOLD THAT WHERE THE ASSESSING OFFICER OF THE PERSON SEARCHED AND THE OTHER PERSON ARE THE SAME THERE IS NO NEED FOR RECORDING TWO SEPARATE SATISFACTION NOTES. ON THE FACTS OF THE PR ESENT CASE WHERE ASSESSING OFFICER OF THE SEARCHED PERSON AND OTHER PERSON ARE NOT SAME THIS DECISION IS NOT RELEVANT. INTERESTINGLY IN THE CASE OF PCIT VS. INSTRONICS LTD. (2017) 82 TAXMANN.COM 357 (DELHI) THE MATER WAS RESTORED TO ITAT FOR CONSIDERATION OF FURTHER GROUN DS INCLUDING THE QUESTION WHETHER ASSUMPTION OF JURISDICTION BY THE AO UND SECTION 153C QUA THE ASESSEE WAS JUSTIFIED ON THE GROUND THAT TH E DOCUMENTS SEIZED AND STATED TO BELONG TO THE ASSESSEE WERE NOT INCR IMINATING. THE DECISION IN THE CASE OF CIT VS. CLASSIC ENTERPRISES (35 TAXM ANN.COM 244) LAYS DOWN THAT WHERE AFTER SEARCH AT BUSINESS PREMISES O F ASSESSEE-FIRM AND ITS PARTNER, BOOKS OF ACCOUNT WERE HANDED OVER TO C ONCERNED ASSESSING OFFICER, WHO AFTER RECORDING SATISFACTION ISSUED NO TICE UNDER SECTION 153C AND COMPLETED ASSESSMENT UNDER SECTION 153C/143(3), ASSESSMENT WAS IN ACCORDANCE WITH LAW. IN SAVESH KUMAR AGGARWAL VS . UOI 35 TAXMANN.COM 85 (ALL) IT WAS HELD THAT ASSESSING OFF ICER CAN PROCEED UNDER SECTION 153A TO FIND OUT SOURCE OF INCOME, EV EN IF SEIZED GOODS WERE RELEASED FOR VALID ENTRY IN STOCK BOOKS. IN RA JESH SUNDERDAS VASWANI VS. ACIT (2016) 76 TAXMANN.COM 311 (GUJARAT ) ISSUANCE NOTICE U/S 153C WAS HELD TO BE VALID AS THERE WAS PRIMA FA CIE INCRIMINATING MATERIAL. IN IN DR. KM MEHBOOB VS. DCIT (2012) 211 TAXMAN 52 (KER) IT WAS HELD THAT FOR TRANSFERRING FILE UNDER SECTION 1 53C, THERE IS NO NEED TO EXAMINE AS TO WHETHER EVIDENCE OR MATERIALS SEIZED IN COURSE OF SEARCH OF AN ASSESSEE REPRESENTS OR PROVES UNDISCLOSED INCOME OF ANOTHER ASSESSEE. THIS VIEW IS OPPOSITE TO THE LATEST DECIS IONS OF THE JURISDICTIONAL HIGH COURT I.E DELHI HIGH COURT AND HENCE RATIO OF DECISION OF KERELA HIGH COURT CANNOT BE APPLIED. THE DECISION IN THE CASE O F SSP AVIATION LTD. 20 TAXMANN.COM 214 (DELHI HIGH COURT) HAS ALREADY BEEN CONSIDERED BY THE SUPREME COURT IN THE CASE OF CIT VS. SINGHAD TECHNI CAL EDUCATION SOCIETY (SUPRA). 37 9.20 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCE S OF THE CASE AS EXPLAINED ABOVE AND RESPECTFULLY FOLLOWING THE DECI SION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. SINGH AD TECHNICAL EDUCATION SOCIETY (SUPRA) AS WELL AS THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURTS REFERRED ABOVE, WE ARE OF THE CONSIDERED VI EW THAT DOCUMENTS REFERRED TO IN THE SATISFACTION NOTE ARE RELATED TO ASSESSMENT YEAR IN DISPUTE I.E. AY 2008-09. THEREFORE, INVOCATION OF JURISDICTION IS VITIATED IN LAW AND WOULD RENDER THE ASSESSMENT VOID-AB-INITIO. ACCORDINGLY, WE CANCEL THE ASSESSMENT ORDER AS WELL AS APPELLATE O RDER. 9.21 SINCE THE ASSESSMENT ORDER IS BEING QUASHED ON THE VALIDITY OF ASSUMPTION OF JURISDICTION U/S 153C OF THE ACT REMA INING GROUND RAISED BY THE ASSESSEE HAVE BECOME ACADEMIC IN NATURE AND ARE THEREFORE NOT BEING ADJUDICATED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 19/07/2018. SD/- SD/- [T.S. KAPOOR] (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/07/2018 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR