ITO, New Delhi V. M/s. Prabhatam Developers Ltd., New Delhi

ITA 4308/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3458 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: CROSSOBJECTOR SHRI GAUTAM JAIN; P K KAMAL ADVOCAT
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Loose papers; Document seized; Question of law; Cancellation of registration; Documents seized
• Section: 69C; 153A; 69; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES F : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NOS.4307,4308 & 4309/DEL./2016 ASSESSMENT YEARS 2007-2008, 2008-09 & 2010-2011, THE INCOME TAX OFFICER, WARD-20(1), ROOM NO.218, 2 ND FLOOR, C.R. BUILDING, NEW DELHI. VS. M/S. PRABHATAM DEVELOPERS LTD., 38, RASTHRYA TOWER, RANI JHANSI ROAD, NEW DELHI 110055 PAN AAECP0839P (APPELLANT) (RESPONDENT) CROSS OBJECTION NOS.2, 3 & 4/DEL./2017 ARISING OUT OF ITA.NOS.4307, 4308 & 4309/DEL./2016 ASSESSMENT YEARS 2007-2008, 2008-2009 & 2010-2011, M/S. PRABHATAM DEVELOPERS LTD., 38, RASTHRYA TOWER, RANI JHANSI ROAD, NEW DELHI 110055 PAN AAECP0839P VS. THE INCOME TAX OFFICER, WARD-20(1), ROOM NO.218, 2 ND FLOOR, C.R. BUILDING, NEW DELHI. (CROSS - OBJECTOR) (RESPONDENT) FOR REVENUE : SMT. PARAMITA TRIPATHY, CIT - D.R. FOR CROSS-OBJECTOR SHRI GAUTAM JAIN & SHRI P.K. KAMAL, ADVOCATES. DATE OF HEARING : 01.02.2018 DATE OF PRONOUNCEMENT : 09 .02.2018 2 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. ORDER PER BHAVNESH SAINI, J.M. THE DEPARTMENTAL APPEALS AS WELL AS CROSS OBJECTIONS BY ASSESSEE ARE DIRECTED AGAINST DIFFERE NT ORDERS OF THE LD. CIT(A)-7, NEW DELHI, DATED 27 TH MAY, 2016, FOR THE A.YS. 2007-2008, 2008-2009 AND 2010-2011. 2. THE DEPARTMENT IN ALL ITS APPEALS RAISED A COMM ON GROUND CHALLENGING THE ORDERS OF LD. CIT(A) IN QUAS HING THE ASSESSMENTS OBSERVING THAT NOTICE ISSUED UNDER SECT ION 153C OF THE ACT IS NOT VALID AND CONSEQUENTLY, THE ASSES SMENTS FRAMED BEING LEGALLY UNSUSTAINABLE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE WITHDREW A LL THE CROSS OBJECTIONS. THE SAME ARE DISMISSED AS WIT HDRAWN. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. 5. THE ISSUES IN DEPARTMENTAL APPEALS ARE IDENTICA L AND SUBMISSIONS OF THE PARTIES ARE SAME. THE FINDINGS O F THE LD. CIT(A) AND MATERIAL ON RECORD ARE SAME IN ALL THE A PPEALS. 3 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. THEREFORE, THE DEPARTMENTAL APPEALS ARE DECIDED TOG ETHER BY TAKING FACTS FROM THE A.Y. 2007-2008. 6. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASS ESSEE- COMPANY FILED RETURN OF INCOME ORIGINALLY WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE I.T. ACT, 1961. SUBSEQU ENTLY, AN INFORMATION WAS RECEIVED FROM ACIT, CIRCLE-2, GWALI OR VIDE LETTER DATED 30 TH MAY, 2012 PASSING ON CERTAIN SEIZED DOCUMENTS RELATING TO THE ASSESSEE-COMPANY WERE FOUND DURING THE COURSE OF SEARCH IN THE K.S. OIL GROUP ON 11 TH MARCH, 2010. THEREAFTER, AFTER DULY RECORDING SATISFACTION, NOTICE UNDER SEC TION 153C OF THE I.T. ACT, 1961, WAS SERVED UPON THE ASSESSEE-CO MPANY. THE ASSESSEE-COMPANY IS A BUILDER. THE ASSESSEE-COMPANY WAS INCORPORATED ON 17 TH NOVEMBER, 2006. THE ASSESSEE-COMPANY FILED REQUISITE DETAILS AND DOCUMENTS AT ASSESSMENT STAGE. DURING THE COURSE OF SEARCH AT THE OFFICE PREMISES OF K.S. CITY P. LTD., AND M/S. JAGANNATH IMPEX P. LTD., AT INDOR E, THE DOCUMENT LPS-6 WAS SEIZED, OUT OF WHICH, PAGE NO-1 IS RELATED TO THE ASSESSEE-COMPANY. THE DOCUMENT IS A LETTER W RITTEN BY 4 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. SHRI ASHISH GUPTA, DIRECTOR OF M/S. K.S. CITY P. LT D., TO HIS FATHER-IN-LAW SHRI RAMESH CHAND GARG, CHAIRMAN, M/S . K.S. OIL GROUP, IN WHICH HE HAS DESCRIBED THE LAND ACQUI SITION AND DEVELOPMENT DEALS THAT HAVE TAKEN PLACE BETWEEN THE ASSESSEE- COMPANY AND M/S. K.S. CITY P. LTD., FOR LAND AT BYP ASS ROAD, INDORE, KHANDWA ROAD AND PITHAMPURA. THIS LETTER HA S BEEN FAXED TO SHRI RAMESH CHAND GARG AT THE MORENA OFFIC E ON 29 TH MAY, 2009 AS MENTIONED ON THE OVERLEAF OF THIS PAGE . THIS LETTER DESCRIBES THE TRANSACTION ON LAND ACQUISITION/DEVEL OPMENT AT BYPASS ROAD @ RS.47.50 LAKHS PER ACRE. IN THIS DEAL , SHARE OF THE ASSESSEE-COMPANY IS SHOWN AT 10% AND M/S. K.S. CITY P. LTD., OF 90% EACH RESPECTIVELY. THE ASSESSEE-COMPAN Y WAS REQUIRED TO EXPLAIN PAGE-1 OF LPS-6, GIVING COMPLET E DETAILS OF SOURCE OF INVESTMENT, TREATMENT IN ITS BOOKS OF ACC OUNT ALONG WITH DOCUMENTARY EVIDENCE FOR THE SAME. THE ASSESSE E- COMPANY SUBMITTED BEFORE A.O. THAT HIS COMPANY HAS ADVANCED AMOUNTS TO M/S. K.S. CITY P. LTD., FOR THE PURPOSE OF JOINTLY DEVELOPING COLONIES, BUT DUE TO SOME DIFFERENCES, T HE AGREEMENT WOULD NOT BE EXECUTED AND THE DEAL WAS CANCELLED. T HE RATES 5 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. STATED IN THE DOCUMENTS SEIZED FROM THE PREMISES OF M/S. K.S. CITY P. LTD., ARE NOT RELEVANT TO ASSESSEE-COMPANY AS THIS IS SOME THING CONVEYED BY MR. ASHISH GUPTA TO MR. RAME SH CHANDRA GARG. DURING THE COURSE OF SEARCH IN O/O. S HRI SANJAY AGARWAL, MANAGING DIRECTOR OF M/S. K.S. OILS LTD., A DOCUMENT LPS-4 WAS SEIZED, OUT OF WHICH, PAGE NOS.69 AND 70 ARE RELATED TO THE ASSESSEE-COMPANY. THIS IS CHART OF LAND ACQU IRED/ REGISTERED IN THE VARIOUS COMPANIES OF M/S. K.S. CI TY GROUP. THIS CHART SHOWS TOTAL LAND ACQUIRED BY M/S. K.S. G ROUP AT BYPASS ROAD AT RS.40.41 CRORES ON 272.92 ACRES. AS AGAINST THIS, THE ACTUAL COST OF LAND MENTIONED IN THE LETT ER AT PAGE NO.1, LPS-6 ABOVE IS RS.1229.63 CRORES @ RS.47.50 LAKHS P ER ACRE. THE ASSESSEE-COMPANY WAS REQUIRED TO EXPLAIN PAGE-7 0 OF LPS- 4, GIVING COMPLETE DETAILS OF SOURCE OF INVESTMENT, TREATMENT IN ITS BOOKS OF ACCOUNT ALONG WITH DOCUMENTARY EVIDENC E FOR THE SAME. THE COPY OF THE SHOW CAUSE NOTICE IS REPRODUC ED IN THE ASSESSMENT ORDER IN WHICH THE A.O. ESTIMATED ON-MON EY PAID IN DIFFERENT ASSESSMENT YEARS AND ESTIMATED THE AMO UNT OF 6 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. RS.1,62,82,284 FOR A.Y. 2007-2008 AND DIRECTED THE ASSESSEE- COMPANY AS TO WHY THIS ADDITION BE NOT MADE. 6.1. THE ASSESSEE-COMPANY FILED REPLY BEFORE A.O. WHICH IS REPRODUCED IN THE ASSESSMENT ORDER IN WHICH THE ASSESSEE- COMPANY BRIEFLY EXPLAINED AS REGARDS TO PAGE NOS 65 -70, ASSESSEE-COMPANY IS UNABLE TO COMMENT ON THIS DOCUM ENT AS NEITHER THE SEIZED DOCUMENTS CONTAIN THE NAME OF TH E ASSESSEE- COMPANY NOR DOES IT BELONG TO THE ASSESSEE-COMPANY AS THE SAME HAS BEEN OBTAINED FROM SOMEBODY ELSES OFFICE. THE DOCUMENTS SEEMS TO BE INTERNAL CALCULATION OF K.S. CITY AND GROUP COMPANIES. PAGE NOS.69 AND 70 CONTAINS THE DE TAILS OF LAND HOLDING OF K.S. CITY P. LTD., AND OTHER COMPAN IES. THE ASSESSEE-COMPANY UNABLE TO COMMENT ON THE STATUS OF THE LANDS AND THE VALUE STATED IN THE CHART AS ASSESSEE -COMPANY DID NOT HAVE ACCESS TO SUCH INTERNAL CALCULATION OF SUCH COMPANIES. THE CHART DID NOT CONTAIN NAME OF THE AS SESSEE- COMPANY. THE DOCUMENTS REFERRED IN THE NOTICE SEEMS TO BE SOME INTERNAL PROJECTIONS/CALCULATIONS MADE BY K.S. CITY GROUP 7 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. FOR MAKING PROPOSALS FOR JOINT DEVELOPMENT OR SUCH OTHER ASSOCIATIONS. 6.2. WITH REGARD TO PAGE-1, LPS-6, IT WAS EXPLAINE D THAT LAND WAS TO BE PURCHASED BY K.S. CITY AND DEVELOPME NT WAS TO BE DONE BY ASSESSEE-COMPANY. HOWEVER, THE ASSESSEE- COMPANY HAS NOT INCURRED A SINGLE PENNY ON THE DEVELOPMENT OF THE KHANDWA ROAD LANDS AS THE AGREEMENT COULD NOT BE CONSUMMATED. SINCE THE ASSESSEE-COMPANY HAS NOT PRO CEEDED WITH THE AGREEMENT, THEREFORE, MAKING HYPOTHETICAL ADDITION IS UNJUSTIFIED. IT WAS FURTHER SUBMITTED THAT THE SEIZ ED PAPER STATED TO BE LETTER WRITTEN BY SHRI ASHISH GUPTA (S ON-IN-LAW) TO SHRI RAMESH CHANDRA GARG (FATHER-IN-LAW). THE ASSES SEE- COMPANY ENQUIRED FROM SHRI ASHISH GUPTA REGARDING T HIS AND IT IS EXPLAINED THAT HE HAS NOT MADE ANY SUCH LETTE R BECAUSE HE CANNOT CALL HIS FATHER-IN-LAW AS CHACHAJI WHICH IS MENTIONED IN THE SEIZED PAPER. NONE OF THESE DOCUMENTS HAVE B EEN SIGNED BY THE ASSESSEE-COMPANY. THE ASSESSEE-COMPANY FURTH ER EXPLAINED THAT IT HAS NOT PURCHASED ANY LAND AS IS IN THE SEIZED 8 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. PAPER. THE ASSESSEE-COMPANY HAS MADE PAYMENT TO K.S . CITY PVT. LTD., MOST OF THE DOCUMENTS ARE ESTIMATION/PRO JECTION/ INTERNAL WORKING OF K.S. CITY GROUP WITHOUT ANY CON FIRMATION FROM ASSESSEE-COMPANY. HENCE, THEY DO NOT BELONG TO THE ASSESSEE-COMPANY. THERE IS NO SINGLE EVIDENCE OF AN Y ON-MONEY PAYMENT HAVE BEEN BROUGHT ON RECORD EXCEPT WHAT IS RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE-COMPANY HAS N EITHER PURCHASED NOR SOLD LAND TO K.S. CITY P. LTD., THERE FORE, MAKING ADDITION IS WHOLLY UNJUSTIFIED. K.S. CITY PVT. LTD. , HAS STARTED REPAYING THE AMOUNT TO THE ASSESSEE-COMPANY. THE AS SESSEE- COMPANY FURTHER EXPLAINED THAT IT DID NOT HOLD ANY BENEFICIAL OWNERSHIP OF ANY OF THE COMPANIES NAMED IN THE SEIZ ED PAPER/CHART. THE A.O. HOWEVER, DID NOT ACCEPT THE C ONTENTION OF ASSESSEE-COMPANY AND MADE THE ADDITION OF RS.1,6 2,82,284 ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE I.T. ACT IN A.Y. 2007-2008 AND PASSED ORDER UNDER S ECTIONS 153C/143(3) OF THE I.T. ACT AND MADE SIMILAR ADDITI ONS IN REMAINING ASSESSMENT YEARS OF THE DIFFERENT AMOUNTS ON THE SAME BASIS. 9 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. 7. THE ASSESSEE-COMPANY CHALLENGED THE AFORESAID ADDITIONS BEFORE LD. CIT(A) AS WELL AS CHALLENGED T HE ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE I.T. ACT FOR ALL THE ASSESSMENT YEARS. 7.1. THE WRITTEN SUBMISSIONS OF THE ASSESSEE-COMPA NY CHALLENGING THE ABOVE ISSUES ARE REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSESSEE-COMPANY BRIEFLY EXPLAIN ED THAT THE A.O. HAS MENTIONED IN THE ASSESSMENT ORDER UNDER SE CTION 153C OF THE I.T. ACT THAT INFORMATION WAS RECEIVED FROM ACIT, GWALIOR THAT CERTAIN SEIZED DOCUMENTS RELATING TO A SSESSEE- COMPANY WERE FOUND DURING THE COURSE OF SEARCH IN T HE CASE OF K.S. OIL GROUP. IT WAS FURTHER SUBMITTED THAT THERE IS NO SATISFACTION AS PER SECTION 153C OF THE I.T. ACT. T HE ASSESSEE- COMPANY RELIED UPON SEVERAL DECISIONS OF THE TRIBUN AL IN SUPPORT OF ITS CONTENTION. IT WAS ALSO SUBMITTED TH AT A.O. HAS NOT REFERRED TO ANY MATERIAL MUCH LESS COGENT MATER IAL TO ASSUME AND CONCLUDE WITH THE DOCUMENTS SEIZED FROM THE PREMISES OF THE SEARCHED PERSON BELONGS TO THE ASSE SSEE 10 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. COMPANY AND DO NOT BELONG TO SEARCHED PERSON. IT WA S SUBMITTED THAT IN THE ABSENCE OF SUCH A BURDEN HAVI NG BEEN DISCHARGED BY THE SEARCHED PERSON, INVOCATION OF PR OVISIONS CONTAINED IN SECTION 153C OF THE I.T. ACT, IS NOT I N ACCORDANCE WITH LAW. THE ASSESSEE-COMPANY RELIED UPON THE DECI SIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF PEPSI FOODS PVT. LTD., VS. ACIT REPORTED IN 367 ITR 112 AND PEPSI CO. INDI A HOLDING PVT. LTD., 370 ITR 295. IT WAS, THEREFORE, SUBMITTE D THAT SINCE THE FOUNDATIONAL PRE-CONDITION HAS NOT BEEN SATISFI ED, THEREFORE, A.O. HAS ERRED IN LAW AND ON FACT IN ASSUMING JURIS DICTION UNDER SECTION 153C OF THE I.T. ACT. IT WAS SUBMITTE D THAT IT IS AN ADMITTED POSITION THAT ALL THE DOCUMENTS ADMITTEDLY ARE NOT BELONGING TO THE ASSESSEE-COMPANY. THERE IS NO MATE RIAL MUCH LESS ANY TANGIBLE AND RELEVANT MATERIAL TO SHOW THA T A.O. OF THE SEARCHED PERSON WAS SATISFIED THAT SEIZED DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON, SO AS TO REBUT THE P RESUMPTION UNDER SECTION 292C OF THE I.T. ACT. THERE IS NO DIS CLAIMER ON THE PART OF THE SEARCHED PERSON IN SO FAR AS THE SEIZED DOCUMENTS ARE CONCERNED. THE PHOTO COPY OF THE DOCUMENTS WOUL D NOT 11 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. NECESSARY MEAN AND IMPLY THAT THEY BELONG TO THE PE RSON WHO HOLDS ORIGINALLY AND UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION DO NOT BELONG TO THE SEARCHED PERSON, I NVOCATION OF SECTION 153C OF THE ACT IS NOT VALID. 8. THE LD. CIT(A) CONSIDERING THE SATISFACTION NOT E, MATERIAL ON RECORD IN THE LIGHT OF SUBMISSIONS OF T HE ASSESSEE- COMPANY AND DECISIONS OF THE HONBLE DELHI HIGH COU RT HELD THAT THE ISSUE OF NOTICE UNDER SECTION 153C OF THE I.T. ACT, IS NOT VALID AND ACCORDINGLY, QUASHED THE SAME. THE RESULT ANT ADDITIONS WERE ACCORDINGLY, DELETED. THE FINDINGS O F THE LD. CIT(A) IN PARAS 2.2 TO 2.12 OF THE ORDER ARE REPROD UCED AS UNDER: 2.2. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND WRITTEN SUBMISSION FILED BY THE LD. AR. THIS GR OUND RELATES TO ASSUMPTION OF JURISDICTION U/S 153C OF T HE ACT. THE AO ON THE BASIS OF SATISFACTION NOTE RECORDED B Y THE AO OF THE SEARCHED PERSON PROCEEDED TO ASSUME JURISDICTION AND ISSUED NOTICE U/S 153C TO THE APPE LLANT COMPANY. THE SATISFACTION NOTE RECORDED BY THE AO OF THE SEARCHED PERSON IS AS UNDER: 12 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. SATISFACTION NOTE SATISFACTION NOTE IN THE CASE OF PRABHATAM DEVELOPERS LTD. (AAECP0839P) FOR THEA.Y. 2004-05 TO 2010-11 FOR TAKING ACTIION U/S 153C/148 OF THE INCOME TAX ACT. 1961. DURING THE COURSE OF SEARCH ACTION AT THE PREMISES OF (PARTY NO. 35 PREMISES OF M/S CHAHAT INFRASTRUCTURE PVT. LTD. 201 STARLIT TOWER, Y.N. ROAD. OPPOSITE TO HEAD OFFICE OF STATE BANK OF INDORE, INDORE (M.P.) CERTAIN INCRIMINATING DOCUMENTS (LPS-2 AND LPS-6) WERE FOUND AND SEIZED. I AM SATISFIED THAT THE SOME DOCUMENTS/PAPERS BELONGS TO PRABHATAM DEVELOPERS HENCE, CONCERN ASSESSING OFFICER IS INTIMATED TO TAKE NECESSARY ACTION U/S 1530/148 OF THE I.T. ACT, 1961 FOR VERIFICATION OF THE SAME. (S.L. KATARA) ASSTT. COMMISSIO NER OF INCOME TAX CI RCLE-2, GWALIOR' 2 3. THE LD. AR HAS ARGUED THAT ASSUMPTION OF JURISDICTION ON THE BASIS OF THE AFORESAID SATISFAC TION 13 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. NOTE IS NOT AS PER PROVISIONS OF LAW. HE HAS CONTEN DED THAT SINCE NO MATERIAL BELONGING TO THE APPELLANT COMPANY WAS SEIZED IN PURSUANCE OF SEARCH ON THE ORIGINAL PERSON, THE ASSUMPTION OF JURISDICTION WAS OTHERWISE NOT AS PER LAW. 2.4. THE HON'BLE DELHI HIGH COURT IN THE CASE OF P EPSI FOODS (P) LTD. VS. ACIT 367 ITR 112 HAS HELD AS UND ER: 'ON A PLAIN READING OF SECTION 153C, IT IS EVIDENT THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST B E 'SATISFIED' THAT, INTER ALIA, ANY DOCUMENT SEIZED O R REQUISITIONED 'BELONGS TO' A PERSON OTHER THAN THE SEARCHED PERSON. IT IS ONLY THEN THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON CAN HANDOVER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON (OTHER THAN THE SEARCHED PERSON). FURTHERMORE, IT IS ONLY AFTER SUCH HANDING OVER THAT THE ASSESSING OFFICER OF SUCH OTHER PERSON CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR REASSES S HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SEC TION 153A. THEREFORE, BEFORE A NOTICE UNDER SECTION 153C CAN BE ISSUED TWO STEPS HAVE TO BE TAKEN. THE FIRST STEP IS THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE AT A CLEAR SATISFACTION THAT A DOCUMENT SEIZED FROM HIM DOES NOT BELONG TO HIM BUT 14 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. TO SOME OTHER PERSON. THE SECOND STEP IS AFTER SUC H SATISFACTION IS ARRIVED AT THAT THE DOCUMENT IS HAN DED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM THE SAID DOCUMENT 'BELONGS. IN THE PRESENT CASES, IT H AS BEEN URGED ON BEHALF OF THE PETITIONER THAT THE FIR ST STEP ITSELF HAS NOT BEEN FULFILLED. FOR THIS PURPOSE IT WOULD BE NECESSARY TO EXAMINE THE PROVISIONS OF PRESUMPTIONS AS INDICATED ABOVE. SECTION 132(4A)(I) CLEARLY STIPULATES THAT WHEN, INTER ALIA, ANY DOCUM ENT IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON. IT IS SIMILARLY PROVIDED IN SECTION 292C(1)(I). IN OTHER WORDS, WHENEVER A DOCUMENT IS FOUND FROM A PERSON WHO IS BEING SEARCHED THE NORMAL PRESUMPTION IS THAT THE S AID DOCUMENT BELONGS TO THAT PERSON. IT IS FOR THE ASSE SSING OFFICER TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR 'SATISFACTION' THAT THE DOCUMENT IN F ACT BELONGS TO SOMEBODY ELSE. THERE MUST BE SOME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICER BEFOR E HE/SHE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELONG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE. SURMISE AND CONJECTURE CANNOT TAK E THE PLACE OF 'SATISFACTION'. 15 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. IT IS EVIDENT FROM THE ABOVE SATISFACTION NOTE THAT APART FROM SAYING THAT THE DOCUMENTS BELONGED TO TH E PETITIONER AND THAT THE ASSESSING OFFICER IS SATISF IED THAT IT IS A FIT CASE FOR ISSUANCE OF A NOTICE UNDE R SECTION 153C, THERE IS NOTHING WHICH WOULD INDICATE AS TO H OW THE PRESUMPTIONS WHICH ARE TO BE NORMALLY RAISED AS INDICATED ABOVE, HAVE BEEN REBUTTED BY THE ASSESSIN G OFFICER. MERE USE OR MENTION OF THE WORD SATISFACT ION' OR THE WORDS I AM SATISFIED' IN THE ORDER OR THE N OTE WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C OF THE SAID AC T. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASO NS OR BASIS FOR THE CONCLUSION THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUME NTS BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. WE ARE AFRAID, THAT GOING THROUGH THE CONTENTS OF THE SATISFACTION NOTE, WE ARE UNABLE TO DISCERN ANY 'SATISFACTION' OF THE KIND REQUIRED UNDER SECTION 153C OF THE SAID ACT. THIS BEING THE POSITION THE VERY FIRST STEP PRIOR T O THE ISSUANCE OF A NOTICE UNDER SECTION 153C OF THE SAID ACT HAS NOT BEEN FULFILLED. INASMUCH AS THIS CONDITION PRECEDENT HAS NOT BEEN MET, THE NOTICES UNDER SECTI ON 153C ARE LIABLE TO BE QUASHED. IT IS ORDERED ACCORD INGLY. 16 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. THE WRIT PETITIONS ARE ALLOWED AS ABOVE. THERE SHAL L BE NO ORDER AS TO COSTS.' 2.5. IN THE CASE OF PEPSICO INDIA HOLDING (P) LTD. 370 ITR 295, THE HON'BLE DELHI HIGH COURT HAS HELD AS UNDER : '13. HAVING SET OUT THE POSITION IN LAW IN THE DECI SION OF THIS COURT IN THE CASE OF PEPSI FOODS PVT. LTD. (SUPRA), IT MUST BE SEEN AS TO WHETHER THE ASSESSING OFFICER OF THE SEARCHED PERSON (THE JAIPURIA GROUP) COULD BE S AID TO HAVE ARRIVED AT A SATISFACTION THAT THE DOCUMENT S MENTIONED ABOVE BELONGED TO THE PETITIONERS. 14. FIRST OF ALL WE MAY POINT OUT, ONCE AGAIN, THAT IT IS NOBODY'S CASE THAT THE JAIPURIA GROUP HAD DISCLAIMED THESE DOCUMENTS AS BELONGING TO THEM. UNLESS AND UNTIL IT IS ESTABLISHED THAT DOCUMENTS D O NOT BELONG TO THE SEARCHED PERSON, THE PROVISIONS O F SECTION 153C OF THE SAID ACT DO NOT ATTRACTED BECAU SE THE VERY EXPRESSION USED IN SECTION 153C OF THE SAI D ACT IS THAT, 'WHERE THE ASSESSING OFFICER IS SATISF IED 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 PERS ON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A . .' 17 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. IN VIEW OR 'HIS PHRASE, IT IS NECESSARY MM BEFORE T HE PROVISIONS OF SECTION 153C OF THE SAID ACT CAN BE INVOKED, THE ASSESSING OFFICER OF THE SEARCHED PERS ON MUST BE SATISFIED THAT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE PERSON REFERRED TO IN SECTION 153A (I.E., THE SEARCHED PER SON). IN THE SATISFACTION NOTE, WHICH IS THE SUBJECT MATT ER OF THESE WRIT PETITIONS, THERE IS NOTHING THEREIN TO I NDICATE THAT THE SEIZED DOCUMENTS DO NOT BELONG TO THE JAIPURIA GROUP. THIS IS EVEN APART FROM THE FACT TH AT, AS WE HAVE NOTED ABOVE, THERE IS NO DISCLAIMER ON T HE PART OF THE JAIPURIA GROUP IN SO FAR AS THESE DOCUMENTS ARE CONCERNED. 15. SECONDLY, WE MAY ALSO OBSERVE THAT THE FINDING OF PHOTOCOPIES IN THE POSSESSION OF A SEARCHED PERS ON DOES NOT NECESSARILY MEAN AND IMPLY THAT THEY 'BELONG TO THE PERSON WHO HOLDS THE ORIGINALS. POSSESSION OF DOCUMENTS AND POSSESSION OF PHOTOCOPIES OF DOCUMENTS ARE TWO SEPARATE THINGS. WHILE THE JAIPURIA GROUP MAY BE THE OWNER OF THE PHOTOCOPIES OF THE DOCUMENTS IT IS QUITE POSSIBLE T HAT THE ORIGINALS MAY BE OWNED BY SOME OTHER PERSON. UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION, WHETHER THEY BE PHOTOCOPIES OR ORIGINALS, 18 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. DO NOT BELONG TO THE SEARCHED PERSON, THE QUESTION OF INVOKING SECTION 153C OF THE SAID ACT DOES NOT ARIS E. 16. THIRDLY, WE WOULD ALSO LIKE TO MAKE IT DEA R THAT THE ASSESSING OFFICERS SHOULD NOT CONFUSE THE EXPRESSION 'BELONGS TO' WITH THE EXPRESSIONS 'RELAT ES TO' OR 'REFERS TO'. A REGISTERED SALE DEED, FOR EXA MPLE, 'BELONGS TO' THE PURCHASER OF THE PROPERTY ALTHOUGH IT OBVIOUSLY 'RELATES TO' OR 'REFERS TO' THE VENDOR. I N THIS EXAMPLE IF THE PURCHASERS PREMISES ARE SEARCHED AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT BE SA ID THAT IT 'BELONGS TO' THE VENDOR JUST BECAUSE HIS NA ME IS MENTIONED IN THE DOCUMENT. IN THE CONVERSE CASE IF THE VENDOR'S PREMISES ARE SEARCHED AND A COPY OF TH E SALE DEED IS SEIZED, IT CANNOT BE SAID THAT THE SAI D COPY 'BELONGS TO' THE PURCHASER JUST BECAUSE IT REF ERS TO HIM AND HE (THE PURCHASER) HOLDS THE ORIGINAL SA TE DEED. IN THIS LIGHT, IT IS OBVIOUS THAT NONE OF THE THREE SETS OF DOCUMENTS COPIES OF PREFERENCE SHARES, UNSIGNED LEAVES OF CHEQUE BOOKS AND THE COPY OF THE SUPPLY AND LOAN AGREEMENT-CAN BE SAID TO 'BELONG TO ' THE PETITIONER. 17. IN VIEW OF THE FOREGOING DISCUSSION, WE D O NOT FIND THAT THE INGREDIENTS OF SECTION 153C OF THE SA ID ACT HAVE BEEN SATISFIED IN THIS CASE. CONSEQUENTLY, 19 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. THE NOTICES DATED AUGUST 2, 2013, ISSUED UNDER SECTION 153C OF THE SAID ACT ARE QUASHED. ACCORDING LY ALL PROCEEDINGS PURSUANT THERETO STAND QUASHED. 18. THE WRIT PETITIONS ARE ALLOWED AS ABO VE. THERE SHALL BE NO ORDERS AS TO COSTS. 19. ALL PENDING APPLICATIONS ALSO STAND D ISPOSED OF.' 2.6. THE HONBLE JURISDICTIONAL HIGH COURT IN THE JUDGEMENTS REFERRED ABOVE HAVE DEFINED PRINCIPLES WHICH PREMISE THE OPERATION OF SECTION 153C OF THE ACT. IN THE PRESENT APPEAL, THE FACTS ARE THAT THER E WAS A SEARCH AT THE PREMISES OF M/S CHAHAT INFRASTRUCTU RE (P) LTD. 201 STARLIT TOWER, Y.N. ROAD, OPPOSITE TO HEAD OFFICE OF STATE BANK OF INDORE, INDORE (M.P.). PURS UANT TO THE SEARCH ACIT, CIRCLE-2, GWALIOR IN THE SATISFACTION NOTE RECORDS THAT CERTAIN INCRIMINATIN G DOCUMENTS (LPS-2 & LPS-6) WERE FOUND AND SEIZED AT THE PREMISES AND HE THEREFORE WAS SATISFIED THAT SOME DOCUMENTS/PAPERS BELONGS TO M/S PRABHATAM DEVELOPERS, AND HENCE, THE CONCERNED AO IS INTIMATE D TO TAKE NECESSARY ACTION U/S 153C/148 OF THE ACT FO R VERIFICATION OF THE SAME. 20 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. 2.7. IT IS EVIDENT THAT IN THE FIRST INSTANCE, N O CLEAR SATISFACTION FOR ASSUMPTION OF JURISDICTION U/S 153 C OF THE ACT IS RECORDED IN THE NOTE AS IT IS STATED THA T ACTION MAY BE TAKEN U/S 153/148 OF THE ACT FOR VERIFICATIO N OF THE DOCUMENTS. THE AO OF THE SEARCHED PERSON HAS NOT HELD THAT THE PERSON SEARCHED HAVE DISCLAIMED T HE OWNERSHIP OF THE SAID PAPERS FOUND FROM THEIR PREMISES. THE JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSI FOODS (P) LTD. VS. ACIT (SUPRA) HAS HELD THAT IN RESPECT OF ANY DOCUMENT FOUND FROM THE PREMISES OF THE SEARCHED PERSON, IT IS FOR THE AO OF THE SEARCH ED PERSON TO REBUT THE PRESUMPTION AND COME TO A CONCLUSION OR SATISFACTION THAT THE DOCUMENTS BELON GS TO SOMEBODY ELSE. FURTHER, THERE MUST BE COGENT MATERIAL AVAILABLE WITH THE AO BEFORE ARRIVING AT T HE SATISFACTION THAT THE SEIZED DOCUMENTS DOES NOT BELONG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE. IT IS NOTED FROM THE SATISFACTION NOTE THAT NO MATE RIAL HAS BEEN BROUGHT OUT OR RECORDED TO SHOW THAT THE A O OF THE SEARCHED PERSON WAS SATISFIED THAT THE SEIZE D DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON SO A S TO REBUT THE PRESUMPTION U/S 292C OF THE ACT. A SIM PLE OBSERVATION THAT SOME DOCUMENTS/PAPERS BELONG TO THE APPELLANT COMPANY DOES NOT SATISFY THE PRECONDITION PROVIDED U/S 153C OF THE ACT AS OBSERV ED 21 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. IN THE JUDGEMENTS OF THE HON'BLE DELHI HIGH COURT REFERRED ABOVE. IT IS ALSO SEEN THAT THE DOCUMENTS/PAPERS STATED TO BE BELONGING TO THE APPELLANT HAVE ALSO NOT BEEN IDENTIFIED. IT IS RELE VANT TO MENTION HERE THAT CBDT VIDE LETTER DATED 31.03.2014 HAD ISSUED GUIDELINES REGARDING PROVISIONS OF SECTION 153C OF THE ACT IN WHICH IT H AS BEEN PROVIDED THAT DUE DILIGENCE MUST BE OBSERVED B Y AO OF THE SEARCHED PERSON WHILE RECORDING SATISFACT ION IN CASES WHERE DOCUMENTS FOUND AND SEIZED DURING THE SEARCH BELONGS TO ANY OTHER PERSON. 2.8. THE AO HAS REFERRED TO DOCUMENTS/PAPERS IN LPS -4 & LPS-6 IN THE ASSESSMENT ORDER. IT IS SEEN THAT TH E AFORESAID DOCUMENTS ARE EITHER LEDGER ACCOUNTS OF T HE GROUP COMPANIES OF THE PERSON SEARCHED OR OF THE APPELLANT IN THE BOOKS OF M/S K. S. CITY (P) LTD OR HAND WRITTEN SHEETS OR COMPUTERIZED TABULATION SHEETS WH ICH CANNOT BE SAID TO BE PAPERS BELONGING TO THE APPELL ANT. THUS, IT IS NOT A CASE WHERE THE AO OF THE SEARCHED PERSON HAS BEEN ABLE TO DEMONSTRATE THAT ANY PAPERS BELONGING TO THE APPELLANT WERE SEIZED AS A RESULT OF SEARCH ON M/S. CHAHAT INFRASTRUCTURE (P) LTD. MERE FACT THAT PAPERS ARE PERTAINING OR RELATING DOES NOT CON FER JURISDICTION. 22 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. 2.9. IN THE ASSESSMENT ORDER THE A.O. HAS ALSO HELD THAT DOCUMENTS ONLY RELATED TO THE APPELLANT WERE FOUND AND SEIZED IN THE SEARCH. RELEVANT PORTION OF THE ASSESSMENT ORDER IS REPRODUCED AS UNDER : 3.1. DURING THE COURSE OF SEARCH AT THE OFFICE PREMISES OF M/S K.S CITY P. LTD. AND M/S JAGANNATH IMPEX P. LTD. AT 201, STARLIT TOWER, Y.N. ROAD, INDORE, A DOCUMENT LPS-6 WAS SEIZED OUT OF WHICH PAGE NO. 1 IS RELATED TO THE ASSESSEE. THIS DOCUMENT IS A LETTER WRITTEN BY SHRI ASHISH GUPTA, DIRECTOR, M/S K.S. CITY P. LTD. TO HIS FATHER-IN-LAW SHRI RAMESH CHAND GARG, CHAIRMAN, M/S. K.S. OIL GROUP, IN WHICH HE HAS DESCRIBED THE LAND ACQUISITION AND DEVELOPMENT DEALS THAT HAVE TAKEN PLACE BETWEEN THE ASSESSEE COMPANY AND M/S K.S. CITY P LTD FOR LAND AT BYPASS ROAD, INDORE, KHANDWA ROAD AND PITHAMPURA. THIS LETTER HAS BEEN FAXED TO SHRI RAMESH CHAND GARG AT THE MORENA OFFICE ON 29.05.2009 AS MENTIONED ON OVERLEAF OF THIS PAGE. THIS LETTER DESCRIBES THE TRANSACTIONS OF LAND ACQUISITION/DEVELOPMENT AT BYPASS ROAD @ RS.47.50 LAKHS PER ACRE. IN 23 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. THIS DEAL, THE SHARES OF THE ASSESSEE COMPANY IS SHOWN AT 10% AND M/S K.S. CITY PVT. LTD. OF 90% EACH RESPECTIVELY. .. .. 3.3. DURING THE COURSE OF SEARCH IN THE OFFICE OF SHRI SANJAY AGARWAL, MD OF M/S K. S. OILS LTD., A DOCUMENT LPS-4 WAS SEIZED OUT OF WHICH PAGE NO. 69 & 70 ARE RELATED TO THE ASSESSEE. THIS IS CHART OF LAND ACQUIRED/REGISTERED IN THE VARIOUS COMPANIES OF M/S K. S. CITY GROUP. THIS CHART SHOWS THAT TOTAL LAND ACQUIRED BY M/S K.S. GROUP AT BYPASS ROAD OF RS.40,41,90,035/- OF 272.92 ACRES. AS AGAINST THIS, THE ACTUAL COST OF LAND MENTIONED IN THE LETTER AT PAGE NO.1, LPS-6 ABOVE I S RS. 12,29,63,70,000/- @ RS.47.50 LAKHS PER ACRE.' 2.10. THE AO HAS PROCEEDED TO MAKE ADDITION ON THE BASIS OF PAGE 1 OF DOCUMENT LPS-6 AND PAGE 69 & 70 OF LPS-4 SEIZED DURING THE SEARCH ON M/S K.S. OIL GROU P. THE AO HAS STATED THAT THE DOCUMENT IS A LETTER WRI TTEN BY SHRI ASHISH GUPTA, DIRECTOR, M/S K. S. CITY (P) LTD. TO HIS FATHER-IN-LAW SHRI RAMESH CHAND GARG, CHAIRMAN, M/S. K. S. OIL GROUP WHEREAS PAGE 69 & 70 FOUND AT PREMISES OF M/S K. S. CITY WHICH IS A CHART OF PROP ERTY SNOWING AREA OF LAND ACQUIRED AND THEIR VALUE REGIS TERED 24 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. IN THE NAME OF VARIOUS COMPANIES AND GROUP. THE AO HAS STATED THAT THE IMPUGNED DOCUMENTS ARE RELATED TO THE APPELLANT. SINCE THESE DOCUMENTS/PAPERS ARE NOT BELONGING TO THE APPELLANT, A CONDITION PRECEDENT ASSUMPTION OF JURISDICTION U/S 153C IS NOT SATISFIE D IN THE CASE OF THE APPELLANT. 2.11. IN THE CASE OF CIT VS. RRJ SECURITIES LTD. 380 ITR 612, THE HON'BLE DELHI HIGH COURT HAS HELD THAT U/S 153C OF THE ASSESSMENT OR RE-ASSESSMENT OF INCOME O F A PERSON OTHER THAN A SEARCHED PERSON WOULD PROCEED I N ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF T HE ACT AND THE CONCLUDED ASSESSMENT CANNOT BE INTERFERED W ITH U/S 153C OF THE ACT UNLESS THE INCRIMINATING MATERI AL BELONG TO SUCH OTHER PERSON HAS BEEN SEIZED. IN THE CASE OF THE APPELLANT IT IS QUITE EVIDENT THAT NO INCRIM INATING MATERIAL BELONGING TO THE APPELLANT HAS BEEN SEIZED . 2.12. IN VIEW OF THE RATIO LAID DOWN IN THE DECISIONS OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF PEPSICO INDIA HOLDING (P) LTD. (SUPRA) AND PEPSI FO ODS (P) LTD. (SUPRA), THE SATISFACTION OF THE AO THAT SOME DOCUMENTS BELONGING TO THE APPELLANT IS FOUND TO BE NOT IN ACCORDANCE WITH LAW AND AS SUCH THE NOTICE ISSUED U /S 153C IS HELD AS NOT VALID AND THE CONSEQUENT ASSESS MENT FRAMED U/S 153A/143(3) BEING LEGALLY UNSUSTAINABLE, 25 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. STANDS QUASHED. THESE GROUNDS OF APPEAL ARE RULED I N FAVOUR OF THE APPELLANT. 9. THE LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT PROCEEDINGS UNDER SECTION 153C CANNO T BE INVALIDATED MERELY BECAUSE THE A.O. OF THE SEARCHED PERSON WAS ALSO THAT OF THE ASSESSEE, DID NOT RECORD A SEPARAT E SATISFACTION. THE LD. CIT(A) CANNOT DECLARE THE SATISFACTION AS I NVALID ON HYPER TECHNICAL GROUND OF INCORRECT TERMINOLOGY USE D IN NOTE. THE LD. D.R. RELIED UPON THE FOLLOWING DECISIONS : 1. PCIT VS. SHEETAL INTERNATIONAL PVT. LTD., (2017-TI OL-1355-HC- DEL-IT. 2. PCIT VS. INSTRONICS LTD., (2017) 82 TAXMANN.COM 357 (DEL.) 3. GANPATI FINCAP SERVICES (P) LTD., VS. CIT (2017) 82 TAXMANN.COM 408 (DEL.) 4. PCIT VS. SUPER MALLS PVT. LTD., (2016) 76 TAXMAN N.COM 267 (DEL.)/(2017) 393 ITR 557 (DEL.) 5. PCIT VS. M/S. NAU NIDH OVERSEAS PVT. LTD., (ITA. NO.58/2017). 6. KAMLESHBHAI DHARMSIBHAI PATEL VS. CIT (2013) 31 TAXMANN.COM 50 (GUIJ.) 7. RAJESH SUNDERDAS VASWANI VS. ACIT (2016) 76 TAXM ANN.COM 311 8. SSP AVIATION LTD., VS. DCIT 20 TAXMANN.COM 214 9. CIT VS. CLASSIC ENTERPRISES 35 TAXMANN.COM 244/3 58 ITR 465. 26 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. 10. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASS ESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. HE HAS REFERRED TO PB-168 AND 169 WHICH IS SATISFAC TION NOTE RECORDED UNDER SECTION 153C OF THE ACT AND LETTER O F THE A.O. OF THE PERSON SEARCHED WHICH IS REPRODUCED IN THE FIND INGS OF THE LD. CIT(A). PB 170 AND 171 ARE THE COPIES OF THE SE IZED DOCUMENTS REFERRED TO BY THE A.O. IN THE ASSESSMENT ORDER. HE HAS RELIED UPON THE DECISION OF THE HONBLE DELHI H IGH COURT IN THE CASE OF PEPSI FOOD PVT. LTD., VS. ACIT (2014) 3 67 ITR 112 (DEL.) IN WHICH IT WAS HELD AS UNDER : MERE USE OR MENTION OF WORD SATISFACTION OR THE WORDS I AM SATISFIED IN ORDER OR NOTE WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C, SATISFACTION NOTE ITSELF MUST DISPLAY REASONS OR BASIS FOR CONCLUSION THAT A.O. OF SEARCHED PERSON WAS SAT ISFIED THAT THE SEIZED DOCUMENTS BELONG TO A PERSON OTHER THAN SEARCHED PERSON IN THIS REGARD. 27 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. 10.1. HE HAS SUBMITTED THAT THE JUDGMENT OF THE DE LHI HIGH COURT HAS BEEN CONFIRMED BY THE HONBLE SUPREM E COURT IN THE CASE OF ACIT VS. PEPSI FOODS PVT. LTD., 89 T AXMAN.COM 10 IN WHICH IT WAS HELD THAT A.O. IS REQUIRED TO ARRI VE AT A CONCLUSIVE SATISFACTION THAT DOCUMENTS BELONGS TO T HE PERSON OTHER THAN SEARCHED PERSON. HE HAS SUBMITTED THAT A.O. IN THE ASSESSMENT ORDER HAS MENTIONED THAT THE SEIZED DOCU MENTS RELATING TO THE ASSESSEE. THE A.O. DID NOT GIVING ANY FINDING OF FACT THAT THE SEIZED DOCUMENTS BELONGS TO THE ASSES SEE AS PER REQUIREMENT OF SECTION 153C OF THE I.T. ACT. HE HAS ALSO RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT I N THE CASE OF PR. CIT VS. INDEX SECURITIES PVT. LTD., AND OTHERS 157 DTR 20 IN WHICH IT WAS HELD THAT IN ORDER TO JUSTIFY ASSUMPTION OF JURISDICTION UNDER SECTION 153C, DOCUMENTS SEIZED M UST BE INCRIMINATING MATERIAL AND MUST RELATE TO EACH OF T HE ASSESSMENT YEAR WHOSE ASSESSMENTS WERE SOUGHT TO BE REOPENED. HE HAS SUBMITTED THAT THE SEIZED DOCUMENTS WERE NOT RECOVE RED FROM THE POSSESSION OF ASSESSEE AND NOTHING WAS FOUND TH AT SAME WERE UNDER THE HANDWRITING OF THE ASSESSEE. NO CORR OBORATIVE 28 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. EVIDENCE WAS FOUND. THEREFORE, THE LD. CIT(A) CORRE CTLY QUASHED THE INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT. 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND MATERIAL AVAILABLE ON RECORD. THE HONBLE BOMBAY HI GH COURT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY (2015) 378 ITR 84 (BOM.) HELD AS UNDER : IN TERMS OF SECTION 153C OF THE INCOME-TAX ACT, 1961, THE ASSESSING OFFICER SHOULD BE SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE S OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG OR BELONGS TO A PERSON OTHER TH AN THE PERSON REFERRED TO IN SECTION 153 A OF THE ACT AND HE CAN HAND OVER THE SEIZED DOCUMENTS TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THAT PERSON. THE ASSESSEE WAS AN EDUCATIONAL INSTITUTION SINCE THE ASSESSMENT YEAR 1994-95. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AND CERTAIN LOOSE PAPERS WERE SEIZED FROM THE PRESIDENT OF THE ASSESSEE. SIMULTANEOUSLY A SURVEY ACTION WAS CONDUCTED ON THE ASSESSEE. ON THE BASIS OF LOOSE PAPERS FOUND WITH AND SEIZED FROM THE PRESIDENT THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 29 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. 153C ON THE ASSESSEE AND ASSESSED THE INCOME. THE TRIBUNAL SET ASIDE THE ASSESSMENTS. ON APPEALS TO THE HIGH COURT: HELD, DISMISSING THE APPEALS, THAT THE REASONS ASSIGNED BY THE ASSESSING OFFICER IN THE SATISFACTI ON NOTE WERE SILENT ABOUT THE ASSESSMENT YEAR IN WHICH SPECIFIC INCRIMINATING INFORMATION OR UNACCOUNTED O R UNDISCLOSED HIDDEN INFORMATION WAS DISCOVERED OR SEIZED BY THE REVENUE FROM THE ASSESSEE. IN THE CIRCUMSTANCES, THE GENERAL SATISFACTION AND AS RECORDED IN THE NOTE WAS NOT ENOUGH. THERE WAS ABSOLUTELY NOTHING TO INDICATE AS TO IN WHICH EDUCATIONAL COURSES, THE EDUCATION WAS IMPARTED AND INSTITUTION-WISE, WHETHER THE ADMISSIONS WERE GRANTED TO THE TECHNICAL COURSES MERIT-WISE OR ON T HE BASIS OF MARKS OBTAINED IN XII STANDARD HSC EXAM. WHETHER ANY FEE STRUCTURE WAS APPROVED AND CASH COMPONENT WAS, THEREFORE, COLLECTED OVER AND ABOVE THE SANCTIONED FEES WERE MATTERS WHICH OUGHT TO HAV E BEEN GONE INTO AND THERE COULD NOT BE A GENERAL OR VAGUE SATISFACTION. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ASSESSMENTS. 30 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. 11.1. THIS DECISION HAS BEEN CONFIRMED BY THE HON BLE SUPREME COURT IN THE CASE OF CIT VS. SINGHAD TECHNI CAL EDUCATION SOCIETY (2017) 397 ITR 344 (SC) IN WHICH IT WAS HELD AS UNDER : HELD, DISMISSING THE APPEALS, (I) THAT THE TRIBUNAL PERMITTED THE ASSESSEE TO RAISE THE ADDITIONAL GROU ND ON THE GROUND THAT IT WAS A JURISDICTIONAL ISSUE TA KEN UP ON THE BASIS OF FACTS ALREADY ON RECORD, THAT UN DER SECTION 153C OF THE ACT, INCRIMINATING MATERIAL WHI CH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT YEARS I N QUESTION, AND THAT THE DOCUMENTS WHICH WERE SEIZED DID NOT ESTABLISH ANY CO-RELATION, DOCUMENT-WISE, W ITH THESE FOUR ASSESSMENT YEARS. THE TRIBUNAL FOUND THA T THE MATERIAL DISCLOSED IN THE SATISFACTION NOTE BELONGED TO ASSESSMENT YEAR 2004-05 OR THEREAFTER. THE TRIBUNAL RIGHTLY PERMITTED THIS ADDITIONAL GROU ND TO BE RAISED AND CORRECTLY DEALT WITH THE GROUND ON THE 31 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. MERITS AS WELL. THE HIGH COURT WAS RIGHT IN AFFIRMI NG THIS VIEW OF THE TRIBUNAL. DECISION OF THE BOMBAY HIGH COURT IN CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY [2015] 378 ITR 84 (BOM) AFFIRMED. (II) THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER COVERED EIGHT ASSESSMENT YEARS. F OR SIX ASSESSMENT YEARS THE ASSESSMENT WAS UNDE R SECTION 153C OF THE ACT. THE ASSESSMENT ORDER WAS S ET ASIDE ONLY IN RESPECT OF FOUR OF THOSE ASSESSMENT Y EARS AND ON A TECHNICAL GROUND. THE OBJECTION PERTAINING TO THE FOUR ASSESSMENT YEARS IN QUESTION DID NOT RELAT E TO THE OTHER TAX ASSESSMENT YEARS, NAMELY, 2004-05 AND 2005-06. NOR DID THIS DECISION HAVE A BEARING IN RESPECT OF ASSESSMENT FOR ASSESSMENT YEAR 1999- 2000 OR ASSESSMENT YEAR 2006-07. THE NECESSARY CONSEQUENCE WOULD BE THAT THE CONCLUSIONS OF THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER REGARDING 32 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. THE ACTIVITIES OF THE TRUST NOT BEING GENUINE AND N OT CARRIED OUT IN ACCORDANCE WITH THE TRUST DEED OR CANCELLATION OF REGISTRATION, DENIAL OF BENEFITS OF SECTIONS 11 AND 12 WOULD NOT BE AFFECTED BY THIS JUDGMENT. 12. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI VS. ACIT (2011) 333 ITR 436 (GUJ.) HELD AS UNDER: SECTIONS 153A, 153B AND 153C OF THE INCOME-TAX ACT , 1961, LAY DOWN A SCHEME FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. SECTION 153C WHICH IS SIMILARLY WORDED TO SECTION 158BD OF THE ACT, PROVI DES THAT WHERE THE ASSESSING OFFICER 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 PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A HE SHALL PRO CEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER 33 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON. HOWEVER, THERE IS A DISTINCTION BETWEEN THE TWO PROVISIONS INASMUCH AS UNDER SECTION 153C NOTICE CAN BE ISSUED ONLY WHERE THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG TO SUCH OTHER PERSON, WHEREAS UNDER SECTION 158BD IF THE ASSESSING OFFICER WAS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THA N THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHE R DOCUMENTS OR ASSETS WERE REQUISITIONED UNDER SECTIO N 132A, HE COULD PROCEED AGAINST SUCH OTHER PERSON UNDER SECTION 158BC. THUS A CONDITION PRECEDENT FOR ISSUING NOTICE UNDER SECTION 153C AND ASSESSING OR REASSESSING INCOME OF SUCH OTHER PERSON, IS THAT TH E MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH PERSON. IF THE 34 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. REQUIREMENT IS NOT SATISFIED, RECOURSE CANNOT BE HA D TO THE PROVISIONS OF SECTION 153C. HELD, ALLOWING THE PETITION, THAT ADMITTEDLY, THE T HREE LOOSE PAPERS RECOVERED DURING THE SEARCH PROCEEDING S DID NOT BELONG TO THE PETITIONER. IT WAS NOT THE CA SE OF THE REVENUE THAT THE THREE DOCUMENTS WERE IN THE HANDWRITING OF THE PETITIONER. IN THE CIRCUMSTANCES , WHEN THE CONDITION PRECEDENT FOR ISSUANCE OF NOTICE WAS NOT FULFILLED ACTION TAKEN UNDER SECTION 153C O F THE ACT STOOD VITIATED. 13. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF C IT VS. LAVANYA LAND PVT. LTD., (2017) 397 ITR 246 (BOM .) HELD AS UNDER : IT IS CLEAR THAT BEFORE ISSUING NOTICE UNDER SECTIO N 153C OF THE INCOME-TAX ACT , 1961, THE PRIMARY CONDITION THAT HAS TO BE FULFILLED IS THAT THE MONEY, BULLION, DOCUMEN TS, ETC., SEIZED SHOULD BELONG TO SUCH OTHER PERSON. IF THIS CO NDITION 35 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. IS NOT SATISFIED, NO PROCEEDINGS COULD BE TAKEN UNDER SECTION 153C. THE JC GROUP WAS A PARTNER IN THE MUMBAI SPECIAL ECONOMIC ZONE AND NAVI MUMBAI SPECIAL ECONOMIC ZONE PROJECTS OF INDIA. THIS GROUP HAD FLOATED VARIOUS COMPANIES TO PURCHASE LARGE CHUNKS OF LAND IN THE VI CINITY OF THE SPECIAL ECONOMIC ZONES. THE GROUP'S REAL EST ATE OPERATIONS WERE BEING HANDLED BY V, G AND D. D WAS AL SO THE MANAGING LAND TRANSACTIONS OUTSIDE THE MUMBAI SPECIAL ECONOMIC ZONE. THE ASSESSEE WAS ONE OF THE COMPANIES FLOATED BY THIS GROUP TO PURCHASE LAND OUT SIDE THE MUMBAI SPECIAL ECONOMIC ZONE. DURING SEARCH OF D'S RESIDENCE, CERTAIN INCRIMINATING DOCUMENTS WERE SEIZ ED AND HIS STATEMENT WAS RECORDED. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE INFORMING IT THAT RS. 38.45 CRORES, WHICH WAS A SUM REFLECTED FROM THE DOCUMENTS SEIZED FROM D'S RESIDENCE AND RS. 4 CRORES IN ADDITION, WH ICH WAS EVIDENCED BY LOOSE DOCUMENTS IN THE FORM OF CASH RECE IPTS, WERE FOUND DURING SEARCH AND SEIZURE PROCEEDINGS. THE ASSESSEE WAS CALLED UPON TO EXPLAIN AND SHOW CAUSE WH Y THESE AMOUNTS SHOULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT, SINCE THE ASSESSEE DID NOT PROVIDE ANY EXPLANATION WITH REGAR D TO THE DOCUMENTS SEIZED UNDER SECTION 132 OF THE ACT FOR THE ASSESSMENT YEARS FROM 2003 TO 2009 AND 2009-10. THE ASSESSMENT ORDER WAS PASSED AND THE ADDITIONS WERE 36 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. MADE. THE UNEXPLAINED EXPENDITURE WAS APPORTIONED TO ALL THE LAND COMPANIES FLOATED BY THE JC- GROUP. THE TRIBUNAL HELD THAT AN ENTRY IN THE HOOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE OF BUSINESS IS RELEVANT FOR THE PURPOSE OF CONSIDERING THE NATURE AND IMPACT OF A TRANSACTION, BUT NOTINGS ON SLIPS OF PAPER OR LOOSE SHEETS OF PAPER WERE REQUIRED TO BE SUPPORTED OR CORROBORA TED BY OTHER EVIDENCE. THERE WAS A DISTINCTION BETWEEN LOO SE PAPERS FOUND FROM THE POSSESSION OF THE ASSESSEE AND SIMILAR DOCUMENTS FOUND FROM A THIRD PERSON. THE DOCUMENTS WERE NOT FOUND FROM THE POSSESSION OF THE ASSESSEE BUT FROM THE POSSESSION OF A THIRD PERSON I.E., D. MERE MENTION OF THE NAMES OF THE VILLAGES WHERE THE COMPANIES MIGHT HAVE PURCHASED LANDS WOULD NOT GIVE ANY BASIS TO ASSUME, PRESUME OR SURMISE THAT THE NA MES OF THE COMPANIES WERE MENTIONED IN THE DOCUMENTS. TH E TRIBUNAL SET ASIDE THE ORDER OF THE COMMISSIONER (APPEALS) PERTAINING TO THE ASSESSMENT YEAR 2008-09 HOLDING T HAT THE ACTION UNDER SECTION 153C OF THE ACT WAS BAD IN L AW. ON APPEAL : HELD , DISMISSING THE APPEAL, THAT THE FINDING THAT SECTION 153C WAS NOT ATTRACTED AND ITS INVOCATION WAS BAD IN LAW WAS NOT BASED JUST ON INTERPRETATION OF SECTI ON 153C BUT AFTER HOLDING THAT THE INGREDIENTS THEREOF WERE NOT SATISFIED IN THE PRESENT CASE. THAT WAS AN EXERCISE CARRIED OUT BY THE TRIBUNAL AS THE LAST FACT FINDING AUTHOR ITY. 37 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. THEREFORE, THE FINDING WAS A MIXED ONE. THERE WAS N O SUBSTANTIAL QUESTION OF LAW ARISING FROM SUCH AN OR DER WHICH ALTERNATIVELY CONSIDERED THE MERITS OF THE CASE AS WELL. THE DELETION OF THE ADDITION WAS JUSTIFIED. 14. THE A.O. ON THE BASIS OF SATISFACTION NOTE REC ORDED BY THE A.O. OF THE SEARCHED PERSON PROCEEDED TO ASSUME JURISDICTION UNDER SECTION 153C OF THE I.T. ACT. CO PY OF THE SATISFACTION NOTE IS FILED IN THE PAPER BOOK WHICH IS ALSO REPRODUCED IN THE FINDINGS OF THE LD. CIT(A) ABOVE. IN THE SATISFACTION NOTE, THE SEIZED DOCUMENTS. LPS-2 AND LPS-6 REFERRED. THE A.O. OF THE PERSON SEARCHED INTIMATED THIS FACT TO THE CONCERNED A.O. TO TAKE NECESSARY ACTION UNDER S ECTIONS 153C/148 FOR VERIFICATION OF THE SAME. IT IS, THERE FORE, CLEAR THAT A.O. OF THE SEARCHED PERSON WAS NOT SATISFIED, WHET HER IT IS INCRIMINATING IN NATURE AGAINST THE ASSESSEE OR THE SEIZED DOCUMENTS BELONG TO THE ASSESSEE. HE WAS NOT SURE A S TO WHETHER A.O. OF THE ASSESSEE SHOULD PROCEED UNDER S ECTION 153C OR FOR SECTION 148 OF THE I.T. ACT. HE JUST WA NTED THAT THE PROCEEDING MAY BE INITIATED FOR VERIFICATION OF THE SEIZED DOCUMENTS. THE A.O. WHILE REFERRING TO THE SEIZED P APER IN THE 38 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. ASSESSMENT ORDER HAS MENTIONED THAT THE DOCUMENT LP S-6, PAGE-1 FOUND DURING THE COURSE OF SEARCH IN THE CAS E OF K.S. CITY PVT. LTD., IS RELATED TO THE ASSESSEE. THE A.O. DID NOT REFER THAT THE SEIZED DOCUMENTS BELONGS TO THE ASSESSEE. SUCH DOCUMENT WAS A LETTER WRITTEN BY SHRI ASHISH GUPTA, DIRECTOR OF K.S. CITY PVT. LTD., TO HIS FATHER-IN-LAW SHRI RAMESH CHAND G ARG, CHAIRMAN OF K.S. OIL GROUP REGARDING ACQUISITION AN D DEVELOPMENT OF SOME LAND WITH THE ASSESSEE COMPANY. THIS DOCUMENT DID NOT REVEAL ANYTHING. THEREFORE, MERE M ENTION OF THE NAME OF THE ASSESSEE WAS NOT SUFFICIENT TO SATI SFY THE A.O. OF THE SEARCHED PERSON THAT THIS DOCUMENT BELONG TO THE ASSESSEE. THIS SEIZED PAPER WAS NOT FOUND FROM THE POSSESSION OF THE ASSESSEE AND DID NOT CONTAIN THAT IT WAS IN THE HAND WRITING OF THE ASSESSEE. THE ASSESSEE HAD DENIED TO HAVE ENTERED INTO ANY SUCH TRANSACTION EITHER WITH M/S. K.S. CIT Y PVT. LTD., OR M/S. K.S. OIL GROUP OF CASES. REGARDING ANOTHER SEIZED PAPER LPS-4, PAGES 69 AND 70 WHICH IS A CHART OF LAND ACQUIRED/REGISTERED IN VARIOUS COMPANIES OF M/S. K. S. CITY GROUP, IT IS REGARDING COST OF SOME PROPERTY AND LE DGER TO WHICH 39 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. ALSO ASSESSEE DENIED TO HAVE ANY CONNECTION. THE AS SESSEE EXPLAINED THAT THE SAME DID NOT BELONG TO THE ASSES SEE AND NO TRANSACTION HAVE BEEN CARRIED OUT. IT MAY BE SOME I NTERNAL PROJECTION / CALCULATION OF K.S. CITY GROUP OF CASE S. NO EVIDENCE OR DOCUMENTS WERE FOUND TO PROVE ANY ON-MONEY PAYM ENT OUTSIDE THE BOOKS OF ACCOUNT. NONE OF THE DOCUMENTS WERE HAVING SIGNATURE OR ACKNOWLEDGMENT FROM THE SIDE OF THE ASSESSEE. THE ASSESSEE THUS, DENIED HAVING ANY CONN ECTION WITH THE SEIZED PAPER. THESE FACTS, THEREFORE, MAKES IT CLEAR THAT NONE OF THE DOCUMENTS WERE INCRIMINATING IN NATURE SO AS TO PUT ANY LIABILITY UPON ASSESSEE. NO CORROBORATIVE EVIDENCE WAS FOUND TO LINK THE ASSESSEE WITH THESE SEIZED PAPERS. THE DOC UMENTS WERE NOT HAVING ANY CONNECTION BETWEEN THE ASSESSEE OR T HE PERSON SEARCHED. NO EXPENDITURE HAVE BEEN INCURRED BY THE ASSESSEE. THESE DOCUMENTS WERE NOT ISSUED BY THE ASSESSEE. TH EREFORE, THE SAME DID NOT BELONG TO THE ASSESSEE COMPANY. TH E SATISFACTION NOTE DID NOT DISCLOSE ANY REASONS OR B ASIS FOR THE CONCLUSION THAT THE A.O. OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUMENTS BELONG TO THE PERSON OTHER THA N THE 40 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. PERSON SEARCHED. MERE RECOVERY OF SOME DOCUMENTS FR OM THIRD PERSON WOULD NOT BIND THE ASSESSEE OR TO PROVE THAT THESE SAME HAVE BEEN OWNED BY THE ASSESSEE. THE A.O. IN THE AS SESSMENT ORDER DID NOT SAY THAT THE DOCUMENTS BELONGS TO THE ASSESSEE. IT IS, THEREFORE, EVIDENT THAT NO CLEAR SATISFACTIO N FOR ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE ACT HAS B EEN RECORDED IN THE NOTE SO AS TO TAKE ANY ACTION AGAINST THE AS SESSEE. THE A.O. RECORDED VAGUE SATISFACTION TO TAKE ACTION AGA INST THE ASSESSEE UNDER SECTION 148 FOR VERIFICATION OF THE DOCUMENTS. THE A.O. OF THE SEARCHED PERSON HAS NOT RECORDED TH AT A PERSON SEARCHED HAVE DISCLAIMED THE OWNERSHIP OF THE SAID PAPERS FOUND FROM THEIR PERSON/PREMISES. FURTHER, NO FINDI NGS AND MATERIAL IS AVAILABLE ON RECORD (SATISFACTION) THAT THE SEIZED DOCUMENTS DOES NOT BELONG TO THE SEARCHED PERSON BU T TO SOMEBODY ELSE. LPS-4 AND LPS-6 REFERRED IN THE ASSE SSMENT ORDER ARE LEDGER ACCOUNTS OF GROUP COMPANIES OF THE PERSON SEARCHED IN THE BOOKS OF M/S. K.S. CITY PVT. LTD., AND HANDWRITTEN SHEET, WHICH CANNOT BE SAID TO BE THE P APERS BELONGING TO THE ASSESSEE COMPANY. THUS, IT IS NOT A CASE WHERE 41 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. SEARCHED PERSON HAS BEEN ABLE TO DEMONSTRATE THAT T HE PAPERS BELONGING TO THE ASSESSEE WERE SEIZED AS A RESULT O F SEARCH. SINCE THE SEIZED DOCUMENTS ARE NOT BELONGING TO THE ASSESSEE, THE CONDITIONS FOR ASSUMING JURISDICTION UNDER SECT ION 153C IS NOT SATISFIED IN THIS CASE. IT IS QUITE EVIDENT THA T NO INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE HA S BEEN SEIZED. THE A.O. IN THE SATISFACTION NOTE DID NOT M ENTION ABOUT THE ASSESSMENT YEAR IN WHICH SPECIFIC INCRIMINATING MATERIAL, INFORMATION OR UNACCOUNTED OR UNDISCLOSED HIDDEN IN FORMATION WAS DISCOVERED OR SEIZED BY THE REVENUE FOR THE ASS ESSEE. THEREFORE, PRIMARY CONDITIONS OF SECTION 153C OF TH E I.T. ACT HAVE NOT BEEN SATISFIED IN THIS CASE. SINCE, NO INC RIMINATING MATERIAL WAS RECOVERED DURING THE COURSE OF SEARCH WHICH MAY BELONG TO THE ASSESSEE, THE LD. CIT(A) WAS JUSTIFIE D IN QUASHING THE ASSESSMENT IN THE MATTER. THE DECISIONS OF HON BLE DELHI HIGH COURT IN THE CASE OF PEPSI FOODS PVT. LTD., AN D PEPSI CO. INDIA HOLDING PVT. LTD., (SUPRA), SQUARELY APPLY TO THE FACTS OF THE CASE. THE DECISIONS RELIED UPON BY THE LD. D.R. ARE CLEARLY DISTINGUISHABLE ON FACTS. CONSIDERING THE ABOVE DIS CUSSION IN 42 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. THE LIGHT OF VARIOUS DECISIONS REFERRED TO ABOVE, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN QUA SHING THE PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT. NO INTERFERENCE IS CALLED FOR IN THE MATTER. WE, ACCORDINGLY, DISMI SS ALL THE DEPARTMENTAL APPEALS. 15. IN THE RESULT, ALL THE DEPARTMENTAL APPEALS AR E DISMISSED AND CROSS-OBJECTIONS OF THE ASSESSEE ARE DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 09 TH FEBRUARY, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT F BENCH, DELHI 6. GUARD FILE. 43 ITA.NOS.4307, 4308 & 4309/DEL./2016 AND C.O.NOS.2, 3 & 4/DEL./2017 M/S. PRABHATAM DEVELOPER S LTD., NEW DELHI. // BY ORDER // ASSESSMENT. REGISTRAR : ITAT DELHI BENCHES : DELHI.