ACIT, New Delhi V. M/s. Nahid Finlease Pvt. Ltd., New Delhi

ITA 4823/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4063 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 3
• Next Hearing Date: 27-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 04-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEFALI SWAROOP
• Assessee Lawyers: S K TULSIAN
• Keywords: Unexplained expenditure; Search and seizure; Loose papers; Document seized; Question of law; Cancellation of registration; Documents seized
• Section: 69C; 143(3); 153A; 132; 15

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P.SAHU, ACCOUNTANT MEMBER ITA NO. 4822 TO 4824/DEL/2014 (ASSESSMENT YEAR: 2007-08 TO 2 009-10) ACIT, CENTRAL CIRCLE-19, NEW DELHI. VS NAHID FINLEASE P VT.LTD., 10, 1 ST FLOOR, TODARMAL LANE, BENGALI MARKET, NEW DELHI-110011. PAN-AABCN5146L (APPELLANT) (RESPONDENT) APPELLANT BY SMT. SHEFALI SWAROOP, CIT DR RESPONDENT BY SH.S.K.TULSIAN, ADV. & MS. BHOOMIJA VERMA, ADV. DATE OF HEARING 11.01.2018 DATE OF PRONOUNCEMENT 22.01.2018 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER ALL THESE APPEALS BY THE REVENUE ARE DIRECTED AGAI NST THE DIFFERENT ORDERS OF LD. CIT(A)-XII, NEW DELHI DATED 30.06.2014 FOR THE AYS 2007-08, 2008-09 & 2009-10 ON THE FOLLOWING IDE NTICAL GROUNDS:- ITA NO.4822/DEL/2014 (A.Y. 2007-08) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE A DDITIONS MADE WITHOUT ANY MATERIAL FOUND DURING THE COURSE O F SEARCH ARE OUTSIDE THE SCOPE OF SECTION 153A / 153C OF THE ACT, WHEN SECTION 153A MANDATES THE AO TO 'ASSESS OR REASSESS THE TOTAL INCOME' AS AGAINST 'ASSESS OR REASSESS SUCH INCOME (ESCAPING ASSESSMENT) U/S 147. ITA NO. 4822-4824/DEL/2014 PAGE | 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT WITHO UT ANY MATERIAL BEING FOUND IN SEARCH, IT WAS NOT PERMISSI BLE TO ASSESS OR RE-ASSESS TOTAL INCOME U/S 153A AS THERE IS NOTHING IN THAT SECTION WHICH CONTEMPLATES ANY SUCH CONDITI ON. 3. WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, T HE CIT(A) GROSSLY ERRED IN HOLDING THAT THERE WAS NO REFERENC E IN THE ASSESSMENT ORDER TO ANY MATERIAL FOUND DURING THE C OURSE OF SEARCH, RELATING TO THE ISSUE ON WHICH ADDITION IS MADE, WITHOUT APPRECIATING THE FACT THAT THE AO HAD SPECIFICALLY DISCUSSED IN PARA 2.5.(III) OF THE ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH THE ENTIRE PROPERTY BELONGING TO THE ASSESSE E WAS FOUND TO BE OCCUPIED BY TODAY HOTELS PVT. LTD. AND HENCE THE ANNUAL LETTING VALUE WAS TO BE ASSESSED OR RE-ASSESSED U/S 153A R.W.S. 153C AS A RESULT OF FACTUAL MATERIAL FOUND D URING SEARCH. 4. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TEN ABLE ON FACTS AND IN LAW. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 2. BRIEFLY, THE FACTS OF THE CASE IN AY 2007-08 ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE VARIOUS PR EMISES OF M/S TODAY HOMES & INFRASTRUCTURE PVT. LTD. AND ITS GROU P CONCERNS AND ASSOCIATED PERSONS (HEREINAFTER REFERRED TODAY GRO UP OF CASES) ON 26.11.2009 AND WAS FINALLY CONCLUDED ON 25.01.2010. THE ASSESSEE IS ONE OF THE ASSOCIATED/GROUP CONCERNS OF TODAY GR OUP OF CASES. ITA NO. 4822-4824/DEL/2014 PAGE | 3 DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A T THE VARIOUS PREMISES OF TODAY GROUP OF CASES MANY BOOKS OF ACCO UNTS OR DOCUMENTS BELONGING TO THE ASSESSEE COMPANY WERE FO UND AND SEIZED AND HENCE PREREQUISITE CONDITION TO INITIATE PROCEE DINGS U/S 153C OF THE I.T. ACT, 1961 (IN SHORT ACT) WAS FULFILLED. THE AO ISSUED NOTICE U/S 153C OF THE ACT DIRECTING THE ASSESSEE TO FILE RETURN OF INCOME. THE ASSESSEE FILED A LETTER SUBMITTING THEREIN WITH ORIGINAL RETURN FILED MAY BE TREATED ITS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153C OF THE ACT. THE AO REJECTED THE OBJECTION OF THE ASSE SSEE REGARDING INITIATION OF PROCEEDINGS U/S 153C OF THE ACT. 3. ON PERUSAL OF THE RECORDS, THE AO NOTICED THAT D URING ASSESSMENT YEAR IN APPEAL, THE ASSESSEE HAS NOT CAR RIED OUT ANY BUSINESS ACTIVITY. FURTHER, IT WAS SEEN THAT THE A SSESSEE HAS PURCHASED OFFICE SPACE AT A-1601 & B-1601 HAVING TO TAL SUPER BUILT UP AREA OF 5402 FT. ALONGWITH TWO TERRACES ADMINIST ERING 1256 FT. APPURTENANT TO THE SAID OFFICE, IN TOTAL AMOUNTING TO 6658 FT. LOCATED ON 16 TH FLOOR, STATESMAN HOUSE, B-148, BARAKHAMBA ROAD, NE W DELHI ALONGWITH 6 CAR PARKING SPACES IN THE LOWER B ASEMENT FROM M/S UTI LTD. ON 05.05.2006 I.E. DURING THE FY 2006-07. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAS NOT CAR RIED OUT ANY BUSINESS ACTIVITY DURING THE FY 2003-04 TO 2009-10 AND THIS PREMISE ITA NO. 4822-4824/DEL/2014 PAGE | 4 WAS BEING USED BY VARIOUS GROUP CONCERNS OF M/S TOD AY GROUP NAMELY M/S TODAY HOTELS PVT. LTD. ETC. THE ASSESSI NG OFFICER ASKED THE ASSESSEE AS TO WHY FAIR RENTAL VALUE NOT BE CAL CULATED IN RESPECT OF ITS OFFICE SPACE IN THE ABOVE PROPERTY. THE ASSES SEE EXPLAINED THAT ONLY 1/3 OF THE TOTAL SPACE WAS USED BY M/S TODAY H OTELS PVT. LTD. ETC. AND REST 2/3 OF SPACE REMAINED IN POSSESSION O F THE ASSESSEE. THEY HAVE USED THE PREMISE JUST FOR THE PURPOSE OF THE REGISTERED OFFICE AND NOT OTHER ACTIVITIES HAVE BEEN CONDUCTED . THE ASSESSING OFFICER DID NOT ACCEPT CONTENTION OF THE ASSESSEE A ND NOTED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY IN ASSESSMENT YEAR UNDER APPEAL AND IT IS BEYOND HUMAN PROBABILITIES T HAT MAJOR PART OF VALUABLE PROPERTY LOCATED AT PRIME LOCATION IN CONN AUGHT PLACE, NEW DELHI HAS BEEN LEFT VACANT. IT IS ALSO NOTED THAT THE ASSESSEE FILED RETURN OF INCOME GIVING ADDRESS OF REGISTERED OFFIC E AT 10, TODARMAL LANE, BENGALI MARKET, NEW DELHI. THE WHOLE OF THE FLOOR HAS BEEN USED BY M/S TODAY HOTELS PVT. LTD. AND OTHERS. NO BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY WERE FOUND IN THE PREMISES. M/S TODAY HOTELS PVT.LTD. HAS PAID THE MAINTENANCE AND ELECTR ICITY BILLS OF THE ENTIRE SPACE OF THE PROPERTY IN QUESTION. THE ASSE SSING OFFICER IN VIEW OF FACT THAT SINCE ENTIRE PROPERTY HAS BEEN USED BY M/S TODAY HOTELS PVT. LTD. AND OTHERS, THEREFORE, ANNUAL RENTAL VALU E TO BE DETERMINED ITA NO. 4822-4824/DEL/2014 PAGE | 5 AS PER SECTION 22 & 23 OF THE ACT WHICH WAS CALCULA TED AT RS.68,31,000/-. THE ASSESSING OFFICER AFTER GIVING DEDUCTION U/S 24 OF THE ACT, COMPUTED THE INCOME FROM HOUSE PROPERTY . THE FINDINGS OF THE ASSESSING OFFICER ARE SAME IN THE REMAINING AYS 2008-09 & 2009- 10. THE ASSESSEE CHALLENGED THE INITIATION OF PROC EEDINGS U/S 153C OF THE ACT BEFORE LD.CIT(A) AS WELL AS ADDITIONS ON ME RITS. THE SUBMISSIONS OF THE ASSESSEE IN DETAIL ARE REPRODUCE D IN THE IMPUGNED ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT INITIATION OF THE PROCEEDINGS U/S 153C OF THE ACT, IS ILLEGAL AND BAD IN LAW SINCE REQUISITE CONDITIONS FOR INITIATION PROCEEDINGS U/S 153C OF THE ACT WERE NOT FULFILLED IN THE PRESENT CASE. NO BOOKS O F ACCOUNTS OR DOCUMENTS BELONGING TO THE ASSESSEE, WERE SEIZED DU RING THE COURSE OF SEARCH ON THE PERSON REFEREED UNDER SECTION 153 A OF THE ACT. THE ASSESSING OFFICER RECORDED SATISFACTIONS U/S 153C O F THE ACT SOLELY ON THE GROUND THAT CERTAIN DOCUMENTS RELATING TO THE A SSESSEE COMPANY WERE FOUND DURING THE SEARCH AND SEIZURE OPERATION CARRIED OUT ON M/S TODAY GROUP OF CASES. IT WAS SUBMITTED THAT ME RE FACT THAT CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOU ND DURING THE COURSE OF SEARCH IN THE CASE OF 3 RD PERSON DOES NOT IFSO FACTO GIVE JURISDICTION TO RE-OPEN THE CONCLUDED PROCEEDINGS U /S 153C OF THE ACT. SECTION 153C OF THE ACT PROVIDES THAT WHERE T HE ASSESSING ITA NO. 4822-4824/DEL/2014 PAGE | 6 OFFICER OF THE PERSON IN WHOSE CASE SEARCH WAS COND UCTED IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY AND OTHER VALUAB LE ARTICLES OR THINGS OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED /RE QUISITION BELONGS TO SOME OTHER PERSONS, THEN SUCH BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED SHALL BE HANDLED TO THE ASSESSING OFF ICER HAVING JURISDICTION OVER SUCH OTHER PERSON. THEREAFTER, T HE ASSESSING OFFICER CAN PROCEED U/S 153C OF THE ACT. ALL THESE CONDITI ONS HAVE TO BE SATISFIED CUMULATIVELY BEFORE ASSUMING VALID JURISD ICTION TO ASSESS OR REASSESS INCOME ON SUCH OTHER PERSON IN ACCORDANCE WITH SECTION 153C. IN SECTION 132(1) OF THE ACT, THEY WORD SEI ZED CLEARLY REFERRED TO UNDISCLOSED ASSETS OF THE PERSON SEARCHED AND NO T ASSETS WHICH ARE DULY DECLARED OR DISCLOSED BY SUCH PERSONS. TH E ASSESSEE RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CA SE OF L.R.GUPTA VS UNION OF INDIA 194 ITR 32 IN WHICH IT WAS HELD THAT IT IS NOT EVERY ARTICLE, WHICH IS FOUND AS A RESULT OF SEARCH, WHIC H HAS TO BE SEIZED. THE SEIZED BOOKS OF ACCOUNTS OR OTHER VALUABLE ARTI CLES OR THINGS REFERRED TO IN SECTION 153C OF THE ACT, WOULD MEAN ANY DOCUMENT/ ARTICLE WHICH IS HIDDEN FROM THE INCOME TAX DEPARTM ENT AND REPRESENTS WHOLLY OR PARTLY ANY UNDISCLOSED INCOME OF ANY PERSON. THE SATISFACTION NOTE AND THE DOCUMENTS REFERRED TH EREIN IS THE AGREEMENT FOR SALE DATED 05.05.2006 FOR RS.5,01,51, 000/- BETWEEN ITA NO. 4822-4824/DEL/2014 PAGE | 7 UTI & THE ASSESSEE COMPANY FOR OFFICE SPACE NO.A-16 01 & B-1601, 16 TH FLOOR, STATESMAN HOUSE, BARAKHAMBA ROAD, NEW DELHI . IT WAS SUBMITTED THAT THE SAID DOCUMENT HAS BEEN DULY DISC LOSED IN THE REGULAR BOOKS OF ACCOUNTS AND NONE OF THESE DOCUMEN TS WOULD BE TREATED AS INCRIMINATING DOCUMENT/MATERIAL FOUND DU RING THE COURSE OF SEARCH IN M/S TODAY GROUP OF CASES. THEREFORE, ON SUCH DOCUMENTS, AO CANNOT INITIATE PROCEEDINGS U/S 153C OF THE ACT. THERE COULD NOT BE ANY SATISFACTION TO PROVE THAT T HE ASSESSEE HAS EARNED ANY UNDISCLOSED INCOME ON THE BASIS OF THE A FORESAID DOCUMENT REFERRED TO IN SATISFACTION NOTE. THE AO CANNOT INITIATE PROCEEDINGS U/S 153C ON THE BASIS OF THE ENTITIES A LREADY RECORDED IN THE BOOKS OF ACCOUNTS PRIOR TO THE SEARCH. THEREFO RE, SATISFACTION IS INVALID AND BAD IN LAW. THE ASSESSEE RELIED UPON T HE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS ACIT 289 ITR 340 (SC) . THE CONDITIONS OF SECTION 153C OF THE ACT HAVE N OT BEEN COMPLIED AND SATISFIED BY THE AO BEFORE INITIA TING THE PROCEEDINGS U/S 153C OF THE ACT. THEREFORE, ENTIRE PROCEEDINGS U/S 153C OF THE ACT SHALL BE WITHOUT JURISDICTION, IL LEGAL AND VOID AB INITIO . THE ASSESSEE RELIED UPON OTHER DECISIONS AS WELL AS SUBMITTED THAT SINCE THE SATISFACTION NOTE MAKES IT PATENTLY CLEAR THAT NOTHING INCRIMINATING MATERIAL AGAINST THE ASSESSEE WAS FOU ND DURING THE ITA NO. 4822-4824/DEL/2014 PAGE | 8 COURSE OF SEARCH IN M/S TODAY GROUP OF CASES, THERE FORE, INITIATION OF THE PROCEEDINGS U/S 153C OF THE ACT IS BAD IN LAW. AS REGARDS DETERMINATION OF ANNUAL LETTING VALUE OF THE ENTIRE SPACE, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD NOT LET OUT THE ENT IRE AREA OF PROPERTY TO M/S TODAY HOTELS PVT. LTD. AND OTHERS. THE ASS ESSEE RELIED UPON DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS DCIT 137 ITD 287 (MUM.) IN WHICH IT WAS HELD THAT ASSESSMENT U/S 153A OF THE ACT SHALL BE R ESTRICTED TO UNDISCLOSED INCOME/PROPERTY FOUND DURING THE COURSE OF SEARCH AND INCOME ON THE BASIS OF BOOKS OF ACCOUNTS OR OTHER D OCUMENTS WHICH WAS NOT PRODUCE IN THE REGULAR ASSESSMENT AND ARE F OUND DURING THE COURSE OF SEARCH. THE ASSESSEE ALSO RELIED UPON TH E ORDER OF THE ITAT, PUNE BENCH IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY VS ACIT 140 TTJ 233 IN WHICH IT WAS HELD THAT SECTION 153C ASSESSMENT SANS SPEAKING AND INCRIMINATING DOCUMENTS ARE V OID. IN THAT CASE, THE TRIBUNAL CATEGORICALLY OBSERVED THAT IN O RDER TO INITIATE PROCEEDINGS U/S 153C OF THE ACT, DOCUMENTS SEIZED M UST BE INCRIMINATING IN NATURE. IT WAS SUBMITTED THAT THE AO HAS MERELY COMPUTED THE ANNUAL LETTING VALUE OF THE PROPERTY W ITHOUT REFERENCE TO ANY INCRIMINATING MATERIAL IN THE ASSESSMENT ORD ER U/S 153C OF ITA NO. 4822-4824/DEL/2014 PAGE | 9 THE ACT. THUS, NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO INITIATE PROCEEDINGS U/S 153C OF THE A CT. 4. LD.CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE AND MATERIAL ON RECORD, OBSERVED THAT WHERE THE ASSESSM ENT OR RE- ASSESSMENT PROCEEDINGS ARE PENDING COMPLETION WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WILL ABATE M AKING WAY FOR AO TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED. HOWEVER, IN CASES W HERE ASSESSMENT OR RE-ASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMP LETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL INCOME AND SUCH ORDERS ARE SUBSTITUTING AT THAT TIM E WHEN SEARCH OR REQUISITION IS MADE, THERE IS NO QUESTION OF ANY AB ATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE AO WILL RE-OPEN THE ASSESSMENT OR RE-ASSESSMENT ALREADY MADE AND DE TERMINE THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE IF ANY UNE ARTHED DURING SEARCH. AS FAR AS COMPLETED ASSESSMENT ARE CONCERNE D, THE ISSUES ALREADY EXAMINED BY THE AO IN SUCH COMPLETED ASSESS MENT WOULD BE DIFFICULT FOR RE-EXAMINING IN ASSESSMENTS U/S 153A UNLESS SOME MATERIAL IS FOUND IN ACCORDANCE OF SEARCH ACTION. LD.CIT(A) CONSIDERING THIS LEGAL POSITIONS HELD THAT THE ADDI TION HAS BEEN MADE WITHOUT REFERENCE TO ANY MATERIAL HAVING BEEN FOUND DURING THE ITA NO. 4822-4824/DEL/2014 PAGE | 10 COURSE OF SEARCH AND, THEREFORE, CLEARLY OUTSIDE T HE SCOPE OF PROCEEDINGS U/S 153C OF THE ACT. THE APPEAL WAS AC CORDINGLY ALLOWED. THE FINDINGS OF THE LD.CIT(A) IN REMAININ G YEARS ARE SAME. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES. LD. DR SOUGHT ADJOURNMENT ON THE GROUND THAT SIMILAR IS SUE IN AY 2006- 07 IN DEPARTMENT APPEAL IS FIXED BEFORE E BENCH O F THE TRIBUNAL AND REQUEST IS MADE FOR CONSOLIDATION AND TO PREPARE A PAPER BOOK. THE REQUEST FOR ADJOURNMENT WAS OPPOSED BY THE LD. COUN SEL FOR THE ASSESSEE ON THE GROUND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENTS OF HONBLE SUPREME COURT IN THE CASE OF CIT VS SINHGAD TECHNICAL EDUCATION SOCIETY 397 ITR 344 (SC) AND ALSO SUBMITTED THAT THE ASSESSEE FILED COMPLETE DETAILS IN THE PAPER BOOK INCLUDING SATISFACTION NOTE, THEREFORE, THERE IS NO NEED FOR FILING OF THE PAPER BOOK BY THE LD. DR. CONSIDERING THE FACTS OF THE CASE, AN ADJOURNMENT SOUGHT BY THE LD. DR WAS REJECTED. 6. LD. COUNSEL FOR THE ASSESSEE RE-ITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAD SUBMITTED THA T NO INCRIMINATING DOCUMENTS BELONGING TO THE ASSESSEE ARE FOUND DURIN G THE COURSE OF SEARCH. HE HAS REFERRED TO PAPER BOOK PAGE 71 WHIC H IS SATISFACTION NOTE RECORDED BY THE AO ON 06.06.2011 IN WHICH ONLY DOCUMENT SEIZED DURING THE COURSE OF SEARCH HAS BEEN MENTION ED AS AGREEMENT ITA NO. 4822-4824/DEL/2014 PAGE | 11 FOR SALE DATED 05.05.2006 FOR RS.5,01,51,000/- BETW EEN UTI LTD. AND THE ASSESSEE COMPANY FOR OFFICE SPACE NO.A-1601 & B -1601 AT 16 TH FLOOR, STATESMAN HOUSE, BARAKHAMBA ROAD, NEW DELHI. PAPER BOOK PAGE 89 IS THE SAME AGREEMENT TO SALE DATED 05.05. 2006, P.B PAGE 67 IS THE BALANCE SHEET OF THE ASSESSEE COMPANY ENDING ON 31.03.2007 IN WHICH THE ASSESSEE HAS DISCLOSED THIS PROPERTY I N SCHEDULE OF FIXED ASSETS. HE IS, THEREFORE, SUBMITTED THAT THE SALE DEED WHICH IS ALREADY DISCLOSED TO THE REVENUE DEPARTMENT AND DUL Y DISCLOSED IN THE BOOKS OF ACCOUNTS COULD NOT BE TREATED AS INCRI MINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HE HAS SUBMITTE D THAT NO INCRIMINATING MATERIAL HAVE BEEN REFERRED TO IN THE SATISFACTION NOTE. THE AO DID NOT MAKE ANY ADDITION IN AY 2007-08 AS R EGARDS THE SALE CONSIDERATION MENTIONED IN THE SATISFACTION NOTE. THE AO MERELY CALCULATED THE AKV OF THE PROPERTY IN QUESTION WITH OUT BRINGING ANY MATERIAL ON RECORD THAT THE ASSESSEE HAS LET OUT TH E ENTIRE PROPERTY IN QUESTION TO M/S TODAY HOTELS PVT. LTD. AND OTHERS. HE HAS SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA). THE ISSUE IS SAME IN REMAINING APPEALS. 7. LD. DR HAS NOT BEEN ABLE TO POINT OUT ANY INFIRM ITY IN THE ORDER OF THE LD.CIT(A) IN ALLOWING APPEAL OF THE ASSESSEE . LD. DR HAS ALSO ITA NO. 4822-4824/DEL/2014 PAGE | 12 NOT POINTED OUT AS TO WHY THE ISSUE IS NOT COVERED BY THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA). 8. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE LIGHT OF THE MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) IN ALLOWI NG THE APPEALS OF THE ASSESSEE U/S 153C OF THE ACT. HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SINHGAD TECHNICAL EDUCATION SOCIETY [2015] 3 78 ITR 84 (BOM.) HELD AS UNDER:- IN TERMS OF SECTION 153C OF THE INCOME-TAX ACT, 19 61, THE ASSESSING OFFICER SHOULD BE SATISFIED THAT ANY MONE Y, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THING OR BO OKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG OR BELONGS TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A O F 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 T HE ASSESSMENT YEAR 1994-95. A SEARCH AND SEIZURE OPERA TION WAS CARRIED OUT AND CERTAIN LOOSE PAPERS WERE SEIZED FR OM THE PRESIDENT OF THE ASSESSEE. SIMULTANEOUSLY A SURVEY ACTION WAS CONDUCTED ON THE ASSESSEE. ON THE BASIS OF LOOSE PA PERS FOUND WITH AND SEIZED FROM THE PRESIDENT THE ASSESSING OF FICER ISSUED A NOTICE UNDER SECTION 153C ON THE ASSESSEE AND ASSES SED THE ITA NO. 4822-4824/DEL/2014 PAGE | 13 INCOME. THE TRIBUNAL SET ASIDE THE ASSESSMENTS. ON APPEALS TO THE HIGH COURT: HELD, DISMISSING THE APPEALS, THAT THE REASONS ASSI GNED BY THE ASSESSING OFFICER IN THE SATISFACTION NOTE WERE SILENT ABOUT THE ASSESSMENT YEAR IN WHICH SPECIFIC INCRIMINATING INF ORMATION OR UNACCOUNTED OR UNDISCLOSED HIDDEN INFORMATION WAS D ISCOVERED OR SEIZED BY THE REVENUE FROM THE ASSESSEE. IN THE CIR CUMSTANCES, THE GENERAL SATISFACTION AND AS RECORDED IN THE NOT E 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 TE CHNICAL COURSES MERIT-WISE OR ON THE BASIS OF MARKS OBTAINE D IN XII STANDARD HSC EXAM. WHETHER ANY FEE STRUCTURE WAS AP PROVED AND CASH COMPONENT WAS, THEREFORE, COLLECTED OVER A ND ABOVE THE SANCTIONED FEES WERE MATTERS WHICH OUGHT TO HAVE BE EN GONE INTO AND THERE COULD NOT BE A GENERAL OR VAGUE SATISFACT ION. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ASSESSM ENTS. 9. HONBLE SUPREME COURT IN THE CASE OF CIT VS SINHGAD TECHNICAL EDUCATION SOCIETY 397 ITR 344 (SC) CONFIRMED THE DECISION OF THE BOMBAY HIGH COURT ABOVE AND HELD AS UNDER:- 'HELD, DISMISSING THE APPEALS, (I) THAT THE TRIBUNA L PERMITTED THE ASSESSEE TO RAISE THE ADDITIONAL GROUND ON THE GROU ND THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FAC TS ALREADY ON RECORD, THAT UNDER SECTION 153C OF THE ACT, INCRIMI NATING MATERIAL WHICH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT Y EARS IN QUESTION, AND THAT THE DOCUMENTS WHICH WERE SEIZED DID NOT ITA NO. 4822-4824/DEL/2014 PAGE | 14 ESTABLISH ANY CO-RELATION, DOCUMENT-WISE, WITH THES E FOUR ASSESSMENT YEARS. THE TRIBUNAL FOUND THAT THE MATER IAL DISCLOSED IN THE SATISFACTION NOTE BELONGED TO ASSESSMENT YEA R 2004-05 OR THEREAFTER. THE TRIBUNAL RIGHTLY PERMITTED THIS ADD ITIONAL GROUND TO BE RAISED AND CORRECTLY DEALT WITH THE GROUND ON TH E MERITS AS WELL. THE HIGH COURT WAS RIGHT IN AFFIRMING THIS VI EW 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 ASSESS ING OFFICER COVERED EIGHT ASSESSMENT YEARS. FOR SIX ASSESSMENT YEARS THE ASSESSMENT WAS UNDER SECTION 153C OF THE ACT. THE A SSESSMENT ORDER WAS SET ASIDE ONLY IN RESPECT OF FOUR OF THOS E ASSESSMENT YEARS AND ON A TECHNICAL GROUND. THE OBJECTION PERT AINING TO THE FOUR ASSESSMENT YEARS IN QUESTION DID NOT RELATE TO THE OTHER TAX ASSESSMENT YEARS, NAMELY, 2004-05 AND 2005-06. NOR DID THIS DECISION HAVE A BEARING IN RESPECT OF ASSESSMENT FO R ASSESSMENT YEAR 1999-2000 OR ASSESSMENT YEAR 2006-07. THE NECE SSARY CONSEQUENCE WOULD BE THAT THE CONCLUSIONS OF THE AS SESSING OFFICER IN HIS ASSESSMENT ORDER REGARDING THE ACTIV ITIES OF THE TRUST NOT BEING GENUINE AND NOT CARRIED OUT IN ACCORDANCE WITH THE TRUST DEED OR CANCELLATION OF REGISTRATION, DENIAL OF BEN EFITS OF SECTIONS 11 AND 12 WOULD NOT BE AFFECTED BY THIS JUDGMENT. 10. HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI VS ACIT [2011] 333 ITR 436 (GUJ.) HELD AS UNDER:- ITA NO. 4822-4824/DEL/2014 PAGE | 15 '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, PROVIDES THAT WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A HE SHALL PROCEED AGAINS T EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON. HOWEVER, THER E IS A DISTINCTION BETWEEN THE TWO PROVISIONS INASMUCH AS UNDER SECTION 153C NOTICE CAN BE ISSUED ONLY WHERE THE MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG TO SUCH OT HER PERSON, WHEREAS UNDER SECTION 158BD IF THE ASSESSING OFFICE R WAS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO AN Y PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH W AS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHE R DOCUMENTS OR ASSETS WERE REQUISITIONED UNDER SECTION 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 THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH PERSON. IF THE REQUIREMENT IS NOT SATISFIED, R ECOURSE CANNOT BE HAD TO THE PROVISIONS OF SECTION 153C. HELD, ALLOWING THE PETITION, THAT ADMITTEDLY, THE T HREE LOOSE PAPERS RECOVERED DURING THE SEARCH PROCEEDINGS DID NOT BELONG TO ITA NO. 4822-4824/DEL/2014 PAGE | 16 THE PETITIONER. IT WAS NOT THE CASE OF THE REVENUE THAT THE THREE DOCUMENTS WERE IN THE HANDWRITING OF THE PETITIONER . IN THE CIRCUMSTANCES, WHEN THE CONDITION PRECEDENT FOR ISS UANCE OF NOTICE WAS NOT FULFILLED ACTION TAKEN UNDER SECTION 153C OF THE ACT STOOD VITIATED.' 11. HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS LAVANYA LAND PVT. LTD. [2017] 397 ITR 246 (BOM.) HELD AS UNDER:- 'IT IS CLEAR THAT BEFORE ISSUING NOTICE UNDER SECTI ON 153C OF THE INCOME-TAX. ACT, 1961, THE PRIMARY CONDITION TH AT HAS TO BE FULFILLED IS THAT THE MONEY, BULLION, DOCUMENTS, ET C., SEIZED SHOULD BELONG TO SUCH OTHER PERSON. IF THIS CONDITION IS N OT SATISFIED, NO PROCEEDINGS COULD BE TAKEN UNDER SECTION 153C. THE JC GROUP WAS A PARTNER IN THE MUMBAI SPECIAL EC ONOMIC ZONE AND NAVI MUMBAI SPECIAL ECONOMIC ZONE PROJECTS OF INDIA. THIS GROUP HAD FLOATED VARIOUS COMPANIES TO PURCHAS E LARGE CHUNKS OF LAND IN THE VICINITY OF THE SPECIAL ECONO MIC ZONES. THE GROUP'S REAL ESTATE OPERATIONS WERE BEING HANDLED B Y V, G AND D. D WAS ALSO THE MANAGING LAND TRANSACTIONS OUTSIDE T HE MUMBAI SPECIAL ECONOMIC ZONE. THE ASSESSEE WAS ONE OF THE COMPANIES FLOATED BY THIS GROUP TO PURCHASE LAND OUTSIDE THE MUMBAI SPECIAL ECONOMIC ZONE. DURING SEARCH OF D'S RESIDENCE, CERT AIN INCRIMINATING DOCUMENTS WERE SEIZED AND HIS STATEME NT WAS RECORDED. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASS ESSEE INFORMING IT THAT RS. 38.45 CRORES, WHICH WAS A SUM REFLECTED FROM THE DOCUMENTS SEIZED FROM D'S RESIDENCE AND RS. 4 C RORES IN ADDITION, WHICH WAS EVIDENCED BY LOOSE DOCUMENTS IN THE FORM OF ITA NO. 4822-4824/DEL/2014 PAGE | 17 CASH RECEIPTS, WERE FOUND DURING SEARCH AND SEIZURE PROCEEDINGS. THE ASSESSEE WAS CALLED UPON TO EXPLAIN AND SHOW CA USE WHY THESE AMOUNTS SHOULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT, SINCE THE ASSESSEE DI D NOT PROVIDE ANY EXPLANATION WITH REGARD TO THE DOCUMENTS SEIZED UNDER SECTION 132 OF THE ACT FOR THE ASSESSMENT YEARS FRO M 2003 TO 2009 AND 2009-10. THE ASSESSMENT ORDER WAS PASSED A ND THE ADDITIONS WERE MADE. THE UNEXPLAINED EXPENDITURE WA S APPORTIONED TO ALL THE LAND COMPANIES FLOATED BY TH E JC- GROUP. THE TRIBUNAL HELD THAT AN ENTRY IN THE HOOKS OF ACC OUNT MAINTAINED IN THE REGULAR COURSE OF BUSINESS IS REL EVANT FOR THE PURPOSE OF CONSIDERING THE NATURE AND IMPACT OF A T RANSACTION, BUT NOTINGS ON SLIPS OF PAPER OR LOOSE SHEETS OF PAPER WERE REQUIRED TO BE SUPPORTED OR CORROBORATED BY OTHER EVIDENCE. THE RE WAS A DISTINCTION BETWEEN LOOSE PAPERS FOUND FROM THE POS SESSION OF THE ASSESSEE AND SIMILAR DOCUMENTS FOUND FROM A THIRD P ERSON. 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 NAMES OF THE COMPANIES WERE MENTIO NED IN THE DOCUMENTS. THE TRIBUNAL SET ASIDE THE ORDER OF THE COMMISSIONER (APPEALS) PERTAINING TO THE ASSESSMENT YEAR 2008-09 HOLDING THAT THE ACTION UNDER SECTION 153C OF THE ACT WAS BAD IN LAW. ON APPEAL: HELD, DISMISSING THE APPEAL, THAT THE FINDING THAT SECTION 153C WAS NOT ATTRACTED AND ITS INVOCATION WAS BAD I N LAW WAS NOT BASED JUST ON INTERPRETATION OF SECTION 153C BU T AFTER HOLDING ITA NO. 4822-4824/DEL/2014 PAGE | 18 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 AUTHORITY. THEREFORE, THE FINDING WAS A MIX ED ONE. THERE WAS NO SUBSTANTIAL QUESTION OF LAW ARISING FROM SUC H AN ORDER WHICH ALTERNATIVELY CONSIDERED THE MERITS OF THE CA SE AS WELL. THE DELETION OF THE ADDITION WAS JUSTIFIED. 12. HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS LATE J. CHANDRASEKAR (HUF) [2011] 338 ITR 61 (MAD.) HELD AS UNDER:- 'ON THE SEARCH CONDUCTED IN THE CASE OF A AND GROUP ON NOVEMBER 25, 2003, MATERIAL PERTAINING TO 'ON-MONEY' PAYMENT PAID TO THE ASSESSEE IN RESPECT OF PROPERTY PURCHASED FROM THE ASSESSEE WERE SEIZED. BASED ON THAT, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153C OF THE INCOME-TAX ACT, 1961, AND REWOR KED THE CAPITAL GAINS. THE COMMISSIONER (APPEALS) AND THE T RIBUNAL HELD THAT THE NOTICE UNDER SECTION 153C WAS NOT VALID. O N APPEAL TO THE HIGH COURT: HELD, DISMISSING THE APPEALS, THAT THE ASSESSING OF FICER DID NOT HAVE THE BENEFIT OF THE SEIZED MATERIAL WHILE I SSUING THE NOTICE UNDER SECTION 153C. IN THE LIGHT OF THE FACT THAT T HE REVENUE DID NOT PRODUCE ANY MATERIAL TO SHOW THAT THE MATERIALS WERE AVAILABLE AT THE HANDS OF THE ASSESSING OFFICER AT THE TIME OF ISSUING NOTICE, THE TRIBUNAL RIGHTLY CAME TO THE CO NCLUSION THAT HE ASSUMPTION OF JURISDICTION UNDER SECTION 153C WAS N OT VALID. 13. THE ITAT, AGRA BENCH IN THE CASE OF ACIT, CIRCLE-1, GWALIOR VS GLOBAL ESTATE [2013] 142 ITD 740 (AGRA) HELD AS UNDER:- ITA NO. 4822-4824/DEL/2014 PAGE | 19 THE ASSESSEE HAD A CASE FOR QUASHING OF PROCEEDI NGS UNDER SECTION 153C. NO MATERIAL IS PRODUCED TO PROVE THAT THE ASSESSING OFFICER IN THE CASE OF PERSON SEARCHED WAS SATISFIE D THAT ANY MONEY) BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION ED BELONGS TO OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRE D TO IN SECTION 153A . NO MATERIAL IS PRODUCED BEFORE TO SHOW IF ANY SAT ISFACTION WAS RECORDED BY THE ASSESSING OFFICER IN THAT CASE THAT THE MATERIAL BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RE SPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132. DEPARTMENT DID N OT PRODUCE ANY MATERIAL TO SHOW IF ANY SUCH SATISFACTION AS RE QUIRED UNDER SECTION 153C WAS RECORDED BY THE ASSESSING OFFICER IN THE CASE OF PERSON SEARCHED. NO MATERIAL IS PRODUCED IN REFEREN CE TO ABOVE REQUIREMENT. NO MATERIAL IS ALSO PRODUCED BEFORE TO SHOW THAT BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED HAD BEEN HAND ED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. IN THE ABSENCE OF ANY ADEQUATE MATERIAL PRODUCED BY THE DEPARTMENT CONTENTION OF THE ASSESSEE WAS JUSTIFIED THAT IN THIS CASE, THE ASSESSING OFFICER HAD NOT RECORDED ANY SA TISFACTION THAT ANY SEIZED DOCUMENT OR MATERIAL BELONGS TO ANY PERS ON OTHER PERSON SEARCHED . SINCE THE REVENUE IS IN APPEAL, THEREFORE, BURDEN WAS UPON THEM TO PROVE THAT NECESSARY INGREDIENTS OF SECTION 153C HAVE BEEN COMPLIED WITH IN THIS CASE BEFORE INVOKING JURISDIC TION UNDER SECTION 153C. ITA NO. 4822-4824/DEL/2014 PAGE | 20 IT IS ADDED FURTHER HERE THAT THE ASSESSING OFFIC ER HAS NOT REFERRED TO ANY SEIZED DOCUMENT OR MATERIAL IN THE ASSESSMENT ORDERS ON THE BASIS OF WHICH, ADDITIONS ON MERIT HA VE BEEN MADE. THEREFORE, THE CONDITIONS OF SECTION 153C AS NOTED ABOVE ARE ALSO NOT SATISFIED IN THIS CASE. THEREFORE, THERE IS NO INFIRMITY IN THE ORDER OF THE COMMISSIONER (APPEALS) IN QUASHING THE PROCEEDINGS UNDER SECTION 153C. 14. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA [2016] 380 ITR 573 (DEL.) HELD AS UNDER:- HELD ACCORDINGLY, THAT THE MATTER RELATED TO THE A SSESSMENT YEARS 2002-03, 2005-06 AND 2006-07. ON THE DATE OF THE SEARCH THE ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 15. CONSIDERING THE FACTS OF THE CASE, IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT IN TERMS OF SECTION 153 C OF THE ACT, THE AO SHOULD BE SATISFIED THAT ANY MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLES OR THINGS OR BOOKS OF ACCOUNTS O R DOCUMENTS SEIZED OR REQUISITION BELONG OR BELONGS TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT AND HE SHALL HAND OVER THE SEIZED DOCUMENTS TO THE AO HAVING JURISDICTION OVER THAT PERSON. THEREFORE, THE SATISFACTION OF THE AO BEFORE INITIA TING PROCEEDINGS U/S 153C IS MUST THAT THE SEIZED DOCUMENTS WHICH ARE IN CRIMINATING IN ITA NO. 4822-4824/DEL/2014 PAGE | 21 NATURE BELONG OR BELONGS TO THE ASSESSEE SO AS TO P ROCEED U/S 153C OF THE ACT. THE COPY OF THE SATISFACTION NOTE RECORDE D BY THE AO U/S 153C IS FILED AT PAGE 71 OF THE PAPER BOOK. IN THI S SATISFACTION NOTE, THE AO HAS REFERRED TO THE SEIZED ANNEXURES/DOCUMEN TS WHICH IS AGREEMENT FOR SALE DATED 05.05.2006 FOR RS.5,01,51, 000/- BETWEEN UTI AND THE ASSESSEE COMPANY FOR PURCHASE OF OFFICE SPACE IN PROPERTY LOCATED AT 16 TH FLOOR, STATESMAN HOUSE, BARAKHAMBA ROAD, NEW DELHI. THE AO ON THE BASIS OF THIS SEIZED DOCU MENTS SATISFIED HIMSELF THAT THERE IS AN ESCAPEMENT OF INCOME, HOWE VER, THE PROPERTY IN QUESTION HAVE ALREADY BEEN DISCLOSED BY THE ASSE SSEE IN THE REGULAR BOOKS OF ACCOUNTS AND TO THE REVENUE DEPARTMENT. T HE PROPERTY IS TAKEN IN THE SCHEDULE OF FIXED ASSETS IN THE BALANC E SHEET OF THE ASSESSEE. COPY OF WHICH IS FILED AT PAGE 67 OF THE PAPER BOOK. THE AO IN THE ASSESSMENT ORDER IN PARA 2 HAS MENTIONED THE SAME FACT THAT THE PROPERTY IN QUESTION HAS BEEN PURCHASED BY THE ASSESSEE FROM M/S UTI LTD. ON 05.05.2006 IN AY 2007-08. THE AO DID NOT MAKE ANY ADDITION ON ACCOUNT OF PURCHASE OF THE PRO PERTY TREATING UNDISCLOSED INCOME. THE AO MENTIONED IN THE ASSESS MENT ORDER THAT BOOKS OF ACCOUNTS OR DOCUMENTS BELONG TO THE ASSESS EE WERE FOUND AND SEIZED DURING SEARCH. WHEN THE PROPERTY WAS PU RCHASED BY THE ASSESSEE THROUGH AGREEMENT TO SALE DATED 05.05.2006 HAS ALREADY ITA NO. 4822-4824/DEL/2014 PAGE | 22 BEEN DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT, THE REFORE, THE SAME COULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE A SSESSEE OR INCRIMINATING MATERIAL IN NATURE AGAINST THE ASSESS EE. THE AO IN THE ASSESSMENT ORDER DID NOT QUESTION THE AFORESAID SEI ZED DOCUMENT I.E AGREEMENT TO SALE FOR THE PURPOSE OF MAKING ANY AD DITION AGAINST THE ASSESSEE. IT WAS CLEAR THAT THE REASONS ASSIGNED B Y THE AO IN THE SATISFACTION NOTE WERE SILENT ABOUT ANY INCRIMINATI NG INFORMATION OR UNACCOUNTED OR UNDISCLOSED HIDDEN, INCOME, SEIZED B Y THE REVENUE FROM THE ASSESSEE. THE REASONS RECORDED BY THE AO IN THE SATISFACTION NOTE ARE FACTUALLY INCORRECT OR WITHOUT SUSTENANCE BECAUSE THE PROPERTY IN QUESTION PURCHASED ON 05.05.2006 WAS AL READY DISCLOSED IN THE REGULAR BOOKS OF ACCOUNTS FOR AY 2007-08. T HEREFORE, THERE IS NO QUESTION OF AO BEING SATISFIED WITH CONDITIONS O F SECTION 153C OF THE ACT SO AS TO INITIATE PROCEEDINGS U/S 153C OF T HE ACT AGAINST THE ASSESSEE. THE SATISFACTION HAS ALSO NOT RECORDED I N CASE OF PERSON SEARCHED AS PER LAW BECAUSE IT IS RECORDED IN CASE OF ASSESSEE ONLY. IT IS, THEREFORE, BAD IN LAW. LD.CIT(A), THEREFORE, H AS RIGHTLY APPRECIATED THE MATERIAL ON RECORD AND CORRECTLY HELD THAT THE ADDITION HAS BEEN MADE WITHOUT REFERENCE TO ANY MATERIAL, FOUND DURIN G THE COURSE OF SEARCH, THEREFORE, IT IS CLEARLY BEYOND THE SCOPE O F THE PROCEEDINGS U/S 153C OF THE ACT BECAUSE THE ANNUL LETTING VALUE WAS DETERMINED IN ITA NO. 4822-4824/DEL/2014 PAGE | 23 ASSESSMENT YEAR WITHOUT REFERENCE TO ANY INCRIMINAT ING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE AO MERELY O N PRESUMPTION ASSUMED THAT THE ASSESSEE HAS LET OUT ENTIRE OFFICE SPACE OF M/S TODAY HOTELS PVT. LTD. THE ISSUE IS, THEREFORE, C OVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE SUPREME CO URT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA) BECAUSE THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH SO AS TO MAKE THE ABOVE ADDITION IN THE ASSESSMENT ORDER. 16. IT MAY ALSO BE NOTED HERE THAT THE DEPARTMENTAL APPEAL IN ITA NO.4825/DEL/2014 (AY 2010-11) WAS ALSO HEARD SEPARA TELY IN WHICH THE ONLY ISSUE WAS INVOLVED OF THE ALV DETERMINED B Y THE AO WHICH WAS RESTRICTED TO LD.CIT(A) TO 1/3 RD OF THE OFFICE SPACE LEASED OUT TO M/S TODAY HOTELS PVT. LTD. ETC. AS CLAIMED BY THE A SSESSEE. THE FINDINGS OF THE LD.CIT(A) WERE BASED ON THE FACTS T HAT IN SUBSEQUENT ASSESSMENT YEAR, THE AO IN THE ORDERS U/S 143(3) HA VE ACCEPTED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE MATTER RE MANDED BY THE TRIBUNAL. THIS APPEAL IS SEPARATELY DECIDED VIDE O RDER DATED 17.01.2018 AND FINDINGS IN THIS APPEAL ARE REPRODUC ED AS UNDER:- 8. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ORDER OF THE TRIBUNAL AND THE ASSESSMENT ORDER FOR AY 2011-1 2 & 2013- 14, IT IS CLEAR THAT THE CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED BY ITA NO. 4822-4824/DEL/2014 PAGE | 24 THE AO IN SET ASIDE PROCEEDINGS FOR AY 2011-12 THAT THE ASSESSEE LEASED OUT ONLY 1/3 OF THE SPACE IN PROPERTY UNDER CONSIDERATION FOR WHICH RENTAL VALUE WAS COMPUTED BY THE AO. THE FINDINGS OF THE LD.CIT(A) ARE THUS SUPPORTED BY THE STAND OF TH E AO TAKEN IN AY 2011-12 & 2013-14. ONCE THE AO ACCEPTED THE CLA IM OF THE ASSESSEE THAT THE ASSESSEE LEASED OUT ONLY 1/3 OF T HE AREA IN PROPERTY IN QUESTION, THERE IS NO INFIRMITY IN THE ORDER OF THE LD.CIT(A) IN DIRECTING THE AO TO COMPUTE ONLY LETTI NG VALUE OF 1/3 PROPERTY IN QUESTION. ACCORDINGLY, THE APPEAL OF T HE DEPARTMENT IS DISMISSED. 16.1. IT MAY ALSO BE NOTED THAT AFTER CONCLUSION OF HEARING, LD.CIT DR ALSO MADE A REQUEST IN WRITING FOR DE-HEARING OF TH ESE CASES BECAUSE AT THE TIME OF HEARING OF THE APPEALS, IT WAS REALI ZED BY THE LD. CIT DR THAT THE APPEAL OF THE SAME GROUP IS PENDING BEFORE E BENCH. LD. DR IN THIS APPLICATION ALSO SOUGHT DE-HEARING OF C. O.NO.10/DEL/2018 WHICH WAS ALREADY WITHDRAWN BY THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING AND DISPOSED OF SEPARA TELY. THESE APPEALS WERE INITIALLY FIXED FOR HEARING ON 27.06.2 016 AND, THEREAFTER, FIXED FOR HEARING ON SEVERAL DATES AND THERE IS ALS O NOTING IN THE FILES THAT OTHER CONNECTED APPEALS IN THE CASES OF TAKSHILA & RENCHO PLACE PVT. LTD. ARE ALSO CLUBBED WITH THESE APPEALS VIDE ORDER OF THE HONBLE PRESIDENT. IN OUR OPINION, THE REQUEST FOR ADJOURN MENT AND DE- ITA NO. 4822-4824/DEL/2014 PAGE | 25 HEARING OF APPEALS IS WHOLLY INAPPROPRIATE AND WITH OUT ANY BASIS. THE REQUEST OF THE LD. DR IS, THEREFORE, REJECTED. 17. CONSIDERING THE ABOVE DISCUSSION, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) IN ALLOWING THE APPEA LS OF THE ASSESSEE. ACCORDINGLY, ALL THE APPEALS FILED BY THE REVENUE A RE DISMISSED. 18. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.01.2018. SD/- SD/- (L.P.SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:- 22MD JANUARY, 2018 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI