ACIT, New Delhi V. M/s. Rangoli Buildtech (P) Ltd., New Delhi

ITA 5015/DEL/2014

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4475 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 12-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIT SINGH
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 153A; 13; 153; 22; 153C; 132; 15

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO. 5015 / DEL/201 4 ASSESSMENT YEAR : 20 0 7 - 08 ACIT, CENTRAL CIRCLE - 14, NEW DELHI. VS RANGOLI BUILDTECH (P) LTD., 1105, AKASH DEEP BUILDING, BARAKHAMBA ROAD, NEW DELHI. PAN: AACCR8695P (APP ELL A NT ) (RESPONDENT) A SSESSEE BY : SHRI RAKESH GUPTA, ADVOCATE & SHRI SOMIL AGARWAL, CA RE VENUE BY : MS SUNIT SINGH, CIT - DR DATE OF HEAR ING : 14 . 10 . 20 20 DATE OF PRONOUNCEMENT : 22 . 10 . 20 20 ORDER PER R. K. PANDA, AM : THIS APPEAL FILED BY THE R EVENUE IS DIRECTED AGAINST THE ORDER DATED 26 TH MARCH , 2014 OF THE CIT (A) - 33 NEW DELHI , RELATING TO ASSESSMENT YEAR 2007 - 0 8 . 2 . F ACTS OF THE CASE , IN BRIEF , ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF PURCHASING AND SELLING AND DEVELOPING OF REAL ESTATE . A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT, 1961 WAS CONDUCTED BY THE INVESTIGATION ITA NO. 5015 /DEL/201 4 2 WING OF THE DEP ARTMENT ON 22.03.2011 IN THE AMTEK GROUP OF CASES. THE PREMISES OF M/S EXCEL INFOTECH PVT. LTD. & OTHERS, 9, TOLSTOY MARG, CONNAUGHT PLACE, NEW DELHI WAS ALSO COVERED U/S 132(1) OF THE INCOME - TAX ACT, 1961 WHICH IS A GROUP COMPANY OF AMTEK GROUP. THE DOC UMENTS BELONGING TO THE ASSESSEE, M/S RANGOLI BUILDTECH PVT LTD, 1105, AKASH DEEP BUILDING, BARAKHAMBA ROAD, NEW DELHI - 110001 WERE ALSO FOUND AND SEIZED FROM THE PREMISES OF M/S EXCEL INFOTECH PVT LTD & OTHERS, 9, TOLSTOY MARG, CONNAUGHT PLACE, NEW DELHI IN WHOSE NAME SEARCH WARRANT OF AUTHORIZATION WAS ISSUED. THE ASSESSEE'S CASE WAS PROPOSED FOR CENTRALIZATION BY THE INVESTIGATION WING FOR COORDINATED INVESTIGATION AND ASSESSMENT U/S 153C AND SUBSEQUENTLY IT WAS CENTRALIZED WITH CENTRAL CIRCLE - 14, NEW DE LHI VIDE ORDER F.NO CIT(C) CENTR/2012 - 13/239 DATED 25.04.2012. ACCORDINGLY NOTICE U/S 153C OF THE INCOME TAX ACT WAS ISSUED TO THE ASSESSEE ON 08.11.2012. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 05.02.2013 DECLARING A LOSS O F RS.6,89,710/ - . 3. D URING THE COURSE OF ASSESSMENT PROCEEDINGS , THE AO NOTED THAT DURING THE COURSE OF SEARCH , CERTAIN DOCUMENTS WERE FOUND AND SEIZED WHICH WERE INVENTORIED AT PAGE 55 - 57 OF ANNEXURE A - 3 AND WERE SEIZED FROM 9 TOLSTOY MARG, CONNAUGHT PLA CE, NEW DELHI WHICH CONTAINS THE DETAILS OF FINANCE TO M/S RANGOLI BUILDTECH PVT. LTD AS ON 29.01.2007. THE PAGE 57 SHOWS THE FINANCING OF THE PROJECT UNDERT AKEN JOINTLY BY M/S RANGOLI BUILDTECH PVT. LTD. IN THE NAME OF TDI GREEN, SONIPAT. THE FIRST PARTY WAS SH RAVINDER TANEJA AND SH PARVEEN JOLLY WHO ARE THE ITA NO. 5015 /DEL/201 4 3 DIRECTORS OF M/S RANGOLI BUILDTECH PVT LTD AND THE OTHER PARTY WAS M/S GRACIOUS PROJECTS PVT. LTD. WHICH IS THE GROUP COMPANY OF THE AMTEK GROUP IN 50:50 RATIO. ON PAGE NUMBER 56 IT IS MENTIONED THAT CASH PROCEEDS OF RS 4.40 CRORES WAS RETAINED OUTSIDE THE BOOKS BY BOTH THE PARTIES IN 50:50 RATIO ON ACCOUNT OF CASH PROCEEDS RECEIVED ALONG WITH OTHER AMOUNTS MENTIONED THEREIN. H E , THEREFORE , ASKED THE ASSESSEE TO EXPLAIN TH E SOURCE OF CASH PROCEEDS OF R S. 2.20 CRORES RECEIVED BY THE FIRST PARTY , I.E., THE ASSESSEE COMPANY THROUGH ITS DIRECTORS SHRI RAVINDER TANEJA AND SHRI P ARVEEN JOLLY FROM THE PROJECT TDI GREEN, SONEPAT. T HE ASSESSEE SUBMITTED THAT AS PER TH AT THE FIRST PARTY , I.E., M/S RANGOLI BUILDTEC H PVT. LTD. HAS DETERMINED THE COST TO BE BORNE BY THE 2 ND PARTY AT RS.1 4.9 8 CRORE AND AFTER GIVING CREDIT OF RS. 8.70 CRORE WHICH PERTAIN ED TO THE BUSINESS OF THE COMPANY , T HE SECOND PARTY , I.E., G RACIOUS PROJECTS PVT. LTD. PAID A S U M OF RS. 6.28 CRORES BY WAY OF T W O CHE QUES MENTIONED IN THE SEIZED MATERIAL . T HIS AMOUNT IS SHOWN IN THE BOOKS OF ACCOUNT AS LOAN AND ADVANCES . I T WAS ACCORDINGLY SUBMITTED THAT NO AMOUNT IS TAXABLE IN THE CASE OF THE ASSESSEE . 4. H OWEVER , THE AO WAS NOT SATISFIED WITH THE EXP LANATION GIVEN BY THE ASSESSEE . H E NOTED THAT IN THE SEIZED MATERIAL AT PAGE 56 IT HAS BEEN CLEARLY MENTIONED THAT 50% SHARE OF THE TOTAL CASH PROCEEDS OF RS. 4.40 CRORES WAS RETAINED OUTSIDE THE BOOKS OF ACCOUNT B EING SHARE OF THE ASSESSEE COMPANY . S INCE T HE ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION REGARDING THIS CASH RECEIPT OF RS. 2. 20 CRORES , THE AO MADE ADDITION OF THE SAME TO THE TOTAL INCOME OF THE ASSESSEE . ITA NO. 5015 /DEL/201 4 4 5. B EFORE THE C IT ( A ), IT WAS SUBMITTED THAT THE SATISFACTION NOT E FOR INITIATI NG ACTION UNDE R SECTION 153 C WAS NOT RECORDED IN THE CASE OF THE PERSON SEARCHED . R ELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S DSL P ROPERTIES (P) LTD. V S DCIT, VIDE ITA NO. 1344 / DEL / 2012 , ORDER DATED 22 ND MARCH 2013 , IT WAS SUBMITTED THAT THE TRIBUNAL IN T HE SAID DECISION HAS HELD THAT EVEN IF THE ASSESSING OFFICER OF THE PERSON SEARCHED AND THE PERSON IN WHOSE H AND ACTION IS TO BE INITIATED IS SAME , NECESSARILY , SATISFACTION NOT E FOR INITIATING ACTION UNDER SECTION 153C HAS TO BE RECORDED IN THE FILES OF T HE PERSON SEARCHED FOR VALID INITIATION OF PROCEEDINGS UNDER SECTION 153 C AND DOCUMENTS BELONG ING TO THE OTHER PERSON SHOULD BE KEPT IN THE FILE OF THE OTHER PERSON . I T WAS ARGUED THAT THE SATISFACTION NOT E HAS BEEN RECORDED IN THE CASE OF THE ASSESSEE ONL Y WHICH I S EVIDENT FROM TWO OBSERVATIONS, I.E., (A) THE NAME, ADDRESS, PAN OF THE ASSESSEE IS MENTIONED ON THE TOP OF SATISFACTION NOTE; AND (B) AT THE END OF THE SATISFACTION NOTE AO HAS MENTIONED THAT NOTICE IS ISSUED IN ASSESSEE S CASE. 6. B ASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE , THE L D. CIT(A) QUA SHED THE ASSESSMENT ORDER ON THE GROUND THAT THE JURISDICTION UNDER SECTION 153 C HAS NO T BEEN ASSUMED PROPERLY . H E NOTED THAT O N THE TOP OF THE SATISFACTION NOT E THE NAME AND ADDRESS WITH PAN OF THE AS SESSEE HAS BEEN MENTIONED . T HE DOCUMENTS ALLEGED TO HAVE BELONGED TO THE ASSESSEE AS PER SATISFACTION NOT E WERE SEIZED FROM THE PREMISES OF TWO ASSESSES, NAMELY , M/S EX CEL INFOTECH PVT. LTD. AND M/S AMTEK AUTO LTD. IF THE SATISFACTION IS RECORDED IN THE FI LE OF PERSON SEARCHED , THEN HOW ITA NO. 5015 /DEL/201 4 5 NAME OF THE OTHER PERSON NOT SEARCHED ALONG WITH DOCUMENTS APPEARED IN THE SA I D SATISFACTION NOTE . T HIS , ACCORDING TO HIM , PROVES THAT THE SATISFACTION WAS NOT RECORDED IN THE FILE OF THE PERSON SEARCHED . H E FURTHER NOTED TH AT AT THE END OF THE SATISFACTION NOTE IT IS WRITTEN : NOTICE U/S 153C IS ISSUED TO M/S RANGOLI BUILDTECH (P) LTD. THIS ACCORDING TO HIM CAN HAPPEN ONLY IN THE FILE OF APPE LLANT AS NOTICE IS ISSUED FROM THE FILE OF APPE LLANT AND CANNOT BE ISSUED FROM OTH ER FILES . R EFERRING TO THE DECISION OF THE TRIBUNAL RELIED ON BY THE L D. COUNSEL IN THE CASE OF DSL PROPERT IES (P) LTD. (SU PRA ), HE NOTED THAT THE TRIBUNAL HAS S ET THE GUIDELINES FOR ASSUMING JURISDICTION UNDER SECTION 1 5 3 C, I.E., THE AO OF THE ASSESSEE S E ARCH ED UNDER SECTION 132 WILL WRITE SATISFACTION NOT E THAT CERTAIN DOCUMENTS BELONGED TO OTHER PERSON AND SUCH DOCUMENTS / ASSETS / BOOKS OF ACCOUNT WILL BE HANDED OVER TO THE AO OF THE OTHER PERSON . T HEN , ON THE BASIS OF SATISFACTION OF SUCH DOCUMENTS /ASSET S/ BOOKS OF ACCOUNT , THE AO OF OTHER PERSON WILL ASSUME JURISDICTION UNDER SECTION 153 C TO ASSESS SUCH OTHER PERSON . HE OBSERVED THAT THE SATISFACTION NOT E IN THE INSTANT CASE IS NOT RECORDED IN THE FILE OF THE SEARCHED PERSON AND DOCUMENTS CLAIMED TO BE O WNED BY THE ASSESSEE WAS TRANSFERRED TO THE FILE OF THE APP ELLANT. T HEREFORE , THE JURISDICTION ASSUMED UNDER SECTION 153 C IN THE CASE OF THE ASSESSEE IS NOT IN ACCORDANCE WITH THE FINDING OF THE TRIBUNAL IN THE CASE OF DSL P ROPERT IES PVT. LTD. (SUPRA) . H E ACCORDINGLY CONCLUDED THAT THE JURISDICTION UNDER SECTION 153C HAS NOT BEEN ASSUMED PROPERLY , THEREFORE , HE QU ASHED THE ASSESSMENT ORDER PASSED UNDER SECTION 153C OF THE A CT . ITA NO. 5015 /DEL/201 4 6 7. A GGRIEVED WITH SUCH ORDER OF THE CIT (A), THE R EVENUE IS IN APPEAL BEFORE T HE TRIBUNAL ON THE FOLLOWING GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN QUASHING THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 153 A READ WITH 153C OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW IN TREATING A DIRECTORY PROCEDURE OF RECORDING OF SATISFACTION ENVISAGED UNDER SECTION 153C OF THE ACT AS A MANDATORY REQUIREMENT SO AS TO AFFECT THE ASSUMPTION OF JURISDICTION BY THE AO ESPECIALLY WHEN IT IS NOT IN DISPUTE THAT DOCUMENTS BELONGING TO THE ASSESSEE HAS BEEN FOUND IN THE PREMISES OF THE PERSON SEARCHED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT JURISDICTION U/S 153C WAS NOT ASSUMED PROPERLY WHEN THE AO OF THE ASSESSEE SEARCHED AND THE AO OF THE ASSESSEE INTENDED TO BE COVERED UNDER SECTION 153C ARE THE SAME AND THE SAID AO HAS RECORDED SATISFACTION WHILE ISSUING NOTICE UNDER SECTION 153A READ WITH SECTION 153COF THE INCOME TAX ACT, 1961. 4. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DEMAND ANY/ALL OF GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 8. T HE L D. DR STRONGLY CHALLENGED THE ORDER OF TH E CIT(A) IN QU ASHING THE ASSESSMENT PROCEEDINGS PASSED UNDER SECTION 153 C READ WITH SECTION 1 43( 3 ) . S HE SUBMITTED THAT THE DOCUMENTS BELONGING TO THE ASSESSEE HAS BEEN FOUND IN THE PREMISES OF THE PERSON SEARCHE D . FURTHER, THE AO OF THE PERSON SEARCHED AND THE DOCUMENTS BELONGING TO THE OTHER PARTY ARE ONE AND THE SAME AND THE AO HAS RECORDED SATISFACTION WHILE ISSUING NOTICE UNDER SECTION 153 C OF THE IT ACT, 1961 . T HEREFORE , PROPER SATISFACTION WAS RECORDED AND THERE IS NO ASSUMPTION OF INVALID JURISDICTION UNDER SECTION 153 C AS HELD BY THE L D. CIT(A). ITA NO. 5015 /DEL/201 4 7 9. R EFERRING TO THE SATISFACTION NOT E UNDER SECTION 153 C OF THE A CT , SHE SUBMITTED THAT THE NAME OF THE ASSESSEE HAS CLEARLY BEEN MENTIONED WITH P AN NUMBER . T HEREFORE , IT IS CLEAR THAT SATISFACTION NOT E HAS BEEN CORRECTLY WRITTEN. S HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE QUASHED AND SINCE HE HAS NOT DECIDED THE ISSUE ON M ERIT, THE MATTER MAY BE RESTORED TO HIS FILE FOR DECIDING THE IS SUE ON MERIT . 10. T HE LD. COUN SE L , ON THE OTHER HAND , STRONGLY SUPPORTED THE ORDER OF THE CI T( A ). R EFERRING TO THE COPY OF THE SATISFACTION NOT E, HE SUBMITTED THAT THE AO HAS NOW H ERE MENTIONED AS TO HOW THESE DOCUMENTS ARE BELONGING TO THE ASSESSEE AND N OT OF THE SEARCHED PERSON . R EFERRING TO THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PEPSI F OODS (P) LTD. VS AC IT, 2 31 TAXMAN 58 , HE SUBMITTED THAT THE H ON BLE HIGH COURT IN THE SAID DECISION HAS HELD THAT THE SATISFACTION NOTE ITSELF M UST DISPLAY THE REASONS O R BAS I S FOR THE CONCLUSION THAT THE AO OF THE SEARCHED PERSON IS SATISFIED THA T THE SEIZED DOCUMENTS BELONG ED TO A PERSON OTHER THAN THE SEARCHED PERSON . R EFERRING TO THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PC IT VS. NS S OFTWARE 403 ITR 259 , HE SUBMITTED THAT THE H ON BLE HIGH COURT IN THE SAID DECISION HAS HELD THAT THE FAILURE OF THE AO TO RECORD A SPECIFIC SATISFACTION AS TO HOW THE RECOVERED MATERIAL BELONG ED TO THE ASSESSEE IN THE NOT E THAT PRECEDED THE NOT IC E ISS UED UNDER IT , VITIATES THE ASSESSMENTS . R EFERRING TO THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS (P) LTD. VS. ACIT, 37 0 ITR 295 , HE SUBMITTED THAT THE ITA NO. 5015 /DEL/201 4 8 H ON BLE HIGH COURT IN THE SAID DECISION HAS HELD THAT IT IS NECE SSARY THAT BEFORE THE PROVISIONS OF SECTION 153 C OF THE SAID A CT CAN BE INVOKED , THE AO OF THE SEARCHED PERSON MUST BE SATISFIED THAT TH E SEIZED MATERIAL ( WHICH INCLUDES DOCUMENTS ) DOES NOT BELONG TO THE SEARCHED PERSON . R EFERRING TO THE DECISION OF THE H ON BLE DELHI HIGH COURT IN THE CASE OF CI T V S. RENU CONSTRUCTION S ( P ) LIMITED , 399 I T R 262 , THE L D. COUNSEL D REW THE ATTENTION OF THE B ENCH TO THE FOLLOWING OBSERVATION S OF THE H ON BLE HIGH COURT : - 9. CONSEQUENTLY, THIS COURT REJECTS THE CONTENTION OF T HE LEARNED COUNSEL FOR THE REVENUE THAT EVEN PRIOR TO 1ST JUNE 2015 AT THE STAGE OF INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT, IT IS SUFFICIENT IF THE SEIZED DOCUMENT PERTAINED TO THE OTHER PERSON AND IT IS NOT NECESSARY TO SHOW THAT THE SE IZED MATERIAL BELONGED TO THE OTHER PERSON. THIS LEGAL POSITION HAS BEEN EXPLAINED BY THIS COURT IN ITS RECENT DECISION DATED 10TH JULY 2017 IN W.P. (C) NO. 3241/2015 (CANYON FINANCIAL SERVICES LTD. V. INCOME TAX OFFICER). 11. R EFERRING TO THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF A RN. INF RASTRUCTURE INDIA LIMITED VS AC IT, 394 I TR 569 , HE SUBMITTED THAT THE HON BLE DELHI HIGH COURT IN TH E SAID DECISION HAS HELD THAT THE DOCUMENTS SHOULD NOT ONLY BELONG TO THE OTHER PERSON BUT ALSO SHOU LD BE INCRIMINATING IN NATURE . R EFERRING TO THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SIN H G AD TECHNICAL EDUCATION SOCIETY , 378 ITR 84 , HE SUBMITTED THAT THE H ON BLE HIGH COURT IN TH E SAID DECISION HAS HELD THAT THE SATISFACTION M UST CLEARLY POINT OUT THAT THE DOCUMENT DOES BELONG TO THE ASSESSEE . H E ACCORDINGLY SUBMITTED THAT IN THE LIGHT OF THE ABO VE DECISIONS THE DECISION OF THE L D. CIT(A) QUASHING THE ASSESSMENT ORDER PASSED UNDER SECTION 153 C /1 4 3 (3) DUE TO INVALID ASSUMPTION O F J URISDICTION IS ITA NO. 5015 /DEL/201 4 9 LEGALLY CORRECT AND , THEREFORE , THE GROUNDS RAISED BY THE R EVENUE SHOULD BE DISMISSED . 12. R EFERRING TO THE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS. G RACIOUS PROJECTS PVT. LTD., V IDE I TA NO. 1720 /D EL / 2015 , ORDER DATED 11 TH DECEMBE R , 2019 , HE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES , T HE TRIBUNAL HAS DISMISSED T HE A PPEAL FILED BY THE R EVENUE WHEREIN THE LD. CIT(A) HAS QUASHED THE ASSESSMENT PROCEEDINGS OBSERVING THAT SATISFACTION NOT E HAS NOT BEEN RECORDED IN THE FILE OF THE ASS ESSEE S EARCH ED UNDER SECTION 132 OF THE ACT AND DOCUMENTS CLAIMED TO BE OWNED BY THE ASSESSEE WAS TRANSFERRED TO THE FILE OF THE ASSESSEE . A CCORDINGLY HE HELD THAT THE JURISDICTION ASSUMED UNDER SECTION 153 C IN THE CASE OF THE ASSESSEE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153C WHEREIN SATISFACTION NOT E IN THE SEARCHED PERSON S PROCEEDINGS HAS TO BE RECORDED SEPARATELY . S INCE , IN THE INSTANT CASE ALSO , THE AO OF THE SEARCH ED PARTY AND THE AO OF THE OTHER PARTY IS SAME , THEREFORE , IN VIEW OF TH E DECISION OF THE TRIBUNAL THE ORDER OF THE CIT (A) HAS TO BE UPHELD AND THE GROUNDS RAISED BY THE R EVENUE SHOULD BE DISMISSED . 13. T HE L D. DR, IN HER REJOINDER , SUBMITTED THAT HOW CAN PART OF THE BOOKS OF ACCOUNT BELONGED TO THE ASSESSEE AND THE OTHER PAR T DOES NOT BELONG TO THE ASSESSEE . ALL THE DOCUMENTS SHOULD BE ACCEPTED AS BELONGING TO THE ASSESSEE AND IT CANNOT BE SAID THAT PART OF THE DOCUMENT S BELONG TO THE ASSESSEE AND THE OTHER PART DOES NOT BELONG TO THE ASSESSEEE. ITA NO. 5015 /DEL/201 4 10 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES , P ERUS ED THE ORDERS OF THE AO AND THE CI T(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE . W E HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US . W E FIND , DURING THE COURSE OF SEARCH ACTION UNDER SECTION 132 OF THE A CT IN THE CASE OF A MTEK GROUP, CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE I.E., M/S R ANGOLI BUILDTECH PVT. LTD. WERE FOUND AND SEIZED FROM THE PREMISES OF M/S E XCEL INFOTECH PVT. LTD., & OTHERS, 9, TOLSTOY MARG, CONNAUGHT PLACE, NEW DELHI, IN WHOSE NAME SEARCH WARRANT OF AUTHORISATION WAS ISSUED . W E FIND , THE AO ISSUED NOTICE UNDER SECTION 1 5 3 C OF THE A CT ON THE ASSESSEE ON 0 8 . 11 . 2012 AND THE ASSESSEE, IN RESPONSE TO THE SAID NOTICE FILED THE RETURN OF INCOME DECLARING N IL INCOME AND SHOWING LOSS OF RS. 6 , 89 ,710/ - . W E FIND , ON THE BASIS OF SEIZED DOCUMENTS THE AO MADE ADDITION OF RS. 2 , 20 , 00 , 000 / - TO THE TOTAL INCOME OF THE ASSESSEE . I N APPEAL , THE L D. CIT(A) HELD THAT SINCE THE SATISFACTION NOT E IS NOT RECORDED IN THE FILE OF THE SEARCHED PERSO N STATING THAT TH E SEIZED DOCUMENTS BELONGED TO THE ASSESSEE , THEREFORE , THE JURISDICTION ASSUMED UNDER SECTION 153 C IN THE CASE OF THE ASSESSEE IS NOT IN ACCORDANCE WITH THE LAW . H E ACCORDINGLY QUASHED THE ASSESSMENT ORDER PASSED UNDER SECTION 153 C/ 143 ( 3 ) OF THE IT ACT . 15. W E DO NOT FIND ANY INF IRMITY IN THE ORDER OF THE CI T(A). A PERUSAL OF THE SATISFACTION NOT E UNDER SECTION 1 5 3C OF THE IT ACT , 1961 DATED 26 TH OCTOBER , 2012 READ AS UNDER : - ITA NO. 5015 /DEL/201 4 11 ITA NO. 5015 /DEL/201 4 12 16. A PERUSAL OF THE SAME SHOWS THAT THE NAME AND ADDRESS OF THE ASSESSEE WITH PAN NUMBERS HA VE BEEN MENTIONED AT THE TOP OF THE SATISFACTION NOT E AND THE NAME OF THE SEARCHED PERSON IS NOT MENTIONED. FURTHER, NOWHERE IT IS MENTIONED THAT THESE DOCUMENTS ARE INCRIMINATING IN NATURE . F URTHER , THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY SATISFACTION NOT E HAS BEEN RECORDED IN THE FILE OF THE SEARCHED PERSON . W E FIND , THE HON BLE DELHI HIGH COURT IN THE CASE OF PEPSI F OODS ( SUP RA) HAS HELD THAT THE SATISFACTION NOT E ITSELF MUST DISPLAY THE REASONS OR BASIS FOR TH E CONCLUSION THAT THE AO OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUMENTS BELONG ED TO A PERSON OTHER THAN THE SEARCHED PERSON . T HE RELEVANT OBSERVATION OF THE H ON BLE H IGH C OURT AT PARA 11 OF THE ORDER READ AS UNDER : - ITA NO. 5015 /DEL/201 4 13 11. IT IS EVIDENT FROM T HE ABOVE SATISFACTION NOTE THAT APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONER AND THAT THE ASSESSING OFFICER IS SATISFIED THAT IT IS A FIT CASE FOR ISSUANCE OF A NOTICE UNDER SECTION 153C, THERE IS NOTHING WHICH WOULD INDICATE AS TO HOW T HE PRESUMPTIONS WHICH ARE TO BE NORMALLY RAISED AS INDICATED ABOVE, HAVE BEEN REBUTTED BY THE ASSESSING OFFICER. MERE USE OR MENTION OF THE WORD 'SATISFACTION' OR THE WORDS '1 AM SATISFIED' IN THE ORDER OR THE NOTE WOULD NOT MEET THE REQUIREMENT OF THE CON CEPT OF SATISFACTION AS USED IN SECTION 153C OF THE SAID ACT. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSION THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUMENTS BELONG TO A PERSON OTHE R 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.' 17. W E FIND , THE HON BLE DELHI HIGH COURT IN THE CAS E OF NS S OFTWARE (SUPRA) HAS HELD THAT FAILURE OF THE AO TO RECORD A SPECIFIC SATISFACTION AS TO HOW THE RECOVERED MATERIAL BELONGED TO THE ASSESSEE IN THE NOT E THAT PRECEDED THE NOTE ISSUED UNDER IT VITIATES THE ASSESSMENT . W E FIND THE HON BLE DELHI HIGH COURT IN THE CASE OF PEPSICO (S UPRA ) HAS HELD THAT BEFORE THE PROVISIONS OF SECTION 153 C OF THE A CT CAN BE INVOKED , THE AO OF THE SEARCHED PERSON MUST BE SATISFIED THAT THE SEIZED MATERIAL DOES NOT BELONG TO THE SEARCHED PERSON . THE HON BLE DELHI HIGH COU RT IN THE CASE OF CAN YON FINANCIAL SERVICES LTD. VS. ITO, 399 ITR 202, HAS HELD THAT IN ABSENCE OF CONCLUSION EITHER IN SATISFACTION NOT E THAT THE S EIZED DOCUMENTS MENTIONED THERE IN BELONG ED NOT TO THE SEARCHED PERSON , BUT , TO THE ASSESSEE MAKES THE 153 C PROCEEDINGS INVALID . W E FIND , THE HON BLE DELHI HIGH COURT IN THE CASE OF ARN I NFRASTRUCTURE INDIA LTD. (SUPRA) HAS HELD THAT THE AMENDMENT TO SECTION 153 C OF THE A CT IS PROSPECTIVE WITH EFFECT FROM 1 ST JUNE , 2015 . I N THE CASE OF RENU ITA NO. 5015 /DEL/201 4 14 CONSTRUCTIONS PVT. LTD. (S UPRA ) , T HE HON BLE DELHI HIGH COURT HAS HELD THAT P ERTAINED TO ADDED WITH EFFECT FROM 01.0 6 . 2015 IS PROSPECTIVE IN NATURE . 18. S INCE , IN THE INSTANT C ASE , N O SATISFACTION HAS BEEN RECORDED IN THE FILE OF THE SEARCHED PERSON THAT TH E SEIZED DOCUME NTS BELONG ED TO THE OTHER PARTY AND DO NOT BELONG TO THE SEARCHED PERSON , THEREFORE, IN VIEW OF THE DECISION S CITED ABOVE , WE DO NOT FIND ANY INF IRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE HOLDING THAT THE JURISDICTION ASSUMED UNDER SECTION 153 C IN THE CASE OF THE ASSESSEE IS NOT IN ACCORDANCE WITH L A W . W E ACCORDINGLY UPHOLD THE SAME AND THE GROUNDS RAISED BY THE R EVENUE ARE DISMISSED . 19. I N THE RESULT , THE APPEAL FILED BY THE R EVENUE IS DISMISSED . THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 22 . 10.2020. SD/ - SD/ - ( KULDIP SINGH ) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 ND OCTOBER, 2020. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI