M/s. Nageshwar Investment Ltd., New Delhi V. DCIT, New Delhi

ITA 5393/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82062 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-11-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 22-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN P RASAD
• Keywords: Unexplained cash credit; Search and seizure; Document seized; Condonation of delay; Documents seized
• Section: 142(1); 153A; 234B; 68; 132; 144; 139

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 5393 /DEL/ 2012 (ASSESSMENT YEAR: 2005 - 06 ) ITA NO. 5394 /DEL/ 2012 (ASSESSMENT YEAR: 2006 - 07 ) ITA NO. 5395 /DEL/ 2012 (ASSESSMENT YEAR: 2007 - 08 ) ITA NO. 5396 /DEL/ 2012 (ASSESSMENT YEAR: 2008 - 09 ) NAGESHWAR INVESTMENT LTD., 12, RING ROAD, LAJPAT NAGAR - IV, NEW DELHI PAN:AAACN8497R VS. DCIT CENTRAL CIRCLE - 12, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SUDESH GARG, ADV. RESPONDENT BY : GUNJAN PRASAD, CIT DR O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THESE ARE APPEALS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - XXXI DATED 13.07.2012 FOR ASSESSMENT YEAR 2005 - 06 TO 2008 - 09. 2. BRIEF FACTS OF THE CASE IS THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT , 1961(HEREIN AFTER THE ACT) WAS CARRIED OUT IN RAJDARBAR GROUP OF CASES ON 31.07.2008. DURING SEARCH OPERATION CERTAIN DOCUMENTS WERE SEIZED WHICH BELONGED TO THE ASSESSEE COMPANY. THE CASE OF THE ASSESSEE COMPANY WAS CENTRALIZ ED WITH CENTRAL CIRCLE - 5, NEW DELHI UNDER SECTION 127 OF THE ACT BY ORDERS DATED 25.03.2010. 3. NOTICE U / S 153C OF ACT DATED 23.07.2010 WAS ISSUED TO THE ASSESSEE COMPANY, REQUIRING IT TO FILE THE RETURN FOR THE ASSESSMENT YEAR 2005 - 06 WHICH REMAINED UNCOMPLIED WITH. FRESH NOTICE U/S 153C OF ACT DATED 09.08.20 10 WAS ISSUED TO THE ASSESSEE COMPANY, AT THE NEW ADDRESS WHICH WAS SUPPLIED BY A.R. OF THE ASSESSEE COMPANY, REQUIRING IT TO FILE THE RETURN FOR THE ASSESSMENT YEAR 2005 - 06. RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06 WAS FILED BY THE ASSESSEE ON 25. 08.2010 DECLARING INCOME OF RS.350 / - . THE RETURN FILED BY THE ASSESSEE COMPANY WAS THE SAME AS THAT OF FILED UNDER SECTION 139 OF THE ACT ON 24/10/200 5. PAGE 2 OF 10 4. NOTICES U/ S 143(2) AND 142(1) ALONG WITH QUESTIONNAIRE WERE ISSUED TO THE ASSESSEE BY THE AO ON 09/0 9/2010, FIXING THE CASE FOR HEARING AND TO FURNISH NECESSARY DETAILS BY 20 / 09/2010. BUT THE ASSESSEE FAILED TO FURNISH ANY DETAILS. IN O RDER TO COMPLETE THE ASSESSMENT PROCEEDINGS, FINAL NOTICE U/S 142(1) DATED 03/11/2010 WAS ISSUED BY THE AO TO THE ASSESS EE GIV ING ONE MORE OPPORTUNITY TO ATTEND THE HEARING AND FURNISH NECESSARY DETAI L S. THIS NOTICE WAS ALSO REMAINED UNCOMPLIED WITH. IN THE EVENT OF CONTINUOUS NON - COOPERATION AND KEEPING IN VIEW THE LIM ITATION IN THE MATTER, NOTICE U/ S 144 DATED 19.11.2010 WAS ISSUED BY THE AO, GIVING THE ASSESSEE LAST OPPORTUNITY TO FURNISH THE REQUIRED DETAILS FOR THE COMPLETION OF ASSESSMENT. THE AR OF THE ASSESSEE FURNISHED DETAILS THROUGH LETTER DATED 26/11/2010 IN THE AO'S OFFICE ON 06/12/2010. THE DET AILS FILED BY THE ASSESSEE COMPANY HAD BEEN EXAMINED BY THE AO. THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF INVESTMENT, SUBSCRIBE, BUY, SELL AND HOLD OF SHARES, STOCKS AND DEBENTURES ETC. 5. THE AO ON PERUSAL OF BALANCE SHEET FILED BY THE ASSESSEE OBSERVED THAT AN AMOUNT OF RS.4,02,43,956/ - WAS SHOWN AS OUTSTANDING CURRENT LIABILITIES AS ON 31.3.2005. THESES LIABILITIES INCLUDE SUNDRY CREDITORS AS WELL AS UNSECURED LOANS AND ADVANCES RECEIVED BY THE ASSESSEE COMPANY. VIDE THE QUESTIONNAIRE DATED 09 .09.2010, THE ASSESSEE WAS SPECIFICALLY ASKED BY THE AO TO FILE THE COMPLETE DETAILS OF CREDITORS ALONG WITH THEIR CONFIRMATIONS. THE ASSESSEE WAS ALSO ASKED TO FURNISH THE COMPLETE DETAILS OF FRESH UNSECURED LOANS RAISED DURING THE YEAR AND ALSO TO PROVE THE GENUINENESS OF THE LOAN TRANSACTION WITHIN THE MEANINGS OF SEC. 68 OF THE ACT BY FILING CONFIRMATIONS, COPIES OF I. TAX RETURNS/PAN, BANK AL SO ETC. 6. IN RESPONSE TO THIS, THE ASSESSEE HAS FILED ITS REPLY DATED 26.11.2010 ON 06.12.2010. 7. PERUSAL O F DETAILS FILED BY THE ASSESSEE SUGGESTED THAT DURING THE YEAR, THE ASSESSEE HAD RAISED FOLLOWING UNSECURED LOANS: - SL NO. DATE NAME OF THE PERSON AMOUNT 1. 19.02.2005 M/S. P. TEXTILES & COMPANY RS. 35 LAKH 2. 17.02.2005 M/S. TOP GRAIN MANAGEMENT PVT. LTD. RS. 20 LAKH 3. 05.07.2004 M/S. AHDYAY EQUIPREF PVT. LTD. RS.20 LAKH 8 . THE ASSESSEE HAD NOT FILED ANY CONFIRMATION FROM THESE PERSONS AND ONLY COPIES OF ACCOUNTS AS APPEARING IN THE BOOKS OF ACCOUNT OF THE APPELLANT HAD BEEN FILED BY THE ASSESSEE . SO THE AO FOR ASSESSMENT YEAR 2005 - 06 ADDED TO THE PAGE 3 OF 10 INCOME OF THE ASSESSEE AN AMOUNT OF RS.75 LAKHS AS PER THE PROVISION OF SECTION 68 OF THE ACT. 9 . IN THE PRESENT CASE THE ASSESSEE COULD NOT FILED ANY CONFIRMATION FROM THE ABOVE MENTIONED PERSO NS. THE ASSESSEE COULD NOT EVEN FURNISH THE COMPLETE ADDRESSES OF THESE PERSONS IN - SPITE OF PROVIDING MANY OPPORTUNITIES. IT WAS ALSO SEEN FROM THE ACCOUNTS OF THE ASSESSEE FROM THE SUBSEQUENT YEARS THAT THE ABOVE AMOUNT ARE SHOWN AS OUTSTANDING EVEN ON 31 .03.2009, AND IN BETWEEN THE PERIOD THERE HAD NOT BEEN ANY TRANSACTION WITH THESE PERSONS. ALL THESE FACTS CLEARLY SUGGEST THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS AS REQUIRED U/S 68 OF THE ACT. THEREFORE, THIS AMOUNT OF RS.75 LAKH WAS ADDED TO T HE INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 68 OF THE ACT. 10 . FOR ASSESSMENT YEAR 2006 - 07 AN AMOUNT OF RS.35 LAKH WAS ADDED TO THE INCOME OF THE ASSESSEE AS PER THE PROVISION OF SECTION 68 OF THE ACT. 11 . FOR ASSESSMENT YEAR 2007 - 08 AN AMO UNT OF RS.2,41,00,000/ - WAS ADDED TO THE INCOME OF THE ASSESSEE AS PER THE PROVISION OF SECTION 68 OF THE ACT. 12 . FOR ASSESSMENT YEAR 2008 - 09 AN AMOUNT OF RS. 7 LAKH WAS ADDED TO THE INCOME OF THE ASSESSEE AS PER THE PROVISION OF SECTION 68 OF THE ACT. 1 3 . AGGRIEVED WITH THESE ASSESSMENT, THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT(A) CHALLENGING THE JURISDICTION AS WELL AS THE ASSESSMENTS ON THE GROUND THAT THEY ARE ILLEGAL AS THESE ASSESSMENTS WERE NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARCH CONDUCTED IN THE CASE OF RAJDAR B AR GROUP OF COMPANIES. ACCORDING TO THE LD CIT(A), THE AO RIGHTLY ASSUMED JURISDICTION U/S 153A, AND WAS OF THE VIEW THAT ASSESSMENT U/S 153A ARE MANDATORY EVEN WHEN NO INCRIMINATING MATERIAL IS FOUND IN TH E COURSE OF SEARCH AND CONFIRMED THE ASSESSMENT MADE BY THE AO. 14 . AGGRIEVED BY THE SAID ORDER OF THE LD CIT(A), THE ASSESSEE IS BEFORE US. 15 . THE GROUNDS OF APPEAL ARE AS FOLLOWS: - 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ORDER OF ASSESSMENT FRAMED U/S 153C/143(3) OF THE ACT WITHOUT GRANTING ANY FAIR, MEANINGFUL AND, PROPER OPPORTUNITY TO THE APPELLANT COMPANY. 1.1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHILE DISPOSING OF APPEAL EXPARTEE HAS FAILED TO APPRECIATE THAT APPEAL FILED BY PAGE 4 OF 10 THE APPELLANT COMPANY WAS PART OF A BATCH OF APPEALS IN THE CASE OF RAJDARBAR GROUP OF CASES AND SINCE COUNSEL FOR THE APPELLANT HAD DULY BEEN APPEARING IN OTHER MATTERS OF RAJDARBAR GROUP OF CASES, THERE REMAINED NO OCCASION TO HOLD THAT NONE APPEARED ON BEHALF OF THE APPELLANT COMPANY IN RESPONSE TO NOTICE U/S 250 OF THE ACT AND HENCE, DISPOSAL OF APPEAL ON EXPARTEE BASIS WITHOUT GRANTING OPPORTUNITY TO THE APPELLANT IS UNJUSTIFIED AND NOT VALID IN LAW. 2. THAT EVEN OTHERWISE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT BOTH THE NOTICE ISSUED U/S 1 53C OF THE ACT AND, ASSESSMENT FRAMED U/S 153A/143(3) OF THE ACT WERE WITHOUT SATISFYING THE STATUTORY PRECONDITIONS IN THE ACT AND AS SUCH, WERE WITHOUT JURISDICTION AND THEREFORE, DESERVE TO BE QUASHED AS SUCH. 2.1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT SINCE NO MONEY OR BULLION OR JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNTS OR DOCUMENTS BELONGING TO THE APPELLANT WERE SEIZED AS A RESULT OF SEARCH NOT ICE ISSUED U/S 153C OF THE ACT WAS ILLEGAL, INVALID AND UNSUSTAINABLE. 3. THAT FURTHER MORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS. 75,00,000/ - REPRESENTING UNSECURED LOANS RAISED BY THE APPELLANT COMPANY AND BROUGHT TO TAX AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 3.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE ADDITION MADE WAS NOT SUPPORTED BY ANY MATERIAL FOUND AS A RESULT OF SEARCH AND AS SUCH ADDITION MADE AND SUSTAINED IS PERSE WITHOUT JURISDICTION AND HENCE UNSUSTAINABLE. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE UNSECURED LOANS RAISED BY THE APPELLANT COMPANY WERE BY ACCOUNT PAY EE CHEQUES FROM PARTIES DULY ASSESSED TO TAX AND THEREFORE IN ABSENCE OF ANY EVIDENCE TO THE CONTRARY AND WITHOUT MAKING ANY INDEPENDENT ENQUIRIES, THE ADDITION MADE IS NOT TENABLE AS HAS BEEN HELD IN THE APEX COURT IN THE CASE OF CIT VS ORISSA CORPORATION P. LTD. REPORTED IN 159 ITR 78. 4 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY OF INTEREST UNDER SECTION 234B OF THE ACT WHICH IS NOT LEVIABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE O F THE APPELLANT COMPANY. IT IS THEREFORE PRAYED THAT, THAT THE ORDER MADE BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY KINDLY BE SET - ASIDE AND THE ASSESSMENT FRAMED BE HELD TO BE WITHOUT JURISDICTION AND IN ANY CASE ADDITION MADE AND SUSTAINED ALONG - WITH INTEREST LEVIED MAY KINDLY BE DELETED AND APPEAL OF THE APPELLANT COMPANY BE ALLOWED. 16 . THE LD CIT DR OBJECTED THE APPEAL OF THE GROUND THAT THE APPEAL IS BARRED BY LIMITATION AND THE ASSESSEE HAS FAILED TO SHOW SUFFICIENT CAUSE IN HIS APPLIC ATION FOR CONDONATION OF DELAY AND CITED THE CASE OF SURINDER KUMAR BOVEJA V. CWT REPORTED IN (2006) 287 ITR 52 (DELHI) OF THE HONBLE DELHI HIGH COURT. PAGE 5 OF 10 17 . ON THE OTHER HAND THE LD AR SUBMITTED THAT THERE WAS ONLY 28 DAYS OF DELAY IN FILING THE INSTANT APPEAL AND FROM A PERUSAL OF THE APPLICATION OF CONDONATION OF DELAY IT IS CLEAR THAT THE DELAY WAS NOT INTENTIONAL AND THERE WAS IN FACT SUFFICIENT CAUSE WHICH CAUSED THE DELAY. FURTHER IT WAS SUBMITTED THAT THE CA OF THE ASSESSEE, SHRI KAMAL KUMAR HAD TO LOOK AFTER THE TREATMENT OF HIS WIFE WHO WAS NOT WELL BECAUSE OF URTICARIA DISCASE. AND SO THE DELAY IN FILING OF APPEAL WAS NOT INTENTIONAL AND WAS CAUSED BEY OND THE CONTROL OF THE ASSESSEE. 18 . WE HAVE CONSIDERED THE RIVAL SUBMISSION AND IS OF THE OPINION THAT IN THE INTEREST OF SUBSTANTIAL JUSTICE, THE DELAY OF 28 DAYS FOR FILING OF THE INSTANT APPEAL NEED TO BE CONDONED AND WE DO SO AND PROCEED TO ADJUDICAT E THE ISSUES RAISED IN THE APPEAL BEFORE US. 19 . THE LD AR BROUGHT TO OUR NOTICE THE SATISFACTION NOTE RECORDED IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2005 - 06 TO 2008 - 09 WHICH READS AS UNDER: - M/S NAGESHWAR INVESTMENT LTD. (ASSESSMENT YEAR 2005 - 2 006) 23.07.2010 SATISFACTION NOTE FOR PROCEEDINGS U/S 153C OF THE INCOME TAX ACT, 1961. A SEARCH OPERATION WAS CONDUCTED ON RAJ DARBAR GROUP OF CASES ON 31.07.2008. DURING THE COURSE OF SEARCH OPERATIONS AT THE PREMISES OF I) PARTY A - 7. GLOBAL REALITY V ENTURES PVT. LTD. VARIOUS PAPERS WERE FOUND AND SEIZED BELONGING TO M/S NAGESHWAR INVESTMENT LTD. THE ANNEXURE ARE MARKED AS UNDER: PARTY A - 7 ANNEXURE A - 45 , HARD DISC CONTAINING BOOKS OF ACCOUNTS OF M/S NAGESHWAR INVESTMENT LTD. THUS THE PROCEEDINGS U/S 153C R.W. SECTION 153A OF THE INCOME TAX ACT 1961 ARE BEING INITIATED IN THE ABOVE CASE. - SD/ - DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, NEW DELHI. 20 . THE LD AR CONTENDED THAT THE CO - ORDINATE BENCH OF THI S TRIBUNAL IN THE CASE OF M/S. V . K . FISCAL SERVICES PVT . LTD VS. DCIT, DELHI IN ITA NO S.5460 - 5465/ DEL / 2012 IN WHICH IDENTICAL SATISFACTION NOTE PREPARED BY THE SAME AO HAS BEEN QUASHED PAGE 6 OF 10 THEREFORE , IT WAS PRAYED THAT THE IMPUGNED ORDER EMANATING FROM THE T HE ERRON E OUS SATISFACTION NOTE NEED TO BE QUASHED. 21. WE FIND FORCE IN THE CONTENTION OF THE LD AR THAT THE SAME AO, ON THE STRENGTH OF IDENTICAL SATISFACTION NOTE, THAT TOO ON THE SAME DATE ON WHICH HE RECORDED THE SATISFACTION TO PROCEED U/S 153C AGAI NST THE ASSESSEE HAD RECORDED ANOTHER IDENTICAL SATISFACTION NOTE WAS RECORDED, WHICH STANDS QUASHED IN M/S. V . K . FISCAL SERVICES PVT . LTD (SUPRA). IN THE SAID CASE ALSO THE SAME AO ON THE SAME DATE ON WHICH THE SATISFACTION NOTE U/S 153C HAS BEEN RECORDED AGAINST THE ASSESSEE IN THE INSTANT CASE BEFORE US I.E. ON 23.07.2010 MADE A DITTO COPY EXCEPT CHANGE IN THE NAME OF THE ASSESSEE, THE SATISFACTION NOTE WHI CH IS ALSO REPRODUCED IN PAGE 8 OF THE SAID ORDER, WHICH READS AS UNDER: (AND THE FINDING OF THE CO - ORDINATE BENCH IN RESPECT TO THE SAME DOCUMENT ON WHICH RELIANCE WAS PLACED BY THE AO TO IN I TIATE 153C PROCEEDINGS). '23.07.2010 M/ S V.K. FISCAL SERVICES P. LTD. (A. Y. 2008 - 09) SATISFACTION NOTE FOR PROCEEDINGS U/ S 153C OF THE INCOME TAX ACT. 1961 A SEARCH OPERATION WAS CONDUCTED ON RAJ DARBAR GROUP OF CASES ON 31.7.2008. DURING THE COURSE OF SEARCH OPERATIONS AT THE PREMISES OF: (I) PARTY A - 7, GLOBA L REALITY VENTURES P. LTD.: VARIOUS PAPERS WERE FOUND AND SEIZED BELONGING TO M/ S VK FISCAL SERVICES P. LTD. THE ANNEXURE ARE MARKED AS UNDER: PARTY A - 7: ANNEXURE A - 45 : HARD DISC CONTAINING BOOKS OF ACCOUNTS OF M/ S VK FISCAL SERVICES P. LTD. THUS THE PROCEEDINGS U/ S 153 C READ WITH SECTION 153A OF THE INCOME TAX ACT, 1961 ARE BEING INITIATED IN THE ABOVE CASE. SD/ - DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 12, NEW DELHI.' 11.1. A PERUSAL OF THE SATISFACTION NOTE DEMONSTRATES THAT IN THE HARD DISK OF ONE OF THE COMPUTERS SOME ACCOUNTS OF THE ASSESSEE COMPANY WERE FOUND. A PRINT OUT OF THESE BOOKS HAVE BEEN FURNISHED TO US BY THE LD. CIT,D.R. A PERUSAL OF THE PRINT OUT SHOW THAT PA GE 1 IS A 'CONFIRMATION OF ACCOUNTS' GIVEN BY THE ASSESSEE COMPANY M/S V.K. FISCAL SERVICES P. LTD. TO GLOBAL REALITY VENTURES LTD., FOR THE PERIOD IS 1ST APRIL, 2008 TO 31ST MARCH, 2009. AS AN ATTACHMENT TO THIS 'CONFIRMATION OF ACCOUNT', V.K. FISCAL SERV ICES P. LTD. PAGE 7 OF 10 HAS GIVEN A COPY OF ABN AMRO BANK (626643) BOOKS, COPY OF TRIAL BALANCE, COPY OF PROFIT AND LOSS A/C, COPY OF BALANCE SHEET, COPY OF A PARTY OF THE CASH BOOK, FOR THE PERIOD OF SIX MONTHS I.E. THE PERIOD FOR WHICH IT HAD TRANSACTIONS WITH GLOB AL REALITY VENTURES, COPY OF LEDGER ACCOUNT OF GLOBAL REALITY VENTURES AND COPY OF INDIAN OVERSEAS BANK (7556) LEDGER ACCOUNT. THESE IN OUR VIEW ARE NOT BOOKS OF ACCOUNT BELONGING TO THE ASSESSEE, AS SOUGHT TO HAVE BEEN MADE OUT IN THE SATISFACTION NOTE. T HIS DEMONSTRATES THAT, THE SATISFACTION NOTE WHICH SAYS THAT BOOKS OF ACCOUNTS ARE CONTAINED IN THE HARD DISK, IS A WRONG RECORDING OF FACTS. THE ENTIRE CASH BOOK OR THE BANK BOOK IS NOT AVAILABLE IN THE HARD DISK. WHAT WAS AVAILABLE IN THE HARD DISK WAS C ONFIRMATION OF ACCOUNTS GIVEN BY THE ASSESSEE TO GLOBAL REALITY VENTURES AND STATEMENT OF ACCOUNTS, LEDGER ETC. IN SUPPORT OF THE SAME. THE RELEVANT PORTION OF THE CASH BOOK, WHERE THE ENTRIES OF GLOBAL REALITY VENTURES LTD. ARE RECORDED WAS ALSO THERE IN THE HARD DISK. THUS TO HOLD THAT THE HARD DISK CONTAINS BOOKS OF ACCOUNTS OF M/S V.K. FISCAL SERVICES P. LTD. IS PRIMA FACIE WRONG. THUS, IN OUR VIEW NO MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED BELONG TO THE ASSESSEE, WARRANTING ISSUAL OF NOTICE U/S 153C'. 11.2. HENCE WE UPHOLD THE CONTENTION OF THE ASSESSEE THAT THE ISSUAL OF NOTICE U/S 153'C', UNDER THE FACTS AND CIRCUMSTANCES, IS BAD IN LAW. 22 . WE ALSO TAKE NOTE OF THE RECENT JUDGEMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN A SIMILAR CASE IN PEPSICO INDIA HOLIDAY (P) LTD VS. ACIT (2014) 50 TAXMANN. COM 299 (DELHI), AFTER CONSIDERING THE DECISIONS CITED BY THE REVENUE HELD IN PARA 5 AS FOLLOWS: - 5. WHILE COMING TO THE AFORESAID CONCLUSIONS TH E COURT HAD ALSO EXAMINED THE DECISIONS WHICH HAD BEEN CITED ON BEHALF OF THE REVENUE AND WHICH ARE, ONCE AGAIN, BEING REITERATED BY THE LEARNED COUNSEL FOR THE REVENUE BEFORE US. THOSE DECISIONS ARE KAMLESHBHAI DHARAMSHIBHAI PATEL V. CIT [2013] 214 TAXMAN 558/31 TAXMANN.COM 50 (GUJ.); CLT V. CLASSIC ENTERPRISES [2013] 358 ITR 465/219 TAXMAN 237/35 TAXMANN.COM 244 (ALL.) AND A DECISION OF A DIVISION BENCH OF THIS COURT IN SSP AVIATION LTD. V. DY. CIT [2012] 346 ITR 177/207 TAXMAN 260/20 TAXMANN.COM 214. THI S COURT HAD INDICATED IN ITS JUDGEMENT IN PEPSI FOODS (P.) LTD. (SUPRA) THAT THE CASE OF KAMLESHBHAI DHARAMSHIBHAI PATEL (SUPRA) WAS DISTINGUISHABLE ON FACTS. THOSE OBSERVATIONS WOULD APPLY TO THE PRESENT WRIT PETITIONS ALSO. AS REGARDS THE DECISION OF THE ALLAHABAD HIGH COURT IN CLASSIC ENTERPRISES (SUPRA), THIS COURT HAD INDICATED THAT IT COULD NOT AGREE WITH THE CONCLUSIONS AND OBSERVATIONS OF THE ALLAHABAD HIGH COURT INASMUCH AS THE DECISION OF THE ALLAHABAD HIGH COURT WAS PREMISED ON A CONSIDERATION OF THE PROVISIONS OF SECTION 158BD OF THE SAID ACT WHICH ARE ENTIRELY DIFFERENT FROM THE PROVISIONS OF SECTION 153C OF THE SAID ACT. FURTHERMORE, WITH REGARD TO THE DECISION IN SSP AVIATION LTD. (SUPRA), THIS COURT HAD NOTED THAT THE SAID DECISION DOES NOT M ILITATE AGAINST THE VIEW TAKEN IN PEPSI FOODS (P.) LTD. (SUPRA). PAGE 8 OF 10 6. THE LEARNED COUNSEL FOR THE REVENUE HAS CITED AN ADDITIONAL DECISION BEFORE US TODAY AND THAT IS THE CASE OF SARVESH KUMAR AGARWAL V. UNION OF INDIA [2013] 353 ITR 26/216 TAXMAN 109 (MAG .)/35 TAXMANN.COM 85 (AIL). THIS DECISION ALSO, IN OUR VIEW, DOES NOT ADVANCE THE CASE OF THE REVENUE. THIS WOULD BE EVIDENT FROM THE OBSERVATIONS OF THE ALLAHABAD HIGH COURT IN PARAGRAPHS 19 TO 21 OF THE SAID DECISION, WHICH READ AS UNDER: '19. IN MANISH MAHESHWARIS CASE (SUPRA) THE SUPREME COURT OBSERVED THAT TAXING STATUTE MUST BE CONSTRUCTED STRICTLY. THE COURT, HOWEVER, SHALL NOT INTERPRET STATUTORY PROVISIONS IN SUCH A MANNER, WHICH WOULD CREATE AN ADDITIONAL PHYSICAL BURDEN ON A PERSON. IN CASE OF ANY DOUBT OR DISPUTE, CONSTRUCTION IS TO BE MADE IN FAVOUR OF THE TAX PAYER AND AGAINST THE REVENUE. 20. IN THE PRESENT CASE WE DO NOT FIND ANYTHING WRONG IN THE SATISFACTION NOTE AND THE FORWARDING OF THE ENTIRE MATTER BY THE INCOME TAX OFFICER, WARD - ILL (2), AHMEDABAD TO THE ASSESSING OFFICER OF THE PETITIONER AT BAREILLY. ALL THE REQUIREMENTS OF SECTION 15 3(C) WERE COMPLIED WITH BY THE INCOME TAX OFFICER, WARD - ILL (2), AHMEDABAD. A SEARCH UNDER SECTION 132A WAS CARRIED OUT AND BULLION WAS SEIZED. THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY FOR SIX ASSESSMENT YEARS. THE ASSESSEE ESTABLISHED THAT THE SEIZED SILVER BELONGS TO M/S SARVESH JEWELLERS, BAREILLY - THE PETITIONER. THE OWNERSHIP AND CONSIGNMENT OF THE PETITIONER WAS ALSO CONFIRMED BY THE ASSESSING OFFICER OF THE PETITIONER AT BAREILLY. THE INCOME TAX OFFICER, WARD - ILL (2), AHMEDABAD DID NOT COMMIT A NY ERROR IN LAW, IN RECORDING THE SATISFACTION NOTE REQUESTING THE PETITIONERS ASSESSING OFFICER TO PROCEED UNDER SECTION 153(C) OF THE LT. ACT. 21. AFTER THE ASSESSMENT OF THE PERSON IN RESPECT OF WHOM SEARCH ACTION WAS CARRIED OUT IS COMPLETED, THE OFF ICER UNDER SECTION 153C, WHERE HE FIND THAT SEIZED ARTICLES BELONG TO SOME OTHER PERSON, HAS TO FORWARD A SATISFACTION NOTE TO THE ASSESSING OFFICER ON SUCH PERSON. THE SATISFACTION IN SUCH CASE IS IN RESPECT OF THE MATERIAL AND DISCLOSURES OF THE PERSON W ITH WHICH THE ARTICLES OR ASSETS ARE FOUND AND NOT IN RESPECT OF THE PERSON WHO WHOM THEY BELONG.'(UNDERLINING ADDED) 7. THE ABOVE EXTRACT MAKES IT CLEAR THAT A TAXING STATUTE MUST BE CONSTRUED STRICTLY AND IN THE CASE OF A DOUBT OR DISPUTE THE CONSTRUCT ION IN FAVOUR OF THE ASSESSEE HAS TO BE ADOPTED. APART FROM THIS, THE MATERIAL OBSERVATION OF THE ALLAHABAD HIGH COURT IN THE CASE OF SAVESH KUMAR AGARWAL (SUPRA) IS TO BE FOUND IN PARAGRAPH 20 THEREOF WHERE IT HAS BEEN OBSERVED THAT THE ASSESSEE ESTABLISH ED THAT THE SEIZED SILVER BELONGS TO M/S. SARVESH JEWELLERS, BAREILLY - THE PETITIONER. IN OTHER WORDS, THE PERSON FROM WHOM THE BULLION WAS SEIZED WAS ABLE TO ESTABLISH THAT IT DID NOT BELONG TO HIM BUT TO SARVESH JEWELLERS. IT IS IN THAT CONTEXT THAT THE PROVISIONS OF SECTION 153C OF THE ACT WERE INVOKED INASMUCH AS THE ASSESSING OFFICER WOULD THEN BE CONSIDERED AS HAVING BEEN SATISFIED THAT THE BULLION WHICH WAS SEIZED FROM THE SEARCHED PERSON DID NOT BELONG TO THE SEARCHED PERSON BUT TO SOME OTHER PERSO N (IN THAT CASE M/S. SARVESH JEWELLERS, BAREILLY). 8. FROM THE FOREGOING DISCUSSION IT IS EVIDENT THAT IN ORDER THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON COMES TO THE SATISFACTION THAT DOCUMENTS OR MATERIALS FOUND DURING THE SEARCH BELONG TO A PE RSON OTHER PAGE 9 OF 10 THAN THE SEARCHED PERSON, IT IS NECESSARY THAT HE ARRIVES AT THE SATISFACTION THAT THE SAID DOCUMENTS OR MATERIALS DO NOT BELONG TO THE SEARCHED PERSON. WE MAY POINT OUT THAT IN THE COURSE OF THE ARGUMENTS WE HAD ASKED THE LEARNED COUNSEL FOR TH E REVENUE AS TO WHETHER THE DOCUMENTS IN QUESTION HAD BEEN DISCLAIMED BY THE JAIPURIA GROUP. THE LEARNED COUNSEL FOR THE REVENUE, ON INSTRUCTIONS, STATES THAT THIS WAS NOT THE CASE. IN OTHER WORDS, IT FOLLOWS THAT THE JAIPURIA GROUP DID NOT SAY THAT THE DO CUMENTS DID NOT BELONG TO THEM. 23 . THE HONBLE DELHI HIGH COURT FURTHER HELD AS UNDER: - 13. HAVING SET OUT THE POSITION IN LAW IN THE DECISION OF THIS COURT IN THE CASE OF PEPSI FOODS PVT. LTD. (SUPRA), IT MUST BE SEEN AS TO WHETHER THE ASSESSING OFFI CER OF THE SEARCHED PERSON (THE JAIPURIA GROUP) COULD BE SAID TO HAVE ARRIVED AT A SATISFACTION THAT THE DOCUMENTS 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 THE DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON, THE PROVISIONS OF S ECTION 153C OF THE SAID ACT DO NOT GET ATTRACTED BECAUSE THE VERY EXPRESSION USED IN SECTION 153C OF THE SAID ACT IS 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 THAN THE PERSON REFERRED TO IN SECTION 153A .... ' IN VIEW OF THIS PHRASE, IT IS NECESSARY THAT BEFORE THE PROVISIONS OF SECTION 153C OF THE SAID ACT CAN BE INVOKED, THE ASSESSING OFFIC ER OF THE SEARCHED PERSON 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 PERSON). IN THE SATISFACTION NOTE, WHICH IS THE SUBJECT MATTER OF THESE WRIT PETIT IONS, THERE IS NOTHING THEREIN TO INDICATE THAT THE SEIZED DOCUMENTS DO NOT BELONG TO THE JAIPURIA GROUP. THIS IS EVEN APART FROM THE FACT THAT, AS WE HAVE NOTED ABOVE, THERE IS NO DISCLAIMER ON THE PART OF THE JAIPURIA GROUP INSOFAR AS THESE DOCUMENTS ARE CONCERNED. 15. SECONDLY, WE MAY ALSO OBSERVE THAT THE FINDING OF PHOTOCOPIES IN THE POSSESSION OF A SEARCHED PERSON DOES NOT NECESSARILY MEAN AND IMPLY THAT THEY 'BELONG' TO THE PERSON WHO HOLDS THE ORIGINALS. POSSESSION OF DOCUMENTS AND POSSESSION OF P HOTOCOPIES OF DOCUMENTS ARE TWO SEPARATE THINGS. WHILE THE JAIPURIA GROUP MAY BE THE OWNER OF THE PHOTOCOPIES OF THE DOCUMENTS IT IS QUITE POSSIBLE THAT THE ORIGINALS MAY BE OWNED BY SOME OTHER PERSON. UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTIO N, WHETHER THEY BE PHOTOCOPIES OR ORIGINALS, DO NOT BELONG TO THE SEARCHED PERSON, THE QUESTION OF INVOKING SECTION 153C OF THE SAID ACT DOES NOT ARISE. 16. THIRDLY, WE WOULD ALSO LIKE TO MAKE IT CLEAR THAT THE ASSESSING OFFICERS SHOULD NOT CONFUSE THE E XPRESSION 'BELONGS TO' WITH THE EXPRESSIONS 'RELATES TO' OR 'REFERS TO'. A REGISTERED SALE DEED, FOR EXAMPLE, 'BELONGS TO' THE PURCHASER OF THE PROPERTY ALTHOUGH IT OBVIOUSLY 'RELATES TO' OR 'REFERS TO' THE VENDOR. IN THIS EXAMPLE IF THE PURCHASERS PREMISE S ARE SEARCHED AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT BE SAID THAT IT 'BELONGS TO' THE VENDOR JUST BECAUSE HIS NAME IS MENTIONED IN THE DOCUMENT. IN THE PAGE 10 OF 10 CONVERSE CASE IF THE VENDORS PREMISES ARE SEARCHED AND A COPY OF THE SALE DEED IS SEIZED, I T CANNOT BE SAID THAT THE SAID COPY 'BELONGS TO' THE PURCHASER JUST BECAUSE IT REFERS TO HIM AND HE (THE PURCHASER) HOLDS THE ORIGINAL SALE 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 DO NOT FIND THAT THE INGREDIENTS OF SECTION 153C OF THE SAID ACT HAVE BEEN SATISFIED IN THIS CAS E. CONSEQUENTLY THE NOTICES DATED 02.08.2013 ISSUED UNDER SECTION 153C OF THE SAID ACT ARE QUASHED. ACCORDINGLY ALL PROCEEDINGS PURSUANT THERETO STAND QUASHED. 18. THE WRIT PETITIONS ARE ALLOWED AS ABOVE. THERE SHALL BE NO ORDERS AS TO COSTS. 24 . IN THE LIGHT OF THE ORDER OF THE CO - ORDINATE BENCH IN THE CASE OF M/S. V . K . FISCAL SERVICES PVT . LTD (SUPRA) AND THE RATIO OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSICO INDIA HOLIDAY (P) LTD (SUPRA), WE HOLD THAT THE AO LACKS JURISDICTION TO INIT IATE THE 153C PROCEEDING AGAINST THE ASSESSEE AND THEREFORE TH E ISSUANCE OF NOTICE ITSELF IS NULL AND VOID AND THEREFORE QUASHED. CONSEQUENTLY THE IMPUGNED ASSESSMENT ORDER U/S 153C IS ALSO A NULLITY. 25 . SINCE WE HAVE QUASHED THE INITIATION AND THE NOTI CE ISSUED BY THE AO U/S 153C OF THE ACT ITSELF, THE OTHER GROUNDS ARE NOT ADJUDICATED BEING ACADEMIC. 26 . IN THE RESULT ALL THE APPEALS PREFERRED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 .11 .2014. - S D / - - S D / - ( S. V. MEHROTRA ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 8 / 11 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI