DCIT, New Delhi V. M/s. Aakash Arogya Mindir Pvt. Ltd., Delhi

ITA 5437/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82050 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-09-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA MISRA
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A , NEW DELHI) BEFORE SMT. DIVA SINGH , JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.5437 TO 5442 /DEL/2013 ASSESSMENT YEARS : 2003-04 TO 2008-09 DCIT, CC-21, VS. M/S. AAKASH AROGYA MINDIR P.LTD. , NEW DELHI WZ-13, GALI NO.18, KRISHNA PARK, TILAK NAGAR, NEW DELHI-110 018 C.O. NO.77-82/DEL/2014 (ASSESSMENT YEARS 2003-04 TO 2008-09) M/S. AAKASH AROGYA MINDIR P.LTD., VS. DCIT, CC-12 , WZ-13, GALI NO.18, KRISHNA PARK, NEW DELHI TILAK NAGAR, NEW DELHI-110 018 GIR / PAN:AADCA4121A (APPELLANT) (RESPONDENT) APPELLANT BY : MS. ANURADHA MISRA, CIT DR RESPONDENT BY : SHRI KAPIL GOEL, ADV. ORDER PER BENCH: THESE ARE 6 APPEALS FILED BY THE REVENUE AGAINST S EPARATE ORDERS OF LD. CIT(A) ALL DATED 23.07.2013. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION TO THE APPEALS FILED BY THE REVENUE WHEREIN IT HAS RAISED LEGAL ISSUE REGARDING INITIATION OF PROCEEDINGS AS BEING BAD IN LAW AND WITHOUT JURISDICTION. THE ASSESSEE HAS ALSO TAKEN VARIOUS GROUNDS OF CROSS OBJECTIONS AGAINST VARIOUS OBSERVATIONS OF LD. CIT(A). THESE APPEALS AND CROSS OBJECTIONS WERE HEARD TOGETHER AND THEREFORE, FOR T HE SAKE OF CONVENIENCE, A SINGLE AND CONSOLIDATED ORDER IS BEING PASSED. EAR LIER, CROSS OBJECTIONS WERE HEARD ON 09.09.2014 HOWEVER AT THE CONCLUSION OF HE ARING, LD. D.R. HAD ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 2 MENTIONED THAT SHE HAD WRITTEN TO A.O. FOR CERTAIN CLARIFICATIONS WITH REGARD TO SATISFACTION NOTE U/S 153C, WHICH HAD NOT YET BE EN RECEIVED, THEREFORE SHE WANTED SOME TIME TO FILE THE SAME AS AND WHEN THE S AME ARE RECEIVED. THEREFORE, BEFORE DICTATING THE ORDER, IT WAS CONSI DERED APPROPRIATE TO REFIX THE MATTER, THEREFORE, THE SAME WAS REFIXED AND WAS FINALLY HEARD ON 26.09.2014. 2. AT THE OUTSET, LD. A.R. INVITED OUR ATTENTION TO 1 ST GROUND OF C.O. AND ARGUED THAT SINCE ASSESSEE HAD RAISED LEGAL GROUND FOR INITIATION OF PROCEEDINGS OF ASSESSMENT U/S 153C THESE SHOULD BE FIRST DISPOSED OFF BEFORE HEARING THE MATTER ON MERITS. LD. A.R. INVITED OUR ATTENTION TO PAPER BOOK PAGES 34 TO 38 AND SUBMITTED THAT THESE ARE COPIES OF LETTERS OBTAINED BY ASSESSEE UNDER RTI FROM VARIOUS FILES OF ASSESSEES WHOSE PREMISES WERE SEARCHED AND ACTION WAS INITIATED U/S 153A OF THE A CT. IT WAS SUBMITTED THAT FROM THE LETTERS OBTAINED FROM THE FILES OF PERSONS SEARCHED, IT CLEARLY EMERGES THAT NO SATISFACTION NOTE RELATING TO OTHER ENTITIES WAS AVAILABLE IN THE FILES OF SEARCHED PERSONS. IN THESE CIRCUMSTA NCES, IT WAS SUBMITTED THAT HON'BLE HIGH COURT IN THE CASE OF DSL PROPERTIES PV T. LTD. 33 TAXMAN.COM 420 AND HON'BLE DELHI TRIBUNAL IN THE CASE OF PEPSI FOODS PVT. LTD. VS. ACIT IN I.T.A. NO. 575 & 576 HAS CLEARLY HELD THAT RECORDING OF SATISFACTION IS A PRE REQUIREMENT WHICH IS NEEDED TO BE RECORDED BY THE A.O. OF SEARCHED PERSON AND IS REQUIRED TO BE KEPT IN THE FILES OF S EARCHED PERSON BEFORE TAKING ACTION U/S 153C IN THE CASE OF OTHER ENTITIES. LD. A.R. FURTHER SUBMITTED THAT EVEN IF A.O. IS SAME IN THE CASE OF SEARCHED PERSON AND THAT OF OTHER PERSON EVEN THEN SEPARATE SATISFACTION NOTE IS REQUIRED TO BE RECORDED IN BOTH CASES. IN THIS RESPECT, OUR ATTENTION WAS INVITED TO FACTS OF DSL PROPERTIES (P) LTD. ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 3 LD. A.R. SUBMITTED THAT IT IS AN ADMITTED FACT THAT SATISFACTION NOTE WAS NOT RECORDED BY THE A.O. OF SEARCHED PERSON. LD. A.R. IN VIEW OF VARIOUS JUDGEMENTS TRIED TO EXPLAIN THE PROVISIONS OF SECTI ON 153C ALONG WITH SECTION 153A AND IT WAS SUBMITTED THAT FIRST OF ALL , THE A.O. OF SEARCHED PERSON HAS TO RECORD SATISFACTION THAT SOME DOCUMEN TS BELONG TO OTHER PERSONS AND THEN HAND OVER THE SAME TO A.O. OF SUCH PERSONS WHO AGAIN WILL RECORD HIS SATISFACTION. IT WAS SUBMITTED THAT FIRS T SATISFACTION BY A.O. OF SEARCHED PERSONS HAS NOT BEEN DONE IN THESE CASES A ND THEREFORE, THE ASSESSMENT PROCEEDINGS ITSELF WERE NOT LEGAL AND TH E ASSESSMENT ORDERS ITSELF NEEDS TO BE QUASHED. 3. LD. D.R. ON THE OTHER HAND SUBMITTED THAT THERE IS NO NEED TO RECORD A SEPARATE SATISFACTION NOTE AND SATISFACTION CAN BE INFERRED FROM RECORDS/ORDER AND IN THIS RESPECT, RELIANCE WAS PLACED ON THE FOL LOWING CASE LAWS: I) K M MEHBOOB VS DCIT 76 DTR (KER) 449 II) CITVS PANCHIANYAM MANAGEMENT 333 ITR 281 III) SUBHAM JAVED VS ACIT 122 ITD 307 3.1 IT WAS FURTHER SUBMITTED THAT THERE WAS NO NEED TO RECORD SATISFACTION WHEN BOTH CASES WERE WITH THE SAME A.O. AND IT WAS SUBMITTED THAT IN THE PRESENT CASE, THE A.O. IN BOTH THE CASES HAPPENED T O BE THE SAME AND THEREFORE, IT WAS ARGUED THAT NO SEPARATE SATISFACT ION WAS REQUIRED TO BE MADE AND THE ARGUMENT TAKEN BY LD. A.R. IS HYPER TECHNIC AL. IT WAS SUBMITTED THAT TECHNICALITIES AND IRREGULARITIES SHOULD NOT COME I N THE WAY OF ADMINISTERING JUSTICE TO ANY PARTY. RELIANCE IN THIS RESPECT WAS PLACED IN THE CASE OF STATE BANK OF PATIALA VS S K SHARMA (1996) AIR 1669. WIT HOUT PREJUDICE THE LD. D.R. FILED A COPY OF LETTER DATED 09.09.2014 WRITTE N BY THE A.O. IN WHICH HE HAD CLAIMED TO HAVE ENCLOSED SATISFACTION NOTE RECO RDED BY THE A.O. OF SUCH ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 4 OTHER PERSONS WITHOUT PREJUDICE TO THE ABOVE, LD. D .R. FURTHER ARGUED THAT ASSESSEE HAD NOT TAKEN SUCH LEGAL GROUNDS BEFORE LD . CIT(A) AND, THEREFORE THE ASSESSEE SHOULD NOT BE ALLOWED TO TAKE UP SUCH A STAND AT THIS STAGE. 4. LD. A.R. IN HIS REJOINDER SUBMITTED THAT SUCH GR OUND WAS TAKEN BEFORE LD . CIT(A) ALSO WHO HAD SUMMARILY DISMISSED THIS G ROUND AND IN THIS RESPECT, OUR ATTENTION WAS INVITED TO PAPER BOOK PA GE 25 WHERE A COPY OF WRITTEN SUBMISSIONS BEFORE LD . CIT(A) WERE PLACED. OUR SPECIFIC ATTENTION WAS INVITED TO PARA 4-5 OF SUCH WRITTEN SUBMISSIONS AND COMMENTING UPON SATISFACTION NOTE PRODUCED BY LD. D.R., THE LD. A.R . SUBMITTED THAT THIS SATISFACTION NOTE AS PRODUCED BY LD. D.R. RELATES T O THE SATISFACTION NOTE RECORDED BY A.O. OF OTHER PERSON THEREFORE, HIS CON TENTION THAT NO SATISFACTION NOTE WAS RECORDED BY A.O. OF SEARCHED PERSONS WITH REGARD TO OTHER PERSONS IS CORRECT. HE SUBMITTED THAT THE CA SE LAW RELIED UPON BY HIM SQUARELY COVERS THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THOUGH THE MATERIAL PLACED ON RECORD. THE ARGUMENT OF LD. D.R. THAT NO SUCH G ROUND OF NOT RECORDING SATISFACTION WAS TAKEN BEFORE, LD. CIT(A) DOES NOT HOLD ANY FORCE AS FROM THE COPY OF SUBMISSIONS BEFORE LD. CIT(A) PLACED AT PAPER BOOK PAGE 25, WE FIND THAT ASSESSEE HAD RAISED THIS LEGAL GROUND BEFORE LD. CIT(A) INFORMATION OBTAINED BY LD. A.R. FROM A.O. OF SEARC HED PERSONS AS PLACED AT PAPER BOOK PAGES 34-38 CLEARLY MENTIONS THAT THE SA TISFACTION NOTE WITH RESPECT TO OTHER ENTITIES WAS NOT AVAILABLE/RECORDE D BY A.O. OF SEARCHED PERSON AND FURTHER ON THE DIRECTION OF LD. D.R., A. O., CENTRAL CIRCLE -17, WRITTEN TO LD. D.R. VIDE LETTER DATED 09.09.2014 WH EREIN HE HAD MENTIONED TO HAVE ENCLOSED SATISFACTION NOTE RECORDED BY THE A.O. OF SUCH OTHER PERSON. ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 5 THE COPY OF SATISFACTION NOTE ATTACHED WITH THE LET TER CLEARLY SUGGESTS THAT THE SATISFACTION NOTE ENCLOSED WITH THE LETTER WAS PREP ARED BY A.O. OF OTHER ENTITIES WHO HAD ASSUMED JURISDICTION BY INVOKING P ROVISIONS OF SECTION 153C. THE SATISFACTION NOTE READS AS UNDER: IN THE CASE OF SH. B. K. DHINGRA, SMT. POONAM DHI NGRA, M/S MADHUSUDAN BUILDCON PVT. LTD. M/S MAYANK TRADERS PV T. LTD. AND M/S HORIZON PVT. LTD. M/S MIRAGE HOMES LTD., M/S MI RAGE INFOCOM (P) LTD., M/S MIRAGE INVESTMENTS (P) LTD. M/S MIRAG E MANAGEMENT & TRAINING (P) LTD, M/S D.M. INFOTECH (P) LTD, M/S ES TEEM BUILDWELL (P) LTD, M/S HAMILTON TECHNOLOGY (I) (P) LTD, M/S A PEX BUILDWELL (P) LTD, M/S BODHI PROPERTIES (P) LTD, M/S JAGUAR LEASI NG (P) LTD, M/S MADHUSUDAN CONS.(P) LTD, M/S MADHUSUDAN FIBER GOODS (P) LTD,M/S MADHUSUDAN GARMENTS (P) LTD, M/S MADHUSUDAN IMPOTEC H (P) LTD, M/S S. S. CON BUILD PVT. LTD, M/S THAPAR HOMES LTD. (THAPAR BUILDWELL LTD.), M/S WEATHER BYS CONSTRUCTION (P) L TD.M/S. NEWERA SAINATRY WARES (P) LTD SEARCH & SEIZURE TOOK PLACE U/S 132 ON 20.102008. THE UNDERSIGNED IS THE JURISDICTIONAL AO OF THESE CASES. DURING THE COURSE OF SEARCH & SEIZURE DOCUMENTS/PAP ERS PAGES 45 TO 61 OF ANNEXURE A-29 SEIZED BY PARTY R-2, ANNEXURE - SO, 51, 52 AND 103 SEIZED BY PARTY 04 AND ANNUXURE A-15 SEIZED BY PARTY 01, ARE FOUND TO BELONG TO M/S AKASH AROGYA MANDIR PVT. LTD ., 192-C, J & K POCKET, DILSHAD GARDEN, NEW DELHI. 1 HAVE EXAMINED THE ABOVE MENTIONED DOCUMENTS/PAPERS AND PROVISION OF SECTION 153C IS INVOKEABLE IN THIS CASE. AS THE UNDERSIGNED IS ALSO THE JURISDICTIONAL AO OF M/S AKASH AROGYA MANDIR PVT. LTD., 192-C, J & K POCKET, DILSHAD GARDEN, NEW DELHI, THIS SATISFACTION NOTE I S PLACED IN THE FILE BEFORE ISSUING NOTICE U/S 153C.' 5.1 THE FACT THAT THIS SATISFACTION NOTE IS A SATIS FACTION NOTE RECORDED BY A.O. OF OTHER ENTITIES ALSO BECOMES VERIFIABLE FROM THE FACT THAT ASSESSEE UNDER RTI ACT HAD OBTAINED INFORMATION REGARDING TH E FACT THAT SATISFACTION NOTE IN RESPECT OF OTHER ENTITIES WAS NOT FOUND IN THE FILES OF A.O. OF SEARCHED PERSONS AS IS EVIDENT FROM PAPER BOOK PAGES 34 TO 3 8. ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 6 6. IN SUCH CIRCUMSTANCES, HON'BLE DELHI HIGH COURT IN THE CASE OF PEPSI FOODS P. LTD. VS ACIT HAS HELD AS UNDER: 6. ON A PLAIN READING OF SECTION 153C, IT IS EVI DENT THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE 'S ATISFIED' THAT INTER ALIA ANY DOCUMENT SEIZED OR REQUISITIONED 'BELONGS TO' A PERSON OTHER THAN THE SEARCHED PERSON. IT IS ONLY THEN THAT THE ASSESSING OFFICER OF THE SEARCH PERSON CAN HANDOVER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON (OTHER THAN THE SEARCHED PERSON). FURTHERMORE, IT IS ONLY AFTER SUCH HANDING OVER THA T THE ASSESSING OFFICER OF SUCH OTHER PERSON CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR RE-ASSESS HIS INCOME IN ACCORDANCE WITH T HE PROVISIONS OF SECTION 153A. THEREFORE, BEFORE A NOTICE UNDER SECT ION 153C CAN BE ISSUED TWO STEPS HAVE TO BE TAKEN. THE FIRST STEP I S THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE A T A CLEAR SATISFACTION THAT A DOCUMENT SEIZED FROM HIM DOES N OT BELONG TO HIM BUT TO SOME OTHER PERSON. THE SECOND STEP IS - AFTE R SUCH SATISFACTION IS ARRIVED AT - THAT THE DOCUMENT IS HANDED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM THE SAID DOCUMENT 'BE LONGS'. IN THE PRESENT CASES IT HAS BEEN URGED ON BEHALF OF THE PE TITIONER THAT THE FIRST 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 DOCUMENT IS FOUND IN THE POSSESSION OR CONTROL OF A NY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRESUMED THAT SUCH DOC UMENT BELONGS TO SUCH PERSON. IT IS SIMILARLY PROVIDED IN SECTION 29 2C(1)(I). IN OTHER WORDS, WHENEVER A DOCUMENT IS FOUND FROM A PERSON W HO IS BEING SEARCHED THE NORMAL PRESUMPTION IS THAT THE SAID DO CUMENT BELONGS TO THAT PERSON. IT IS FOR THE ASSESSING OFFICER TO REB UT THAT PRESUMPTION AND COME TO A CONCLUSION OR 'SATISFACTION' THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. THERE MUST BE SOME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICER BEFORE HE/SHE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELO NG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE. SURMISE AND CONJECTURE CANNOT TAKE THE PLACE OF 'SATISFACTION'. ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 7 7. THIS WOULD BE THE APPROPRIATE STAGE TO CONSIDER THE DECISIONS REFERRED TO BY THE LEARNED COUNSEL FOR THE REVENUE. THE DECISION REFERRED TO IN KAMLESHBHAI DHARAMSHIBHAI PATEL (SUP RA) IS OF NO RELEVANCE INSOFAR AS THE PRESENT CASE IS CONCERNED. IN THAT CASE CERTAIN DOCUMENTS WERE SAID TO HAVE BELONGED TO THE PETITIONERS THEREIN BUT A PLEA HAD BEEN TAKEN THAT AS THE LAND, IN RELATION TO WHICH THE DOCUMENTS WERE, NO LONGER BELONGED TO THE PETIT IONERS THEREFORE THE SAID DOCUMENTS COULD NOT BE REGARDED AS BELONGI NG TO THE PETITIONERS. THAT IS AN ENTIRELY DIFFERENT SITUATIO N AND THE FACTS OF THAT CASE ARE CLEARLY DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. INSOFAR AS THE DECISION OF THE ALLAHABAD HIGH COURT IN CLASSIC ENTERPRISES (SUPRA) IS CONCERNED, WE ARE, WITH RESP ECT, UNABLE TO AGREE WITH THE OBSERVATIONS THAT AS THE PROCEEDINGS ARE AT THE VERY INITIAL STAGE THE 'SATISFACTION' IS NEITHER REQUIRE D TO BE FIRM OR CONCLUSIVE. WE SAY SO BECAUSE WE ARE OF THE VIEW TH AT THIS CONCLUSION OF THE ALLAHABAD HIGH COURT IS PREMISED ON A CONSID ERATION OF THE PROVISIONS OF SECTION 158BD OF THE SAID ACT WHICH A RE ENTIRELY DIFFERENT FROM SECTION L53C. UNDER SECTION 158BD TH E ASSESSING OFFICER'S SATISFACTION IS WITH REGARD TO 'UNDISCLOS ED INCOME' BELONGING TO A PERSON OTHER THAN THE SEARCHED PERSON. IT IS O BVIOUS THAT SUCH SATISFACTION UNDER SECTION L58BD BY ITS VERY NATURE HAS TO BE PRIMA FACIE AND TENTATIVE. THE SAME METHODOLOGY CANNOT BE IMPORTED INTO SECTION 153C WHERE, IN OUR VIEW, THE ASSESSING OFFI CER IS REQUIRED TO ARRIVE AT A CONCLUSIVE SATISFACTION THAT THE DOCUME NT BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON BECAUSE SUCH ASSESSING OFFICER HAS TO REBUT THE NORMAL PRESUMPTIONS WHICH ARE SUGG ESTED BY THE STATUTE UNDER SECTIONS 132( 4A)(I) AND 292C( 1 )(I) OF THE SAID ACT. THEREFORE, THE DECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF CLASSIC ENTERPRISES (SUPRA) WOULD NOT COME TO THE A ID OF THE REVENUE. 8. INSOFAR AS THE DECISION IN THE SSP AVIATION LTD . (SUPRA) IS CONCERNED WE DO NOT FIND ANYTHING THEREIN WHICH MIL ITATES AGAINST THE VIEW THAT WE ARE TAKING. IN FACT THE VERY DISTINCTI ON BETWEEN SECTION 153C AND 158BD (ALTHOUGH SECTION L58BD IS NOT MENTI ONED) IS INDICATED BY THE FOLLOWING OBSERVATIONS OF THE DIVI SION BENCH IN SSP AVIATION LTD. (SUPRA):- 'IT NEEDS TO BE .APPRECIATED THAT THE SATISFACTION THAT IS REQUIRED TO BE REACHED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 8 THE SEARCHED PERSON IS THAT THE VALUABLE ARTICLE OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED DURING THE SEARCH BELON G TO A PERSON OTHER THAN THE SEARCHED PERSON. THERE IS NO REQUIREMENT IN SECTION 153C( 1) THAT THE ASSESSING OFFICER SHOU LD ALSO BE SATISFIED THAT SUCH VALUABLE ARTICLES OR BOOKS OF A CCOUNT OR DOCUMENTS BELONGING TO THE OTHER PERSON MUST BE SHO WN TO SHOW TO CONCLUSIVELY REFLECT OR DISCLOSE ANY UNDISC LOSED INCOME.' 9. IT IS ONLY IN THIS CONTEXT THAT THE DIVISION BE NCH WAS OF THE VIEW THAT THE ISSUANCE OF THE L53C NOTICE WAS ONLY FIRST STEP IN THE PROCESS OF ENQUIRY. 10. THE ONLY THING THAT REMAINS TO BE E XAMINED NOW IS THE SATISFACTION NOTE ITSELF. THE SATISFACTION NOTE DAT ED 02.08.2013 IS IN RESPECT OF THE ASSESSMENT YEARS 2006-07 TO 2011-12 AND THE SAME READS AS UNDER.- 'M/S PEPSI FOODS PVT. LTD. A Y 2006-07 TO 11-12 02. 08.2013 SATISFACTION NOTE FOR ISSUE OF NOTICE U/S 153C OF I NCOME TAX ACT, 1961 IN THE CASE OF M/S PEPSI FOODS PVT. LTD, FOR T HE ASSESSMENT YEARS 2006-07 TO 2011-12. SATISFACTION NOTE: A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE I. T. ACT WAS CARRIED OUT AT THE VARIOUS PREMISES OF M/S JAIPURIA GROUP O N 27.03.2012. THE GROUP IS ALSO INTO VARIOUS OTHER BUSINESS VIZ. RAYM OND RETAIL FRANCHISEE, REAL ESTATE AND CONSTRUCTION, FAST FOOD S, MINING, EDUCATION, AYURVEDIC PRODUCTS, INFORMATION TECHNOLOGY AND MEDI CAL SERVICES. ONE OF THE MAJOR ALLEGATIONS AGAINST THE JAIPURIA G ROUP IS THAT THE ASSESSEE GROUP IN ORDER TO REDUCE ITS TAXABLE PROFI T INDULGED IN ENHANCING THE COST OF RAW MATERIAL PURCHASED. ON EX AMINATION OF THE ACCOUNTS OF VARIOUS CONCERNS, IT IS NOTICED THAT RA W MATERIAL ARE PROCURED FROM FIXED VENDORS. SINCE BULK PURCHASES A RE MADE, RATES SHOULD HAVE BEEN LOWER. HOWEVER RAW MATERIAL ARE BE ING PROCURED ON A HIGH RATES RESULTING IN LOWER TAXABLE INCOME. THE BOTTLER SHALL BUY ALL UNITS OF CONCENTRATE REQUIRED FOR THE MANUFACTU RE F THE BEVERAGE FROM PFL (PEPSI FOODS LTD.), OR A MANUFACTURER APPR OVED IN WRITING BY PFL (PEPSI FOODS LTD.) AT A PRICE AND IN ACCORDA NCE WITH THE TERMS AND CONDITIONS ESTABLISHED BY THE SELLER. BEI NG THE SOLE SUPPLIER OF CONCENTRATE TO JAIPURIA GROUP, PEPSI FOODS PVT. LTD. IS CLOSELY ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 9 ASSOCIATED TO JAIPURIA GR. DURING THE POST SEARCH I NVESTIGATION, SUMMONS WERE ISSUED TO M/S PEPSI FOODS PVT. LTD. TO FURNISH CERTAIN DETAILS. THE COMPLETE DETAILS WERE NOT FURNISHED. T HE FOLLOWING DOCUMENTS WERE ALSO FOUND AND SEIZED DURING THE COU RSE OF SEARCH AND SEIZURE ACTION U/S 132( I) OF T.T. ACT, 1961 BE LONGING TO (PFL)' M/S PEPSI FOODS PVT. LTD. (PAN:AAACP L557E) OVER W HICH THE JURISDICTION LIES WITH THE' UNDERSIGNED: AY/ANN./PAGE NO. DESCRIPTION OF ANNEXURE C-4/A-2177 THIS PAGE CONTAINS SUMMARY OF PFL CLAIMS AS ON 29-1/-2011 (CLAIMS UP TO 31 II 0/20 II) C-41 A-4118-20 THESE PAGES CONTAIN A DETAIL OF D VAT IMPACT (APRIL' 10- JUNE' 10) VS PFL SUPPORT REPORT AND MRP PLAN. C-4/A-4/21-23 THESE PAGES CONTAIN A DETAILS OF DISCOUNT PER CIS PDL VS PFL. C-4/A-4/27 THESE PAGES CONTAIN A DETAILS OF STATUS OF PFL CLAIMS. C-4/A-S/S4 THIS PAGE CONTAINS DETAILS OF CONCENTRATE STOCK SUMMARY AS ON 31.12.2010. C-4/A-5/99 THIS PAGE CONTAINS A SUMMARY OF PFL CLAIMS AS ON 8/9/2011. CLAIMS UPTO 31/8/20 II. C-4/A-S/100 THIS PAGE CONTAINS A DETAIL OF PFL SUPPORT YEAR 2011 ACCORDINGLY, SECTION L53C OF THE LT. ACT, 1961 IS A PPLICABLE TO M/S PEPSI FOODS PVT. LTD. WHICH STATE THAT 'WHERE AN AS SESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG OR BELONGS TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT, OR DOCUMEN TS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST SUCH OTHER PERSON AND ISSUE S UCH OTHER PERSON ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 10 NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A.' IN VIEW OF FACTS NARRATED ABOVE, I AM SATISFIED THA T THE CASE OF M/S PEPSI FOODS PVT. LTD. IS A FIT CASE FOR ISSUE OF NO TICE U/S 153C OF THE I.T. ACT, 1961. NOTICE U/S L53C DATED 02.08.2013 IS ISSUED' REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME FOR THE A.Y. 2006-07 TO 2011-12. (PUKINI LOKHO) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I2, NEW DELHI' 11. IT IS EVIDENT FROM THE ABOVE SATISFACTION NOTE THAT APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONE R AND THAT THE ASSESSING OFFICER IS SATISFIED THAT IT IS A FIT CAS E FOR ISSUANCE OF A NOTICE UNDER SECTION 153C, THERE IS NOTHING WHICH W OULD INDICATE AS TO HOW THE PRESUMPTIONS WHICH ARE TO BE NORMALLY RA ISED AS INDICATED ABOVE, HAVE BEEN REBUTTED BY THE ASSESSING OFFICER. MERE USE OR MENTION OF THE WORD 'SATISFACTION' OR THE WORDS 'I AM SATISFIED' IN THE ORDER OR THE NOTE 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 REASONS OR BASIS FOR T HE CONCLUSION THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFI ED THAT THE SEIZED DOCUMENTS BELONG TO A PERSON OTHER THAN THE SEARCHE D PERSON. WE ARE AFRAID, THAT GOING THROUGH THE CONTENTS OF THE SATI SFACTION NOTE, WE ARE UNABLE TO DISCERN ANY 'SATISFACTION' OF THE KIND RE QUIRED UNDER SECTION 153C OF THE SAID ACT. 12. THIS BEING THE POSITION THE VERY FIRST STEP PRI OR TO THE ISSUANCE OF A NOTICE UNDER SECTION 153C OF THE SAID ACT HAS NOT B EEN FULFILLED. INASMUCH AS THIS CONDITION PRECEDENT HAS NOT BEEN M ET, THE NOTICES UNDER SECTION 153C ARE LIABLE TO BE QUASHED. IT IS ORDERED ACCORDINGLY. THE WRIT PETITIONS ARE ALLOWED AS ABOV E. THERE SHALL BE NO ORDER AS TO COSTS. 7. THE LD. A.R. HAD ALSO INVITED OUR ATTENTION TO A DECISION OF HONBLE TRIBUNAL IN THE CASE OF M/S. DSL PROPERTIES (P) LTD AND HAD SUBMITTED THAT ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 11 IN THAT CASE AS IN THE PRESENT CASES, THE A.O. OF S EARCHED PERSON AND THAT OF PERSONS COVERED U/S 153C WERE SAME AND THE TRIBUNAL HAD HELD THAT IN SPITE OF A.O. BEING SAME, SEPARATE SATISFACTIONS HAS TO B E RECORDED. THE RELEVANT FINDINGS OF TRIBUNAL ARE REPRODUCED BELOW: HELD FROM A READING OF SECTION 153C( 1) IT IS EVIDENT TH AT ACTION UNDER SECTION 153C CAN BE TAKEN IN RESPECT OF ANY OTHER P ERSON THAN THE PERSON SEARCHED IF THE ASSESSING OFFICER OF THE PER SON SEARCHED IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED. IN SUCH CIRCUMSTANCES, HE SHALL HAND OVER TO THE ASSESSING OFFICER OF SUCH OTHER PERSON MONEY , BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS IF ACCO UNT OR DOCUMENTS. THEREAFTER THE ASSESSING OFFICER OF SUCH OTHER PERS ON SHALL PROCEED AGAINST THE SAID PERSON TO ASSESS OR REASSESS HIS I NCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A THER EFORE, RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE PER SON SEARCHED THAT ANY MONEY BULLION, JEWELLERY OR OTHER VALUABLE ARTI CLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED BELONG TO THE PERSON OTHER THAN THE PERSON SEARCHED AS WELL AS HANDING OVER OF BOOK S OF ACCOUNT, OTHER DOCUMENTS OF ASSETS SEIZED TO ASSESSING OFFIC ER OF SUCH OTHER PERSON IS A SINE QUA NON FOR INITIATING ACTION UNDE R SECTION 153C. [PARAS 9 AND 12] FROM A PERUSAL OF THE SATISFACTION NOTE RECORDED U NDER SECTION 153C, IT IS EVIDENT THAT THIS NOTE DOES NOT INDICAT E IN WHOSE CASE THIS SATISFACTION WAS RECORDED AND WHO IS THE OFFICER RE CORDING THE SATISFACTION. IN THE SATISFACTION NOTE THE ASSESSIN G OFFICER HAS MENTIONED THE NAME OF VARIOUS ASSESSEES, WHO HAVE B EEN COVERED FOR SEARCH AND SEIZURE ACTION UNDER SECTION 132(1). NOW DURING THE SEARCH OF WHOSE PREMISES IT WAS FOUND IS NOT MENTIO NED. THE LAST LINE OF THE SATISFACTION NOTE READS: I AM SATISFIED THAT THE ABOVE DOCUMENTS BELONG TO THE ASSESSEE AND THUS ITS CASE IS BEING T AKEN UP FOR ASSESSMENT UNDER SECTION 153C. A PLAIN READING OF T HE ABOVE SENTENCE INDICATES THAT IT IS RECORDED BY THE ASSESSING OFFI CER, WHO IS TAKING ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 12 ACTION UNDER SECTION 153C. THUS IT SEEMS THAT THE S ATISFACTION NOTE IS RECORDED BY THE ASSESSING OFFICER OF THE ASSESSEE. THIS INFERENCE IS FORTIFIED FROM THE FACT THAT ON THE VERY SAME DATE, I.E., 21-6-2010 THE NOTICE UNDER SECTION L53C IS ISSUED BY THE- SAME PE RSON. THE REVENUE ALSO STATED THAT THE SATISFACTION WAS RECORDED BY T HE ACIT, CIRCLE 8, WHO ISSUED NOTICE UNDER SECTION 153C READ WITH SECT ION 153A. HOWEVER, IT TRIED TO JUSTIFY THE ACTION OF THE ACIT ON THE GROUND THAT AFTER THE ORDER UNDER SECTION 127 BY THE COMMISSION ER, DELHI-IV, THE JURISDICTION OF THE PERSON SEARCHED AS WELL AS THE ASSESSEE BOTH WERE CENTRALIZED WITH THE ACIT, CIRCLE 8. IT ALSO STATED THAT SINCE THE ASSESSING OFFICER OF BOTH THE PERSONS WAS THE SAME, THERE WAS NO QUESTION OF HANDING OVER AND TAKING OVER OF THE DOC UMENTS. THE BENCH DOES NOT AGREE WITH THIS VIEW OF THE REVENUE. IF TH E ASSESSING OFFICER IS ASSESSING THE PERSON SEARCHED AS WELL AS OTHER PERS ON WHOSE ASSETS, BOOKS OF ACCOUNT OR DOCUMENTS WERE FOUND AT THE TIM E OF SEARCH, THEN ALSO, FIRST WHILE MAKING THE ASSESSMENT IN THE CASE OF THE PERSON SEARCHED, HE HAS TO RECORD THE SATISFACTION THAT TH E MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS BELONG TO THE PERSON OTHER THAN THE PERSO N SEARCHED. THEN THE COPY OF THIS SATISFACTION NOTE IS TO BE PLACED IN THE FILE OF SUCH OTHER PERSON AND THE RELEVANT DOCUMENT SHOULD ALSO BE TRANSFERRED FROM THE FILE OF PERSON SEARCHED TO THE FILE OF SUC H OTHER PERSON. THEREAFTER IN THE CAPACITY OF THE ASSESSING OFFICER OF SUCH OTHER PERSON, HE HAS TO ISSUE THE NOTICE UNDER SECTION 15 3C READ WITH SECTION 153A. THE ASSESSING OFFICER OF THE PERSON S EARCHED AND SUCH OTHER PERSON MAY BE THE SAME, BUT THESE ARE TWO DIF FERENT ASSESSEES AND, THEREFORE, THE ASSESSING OFFICER HAS TO CARRY OUT THE DUAL EXERCISE, FIRST AS THE ASSESSING OFFICER OF THE PER SON SEARCHED, IN WHICH HE HAS TO RECORD THE SATISFACTION DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED. AFTE R RECORDING SUCH SATISFACTION NOTE IN THE FILE OF THE PERSON SEARCHE D, THE SAME IS TO BE PLACED IN THE FILE OF SUCH OTHER PERSON. THEN IN HI S CAPACITY AS THE ASSESSING OFFICER OF SUCH OTHER PERSON, HE SHOULD T AKE COGNIZANCE OF SUCH SATISFACTION NOTE AND THEREAFTER ISSUE NOTICE UNDER SECTION 153C. IN THE INSTANT CASE THIS EXERCISE OF RECORDING THE SATISFACTION DURING THE ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED H AS NOT BEEN CARRIED OUT. ON THE OTHER HAND, THE ASSESSING OFFIC ER RECORDED THE ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 13 SATISFACTION IN THE CASE OF SUCH OTHER PERSON WHICH DOES NOT SATISFY THE CONDITION OF ASSUMING JURISDICTION UNDER SECTION LS 3C. THEREFORE, THE ABOVE SATISFACTION NOTE CANNOT BE SAID TO BE A VALI D SATISFACTION NOTE WITHIN THE MEANING OF SECTION 153C. 7.1 WE OBSERVE THAT ON THE BASIS OF REPLIES OBTAINE D BY ASSESSEE UNDER RTI AND ON THE BASIS OF REPLY OF A.O. CENTRAL CIRCL E-21, TO LD. D.R. THE SATISFACTION NOTE DATED 10.09.2010 IS THE SATISFACT ION NOTE PREPARED BY A.O. OF THE OTHER PERSONS. THIS FACT IS FURTHER FORTIFI ED FROM THE FACT THAT ON THE SAME DAY OF RECORDING SATISFACTION ON 10.09.2010, T HE A.O. HAD RAISED NOTICES U/S 153C OF THE ACT AS PLACED IN PAPER BOOK PAGE-I. 8. THEREFORE, FOLLOWING THE ABOVE PRECEDENTS RELIED UPON BY LD. A.R., WE HOLD THAT SATISFACTION WAS TO BE FIRST RECORDED BY A.O. OF SEARCHED PERSON, WHICH IN THE PRESENT CASES HAS NOT BEEN DONE. THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS ARE SIMILAR TO THE CASE LAWS RELIED UPON BY LD. A.R. 9. THE CASE LAW OF CITVS PANCHAJANYAM MANAGEMENT, 3 33 ITSR 281 RELIED UPON BY LD. D.R. RELATES TO PROVISIONS OF SE CTION 158BD AND, THEREFORE, IS NOT APPLICABLE AS IN THAT CASE, PROVI SIONS OF SECTION 158BD WERE APPLICABLE AND HON'BLE DELHI HIGH COURT IN THE CASE OF PEPSI FOODS P. LTD. AS NOTED IN OUR ORDER HAS DISTINGUISHED THE PROVISI ONS OF SECTION 158BD AND 153C. 10. THE CASE LAW OF DR. K M MEHBOOB VS DCIT DEALS W ITH THE NECESSITY OF RECORDING OF SATISFACTION NOTE BY A.O. OF SEARCH ED PERSONS AND HON'BLE KERALA HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR O F REVENUE BY HOLDING AS UNDER: HELD: UNDER S. 153C FOR TRANSFERRING THE MATERIAL OR EVIDENCE COLLECTED IN SEARCH TO THE AO OF AN ASSESSEE OTHER THAN THE SEARCHED ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 14 ASSESSEE, WHAT IS REQUIRED TO BE SATISFIED IS THAT THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED IN THE COURSE OF SEARCH OF AN ASSE SSEE BELONG TO OR RELATE TO A PERSON OTHER THAN THE SEARCHED ASSESSEE . IN OTHER WORDS, UNLIKE UNDER S. 158BD FOR TRANSFERRING A FILE UNDER S. 153C, THERE IS NO NEED TO EXAMINE WHETHER THE BOOKS OF ACCOUNTS OR OTHER EVIDENCE OR MATERIALS SEIZED IN THE COURSE OF SEARCH OF AN A SSESSEE REPRESENTS OR PROVES UNDISCLOSED INCOME OF ANOTHER ASSESSEE. O N THE OTHER HAND, FOR TRANSFERRING THE FILE TO THE AO OF SUCH OTHER A SSESSEE, ALL WHAT IS REQUIRED TO BE CONSIDERED IS WHETHER THE MATERIALS OR BOOKS OF ACCOUNTS OR EVIDENCE RECOVERED RELATES TO ANOTHER A SSESSEE, WHICH MAY OR MAY NOT LEAD TO AN ASSESSMENT IN THE EASE OF THE OTHER ASSESSEE AFTER TRANSFER OF THE FILE TO HIS AO. THIS IS ONLY AN INTERNAL ARRANGEMENT TO BE MADE BETWEEN TWO DEPARTMENTAL OFF ICERS AND IN THIS REGARD THE ONLY FACT THAT NEEDS TO BE VERIFIED IS WHETHER THE ASSESSEE WHOSE BOOKS OF ACCOUNTS OR MATERIALS ARE R ECOVERED IN THE COURSE OF SEARCH OF ANY OTHER ASSESSEE, IS A REGULA R ASSESSEE BEFORE ANOTHER OFFICER, AND IF SO, TO TRANSFER THE FILE TO SUCH OTHER OFFICER FOR HIS CONSIDERATION AND FOR PASSING ORDERS, WHETHER A SSESSMENT OR PENALTY OR SUCH OTHER ORDER PERMISSIBLE UNDER THE A CT BY THAT OFFICER. ADMITTEDLY, IN THIS CASE, THE AO, WHO CONDUCTED THE SEARCH AND WHO OBTAINED MATERIALS AND EVIDENCE ABOUT THE INCOME OF THE ASSESSEE RIGHTLY TRANSFERRED THE FILES TO THE AO OF THE APPE LLANT AT KOZHIKODE, WHO HAS JURISDICTION TO ASSESS HIM, AND IT IS ONLY ON RECEIPT OF SUCH FILES AND MATERIALS FROM THE AO FROM MANGALORE, THE ASSESSEE'S ASSESSMENTS WERE TAKEN UP AND COMPLETED UNDER S. 15 3C R/W S. 153A. THEREFORE, THERE IS NO MERIT IN THE CONTENTION OF T HE ASSESSEE'S COUNSEL THAT SATISFACTION WAS NOT RECORDED BY THE AO AT MAN GALORE BEFORE TRANSFERRING THE MATERIALS AND SEIZED RECORDS TO TH E ASSESSEE'S AO. IF ASSESSEE'S ARGUMENT IS ACCEPTED HE COULD BE PLACED IN A WORSE POSITION, BECAUSE IF HIS OBJECTIONS WERE CONSIDERED AND OVERRULED WHILE TRANSFERRING THE FILE BY THE AO AT MANGALORE HOLDING THAT GOODS SEIZED OR MATERIALS RECOVERED REALLY BELONG TO HIM JUSTIFYING ASSESSMENT, THE ASSESSEE WILL FORFEIT HIS RIGHT TO RAISE SAME OBJECTION BEFORE HIS AO WHO HAS TO CONSIDER THE RELEVANCE OF THE DOCUMENTS, ACCOUNTS OR OTHER MATERIALS RECEIVED FROM THE AO AT MANGALORE. THE SCOPE OF S. 153C IS SUCH THAT ASSESSMENT HAS TO BE STRICTLY MADE ONLY BY THE AO BEFORE WHOM THE ASSESSEE IS REGULARLY ASS ESSED BECAUSE IT ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 15 IS THAT OFFICER WHO IS FAMILIAR WITH THE TRANSACTIO NS, INCOME AND REGULAR ASSESSMENT OF THE ASSESSEE FOR THE PRECEDIN G YEARS AND BASED ON THE SAME TO CONSIDER THE RELEVANCE OF MATERIALS OR DOCUMENTS RECEIVED FROM ANOTHER AO AFTER HEARING THE ASSESSEE TO CONSIDER SUCH MATERIALS OR EVIDENCE FOR ASSESSMENT. SO MUCH SO, N O ENQUIRY OR HEARING OR ADJUDICATION IS CONTEMPLATED BY THE AO, WHO CONDUCTED THE SEARCH OF AN ASSESSEE IN WHICH EVIDENCE OR MATE RIALS BELONGING TO ANOTHER ASSESSEE IS OBTAINED FOR TRANSFERRING THE F ILE TO THE AO BEFORE WHOM SUCH OTHER ASSESSEE IS TO BE ASSESSED. EVEN TH OUGH TRANSFER AS CONTEMPLATED UNDER S 153C HAS TO BE MADE BY THE OFF ICER WHO CONDUCTED THE SEARCH AND WHO RECOVERED BOOKS OF ACC OUNTS, MATERIALS OR ARTICLES IN THE COURSE OF SEARCH OF AN ASSESSEE OTHER THAN SEARCHED ASSESSEE, STILL IT IS OPEN TO SUCH ASSESSEE TO ESTA BLISH BEFORE HIS AO THAT THE OPINION OF THE AO TRANSFERRING THE MATERIA LS OR EVIDENCE OR BOOKS OF ACCOUNTS OR GOODS SEIZED IS WRONG AND THAT THOSE DO NOT BELONG TO HIM. IN OTHER WORDS, THE TRANSFER OF RECO VERED BOOKS OF ACCOUNTS, EVIDENCE OR MATERIALS IS ONLY A PROCEDURA L FORMALITY TO BE COMPLIED WITH BY THE AO WHO SEARCHED AN ASSESSEE AN D RECOVERED MATERIALS PERTAINING TO ANOTHER ASSESSEE, AND THE A O WHO TAKES UP ASSESSMENT UNDER S. 153C AGAINST THE LATTER WE HAVE FULL JURISDICTION TO APPRECIATE EVIDENTIARY VALUE OF THE BOOKS OF ACC OUNTS OR MATERIALS OR GOODS RECEIVED FROM THE OTHER OFFICER AND PROCEE D TO MAKE ASSESSMENT IN HIS OWN WAY. THEREFORE THERE IS, NO M ERIT IN THE CONTENTION OF THE ASSESSEE'S COUNSEL THAT SATISFACT ION IS REQUIRED TO BE RECORDED BY THE AO, WHO CONDUCTED THE SEARCH BEFORE TRANSFERRING MATERIALS OR ARTICLES OR THINGS FOUND BELONGING; TO ANOTHER ASSESSEE.- DR. K.M. MEHABOOB VS. DY. CIT & ANR. (2012) -76 DTR (KER) 90 AFFIRMED. 11. THEREFORE, THERE ARE CONFLICTING VIEWS OF HON'B LE DELHI HIGH COURT AND HON'BLE KERALA HIGH COURT. THE ASSESSEE FALLS INTO THE JURISDICTION OF HON'BLE DELHI HIGH COURT IN VIEW OF THE CASE LAW OF PEPSI FOODS (P) LTD., THEREFORE, WE HELD THAT RECORDING OF SATISFACTION B Y A.O. OF SEARCHED PERSONS IS A NECESSARY PRE CONDITION FOR INITIATION OF PROC EEDINGS U/S 153C WHICH HAS ITA NOS.5437-42/DEL/2013 C.O.NOS.77-82/DEL/2014 16 NOT BEEN DONE IN THE PRESENT APPEALS. THEREFORE, W E QUASH THE ASSESSMENT PROCEEDINGS BEING ILLEGAL. 12. IN VIEW OF THE ABOVE, GROUND NO.1 OF CROSS OBJE CTIONS ARE ALLOWED AND IN VIEW OF THE FACT THAT GROUND NO.1 OF CROSS OBJEC TION HAS BEEN DECIDED IN FAVOUR OF ASSESSEE, THEREFORE, OTHER GROUNDS OF C.O . AND REVENUES APPEALS HAVE BECOME INFRUCTUOUS AND HENCE, DISMISSED. THE APPEALS AND CROSS OBJECTIONS ARE DISPOSED OFF IN THE MANNER STATED AB OVE. 13. ORDER PRONOUNCED IN THE OPEN COURT ON 28-11-201 4. SD/- SD/- ( DIVA SINGH) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28-11-2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).