L V K K Chaitanya, Hyd, Hyderabad V. DCIT, Central Circle-7, (Presently Central Circle -2(4), Hyd, Hyderabad

ITA 623/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2590 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Search and seizure; Document seized; Block assessment; Documents seized
• Section: 143(3); 142(1); 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 623/HYD/2016 ASSESSMENT YEAR: 2008-09 LVKK CHAITANYA, HYDERABAD. PAN ACPPL 1921 L VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 7 (PRESENTLY CENTRAL CIRCLE 2(4), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V. RAGHAVENDRA RAO REVENUE BY : SHRI L. RAMJI RAO DATE OF HEARING : 30-08-2017 DATE OF PRONOUNCEMENT : 22-09-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 12, HYDERABAD, DATED 25-02-2016 FOR AY 2008-09. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF M/S SRI SAI KAMAL CONSTRUCTIONS & DEVELOPERS, HYDERABAD U/S 132 OF THE INCOME-TAX ACT, 1961 ( IN SHORT THE ACT) ON 09/12 /2010. DURING THE COURSE OF SEARCH, IN THE PREMISES OF PARTNERS OF TH E FIRM, CERTAIN MATERIAL/DOCUMENT SHOWING INVESTMENTS MADE BY THE A SSESSEE IN THE LANDS WERE FOUND AND SEIZED. IN VIEW OF THE SAME, THE CASES WERE CENTRALIZED WITH DCIT, CENTRAL CIRCLE 7, HYDERABA D. ACCORDINGLY, NOTICES U/S 153C WERE ISSUED TO THE ASSESSEE FOR TH E AY 2010-11 ON 16/04/2012. IN RESPONSE TO THE NOTICE U/S 153C, TH E ASSESSEE FILED 2 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. HIS RETURN OF INCOME FOR THE AY 2008-09 ON 15/03/20 13 DECLARING A TOTAL INCOME OF RS. 1,24,210/-. OTHER NOTICES U/S 1 43(2) AND 142(1) WERE ISSUED AND SERVED ON THE ASSESSEE. 2.1 BASED ON THE MATERIAL FOUND IN THE RESIDENCE OF SHRI K. SUBBA RAO, PARTNER OF SRI SAI KAMLA CONSTRUCTIONS AND DEV ELOPERS AT PAGE 97 OF THE SEIZED MATERIAL, WHICH INDICATE THAT ASSE SSEE INVESTED IN PURCHASE OF ONE ACRE LAND AT KOTHUR BY MAKING PAYME NT OF RS. 25 LAKHS AS UNDER: DATE OF RECEIPT AMOUNT 17/03/2008 17,00,000 01/04/2008 5,00,000 02/04/2008 3,00,000 TOTAL 25,00,000 THE PAYMENT OF RS. 17 LAKHS MADE BY THE ASSESSEE ON 17/03/2008 RELATING TO THIS AY UNDER CONSIDERATION, BASED ON T HE SUBMISSIONS OF THE ASSESSEE AND BANK STATEMENT, AO ACCEPTED FOR PA YMENT OF RS. 5 LAKHS AND BALANCE MADE ADDITION AS UNEXPLAINED INVE STMENT IN LANDS. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A), THE ASSESSEE HAS RAISED VARIO US GROUNDS OF APPEAL BY QUESTIONING THE VALIDITY OF THE PROCEEDIN GS U/S 153C OF THE ACT SINCE NO SATISFACTION WAS RECORDED BY THE AO BE FORE INITIATING PROCEEDINGS AND OTHER GROUNDS RELATING TO VALIDITY OF MAKING ADDITION OF RS. 12 LAKHS EVEN THOUGH REQUIRED INFORMATION WA S SUBMITTED BEFORE THE AO. 5. LD. CIT(A) DECLINED TO ENTERTAIN THE SUBMISSIONS OF THE ASSESSEE RELATING TO PROCEEDINGS U/S 153C BY MAKING FOLLOWING OBSERVATIONS: 3 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. 6.1 THE ARGUMENTS OF THE APPELLANT ARE PERUSED. IN THIS REGARD, IT MAY BE PERTINENT TO MENTION HERE THAT BASED ON T HE INFORMATION TRACED AT THE RESIDENTIAL PREMISES OF M RS K.USHA AND SRI K.SUBBA RAO, DURING THE SEARCH PROCEEDINGS ON 09-12- 2010, STATED TO BE INDICATING THE INVESTMENTS MADE IN LANDED PROPERTIES, NOTICES U/S.153C WERE ISSUED TO THE ASS ESSEE, IN RESPONSE TO THE SAME THE RETURN OF INCOME WAS FURNI SHED FOR THE YEAR UNDER REFERENCE, APART FROM FURNISHING RETURNS FOR OTHER YEARS. AS COULD BE SEEN FROM THE FACTS OF THE CASE, THE APPELLANT NOT ONLY COMPLIED WITH THE NOTICES U/S.15 3C, THE RETURNED INCOMES WERE ALSO REVISED FOR SOME OF THE ASSESSMENT YEARS, WHICH WERE COVERED BY SUCH NOTICES. THERE IS NO INDICATION AS TO THE QUESTIONING OF THESE PROCEEDIN GS DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND OBJECTIONS ARE RAISED ONLY DURING THE APPELLATE PROCEEDINGS. HAVIN G COMPLIED WITH THE PROCEEDINGS AT THE STAGE OF ASSESSMENT PRO CEEDINGS, I AM OF THE CONSIDERED OPINION THAT THERE IS NO ILLEG ALITY TO THE PROCEEDINGS U/S.153C, AS CLAIMED BY THE APPELLANT I N THE ADDITIONAL GROUNDS OF APPEAL. FURTHER, THE APPELLAN T HAS BEEN VERY MUCH PART OF THE ASSOCIATES OF M/S. SAI KAMAL CONSTRUCTIONS & DEVELOPERS AND THE FINDINGS OF THE PROCEEDINGS CONDUCTED AT THE GROUP ENTITIES WERE CLEARLY INDICA TING THE UNACCOUNTED ACTIVITIES/TRANSACTIONS OF THE ASSESSEE WHICH INVOLVE THE INVESTMENTS IN IMMOVABLE PROPERTIES, WH ICH WERE UNACCOUNTED EITHER FULLY OR PARTIALLY, WERE BROUGHT ON RECORD, BY THE AO IN ISSUING THE NOTICE U/S.153C. FURTHER THE INFORMATION TRACED DURING THE SEARCH PROCEEDINGS WAS CLEARLY IN DICATING THE NAME OF THE ASSESSEE AND THE DETAILS OF THE INVESTM ENTS MADE BY HIM, WHILE SPECIFYING THE DETAILS OF PROPERTIES END AMOUNTS, THERE IN. WITH SO MUCH OF SPECIFICS, THE INFORMATIO N WILL CERTAINLY QUALIFY TO BE TREATED AS RELEVANT INFORMATION VIS-A -VIS WITH THE ASSESSEE. UNDER THE CIRCUMSTANCES, I AM OF THE CONS IDERED OPINION THAT THE CASE LAWS RELIED UPON BY THE ASSES SEE, ARE DISTINGUISHABLE ON FACTS. THUS, BASED ON THE FACTS OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE NOTICES ISSUE D U/S.153C FOR THE YEAR UNDER REFERENCE WAS VALID AND AS SUCH THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE, IS TREATED AS DISMISSED. ACCORDINGLY, I PROCEED TO DECIDE THE APPEAL ON MERI TS. 6. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE US BY RAISING FOLLOWING THE GROUNDS OF APPEA L: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-12, HYDERABAD [CIT(A)] HAS ERRED ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE NOTICE ISSUED U/S. 153C IS VALID. THE LEARNED CIT (A) HAS FAILED TO APPLY THE CIRCULAR NO. 24/2015, DATED 31.12.2015 OF THE CBDT. 4 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. 3. THE A.O DID NOT SHOW THAT THE SATISFACTION U/S. 153C AS REQUIRED WAS REACHED OR RECORDED BY THE ASSESSING O FFICER HAVING JURISDICTION OVER THE SEARCHED PERSON IN WH OSE CASE ANY ITEMS BELONGING TO THE ASSESSEE WERE SEIZED. LEARNE D CIT(A) FAILED TO NOTICE THIS ABSENCE OF THE BASIC LEGAL RE QUIREMENT ~/S. 153C OF THE I.T. ACT. 4. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT COM PLIANCE WITH NOTICE U/S. 153C CONFERS OR RATIFIES THE ILLEGAL JU RISDICTION ASSUMED BY THE A.O U/S. 153C OF THE LT. ACT. 5. THE LEARNED CIT(A), HAVING NOTICED THAT INFORMAT ION PERTAINING TO THE ACQUISITION OF PROPERTIES WAS NOT ICED IN THE COURSE OF SEARCH PROCEEDINGS IN ANOTHER CASE, OUGHT TO HAVE APPRECIATED THAT NO PAPERS OR DOCUMENTS SEIZED ACTU ALLY BELONGED TO THE ASSESSEE. WITHOUT PREJUDICES TO THE ABOVE GROUNDS 6. THE LEARNED CIT(A) IS NOT JUSTIFIED IN NOT GIVIN G CREDIT TO THE WITHDRAWALS MADE FROM THE BANK ACCOUNT OF THE ASSES SEE THROUGH SRI. N. SRINIVASA RAO ON 28.06.2007. SRI. N . SRINIVASA RAO DREW THE MONEY AND GAVE IT TO THE ASSESSEE. 7. THE LEARNED CIT(A) AND A.O OUGHT TO HAVE APPRECI ATED THAT THE ASSESSEE IS IN THE HABIT OF OPERATING HIS BANK ACCOUNT USUALLY THROUGH OTHERS AND WITHDRAWING CASH THROUGH OTHERS. 8. FOR THESE AND ANY OTHER GROUNDS THAT MAY BE RAIS ED AT OR BEFORE THE DATE OF HEARING, IT IS PRAYED THAT THE P ROCEEDINGS U/S 153C BE HELD INVALID IN LAW OR ALTERNATIVELY THE AD DITION BE DELETED. 7. LD. AR PRESSED MAINLY GROUND NOS. 2 TO 5 OF GROU NDS OF APPEAL, WHICH RELATE TO VALIDITY OF PROCEEDINGS U/S 153C. H E SUBMITTED THAT THERE IS NO SATISFACTION RECORDED BY THE AO TO INIT IATE PROCEEDINGS U/S 153C. HE ACCORDINGLY PRAYED THAT NOTICE ISSUED U/S 153C IS INVALID. 8. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF REVENUE AUTHORITIES. 5 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. DURING THE PROCEEDINGS BEFORE US, THE BE NCH ASKED THE LD. DR TO SUBMIT THE ORDER SHEET NOTINGS OF AO BEFORE I NITIATING PROCEEDINGS AND ISSUE OF NOTICE U/S 153C AND ALSO T HE MATERIAL SEIZED DURING SEARCH I.E. PAGE 97, WHICH WAS DULY S UBMITTED BY THE LD. DR, WHICH IS PLACED ON RECORD. FROM THE RECORD, IT CLEARLY SHOWS THAT AO HAS NOT RECORDED ANY SATISFACTION BEFORE INITIAT ING PROCEEDINGS U/S 153C. AS PER THE PROVISIONS OF THE ACT AND ALSO THE RATIOS LAID DOWN IN VARIOUS DECISIONS, IT IS THE DUTY OF AO OF THE PERS ON SEARCHED TO RECORD SATISFACTION, THAT THE DOCUMENT OR MATERIAL FOUND BELONGS TO THE PERSON SEARCHED OR BELONGS TO A PERSON OTHER TH AN A PERSON REFERRED TO IN SECTION 153A OF THE ACT. THEREAFTER, AO HAVING JURISDICTION OVER THIRD PARTY, ON RECEIPT OF THE SE IZED MATERIAL BEING HANDED OVER TO HIM, SHALL RECORD HIS OWN SATISFACTI ON AFTER EXAMINING THE SAME INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE SATISFACTION OF THE OTHER OFFICER. AS HELD IN VARIOUS DECISIONS, IT IS NOT A MERE FORMALITY BECAUSE RECORDING OF SATISFACTION POSTULA TES OF APPLICATION OF MIND CONSCIOUSLY OR THE DOCUMENT SEIZED MUST BE BEL ONGED TO THE PERSON ON WHOM PROCEEDINGS ARE LIKELY TO BE INITIAT ED. IN THE PRESENT CASE, AO HAS NOT APPLIED HIS MIND IN RECORDING SATI SFACTION BEFORE INITIATING PROCEEDINGS AND ISSUE OF NOTICE U/S 153C . TO COME TO THIS CONCLUSION, WE RELY ON THE FOLLOWING DECISIONS, ON WHICH, RELIANCE IS ALSO PLACED BY THE LD. AR OF THE ASSESSEE: 9.1 IN THE CASE OF CIT VS. SHETTYS PHARMACEUTICALS & BIOLOGICALS LTD., 57 TAXMANN.COM 282 (AP), THE HONBLE HIGH COU RT OF AP HAS HELD AS UNDER: NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHER E THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR RE QUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDI CTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGA INST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING 6 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR D OCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATIO N OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A. (EMPHASIS SUPPLIED ) IT IS THEREFORE CLEAR THAT FIRSTLY SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER WHO CONDUCTED SEARCH, THAT ANY MO NEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCO UNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. THEREAFTER, THE ASSE SSING OFFICER HAVING JURISDICTION OVER THIRD PARTY ON RECEIPT OF THE SEI ZED MATERIAL OR BOOKS OF ACCOUNTS OR DOCUMENT BEING HANDED OVER TO HIM SHALL RECORD HIS OWN SATISFACTION AFTER EXAMINING THE SAME INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE SATISFACTION OF THE SEIZING OFFIC ER. IN OTHER WORDS IT IS NOT AN AUTOMATIC ACTION. WE FIND SATISFACTION OF TWO OF FICERS IS MISSING. IN THIS CONNECTION WE SET OUT THE TEXT OF THE ORDER OF THE ASSESSING OFFICER WHICH IS AS FOLLOWS. THE AFORESAID SECTION MANDATES RECORDING OF SATISFA CTION OF THE ASSESSING OFFICER(S) IS A PRE-CONDITION FOR INVOKING JURISDIC TION AND IT IS NOT A MERE FORMALITY BECAUSE RECORDING OF SATISFACTION POSTULA TES APPLICATION OF MIND CONSCIOUSLY AS THE DOCUMENTS SEIZED MUST BE BELONGI NG TO THE ANY OTHER PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153-A OF THE ACT. IT IS CONTENDED THAT THE SAME ASSESSING OFFICER IS INVOLV ED IN THE MATTER. THIS FACT DOES NOT DISPENSE WITH ABOVE REQUIREMENT. IT I S SETTLED POSITION OF LAW THAT WHEN A THING IS TO BE DONE IN ONE PARTICULAR M ANNER UNDER LAW THIS HAS TO BE DONE IN THAT MANNER ALONE AND NOT OTHER WAY ( SEE NAZIR AHMED V. KING EMPEROR ). WE THINK THE LEARNED TRIBUNAL HAS C ORRECTLY FOLLOWED THE PRINCIPLE. WE DO NOT FIND ANY ELEMENT OF LAW TO BE DECIDED. 9.2 IN THE CASE OF MANISH MAHESWARI VS. ACIT, [2007 ] 289 ITR 341, THE HONBLE SUPREME COURT HAS HELD AS UNDER: SEC. 158BD PROVIDES FOR TAKING RECOURSE TO A BLOCK ASSESSMENT IN TERMS OF S. 158BC IN RESPECT OF ANY OTHER PERSON, T HE CONDITIONS PRECEDENT WHEREFOR ARE : (I) SATISFACTION MUST BE R ECORDED BY THE AO THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSO N, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UND ER S. 132; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASS ETS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON; AND (III) THE AO HAS PROCEE DED UNDER S. 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRE CEDENT FOR INVOKING THE PROVISIONS OF S. 158BD, THUS, ARE REQU IRED TO BE SATISFIED BEFORE THE PROVISIONS OF CHAPTER XIV-B AR E APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS H AD BEEN REQUISITIONED UNDER S. 132A. THE IMPUGNED NOTICE DOES NOT RECORD ANY SATISFACTIO N ON THE PART OF THE AO. DOCUMENTS AND OTHER ASSETS RECOVERED DUR ING SEARCH HAD NOT BEEN HANDED OVER TO THE AO HAVING JURISDICT ION IN THE MATTER. NO PROCEEDING UNDER S. 158BC HAD BEEN INITI ATED. THERE IS, THUS, A PATENT NON-APPLICATION OF MIND. A PRESC RIBED FORM HAD 7 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. BEEN UTILIZED. EVEN THE STATUS OF THE ASSESSEE HAD NOT BEEN SPECIFIED. IT HAD ONLY BEEN MENTIONED THAT THE SEAR CH WAS CONDUCTED IN THE MONTH OF NOVEMBER, 1995. NO OTHER INFORMATION HAD BEEN FURNISHED. THE PROVISIONS CONTAINED IN CHA PTER XIV-B ARE DRASTIC IN NATURE. IT HAS DRACONIAN CONSEQUENCES. S UCH A PROCEEDING CAN BE INITIATED, IT WOULD BEAR REPETITI ON TO STATE, ONLY IF A RAID IS CONDUCTED. WHEN THE PROVISIONS ARE ATT RACTED, LEGAL PRESUMPTIONS ARE RAISED AGAINST THE ASSESSEE. THE B URDEN SHIFTS ON THE ASSESSEE. AUDITED ACCOUNTS FOR A PERIOD OF T EN YEARS MAY HAVE TO BE REOPENED. AS THE AO HAS NOT RECORDED HIS SATISFACTION, WHICH IS MANDATORY; NOR HAS HE TRANSFERRED THE CASE TO THE AO HAVING JURISDICTION OVER THE MATTER, THE IMPUGNED J UDGMENTS OF THE HIGH COURT CANNOT BE SUSTAINED. MANISH MAHESHWARI VS. ITAT (2005) 196 CTR (MP) 293 AND CIT VS. INDORE CONSTRUCTIONS (P) LTD. (2005) 195 CTR (MP) 217 : (2005) 279 ITR 545 (MP) SET ASIDE; CIT VS. PUSHPA RANI (2005) 193 CTR (DEL) 256 DISTINGUISHED. 9.3 IN THE CASE OF PEPSICO INDIA HOLDINGS (P.) LTD. VS. ACIT, [2015] 370 ITR 295, THE HONBLE DELHI HIGH COURT HAS HELD AS UNDER: ON GOING THROUGH THE SATISFACTION NOTE IT IS EVIDE NT THAT THERE ARE THREE KINDS OF DOCUMENTS WHICH ARE MENTIONED THEREIN. FIR ST, ARE THE PHOTOCOPIES OF CUMULATIVE REDEEMABLE PREFERENCE SHARES PURCHASE D BY PEPSICO INDIA HOLDINGS PRIVATE LIMITED FROM M/S. TRIPTY DRINKS LI MITED AND M/S. SMV BEVERAGES LIMITED. THE SECOND SET OF DOCUMENTS ARE CHEQUES FOUND IN THE CHEQUE BOOKS OF THE JAIPURIA GROUP COMPANIES. THESE CHEQUES ARE UNSIGNED AND THEY ARE THE ORIGINAL LEAVES IN THE CHEQUE BOOK S THEMSELVES WHICH BELONGED TO THE JAIPURIA GROUP OF COMPANIES. THOUGH , IT MUST BE POINTED OUT THAT THE CHEQUES HAD BEEN WRITTEN IN FAVOUR OF PEPSICO INDIA HOLDINGS PRIVATE LIMITED. THE THIRD DOCUMENT IS A PHOTOCOPY OF A SUPPLY AND LOAN AGREEMENT MADE ON 01.10.2010 BETWEEN PEARL DRINKS L IMITED AND PEPSICO INDIA HOLDINGS PRIVATE LIMITED. IT IS NOBODYS CASE THAT THE JAIPURIA GROUP HAD DIS CLAIMED THESE DOCUMENTS AS BELONGING TO THEM. UNLESS AND UNTIL IT IS ESTABL ISHED THAT THE DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON, THE PROVISION S OF SECTION 153C OF THE SAID ACT DO NOT GET ATTRACTED BECAUSE THE VERY EXPR ESSION USED IN SECTION 153C OF THE SAID ACT IS THAT WHERE THE ASSESSING O FFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG S 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 SECTI ON 153C OF THE SAID ACT CAN BE INVOKED, THE ASSESSING OFFICER OF THE SEARCHED P ERSON MUST BE SATISFIED THAT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE PERSON REFERRED TO IN SECTION 153A (I.E., THE SEARC HED PERSON). IN THE SATISFACTION NOTE, WHICH IS THE SUBJECT MATTER OF T HESE WRIT PETITIONS, THERE IS NOTHING THEREIN TO INDICATE THAT THE SEIZED DOCU MENTS DO NOT BELONG TO THE JAIPURIA GROUP. THIS IS EVEN APART FROM THE FACT TH AT THERE IS NO DISCLAIMER ON THE PART OF THE JAIPURIA GROUP INSOFAR AS THESE DOCUMENTS ARE CONCERNED. SECONDLY, THE FINDING OF PHOTOCOPIES IN THE POSSESS ION OF A SEARCHED PERSON DOES NOT NECESSARILY MEAN AND IMPLY THAT THEY BELO NG TO THE PERSON WHO 8 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. HOLDS THE ORIGINALS. POSSESSION OF DOCUMENTS AND PO SSESSION OF PHOTOCOPIES OF DOCUMENTS ARE TWO SEPARATE THINGS. WHILE THE JAI PURIA GROUP MAY BE THE OWNER OF THE PHOTOCOPIES OF THE DOCUMENTS IT IS QUI TE POSSIBLE THAT THE ORIGINALS MAY BE OWNED BY SOME OTHER PERSON. UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION, WHETHER THEY BE PHOTOCOP IES OR ORIGINALS, DO NOT BELONG TO THE SEARCHED PERSON, THE QUESTION OF INVO KING SECTION 153C OF THE SAID ACT DOES NOT ARISE. THIRDLY, THE ASSESSING OFFICERS SHOULD NOT CONFUSE THE EXPRESSION 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 EXA MPLE IF THE PURCHASERS PREMISES ARE SEARCHED AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT BE SAID THAT IT BELONGS TO THE VENDOR JUST BECAUSE H IS NAME IS MENTIONED IN THE DOCUMENT. IN THE CONVERSE CASE IF THE VENDORS PREMISES ARE SEARCHED AND A COPY OF THE SALE DEED IS SEIZED, IT CANNOT BE SAID THAT THE SAID COPY BELONGS TO THE PURCHASER JUST BECAUSE IT REFERS T O HIM AND HE (THE PURCHASER) HOLDS THE ORIGINAL SALE DEED. IN THIS LI GHT, IT IS OBVIOUS THAT NONE OF THE THREE SETS OF DOCUMENTS COPIES OF PREFEREN CE SHARES, UNSIGNED LEAVES OF CHEQUE BOOKS AND THE COPY OF THE SUPPLY A ND LOAN AGREEMENT CAN BE SAID TO BELONG TO THE PETITIONER. 9.4 IN THE CASE OF P. SRINIVAS NAIK VS. ACIT, 114 T TJ 856 (ITAT BANG.), THE TRIBUNAL HAS HELD AS UNDER: THE BOOKS OF ACCOUNT OR DOCUMENT DO NOT BELONG TO THE ASSESSEE, AS THESE WERE SEIZED FROM THE PREMISES OF R. IT IS NOWHERE STATED THAT THESE BOOKS OF ACCOUNT OR DOCUMENTS SHOWED THA T ALL THE TRANSACTIONS BELONGING TO THE ASSESSEE. SUCH BOOKS OF ACCOUNT OR DOCUMENTS CONTAINED THE TRANSACTIONS RELATING TO TH E GROUP CONCERNS OF R. NO VALUABLE BELONGING TO THE ASSESSE E HAS BEEN SEIZED DURING THE COURSE OF SEARCH. THE TERM BELONG ING IMPLIED SOMETHING MORE THAN THE IDEA OF CASUAL ASSOCIATION. IT INVOLVES THE NOTION OF CONTINUITY AND INDICATES ONE MORE OR LESS INTIMATE CONNECTION WITH THE PERSON OVER A PERIOD OF TIME. T HE BOOKS OF ACCOUNT OR DOCUMENTS SEIZED DURING THE COURSE OF SE ARCH HAVE A CLOSE ASSOCIATION WITH THE GROUP CONCERN OF R. IT R ECORDS THE TRANSACTION CARRIED OUT BY THAT GROUP. IT DOES NOT RECORD THE TRANSACTION CARRIED OUT BY THE ASSESSEE. DOCUMENTS OR BOOKS OF ACCOUNT FOUND DURING THE COURSE OF SEARCH AND SEIZE D CANNOT BE TERMED, TO BE INDICATING ANY LIMITED INTEREST OF TH E OWNERSHIP OF THE ASSESSEE IN SUCH BOOKS OF ACCOUNT OR DOCUMENTS. THE LANGUAGE USED IN S. 153C IS MATERIALLY DIFFERENT FROM THE LA NGUAGE USED UNDER S. 158BD. AS PER S. 158BD, IF ANY UNDISCLOSED INCOME RELATES TO OTHER PERSON, THEN ACTION AGAINST SUCH O THER PERSON CAN BE TAKEN PROVIDED SUCH UNDISCLOSED INCOME IS REFERA BLE TO THE DOCUMENT SEIZED DURING THE COURSE OF SEARCH. HOWEVE R, S. 153C SAYS THAT IF VALUABLE OR BOOKS OF ACCOUNT OR DOCUME NTS BELONGING TO OTHER PERSONS ARE SEIZED THEN ACTION UNDER S. 15 3C CAN BE TAKEN AGAINST THAT PERSON. IN THE INSTANT CASE, BOO KS OF ACCOUNT OR DOCUMENTS DO NOT BELONG TO THE ASSESSEE AND, THEREF ORE, THE AO WAS NOT JUSTIFIED IN INITIATING ACTION UNDER S. 153 A R/W S. 153C. 9 ITA NO. 623/H/16 LVKK CHAITANYA, HYD. 9.5 RESPECTFULLY FOLLOWING THE RATIOS LAID DOWN IN THE AFORESAID CASES, WE SET ASIDE THE ORDER OF THE CIT(A) AND QUA SH THE ORDER PASSED BY THE AO U/S 143(3) R.W.S. 153C OF THE ACT AND ALLOW THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. PRONOUNCED IN THE OPEN COURT ON 22 ND SEPTEMBER, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RA HMAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 22 ND SEPTEMBER, 2017. KV COPY TO:- 1) LVKK CHAITANYA,FLAT NO. 202, DIST. JUDGES QUARTE RS, ROAD NO. 10, BANJARA HILLS, HYDERABAD. 2) DCIT, CENTRAL CIRCLE 2(4), POSNETT BHAVAN, BAS HEERBAGH, HYDERABAD. 3) CIT(A) 12, HYDERABAD 4 PR. CIT (CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE