ACIT, New Delhi V. M/s. Victory Accommodations Pvt. Ltd., New Delhi

ITA 6238/DEL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5821 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 04-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA
• Keywords: Search and seizure; Loose papers; Document seized; Principle of natural justice; Deemed to accrue or arise in india; Assessment record; Block assessment; Cancellation of registration; Reason to believe; Documents seized
• Section: 143(3); 133A; 153A; 133(6); 32; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES D : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.6238/DEL./2014 ASSESSMENT YEAR 2008-2009 THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 09, ROOM NO.357, ARA CENTRE, E-2, JHANDEWALAN EXTN., NEW DELHI. VS M/S. VICTORY ACCOMMODATIONS PVT. LTD., 208, GUPTA TOWER, AZADPUR COMMERCIAL COMPLEX, AZADPUR, DELHI 110 033 PAN AACCV3923C (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI VIJAY VERMA, CIT-D.R. FOR ASSESSEE : SHRI VED JAIN, ADVOCATE DATE OF HEARING : 04.06.2018 DATE OF PRONOUNCEMENT : 27.06.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-XXXII, NEW DELHI, DATED 20. 08.2014, FOR THE A.Y. 2008-2009, ON THE FOLLOWING GROUNDS: 1. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN UPHOLDING THE 2 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. GROUND OF THE ASSESSEE THAT PROVISIONS OF SECTION 153C OF THE ACT COULD NOT BE APPLIED IN THE CASE AND INITIATION OF PROCEEDINGS U/S 153C WAS NOT PROPER AND BAD IN LAW. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN HOLDING THAT FOR INITIATING VALID JURISDICTION U/S 153C, EVEN IF THE AO OF THE SEARCHED PERSON AND THE AO OF SUCH OTHER PERSON IS SAME, IT IS MANDATORY THAT HE HAS TO FIRST RECORD SATISFACTION NOTE IN THE FIL E OF THE PERSON SEARCHED AND THEREAFTER SUCH SATISFACTION NOTE ALONG WITH THE SEIZED DOCUMENTS OR BOOKS OF ACCOUNT TO BE PLACED IN THE FILE OF SUCH OTHER PERSON. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN HOLDING THAT NO FAIR OPPORTUNITY OF HEARING U/S 143(2) OF THE ACT WAS GIVEN TO THE ASSESSEE BEFORE COMPLETING THE ASSESSMENT U/SL53C OF THE !T ACT. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.48,00,000/- ON ACCOUNT OF DEEMED INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 3 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. 2. BRIEF FACTS OF THE CASE AS MENTIONED IN THE IMP UGNED ORDERS ARE THAT ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF A BUILDER AND A DEVELOPER OF REAL ESTATE. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE I.T. ACT, 1961, WAS CONDUC TED BY THE INVESTIGATION WING OF THE DEPARTMENT IN VICTORY GRO UP OF CASES (MAIN JAGAT GROUP) INCLUDING ITS DIRECTORS, OTHER I NDIVIDUALS AND CONNECTED ASSOCIATES ON 14.09.2010. SINCE ONE O F THE DIRECTORS OF THE ASSESSEE-COMPANY WAS ASSOCIATED WI TH ONE OF THE CASES OF JAGAT GROUP, HIS RESIDENTIAL PREMISES WAS ALSO SEARCHED SIMULTANEOUSLY. AS A RESULT OF THIS SEARCH OPERATION, A SURVEY OPERATION U/S 133A OF THE I.T. ACT, 1961 WAS ALSO CONDUCTED BY THE DEPARTMENT ON THE ASSESSEES BUSIN ESS PREMISES ON 14.09.2010. THE CASE OF THE ASSESSEE-CO MPANY WAS CENTRALIZED AND NOTICE UNDER SECTION 153A OF THE I. T. ACT WAS ISSUED WHICH WAS OBJECTED ON THE GROUND THAT NO ACT ION UNDER SECTION 132 WAS INITIATED AGAINST THE ASSESSEE. THE ASSESSING OFFICER ON FINDING THIS CONTENTION AS CORRECT, WITH DREW THE NOTICE DATED 04.11.2011 ISSUED U/S 153A OF THE I.T. ACT, 1 961. THE ASSESSING OFFICER OBSERVED THAT DURING THE COURSE O F THE 4 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. ASSESSMENT PROCEEDINGS U/S 153A IN THE CASE SHRI PR AMOD GOEL, IT WAS NOTICED THAT A SEARCH AND SEIZURE OPER ATION UNDER SECTION 132 WAS CONDUCTED ON 14.09.2010 AT THE RESI DENTIAL PREMISES OF SHRI PRAMOD GOEL, SMT. SAVITA GOEL AND SH. ASHISH GOEL AT BN-33, EAST SHALIMAR BAGH, DELHI, WHEREFROM THE DOCUMENTS BELONGING TO THE ASSESSEE-COMPANY WERE FO UND AND SEIZED WHICH IS PAGE NO. 102 AND 103 OF ANNEXURE A-L OF PARTY V-2 IS A COPY OF THE BALANCE SHEET, PROFIT & LOSS A CCOUNT, PERTAINING TO M/S VICTORY ACCOMMODATIONS PVT LTD. F OR THE FINANCIAL YEAR ENDING 31.03.2010.' ON THE BASIS OF THE ABOVE DOCUMENTS FOUND DURING THE COURSE OF SEARCH, THE AS SESSING OFFICER RECORDED A SATISFACTION NOTE ON 27.02.2013 AND ISSUED AND SERVED UPON THE ASSESSEE A NOTICE UNDER SECTION 153C OF THE I.T. ACT, 1961. IN RESPONSE TO THE SAME, THE AS SESSEE FILED A LETTER STATING THAT THE RETURN FILED UNDER SECTION 139(1) MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 153C OF THE I.T. ACT, 1961. IT WAS CLAIMED, IT IS FILED IN PROTEST AND OBJECTED TO INITIATION OF PROCEEDINGS US 153C OF TH E I.T. ACT. HOWEVER, THE CONTENTION OF THE ASSESSEE WAS REJECTE D. THE A.O. 5 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. ACCORDINGLY COMPLETED THE ASSESSMENT UNDER SECTION 143(3) R.W.S.153C OF THE I.T. ACT VIDE ORDER DATED 28.03.2 013 AT A TOTAL INCOME OF RS.48 LAKHS AS AGAINST NIL INCOME DECLARE D BY THE ASSESSEE-COMPANY. THE ADDITION WAS MADE AT RS.48 LA KHS UNDER SECTION 68 OF THE I.T. ACT ON ACCOUNT OF UNAC COUNTED INCOME WHICH REPRESENTED THE AMOUNTS CREDITED IN TH E BOOKS OF ACCOUNT OF ASSESSEE AS SHARE APPLICATION MONEY R ECEIVED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. 3. THE ASSESSEE-COMPANY CHALLENGED THE VALIDITY OF THE PROCEEDINGS INITIATED UNDER SECTION 153C OF THE I.T . ACT AS WELL AS THE ADDITION ON MERIT BEFORE LD. CIT(A). THE ASS ESSEE- COMPANY CONTENDED THAT THE ASSESSMENT ORDER UNDER S ECTION 153C OF THE I.T. ACT IS BAD IN LAW AND CONTRARY TO PRINCIPLES OF NATURAL JUSTICE. NO INCRIMINATING MATERIAL BELONGIN G TO ASSESSEE-COMPANY WAS FOUND DURING THE COURSE OF SEA RCH. NO SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE-CO MPANY. THE A.O. DID NOT RAISE ANY QUERY ON DOCUMENTS FILED BY THE ASSESSEE- COMPANY IN RESPECT OF EVIDENCE OF SHARE APPLICATION MONEY 6 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. RECEIVED. THE A.O. MERELY INITIATED THE PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT, ON THE BASIS OF COPY OF THE BALANCE SHEET SEIZED DURING THE COURSE OF SEARCH WHICH PERT AINS TO A.Y. 2010-2011. NO UNDISCLOSED INCOME WAS UNEARTHED ON EXAMINATION OF ANY DOCUMENTS FOUND IN SEARCH. SEVER AL CASE LAWS WERE RELIED UPON IN SUPPORT OF THE SAME. 3.1. THE LD. CIT(A) REPRODUCED SECTION 153C OF THE I.T. ACT IN THE ORDER AND ON GOING THROUGH THE INTERPRET ATION OF THE SAID PROVISION, HE NOTED THAT ACTION UNDER SECTION 153C CAN BE TAKEN IN RESPECT OF ANY OTHER PERSON OTHER THAN THE PERSON SEARCHED, IF THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY, OR OT HER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT SEIZED OR REQU ISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED UNDER SECTION 153A. IN SUCH CIRCUMSTANCES, THE ASSE SSING OFFICER SHALL HAND-OVER TO THE ASSESSING OFFICER OF SUCH OTHER PERSON MONEY, JEWELLERY, BULLION OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENT, AND THEREAFT ER, THE 7 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. ASSESSING OFFICER OF SUCH OTHER PERSON SHALL PROCEE D AGAINST THE SAID PERSON TO ASSESS OR RE-ASSESS HIS INCOME IN AC CORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE I.T. ACT , 1961. THEREFORE, RECORDING OF SATISFACTION BY THE ASSESSI NG OFFICER OF THE PERSON SEARCHED THAT ANY MONEY BULLION, JEWELLE RY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED BELONGED TO THE PERSON OTHER THAN THE PERSON SEARCHED IS A SINE-QUA-NON FOR INITIATING ACTION UNDER SECTION 153C OF THE I.T. ACT, 1961. THE LD. CIT(A) IN SUPPORT OF THIS I NTERPRETATION OF SECTION 153C, RELIED UPON THE DECISION OF HON'BLE A PEX COURT IN THE CASE OF MANISH MAHESWARI VS. ACIT & ANOTHER (20 07) 289 ITR 341 (SC). HE HAS ALSO NOTED THAT THE LANGUAGE O F SECTION 158BD AND SECTION 153C HAS SIMILARITY. THEREFORE, I T IS EVIDENT THAT THE CONDITION FOR RECORDING SATISFACTION BY TH E ASSESSING OFFICER OF THE PERSON SEARCHED IS PRESENT IN BOTH T HE SECTIONS. TO THIS EXTENT, DECISION OF HONBLE SUPREME COURT I N THE CASE OF MANISH MAHESHWARI VS. ACIT AND ANOTHER (SUPRA), IS APPLICABLE WHILE INTERPRETING THE PROVISIONS OF SECTION 153C. THE LD. CIT(A) CALLED FOR THE ASSESSMENT RECORD OF THE ASSESSEE-CO MPANY AND 8 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. FOUND THAT THE AO RECORDED THE SATISFACTION NOTE IN THE FILE OF THE ASSESSEE-COMPANY WHICH IS REPRODUCED AS UNDER: 'SATISFACTION U/S 153C OF THE INCOME TAX ACT. 1961 IN THE CASE M/S VICTORY ACCOMMODATIONS PVT. LTD. PAN- AACCV3923C 208. GUPTA TOWER. AZADPUR COMMERCIAL COMPLEX. AZADPUR. DELHI- 11 0033. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153 A IN THE CASE OF SH. PRAMOD GAEL, IT IS NOTICED THAT SEA RCH AND SEIZURE OPERATION U/S 132 WAS UNDERTAKEN ON 14.09.2 010 IN THE CASE OF SH. PRAMOD GOEL, SMT. SAVITA GOEL, A ND SH. ASHISH GOEL AT BN-33, EAST SHALIMAR BAGH, DELHI. UN DER MENTIONED DOCUMENTS BELONGING TO M/S VICTORY ACCOMMODATIONS PVT. LTD. WERE FOUND AND SEIZED FROM THE ABOVE PREMISES. PAGE NO. 102 AND 103 OF ANNEXURE A-L OF PARTY V-2 I S A COPY OF THE BALANCE SHEET, PROFIT LOSS ACCOUNT, PERTAINI NG TO M/S VICTORY ACCOMMODATIONS PVT. LTD. FOR THE FIN. YEAR ENDING 31.03.2010. THE CASE OF M/S VICTORY ACCOMMODATIONS PVT. LTD. WA S CENTRALIZED WITH THIS OFFICE VIDE F.NO;. CLT-DELHI- VL/CENTRALIZATION/2011-12/648 DATED 22.06.2011 ISSU ED BY THE CIT, DELHI-VL, NEW DELHI. 9 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. I AM THEREFORE SATISFIED THAT THE DOCUMENTS SEIZED, AS REFERRED TO ABOVE, BELONG TO M/S VICTORY ACCOMMODAT IONS PVT. LTD. WARRANTING ACTION U/S 153C IN THIS CASE. 27.02.2013 (SUMESH SWANI) DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-09, NEW DELHI NOTICES U/S 153C OF THE INCOME-TAX ACT, 1961 ARE HE REBY ISSUED FOR THE ASSESSMENT YEARS 2005- 06 TO 2010-11 . (SUMESH SWANI) DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-09, NEW DELHI' 3.2. THE LD. CIT(A) ON READING THE ABOVE SATISFACT ION NOTE FOUND THAT THE ASSESSING OFFICER OF THE ASSESSEE-COMPANY RECORDED THE SATISFACTION NOTE UNDER SECTION 153C O F THE I.T. ACT WHO HAS INITIATED ACTION UNDER SECTION 153C OF THE I.T. ACT, WHICH IS ALSO SUPPORTED BY THE FACT THAT THE SAID S ATISFACTION NOTE WAS RECORDED ON 27.02.2013 AND NOTICE UNDER SE CTION 153C HAVE BEEN ISSUED ON THE SAME DATE. THE A.O. WH O RECORDED SATISFACTION NOTE IN THE FILE OF ASSESSEE COMPANY IS ALSO THE SAME A.O. WHO ISSUED NOTICE UNDER SECTION 153C IN THE CASE 10 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. OF THE ASSESSEE-COMPANY. THE LD. CIT(A) ALSO CALLED FOR THE ASSESSMENT RECORD OF SHRI PRAMOD GOEL WHO WAS SEARC HED UNDER SECTION 132 ON 14.09.2010. THE A.O. OF THE SE ARCHED PERSON SHRI PRAMOD GOEL AND A.O. OF THE OTHER PERSO N I.E., ASSESSEE-COMPANY MAY BE SAME, BUT, THE ABOVE TWO EN TITIES ARE TWO DIFFERENT PERSONS, THEREFORE, A.O. IS BOUND TO CARRY-OUT SUCH EXERCISE AND THE A.O. OF THE PERSON SEARCHED SHOULD HAVE RECORDED SATISFACTION NOTE DURING THE COURSE OF ASS ESSMENT PROCEEDINGS UNDER SECTION 153A IN THE CASE OF SHRI PRAMOD GOEL IN HIS FILE AND AFTER RECORDING SUCH SATISFACTION N OTE IN THE FILE OF SHRI PRAMOD GOEL THAT IS THE PERSON SEARCHED, TH E SAME SHOULD BE PLACED IN THE FILE OF THE ASSESSEE-COMPAN Y I.E., OTHER PERSON. THE LD. CIT(A) ON PERUSAL OF THE ASSESSMENT RECORD OF SHRI PRAMOD GOEL FOUND THAT SUCH EXERCISE OF RECORD ING SATISFACTION NOTE IN THE CASE UNDER SECTION 153A WA S NOT CARRIED-OUT AND NO SUCH SATISFACTION NOTE WAS FOUND RECORDED IN THE CASE OF THE PERSON SEARCHED. IT IS, THEREFOR E, CLEAR THAT NO SATISFACTION NOTE WAS FOUND RECORDED IN THE FILE OF SHRI PRAMOD GOEL, THE PERSON SEARCHED UNDER SECTION 132 AND ASS ESSED 11 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. UNDER SECTION 153A OF THE I.T. ACT. THEREFORE, SATI SFACTION NOTE RECORDED IN THE CASE OF THE ASSESSEE I.E., OTHER PE RSON IS NOT VALID UNDER SECTION 153C OF THE I.T. ACT. LD. CIT(A ) ALSO NOTED THAT THE BALANCE-SHEET DATED 31.03.2010 IS NOT INCR IMINATING IN NATURE. LD. CIT(A) RELIED UPON THE ORDER OF ITAT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY IN ITA. NO.114 TO 117/PN/2010 IN SUPPORT OF HIS FINDINGS THAT SINCE N O SATISFACTION NOTE HAVE BEEN RECORDED IN THE CASE OF THE PERSON SEARCHED AS REQUIRED UNDER SECTION 153C OF THE I.T. ACT, THEREFORE, PROCEEDINGS UNDER SECTION 153C ARE NOT P ROPER AND BAD IN LAW. THIS ISSUE WAS DECIDED IN FAVOUR OF ASS ESSEE. 3.3. THE LD. CIT(A) AS REGARDS GIVING OPPORTUNITY TO THE ASSESSEE-COMPANY HELD THAT NO SUFFICIENT TIME WAS G IVEN TO THE ASSESSEE-COMPANY TO REPRESENT BEFORE A.O. THEREFORE , HE FOUND MERIT IN THE GRIEVANCE OF THE ASSESSEE-COMPANY THAT NO PROPER OPPORTUNITY WAS PROVIDED TO THE ASSESSEE-COMPANY. 3.4. AS REGARDS THE ADDITION ON MERIT OF RS.48 LAK HS ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY, LD. CIT(A) 12 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. NOTED THAT SURVEY WAS CONDUCTED UNDER SECTION 133A AT THE BUSINESS PREMISES OF ASSESSEE-COMPANY AT AZADPUR, I N WHICH, SOME DOCUMENTS HAVE BEEN IMPOUNDED WHICH WERE ANNEXURISED AS A-5, PAGES 51 TO 55, WHICH CONTAIN THE TRANSACTIONS OF THE COMPANY OF VICTORY GROUP WITH D IFFERENT COMPANIES IN TABULAR FORM. THE SAME WERE SCANNED IN THE ASSESSMENT ORDER, UPON PERUSAL, THE A.O. NOTED THAT VARIOUS COMPANIES PURCHASED THE SHARES OF THE COMPANY OF TH E VICTORY GROUP AT A PREMIUM OF RS.90/- TO RS.190/- PER SHARE ON A FACE VALUE OF RS.10/- PER SHARE. ACCORDING TO A.O. THE T RANSACTIONS FOR M/S. VICTORY APARTMENTS P. LTD., WERE ARRANGED BY SHRI TARUN GOEL, ENTRY OPERATOR, WHO ARE RUNNING SEVERAL COMPANIES. THE ASSESSEE-COMPANY FILED SEVERAL DOCUM ENTS BEFORE A.O. IN SUPPORT OF GENUINENESS OF THE SHARE APPLICATION MONEY RECEIVED SUCH AS SHARE APPLICATION FORM, COPY OF THE ITR, PAN, BOARD RESOLUTION, BANK STATEMENTS, COPY OF CER TIFICATE OF INCORPORATION, LEDGER ACCOUNT, CHALLAN FOR FILING R ETURN WITH REGISTRAR OF COMPANIES ETC. THE ASSESSEE-COMPANY, T HEREFORE, SUBMITTED THAT IT HAS RECEIVED GENUINE SHARE APPLIC ATION MONEY, 13 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. ON WHICH, A.O. HAS NOT CONDUCTED ANY ENQUIRY. LD. C IT(A), ACCEPTED THE CONTENTION OF ASSESSEE-COMPANY THAT ON FILING DOCUMENTS ON RECORD, A.O. DID NOT MAKE ANY ENQUIRY. THE A.O. HAS GONE THROUGH AND RELIED UPON REPORT OF DDIT, KO LKATA, WHICH WAS IN RESPECT OF SOME OTHER CASES AND NOT CO NNECTED WITH THE ASSESSEE-COMPANY. THE LD. CIT(A) NOTED TH AT A.O. DID NOT ISSUE NOTICE UNDER SECTION 133(6) AND NO FURTHE R ENQUIRY WAS MADE. THEREFORE, ADDITION ON MERIT WAS ALSO DEL ETED. THE APPEAL OF ASSESSEE-COMPANY WAS ACCORDINGLY ALLOWED. 4. THE LD. D.R. RELIED UPON THE ORDER OF THE A.O. HE HAS SUBMITTED THAT LD. CIT(A) HAS REPRODUCED SATISFACTI ON NOTE AT PAGE NO.11 OF THE ORDER. THE BALANCE-SHEET AND PROF IT AND LOSS ACCOUNT WAS SEIZED DURING THE COURSE OF SEARCH, WHI CH LED TO SURVEY UNDER SECTION 133A IN THE CASE OF THE ASSESS EE-COMPANY. IF THE A.O. HAS USED THE MATERIAL/EVIDENCE COLLECTE D UNDER SECTION 133A AND DURING THE COURSE OF SEARCH IN THE CASE OF SHRI TARUN GOEL, THERE IS NO RESTRICTION TO USE IT UNDER SECTIONS 153A AND 153C REGARDING THE SAME. LD. D.R. RELIED UPON D ECISION OF 14 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. HONBLE SUPREME COURT IN THE CASE OF CIT VS. MUKUND RAY K. SHAH 290 ITR 433. THE LD. D.R. RELIED UPON JUDGMENT OF THE HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF PR. CIT VS. SHEETAL INTERNATIONAL PVT. LTD., DATED 10.07.2017 I N WHICH DECISION OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF GANAPATI FINCAP SERVICES PVT. LTD., VS. CIT DATE D 25.05.2017 WAS REFERRED IN WHICH IT WAS HELD THAT (IV) WHERE THE A.O. OF THE SEARCHED PERSON AND TH E OTHER PERSON IS THE SAME, SUCH A SATISFACTION NOTE QUA TH E OTHER PERSON HAS TO BE RECORDED BY THE A.O. OF THE SEARCH ED PERSON PRIOR TO THE INITIATION OF THE PROCEEDINGS A GAINST THE OTHER PERSON. THIS IS A SINE QUA NON FOR TRIGGERING THE PROCEEDINGS AGAINST THE OTHER PERSON UNDER SECTION 153C OF THE ACT. (V) THERE DO NOT HAVE TO BE TWO SEPARATE SATISFACTI ON NOTES PREPARED BY THE A.O. OF THE SEARCHED PERSON EVEN WH ERE HE IS ALSO THE A.O. OF THE OTHER PERSON. IN SUCH EVENT , THE A.O. NEED MAKE ONLY ONE SATISFACTION NOTE. THAT SATISFAC TION NOTE 15 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. IS QUA THE OTHER PERSON. FURTHER, IT IS SUFFICIENT THAT SUCH SATISFACTION NOTE IS PLACED IN THE FILE OF THE OTHE R PERSON BY THE A.O. IN HIS CAPACITY AS THE A.O. OF SUCH OTHER PERSON. 4.1. THE LD. D.R. ALSO RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. S. AJIT KUMAR IN CIVIL APPEAL NO.10164 OF 2010 DATED 02.05.2018 IN WHICH S EARCH WAS CONDUCTED BY THE OFFICER OF THE INCOME TAX DEPA RTMENT IN THE PREMISES OF THE ASSESSEE AND ON THE SAME DATE, THERE WERE SURVEY IN THE PREMISES OF ELEGANT CONSTRUCTIONS AND INTERIORS LTD., WHO CONSTRUCTED AND DECORATED THE HOUSE OF TH E ASSESSEE. PURSUANT TO THE SAME, THE FACT THAT THE ASSESSEE H AVING ENGAGED THE ABOVE WORK OF CONTRACTOR FOR CONSTRUCTI ON OF HOUSES CAME OUT, IN THESE PREMISE, IT WAS HELD THAT THE POWER OF SURVEY HAS BEEN PROVIDED UNDER SECTION 133A OF T HE I.T. ACT. THEREFORE, ANY MATERIAL OR EVIDENCE FOUND/COLLECTED IN A SURVEY WHICH HAS BEEN SIMULTANEOUSLY MADE AT THE PREMISES OF A CONNECTED PERSON CAN BE UTILIZED WHILE MAKING THE B LOCK ASSESSMENT IN RESPECT OF AN ASSESSEE UNDER SECTION 158BB READ 16 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. WITH SECTION 158 BH OF THE IT ACT. THE LD. D.R. RELIED UPON ORDER OF ITAT, DELHI BENCH IN THE CASE OF SHRI PARA G DALMIA, NEW DELHI VS. DCIT, CENTRAL CIRCLE-26, NEW DELHI IN ITA.NO.5499/DEL./2017 DATED 26.02.2018 IN WHICH THE DOCUMENTS RECEIVED BY THE GOVERNMENT OF INDIA FROM A SOVEREIGN COUNTRY CONTAINING INFORMATION REGARDING THE UNDISCLOSED FOREIGN ACCOUNTS WERE RECEIVED PRIOR TO THE SEARCH AND WAS CONFRONTED TO THE ASSESSEE DURING THE COURS E OF SEARCH. THEREFORE, IT WAS HELD THAT THE SAME CONSTITUTES IN CRIMINATING MATERIAL. THE LD. D.R, THEREFORE, SUBMITTED THAT SA TISFACTION NOTE WAS VALIDLY RECORDED UNDER SECTION 153C OF THE I.T. ACT. ON MERITS, THE LD. D.R. SUBMITTED THAT THE NAME OF THE PARTIES TALLY WITH THE ADDITIONS. THE ENTRIES WERE ARRANGED BY SH RI TARUN GOEL, ENTRY OPERATOR, IN WHOSE CASE, ADDITION HAVE BEEN CONFIRMED. IN CASE, A.O. HAS NOT CONDUCTED PROPER E NQUIRY, THE LD. CIT(A) HAVING CO-TERMINUS POWERS, SHOULD HAVE E XERCISED THE SAME POWER BY CONDUCTING FURTHER INVESTIGATION INTO THE MATTER AND RELIED UPON THE DECISION OF HONBLE JURI SDICTIONAL 17 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. DELHI HIGH COURT IN THE CASE OF CIT-II VS. M/S. J ANSAMPARK ADVERTISING AND MARKETING (P) LTD., 375 ITR 373 (DE L.) (HC) 5. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. HE HAS SUBMITTED THAT INITIALLY THE A.O. INITIATED THE PROCEEDINGS AGAINST THE ASSESSEE UNDER SECTION 153A OF THE I.T. ACT AND WHEN IT WAS FOUND THAT NO SEARCH HAVE BEEN CONDUCTED IN THE CASE OF ASSESSEE, THEREFORE, ACTION UNDER SE CTION 153A WAS DROPPED. THE A.O, IN THE CASE OF ASSESSEE-COMPA NY RECORDED SATISFACTION UNDER SECTION 153C OF THE I.T . ACT, WHICH IS ILLEGAL AND BAD IN LAW AND IS NOT IN CONFORMITY WITH SECTION 153C OF THE I.T. ACT BECAUSE NO SATISFACTION NOTE H AVE BEEN RECORDED IN THE CASE OF THE PERSON SEARCHED I.E., S HRI PRAMOD GOEL. FURTHER, THE BALANCE SHEET FOUND DURING THE C OURSE OF SEARCH ENDING 31.03.2010 DID NOT RELATE TO ASSESSME NT YEAR UNDER APPEAL I.E., 2008-2009. FURTHER, THE BALANCE- SHEET IS IN PUBLIC DOMAIN AND CONTAINS LIST OF SHAREHOLDERS WHI CH COULD NOT BE CONSIDERED AS INCRIMINATING MATERIAL. HE HAS SUBMITTED 18 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. THAT IDENTICAL ISSUE HAVE BEEN DECIDED BY ITAT, DEL HI BENCH IN CASE OF ASSESSEE IN FAVOUR OF ASSESSEE-COMPANY [ VICTORY ACCOMMODATION PVT. LTD., NEW DELHI VS. ACIT, CENTRA L CIRCLE- 09, NEW DELHI ] REPORTED IN 2017-(5)-TMI-1050-ITAT-DELHI FOR A.YS. 2009-2010 AND 2010-2011. HE HAS RELIED UPON D ECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SIN HGAD TECHNICAL EDUCATION SOCIETY (2017) 397 ITR 344 (SC) AND DECISION OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF PR. CIT VS. INDEX SECURITIES PRIVATE LIMITED, VI DYA SHANKAR INVESTMENT PRIVATE LIMITED 2017-(9)-TMI-585 (DEL.). LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE NO SA TISFACTION NOTE HAS BEEN RECORDED IN THE CASE OF THE PERSON SE ARCHED AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COUR SE OF SEARCH AGAINST THE ASSESSEE-COMPANY, THEREFORE, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE-COMPANY BY THE JU DGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SINHGA D TECHNICAL EDUCATION SOCIETY (SUPRA). HE HAS SUBMITTED THAT AS SESSEE- COMPANY FILED ALL THE DOCUMENTS BEFORE A.O. ON MERI TS BUT THE A.O. WITHOUT MAKING ANY ENQUIRY OR WITHOUT VERIFYIN G ANY FACT, 19 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. MADE THE ADDITION WHICH WAS CORRECTLY DELETED BY TH E LD. CIT(A). A.O. RELIED UPON THE REPORT OF THE INVESTIGATION WI NG, KOLKATA, WHICH WAS NOT CONNECTED WITH THE ASSESSEE-COMPANY. HE HAS ALSO RELIED UPON THE DECISION OF HONBLE JURISDICTI ONAL DELHI HIGH COURT IN SUPPORT OF HIS CONTENTION IN CASES OF CIT VS. FAIR FINVEST LTD., 357 ITR 146 AND ACIT VS. BEST INFRAST RUCTURE (INDIA) PVT. LTD., 2017-(8)-TMI-250. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ACCOR DING TO SECTION 153C OF THE I.T. ACT, ACTION UNDER SECTI ON 153C CAN BE TAKEN IN RESPECT OF ANY OTHER PERSON THAN THE PE RSON SEARCHED, IF THE A.O. OF THE SEARCHED PERSON IS SAT ISFIED THAT ANY MONEY, BULLION, JEWELLERY, OR OTHER VALUABLE ARTICL E OR THING OR BOOKS OF ACCOUNT SEIZED OR REQUISITIONED BELONGS OR BELONGED TO A PERSON OTHER THAN THE PERSON SEARCHED UNDER SECTI ON 153A. IN SUCH CIRCUMSTANCES, THE ASSESSING OFFICER SHALL HAND OVER TO THE ASSESSING OFFICER OF SUCH OTHER PERSON MONEY, J EWELLERY, BULLION OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENT, AND THEREAFTER, THE ASSESSING OFFICER OF SUCH OTHER 20 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. PERSON SHALL PROCEED AGAINST THE SAID PERSON TO ASS ESS OR RE- ASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE I.T. ACT, 1961. THEREFORE, RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE PERSON SEARCHED IS A CONDITION PRECEDENT FOR INITIATING ACTION UNDER SECTION 153C OF THE I.T. ACT. THE HONBLE SUPREME COURT IN THE CASE OF MANIS H MAHESHWARI VS. ACIT (2007) 289 ITR 341 (SC) IN PARA -11 HELD AS UNDER : CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMEN T IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 , OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A . THE SAID PROVISION WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED O UT UNDER SECTION 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A . SECTION 158BD , HOWEVER, PROVIDES FOR TAKING RECOURSE TO A BLOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITIONS PRECEDENTS WHEREFOR ARE : (I) SATISFACTI ON MUST BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLO SED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OF THE 21 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS O R ASSETS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON; AND (III) THE ASSESSING OFFICER HAS PROCEED ED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISION S OF SECTION 158BD , THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN R ELATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BE EN REQUISITIONED UNDER SECTION 132A OF THE ACT. 6.1. IT WAS FURTHER HELD BY THE HONBLE SUPREME CO URT IN PARA-16 IN THE CASE OF MANISH MAHESHWARI (SUPRA) AS UNDER : LAW IN THIS REGARD IS CLEAR AND EXPLICIT. THE ONLY QUESTION WHICH ARISES FOR OUR CONSIDERATION IS AS TO WHETHER THE NOTICE DATED 06.02.1996 SATISFIES THE REQUIREMENTS OF SECTION 158BD OF THE ACT. THE SAID NOTICE DOES NOT RECORD ANY SATISFACTION ON THE PART OF THE ASSESSING OFFIC ER. DOCUMENTS AND OTHER ASSETS RECOVERED DURING SEARCH HAD 22 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. NOT BEEN HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION IN THE MATTER. 6.2. IT WAS FURTHER HELD IN PARA-22 BY THE APEX C OURT IN THE CASE OF MANISH MAHESHWARI (SUPRA) AS UNDER : AS THE ASSESSING OFFICER HAS NOT RECORDED HIS SATI SFACTION, WHICH IS MANDATORY; NOR HAS HE TRANSFERRED THE CASE TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE MATT ER, WE ARE OF THE OPINION THAT THE IMPUGNED JUDGMENTS OF T HE HIGH COURT CANNOT BE SUSTAINED, WHICH ARE SET ASIDE ACCO RDINGLY. THE APPEALS ARE ALLOWED. HOWEVER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. 6.3. THE CBDT VIDE CIRCULAR NO.24/2015 DATED 31 ST DECEMBER, 2015 ISSUED THE FOLLOWING DIRECTIONS : 'SUBJECT : RECORDING OF SATISFACTION NOTE UNDER SEC TION 158BD/153C OF THE ACT - R EG. 23 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. THE ISSUE OF RECORDING OF SATISFACTION FOR THE PURP OSES OF SECTION 158BD/153C HAS BEEN SUBJECT MATTER OF LITIGATION. 2. THE HON'BLE SUPREME COURT IN THE CASE OF M/S CA LCUTTA KNITWEARS IN ITS DETAILED JUDGMENT IN CIVIL APPEAL NO.3958 OF 2014 DATED 12.3.2014 (AVAILABLE IN NJRS AT 2014- LL- 0312-51) HAS LAID DOWN THAT FOR THE PURPOSE OF SECT ION 158BD OF THE ACT, RECORDING OF A SATISFACTION NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREP ARED BY THE AO BEFORE HE TRANSMITS THE RECORD TO THE OTHER AO WHO HAS JURISDICTION OVER SUCH OTHER PERSON U/S 158BD. THE HON'BLE COURT HELD THAT 'THE SATISFACTION NOTE COUL D BE PREPARED AT ANY OF THE FOLLOWING STAGES : (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; OR (B) IN THE COURSE OF THE ASSESSMENT PROCEEDINGS UND ER SECTION 158BC OF THE ACT; OR (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS AR E COMPLETED UNDER SECTION 158BC OF THE ACT OF THE SEA RCHED PERSON.' 24 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. 3. SEVERAL HIGH COURTS HAVE HELD THAT THE PROVISIO NS OF SECTION 153C OF THE ACT ARE SUBSTANTIALLY SIMILAR/P ARI- MATERIA TO THE PROVISIONS OF SECTION 158BD OF THE A CT AND THEREFORE, THE ABOVE GUIDELINES OF THE HON'BLE SC, APPLY TO PROCEEDINGS U/S 153C OF THE IT ACT, FOR THE PURPOSE S OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PER SON. THIS VIEW HAS BEEN ACCEPTED BY CBDT. 4. THE GUIDELINES OF THE HON'BLE SUPREME COURT AS REFERRED TO IN PARA 2 ABOVE, WITH REGARD TO RECORDI NG OF SATISFACTION NOTE, MAY BE BROUGHT TO THE NOTICE OF ALL FOR STRICT COMPLIANCE. IT IS FURTHER CLARIFIED THAT EVEN IF TH E AO OF THE SEARCHED PERSON AND THE 'OTHER PERSON' IS ONE AND T HE SAME, THEN ALSO HE IS REQUIRED TO RECORD HIS SATISF ACTION AS HAS BEEN HELD BY THE COURTS. 5. IN VIEW OF THE ABOVE, FILING OF APPEALS ON THE ISSUE OF RECORDING OF SATISFACTION NOTE SHOULD ALSO BE DECID ED IN THE LIGHT OF THE ABOVE JUDGEMENT. ACCORDINGLY, THE BOAR D HEREBY DIRECTS THAT PENDING LITIGATION WITH REGARD TO RECO RDING OF SATISFACTION NOTE UNDER SECTION 158BD/153C SHOULD B E WITHDRAWN/NOT PRESSED IF IT DOES NOT MEET THE GUIDE LINES LAID DOWN BY THE APEX COURT.' 25 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. 6.4. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SINGHAD TECHNICAL EDUCATION SOCIETY (2015) 378 ITR 84 (BOM.) HELD AS UNDER : IN TERMS OF SECTION 153C OF THE INCOME-TAX ACT, 19 61, THE ASSESSING OFFICER SHOULD BE SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR TH ING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BEL ONG OR BELONGS TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT AND HE CAN HAND OVER THE SE IZED DOCUMENTS TO THE ASSESSING OFFICER HAVING JURISDICT ION OVER THAT PERSON. THE ASSESSEE WAS AN EDUCATIONAL INSTITUTION SINC E THE ASSESSMENT YEAR 1994-95. A SEARCH AND SEIZURE OPERA TION WAS CARRIED OUT AND CERTAIN LOOSE PAPERS WERE SEIZE D FROM THE PRESIDENT OF THE ASSESSEE. SIMULTANEOUSLY A SUR VEY ACTION WAS CONDUCTED ON THE ASSESSEE. ON THE BASIS OF LOOSE PAPERS FOUND WITH AND SEIZED FROM THE PRESIDE NT THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 153 C ON THE ASSESSEE AND ASSESSED THE INCOME. THE TRIBUNAL SET ASIDE THE ASSESSMENTS. ON APPEALS TO THE HIGH COURT: HELD, DISMISSING THE APPEALS, THAT THE REASONS ASSIGNED BY THE ASSESSING OFFICER IN THE SATISFACTI ON NOTE 26 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. WERE SILENT ABOUT THE ASSESSMENT YEAR IN WHICH SPEC IFIC INCRIMINATING INFORMATION OR UNACCOUNTED OR UNDISCL OSED HIDDEN INFORMATION WAS DISCOVERED OR SEIZED BY THE REVENUE FROM THE ASSESSEE. IN THE CIRCUMSTANCES, TH E GENERAL SATISFACTION AND AS RECORDED IN THE NOTE WA S NOT ENOUGH. THERE WAS ABSOLUTELY NOTHING TO INDICATE AS TO IN WHICH EDUCATIONAL COURSES, THE EDUCATION WAS IMPART ED AND INSTITUTION WISE, WHETHER THE ADMISSIONS WERE G RANTED TO THE TECHNICAL COURSES MERIT-WISE OR ON THE BASIS OF MARKS OBTAINED IN XII STANDARD HSC EXAM. WHETHER ANY FEE STRUCTURE WAS APPROVED AND CASH COMPONENT WAS, THEREFORE, COLLECTED OVER AND ABOVE THE SANCTIONED FEES WERE MATTERS WHICH OUGHT TO HAVE BEEN GONE INTO AND THERE COULD, NOT BE A GENERAL OR VAGUE SATISFACTION. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ASSESSMENTS. 6.5. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY (2017) 397 ITR 344 (SC) HELD AS UNDER : HELD, DISMISSING THE APPEALS, (I) THAT THE TRIBUNAL PERMITTED THE ASSESSEE TO RAISE THE ADDITIONAL GROU ND ON THE GROUND THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FACTS ALREADY ON RECORD, THAT UNDER SECTIO N 153C OF 27 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. THE ACT, INCRIMINATING MATERIAL WHICH WAS SEIZED HA D TO PERTAIN TO THE ASSESSMENT YEARS IN QUESTION, AND TH AT THE DOCUMENTS WHICH WERE SEIZED DID NOT ESTABLISH ANY C O- RELATION, DOCUMENT-WISE, WITH THESE FOUR ASSESSMENT YEARS. THE TRIBUNAL FOUND THAT THE MATERIAL DISCLOSED IN T HE SATISFACTION NOTE BELONGED TO ASSESSMENT YEAR 2004- 05 OR THEREAFTER. THE TRIBUNAL RIGHTLY PERMITTED THIS ADD ITIONAL GROUND TO BE RAISED AND CORRECTLY DEALT WITH THE GR OUND ON THE MERITS AS WELL. THE HIGH COURT WAS RIGHT IN AFF IRMING THIS VIEW OF THE TRIBUNAL. DECISION OF THE BOMBAY HIGH COURT IN CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY [2015] 378 ITR 84 (BOM) AFFIRMED. (II) THAT THE ASSESSMENT ORDER PASSED BY THE ASSESS ING OFFICER COVERED EIGHT ASSESSMENT YEARS. FOR SIX ASS ESSMENT YEARS THE ASSESSMENT WAS UNDE R SECTION 153C OF THE ACT. THE ASSESSMENT ORDER WAS SET ASIDE ONLY IN RESPECT OF FOUR OF THOSE ASSESSMENT YEARS AND ON A TECHNICAL GROUND . THE 28 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. OBJECTION PERTAINING TO THE FOUR ASSESSMENT YEARS I N QUESTION DID NOT RELATE TO THE OTHER TAX ASSESSMENT YEARS, NAMELY, 2004-05 AND 2005-06. NOR DID THIS DECISION HAVE A BEARING IN RESPECT OF ASSESSMENT FOR ASSESSMENT Y EAR 1999-2000 OR ASSESSMENT YEAR 2006-07. THE NECESSARY CONSEQUENCE WOULD BE THAT THE CONCLUSIONS OF THE AS SESSING OFFICER IN HIS ASSESSMENT ORDER REGARDING THE ACTIV ITIES OF THE TRUST NOT BEING GENUINE AND NOT CARRIED OUT IN ACCORDANCE WITH THE TRUST DEED OR CANCELLATION OF REGISTRATION, DENIAL OF BENEFITS OF SECTIONS 11 AND 12 WOULD NOT BE AFFECTED BY THIS JUDGMENT. 6.6. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. LATE J. CHANDRASEKHAR (HUF) (2011) 338 ITR 61 (MAD. ) HELD AS UNDER : ON THE SEARCH CONDUCTED IN THE CASE OF A AND GROUP ON NOVEMBER 25, 2003 , MATERIAL PERTAINING TO 'ON-MONEY' PAYMENT PAID TO THE ASSESSEE IN RESPECT OF PROPERTY PURCHASED FROM THE ASSESSEE WERE SEIZED. BASED ON T HAT, 29 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153C OF THE INCOME-TAX ACT, 1961, AND REWORKED THE CAPITAL GAINS. THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HELD TH AT THE NOTICE UNDER SECTION 153C WAS NOT VALID. ON APPEAL TO THE HIGH COURT : HELD, DISMISSING THE APPEALS, THAT THE ASSESSING OFFICER DID NOT HAVE THE BENEFIT OF THE SEIZED MATE RIAL WHILE ISSUING THE NOTICE UNDER SECTION 153C. IN THE LIGHT OF THE FACT THAT THE REVENUE DID NOT PRODUCE ANY MATERIAL TO SH OW THAT THE MATERIALS WERE AVAILABLE AT THE HANDS OF THE AS SESSING OFFICER AT THE TIME OF ISSUING NOTICE, THE TRIBUNAL RIGHTLY CAME TO THE CONCLUSION THAT HE ASSUMPTION OF JURISD ICTION UNDER SECTION 153C WAS NOT VALID. 6.7. THE ITAT, AGRA BENCH IN THE CASE OF ACIT, CIR CLE-I, GWALIOR VS. GLOBAL ESTATE (2013) 142 ITD 740 (AGRA) HELD AS UNDER : THE ASSESSEE HAD A CASE FOR QUASHING OF PROCEEDINGS UNDER SECTION 153C. NO MATERIAL IS PRODUCED TO PROV E THAT 30 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. THE ASSESSING OFFICER IN THE CASE OF PERSON SEARCHE D WAS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THINGS OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS TO OR BEL ONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A. NO MATERIAL IS PRODUCED BEFORE TO SHOW IF ANY SATIS FACTION WAS RECORDED BY THE ASSESSING OFFICER IN THAT CASE THAT THE MATERIAL BELONGS TO ANY PERSON OTHER THAN THE P ERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132. DEPARTMENT DID NOT PRODUCE ANY MATERIAL TO SHO W IF ANY SUCH SATISFACTION AS REQUIRED UNDER SECTION 153 C WAS RECORDED BY THE ASSESSING OFFICER IN THE CASE O F PERSON SEARCHED. NO MATERIAL IS PRODUCED IN REFEREN CE TO ABOVE REQUIREMENT. NO MATERIAL IS ALSO PRODUCED BEFORE TO SHOW THAT BO OKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDI CTION OVER SUCH OTHER PERSON. IN THE ABSENCE OF ANY ADEQU ATE 31 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. MATERIAL PRODUCED BY THE DEPARTMENT CONTENTION OF T HE ASSESSEE WAS JUSTIFIED THAT IN THIS CASE, THE ASSES SING OFFICER HAD NOT RECORDED ANY SATISFACTION THAT ANY SEIZED DOCUMENT OR MATERIAL BELONGS TO ANY PERSON OTHER PE RSON SEARCHED. SINCE THE REVENUE IS IN APPEAL, THEREFORE, BURDEN W AS UPON THEM TO PROVE THAT NECESSARY INGREDIENTS OF SE CTION 153C HAVE BEEN COMPLIED WITH IN THIS CASE BEFORE INVOKING JURISDICTION UNDER SECTION 153C. IT IS ADDED FURTHER HERE THAT THE ASSESSING OFFICER HAS NOT REFERRED TO ANY SEIZED DOCUMENT OR MATERIAL IN THE ASSESSMENT ORDERS ON THE BASIS OF WHICH, ADDITIONS ON MERIT HAVE BEEN MADE. THEREFORE, THE CONDITIONS OF SECTION 153C AS NOTED ABOVE ARE ALSO NOT SATISFIED IN THIS CASE. THEREFORE, THERE IS NO INFIRMITY IN THE ORDER OF THE COMMISSIONER (APPEALS) IN QUASHING THE PROCEEDINGS UNDER SECTION 153C. 32 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. 6.8. THE ITAT, DELHI BENCH, IN THE CASE OF ASSESSE E FOR A.YS. 2009-2010 AND 2010-2011 IN THE MATTER OF VICT ORY ACCOMMODATION PVT. LTD., VS. ACIT, CENTRAL CIRCLE-0 9, NEW DELHI 2017 (5) TMI 1050-ITAT-DELHI (SUPRA), ON IDEN TICAL FACTS HELD AS UNDER : ASSESSMENT FRAMED U/S 153C - ABSENCE OF SATISFACTI ON NOTE - HELD THAT:- FROM THE PLAIN READING OF THE CI RCULAR NO. 24/2015 DATED 31.12.2015 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, IT IS CRYSTAL CLEAR THAT EVE N IF THE AO OF THE SEARCHED PERSON AND OF THE OTHER PERSON I S ONE AND THE SAME THEN HE IS REQUIRED TO RECORD HIS SATISFACTION IN THE CASE OF SEARCHED PERSON. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT TH E AO OF THE SEARCHED PERSON HAS NOT RECORDED ANY SATISFACTI ON RATHER THE SATISFACTION IS RECORDED BY THE AO OF TH E OTHER PERSON I.E. THE ASSESSEE WHICH IS EVIDENT FROM THE SATISFACTION NOTE, COPY OF WHICH IS PLACED AT PAGE NO. 21 OF THE ASSESSEES PAPER BOOK. THEREFORE, THE ASSESS MENT 33 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. FRAMED IN THE HANDS OF THE ASSESSEE WAS NOT VALID. MOREOVER, FROM THE OBSERVATION OF THE AO IN THE SATISFACTION NOTE ALSO IT IS CRYSTAL CLEAR THAT NO INCRIMINATING MATERIAL WAS FOUND, THE ADDITION WAS MADE ONLY ON THE BASIS OF THE COPY OF BALANCE SHEET , PROFIT AND LOSS ACCOUNT AND SCHEDULE OF ADVANCES AGAINST SUPPLIES PERTAINING TO THE ASSESSEE, THOSE DOCUMENTS WERE ALREADY IN THE KNOWLEDGE OF THE DEPARTMENT AS THE SAME WERE FURNISHED ALONG WITH TH E REGULAR RETURN OF INCOME. THEREFORE, THOSE DOCUMENT S BY NO STRETCH OF IMAGINATION CAN BE SAID TO BE INCRIMI NATING AS THOSE WERE MADE OUT OF THE REGULAR BOOKS OF ACCO UNTS OF THE ASSESSEE AND THE RETURN OF INCOME WAS FILED ON THE BASIS OF THOSE DOCUMENTS ONLY. - DECIDED IN FAVOUR OF ASSESSEE. 6.9. THE HONBLE JURISDICTIONAL DELHI HIGH COURT I N THE CASE OF PR. CIT VS. INDEX SECURITIES PRIVATE LIMITE D, VIDYA SHANKAR INVESTMENT PRIVATE LIMITED 2017 (9) TMI 585 (DEL.) 34 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. (HC) (SUPRA) OBSERVED THAT THE TWO SEIZED DOCUMENTS REFERRED TO IN THE SATISFACTION NOTE IN THE CASE OF EACH ASS ESSEE ARE THE TRIAL BALANCE AND BALANCE-SHEET FOR A PERIOD OF 05 MONTHS IN 2010. IN THE FIRST PLACE, THEY DO NOT RELATE TO THE ASSESSMENT YEARS FOR WHICH THE ASSESSMENTS WERE REOPENED IN TH E CASE OF BOTH ASSESSEES. SECONDLY, THEY CANNOT BE SAID TO B E INCRIMINATING. CONSEQUENTLY, IT WAS FOUND THAT EVEN THE SECOND ESSENTIAL REQUIREMENT FOR ASSUMPTION OF JURI SDICTION UNDER SECTION 153C OF THE I.T. ACT, WAS NOT MET IN THE CASE OF THE TWO ASSESSEES. 7. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS MADE BY BOTH THE PARTIES AND FINDING OF FACT ARRIVED BY THE LD. CIT(A), WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE LD. CIT(A) CALLED FOR THE ASSESSMENT RECORD OF THE ASSESSEE-COMPANY AND FOUND THAT A.O. HAS RECORDED THE SATISFACTION NOTE IN THE FILE OF THE A SSESSEE- COMPANY WHICH IS REPRODUCED ABOVE IN WHICH THE A.O. HAS REFERRED TO THE SEIZED PAPER I.E., BALANCE SHEET AN D P & L A/C OF 35 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. THE ASSESSEE-COMPANY ENDING 31.03.2010. THE NOTICE WAS ISSUED ON THE SAME DAY WHEN SATISFACTION NOTE WAS R ECORDED BY THE A.O. OF THE ASSESSEE I.E., OTHER PERSON. THE SA ME A.O. WHO RECORDED SATISFACTION IN THE CASE OF ASSESSEE PASSE D ASSESSMENT ORDER UNDER SECTION 143(3)/153C OF THE I.T. ACT. TH E LD. CIT(A) ALSO CALLED FOR THE ASSESSMENT RECORD OF THE PERSON SEARCHED SHRI PRAMOD GOEL AND IT WAS FOUND THAT NO SUCH SATI SFACTION HAVE BEEN RECORDED IN THE CASE OF THE PERSON SEARCH ED RELATING TO THE ASSESSEE-COMPANY. IT IS, THEREFORE, CLEAR TH AT NO SATISFACTION NOTE AS REQUIRED BY LAW HAVE BEEN RECO RDED IN THE CASE OF THE PERSON SEARCHED I.E., SHRI PRAMOD GOEL SO AS TO INITIATE PROCEEDINGS AGAINST THE ASSESSEE-COMPANY U NDER SECTION 153C OF THE I.T. ACT. IT MAY ALSO BE NOTED HERE THAT INITIALLY THE A.O. PROCEEDED AGAINST THE ASSESSEE-C OMPANY UNDER SECTION 153A OF THE I.T. ACT, ON THE PREMISE THAT SEARCH WAS CONDUCTED AGAINST THE ASSESSEE-COMPANY UNDER SE CTION 132 OF THE I.T. ACT, THEREFORE, HE HAS ISSUED NOTIC E UNDER SECTION 153A OF THE I.T. ACT AGAINST THE ASSESSEE-COMPANY. WHEN IT WAS FOUND LATER ON, THAT NO SEARCH HAVE BEEN CONDUCTED IN THE CASE 36 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. OF ASSESSEE-COMPANY, THEREFORE, NOTICE UNDER SECTIO N 153A WAS WITHDRAWN. THE A.O. OF THE ASSESSEE LATER ON RECORD ED SATISFACTION NOTE UNDER SECTION 153C OF THE I.T. AC T, WHICH IS NOT VALID IN LAW. THE A.O. OF THE ASSESSEE REFERRED TO BALANCE SHEET OF THE ASSESSEE-COMPANY FOR OTHER YEAR, THERE FORE, THE SAME CANNOT BE CONSIDERED TO BE INCRIMINATING IN NA TURE AGAINST THE ASSESSEE-COMPANY AS IT IS PART OF DEPAR TMENT RECORD AND IN PUBLIC DOMAIN. THEREFORE, IT IS CLEAR FROM THE ABOVE FACTS THAT THE CONDITION PRECEDENT FOR ISSUIN G NOTICE UNDER SECTION 153C ARE NOT SATISFIED IN THIS CASE B ECAUSE NO SATISFACTION HAVE BEEN RECORDED UNDER SECTION 153C IN THE CASE OF THE PERSON SEARCHED AND NO INCRIMINATING MATERIA L WAS SEIZED PERTAINING TO ASSESSMENT YEAR UNDER APPEAL. EVEN DURING THE COURSE OF SURVEY, NO INCRIMINATING MATERIAL WAS FOUND AGAINST THE ASSESSEE-COMPANY BECAUSE THE SAME WERE REGARDING PURCHASE OF SHARES OF THE GROUP COMPANIES AND ULTIMATELY, A.O. MADE THE ADDITION BASED ON BOOKS O F ACCOUNT THAT THE SHARE APPLICATION MONEY HAVE NOT BEEN EXPL AINED BY ASSESSEE-COMPANY. SUCH MATERIAL FOUND IN SURVEY IS NOT 37 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. RELATABLE TO THE MATERIAL FOUND DURING THE COURSE O F SEARCH IN THE CASE OF THE PERSON SEARCHED BECAUSE THE BALANCE -SHEET DOES NOT BELONG TO ASSESSMENT YEAR UNDER APPEAL. THEREFO RE, THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SEARCH AGAINST THE ASSESSEE-COMPANY SO AS TO RECORD ANY SA TISFACTION NOTE AGAINST THE ASSESSEE-COMPANY. THUS, THERE IS N O REASON TO BELIEVE THAT A.O. OF THE SEARCHED PERSON WOULD HAVE RECORDED ANY SATISFACTION NOTE THAT ANY MONEY, BULLION, JEWE LLERY, OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT SEIZED OR REQUISITIONED BELONGS OR BELONGED TO A PERSON OTHER THAN THE PERSON SEARCHED UNDER SECTION 153A. THEREFORE, COND ITIONS OF SECTION 153C OF THE I.T. ACT ARE NOT SATISFIED IN T HIS CASE. THE ISSUE IS COVERED AGAINST THE REVENUE BY JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SINHGA D TECHNICAL EDUCATION SOCIETY (SUPRA) AND ORDER OF THE TRIBUNAL IN THE CASE OF ASSESSEE-COMPANY FOR A.YS. 2009-2010 AND 2010-20 11 (SUPRA). THE DECISIONS RELIED UPON BY THE LD. D.R. ARE, THEREFORE, NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF TH E CASE AS THE SAME ARE CLEARLY DISTINGUISHABLE. WE, THEREFORE, DO NOT FIND ANY 38 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN HOLDING THAT INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT A RE IMPROPER AND BAD IN LAW. NO INTERFERENCE IS CALLED FOR. GROU ND NOS. 1 AND 2 OF THE APPEAL OF THE REVENUE ARE ACCORDINGLY DISM ISSED. 8. AS REGARDS GIVING OF NO OPPORTUNITY TO THE ASSE SSEE- COMPANY, WOULD NOT BE SIGNIFICANT AT THIS STAGE IN VIEW OF THE FINDINGS GIVEN ABOVE. THE ADDITION, ON MERIT, DELET ED BY LD. CIT(A) IS, LEFT WITH ACADEMIC DISCUSSION ONLY BECAU SE THE PROCEEDING UNDER SECTION 153C HAVE NOT BEEN VALIDLY INITIATED AGAINST THE ASSESSEE-COMPANY. HOWEVER, WE MAY NOTE IN BRIEF THAT ASSESSEE-COMPANY FILED ALL THE RELEVANT DOCUME NTS BEFORE A.O. TO PROVE THE EXISTENCE OF THE INVESTOR COMPANI ES, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , ON WHICH, A.O. HAS NOT MADE ANY ENQUIRY. THE A.O. SIMPLY RELI ED UPON REPORT OF THE INVESTIGATION WING, KOLKATA, WHICH IS NOT RELEVANT TO THE ASSESSEE-COMPANY. THE A.O. DID NOT MAKE ANY INDEPENDENT ENQUIRY ON THE DOCUMENTS FURNISHED BY T HE ASSESSEE-COMPANY. THEREFORE, LD. CIT(A), CORRECTLY DELETED THE 39 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. ADDITION ON MERIT. SINCE, WE HAVE CONFIRMED THE OR DER OF THE LD. CIT(A) WITH REGARD TO GROUND NOS. 1 AND 2 THAT INITIATION OF PROCEEDINGS UNDER SECTION 153C IS ILLEGAL AND BAD I N LAW, THEREFORE, NO FURTHER FINDINGS ARE GIVEN ON MERITS. IN VIEW OF THE ABOVE DISCUSSION, THE DEPARTMENTAL APPEAL STANDS DI SMISSED. 9. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 27 TH JUNE, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT D BENCH 6. GUARD FILE 40 ITA.NO.6238/DEL./2014 M/S. VICTORY ACCOMMODATIONS PVT. LTD., DELHI. // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.