P A G E 1 | 8 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER IT (SS) A NO S . 21 & 22 /CTK/201 9 ASSESSMENT YEAR S : 2009 - 2010 & 201 0 - 1 1 UNICON MERCHANTS PVT LTD., P - 25, CIVIL TOWNSHIP, ROURKELA - 4 VS. JCIT/ACIT, CENTRAL CIR C LE, SAMBALPUR PAN/GIR NO. AAACU 6553 H (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI FIRO Z E ANDHYR U JINA, SR. ADV LALITENDU MISHRA/SHYAM SUNDAR JAWGID, NIKHIL JAWGID/SWADESH NARAYAN RATH & SAMEER RANJAN DASH , AR S REVENUE BY : SHRI S .M.KESHKAMAT , CIT DR DATE OF HEARING : 16 / 10 / 201 9 DATE OF PRONOUNCEMENT : 21 / 10 / 201 9 O R D E R PER C.M.GARG,JM TH ESE CAPTIONED APPEAL S HAVE BEEN FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF THE CIT(A), 2 , BHUBANESWAR DATED 19.2.2019 FOR THE ASSESSMENT YEAR S 2009 - 2010 & 2010 - 2011 . 2. LD REPRESENTATIVES OF BOTH PARTIES HAVE AGREED THAT THE ISSUE INVOLVED IN BOTH THE APPEALS IS IDENTICAL AND, THEREFORE, FOR SAKE OF CONVENIENCE, WE ADJUDICATE THE APPEAL FOR THE ASSESSMENT YEAR 2009 - 2010 AND OUR DECISION WILL APPLY MUTATIS - MUTANDIS TO THE ASSESSMENT YEAR 2010 - 2011. IT(SS)A NOS.21 & 22/CTK/2019 ASSESSMENT YEARS :2009 - 2010 & 2010 - 11 P A G E 2 | 8 3 . IN ASSESSM ENT YEAR 2009 - 2010 , T HE ASSESSEE HAS RAISED THE ADDITIONAL GROUNDS OF APPEAL, WHICH READ AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCE OF THE CASE & IN LAW, THE PR. COMMISSIONER OF INCOME TAX - 4, KOLKATA ERRED IN PASSING ORDER FOR TRANSFER OF JURISDICTION F ROM KOLKATA TO SAMBALPUR WITHOUT GIVING AN OPPORTUNITY TO THE APPELLANT BEFORE TRANSFER. WHICH IS A CLEAR VIOLATION OF SECTION 127 OF THE INCOME TAX ACT. 2. IN THE FACTS AND CIRCUMSTANCE OF THE CASE & IN LAW, THE SATISFACTION NOTE MUST BE PREPARED BEFORE TRANSFER OF JURISDICTION, SINCE IT AFFECTS THE THIRD PARTY RIGHTS, IN THE PRESENT CASE THE TRANSFER ORDER WAS PLACED ON RECORD ON DECEMBER 26, 2016, WHEREAS SATISFACTION NOTE U/S 153C OF THE THIRD PARTY WAS RECORDED ON DECEMBER 27, 2016, (S UPPLEMENTARY PAPER BOOK PAGE 23) IS WITHOUT JURISDICTION & BAD IN LAW & ALSO VOID AB INITIO. 3. IN THE FACTS AND CIRCUMSTANCE OF THE CASE & IN LAW, THE ENTIRE ASSESSMENT PROCEEDINGS U/S 153C READ WITH SECTION 144 OF THE INCOME TAX ACT 1961 WAS COMPLETED WITHIN 4 DAYS IN GREAT HASTE FROM THE TRANSFER OF JURISDICTION AND HENCE THE ENTIRE ORDER IN BAD IN LAW AND WITHOUT JURISDICTION. 4. IN THE FACTS AND CIRCUMSTANCE OF THE CASE & IN LAW, THERE IS NO NEXUS, LINKAGE, CONNECTION OR CORROBORATION BETWEEN THE SEIZED MATERIALS / DOCUMENTS AND THE SUBJECT ADDITIONS IN THE IMPUGNED ORDER ARE NOT BASED ON THE SEIZED MATERIALS AND HENCE IMPUGNED ORDER IS NOT MAINTAINABLE IN LAW. 5. IN THE FACTS AND CIRCUMSTANCE OF THE CASE & IN LAW, THE SEIZED DOCUMENTS AS PER SATISFACTION NOTE AS REFERRED THEREIN ARE PAGE 67 - 93 AND 94 - 97 OF SMLO - 05 DON'T BELONG TO AND NO WAY RELATED TO APPELLANT. 6. IN THE FACTS AND CIRCUMSTANCE OF THE CASE & IN LAW, THE SEIZED DOCUMENTS AS PER ANNEXURE A OF THE SATIS FACTION NOTE IS IFCI FACTORS SANCTION LETTER FOR FINANCIAL ASSISTANCE TO THE APPELLANT AND MONEY RECEIVED BY THE APPELLANT FROM SHIVOM MINERALS LTD. DURING THE FY 2011 - 12 AS PER SMLO 52 ARE NOT INCRIMINATING MATERIAL / DOCUMENTS. MOREOVER NO ADDITIONS ARE MADE IN THE ASSESSMENT ORDER BASED UPON THESE DOCUMENTS. IT(SS)A NOS.21 & 22/CTK/2019 ASSESSMENT YEARS :2009 - 2010 & 2010 - 11 P A G E 3 | 8 3. AT THE OUTSET, LD REPRESENTATIVE OF THE ASSESSEE (AR) SUBMITTED THAT HE DOES NOT WANT TO PRESS ADDITIONAL GROUND NOS.1 TO 3 OF APPEAL. HENCE, WE DISMISS GROUND NOS.1 TO 3 OF APPEAL AS NOT PRES SED. 4. APROPOS ADDITIONAL GROUND NOS.4 TO 6 OF APPEAL, WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND CAREFUL CONSIDERED THE RELEVANT MATERIAL ON RECORD OF THE TRIBUNAL INCLUDING FORM NO.35 & FORM NO.36 PLACED IN THE APPEAL FILE. LD COUNSEL FOR THE ASSESSEE PLACING RELIANCE ON VARIOU S DECISIONS INCLUDING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC) AND SUBMITTED THAT GROUND NOS.4 TO 6 OF APPEAL ARE PURELY LEGAL GROUNDS, WHICH GOES TO THE ROOT OF THE MATTER AND MAKE THE ASSESSMENT ORDER BAD IN LAW AND VOID - ABI INITO. HE FURTHER SUBMITTED THT THE SAID ADDITIONAL GROUNDS TAKEN PURELY ON LEGAL ISSUE, WHICH MAY KINDLY BE ADMITTED AND ADJUDICATED IN THE INTEREST OF JUSTICE. 5. REPLYING TO ABOVE, LD CIT DR OPPOSED TO THE ADMISSION OF ADDITIONAL GROUNDS. HOWEVER, ALTERNATIVELY, HE SUBMITTED THAT IF IT IS FOUND JUST AND PROPER TO ADJUDICATE THESE ADDITIONAL GROUNDS, THE DEPARTMENT HAS NO SERIOUS OBJECTION . 6. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE PERUSED THE APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS. WE ARE OF THE VIEW THAT ADDITIONAL GROUND NOS.4 TO 6 OF APPEAL OF THE ASSESSEE ARE THE GROUNDS WHICH CAN BE DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD WITHOUT IT(SS)A NOS.21 & 22/CTK/2019 ASSESSMENT YEARS :2009 - 2010 & 2010 - 11 P A G E 4 | 8 CALLING ANY EXTRANEOUS MATERIALS OR DOCUMENTS. HONBLE SUPREME COURT IN THE CASE OF NTPC (SUPRA) HAS CATEGORICALLY HELD THAT EVEN THE GROUNDS WHICH HAVE NOT BEEN RAISED BEFORE THE AUTHORITIES BELOW CAN BE RAISED BEFORE THE TRIBUNAL FOR THE FIRST TIME FOR WHICH GOES TO THE ROOT OF THE MATTER HAVING THE ISSUE OF LEGAL CONTENTION OF THE ASSESSEE. ACCORDINGLY, WE ADMIT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE IN GROUND NOS.4 TO 6 OF APPEAL FOR ADJUDICATION. ADDITIONAL GROUND NOS.4,5 & 6 OF ASSESSEE FOR A.Y. 2009 - 2010 7. LD SR. COUNSEL FOR THE ASSESSEE APPEARED ON BEHALF OF THE ASSESSEE SUBMITTED THAT THERE IS NO NEXUS, LINKAGE, CONNECTION OR CORROBORATION BETWEEN THE SEIZED MATERIALS/DOCUMENTS AND THE SUBJECT ADDITIONS IN THE IMPUGNED ASSESSMENT ORDER ARE NOT BASED ON THE SEIZED MATERIALS A ND HENCE, THE IMPUGNED ORDER IS NOT MAINTAINABLE IN LAW. THUS, THE SAME IS VOID A BINITIO AND BAD IN LAW. THE S R COUNSEL VEHEMENTLY POINTED OUT THAT THE SEIZED DOCUMENTS, AS PER SATISFACTION NOTE, AS REFERRED THEREIN, ARE PAGES 67 TO 93 AND 94 TO 97 OF SMLO - 05 DO NOT BELONG TO THE ASSESSEE AND IN NO WAY RELATED TO THE ASSESSEE. HE FURTHER CONTENDED THAT THE SEIZED DOCUMENTS AS PER ANNEXURE - A OF THE SATISFACTION NOTE IS IFCI FACTORS SATISFACTION LETTER FOR FINANCIAL ASSISTANCE TO THE ASSESSEE AND MON EY RECEIVED BY THE ASSESSEE FROM SHIVOM MINERALS LTD., DURING FINANCIAL YEAR 2011 - 12 AS PER SMLO 52 ARE NOT INCRIMINATING MATERIAL/DOCUMENTS AND THE SAME ARE NOT PERTAINING TO FINANCIAL YEAR 208 - 09 RELEVANT TO ASSESSMENT IT(SS)A NOS.21 & 22/CTK/2019 ASSESSMENT YEARS :2009 - 2010 & 2010 - 11 P A G E 5 | 8 YEAR 2009 - 2010 AND SUCCEEDING FINAN CIAL YEAR 2009 - 2010 PERTAINING TO ASSESSMENT YEAR 2010 - 2011. THEREFORE, EVEN IF THE SMLO 52 IS TREATED AS INCRIMINATING MATERIAL/DOCUMENTS THEN ALSO ADDITION IN THE HANDS OF THE ASSESSEE FOR ASSESSMENT YEARS 2009 - 10 AND 2010 - 2011 CANNOT BE MADE ON THE BAS IS OF SUCH DOCUMENTS. PLACING RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS NAHID FINLEASE PVT LTD. ORDER DATED 13.5.2019 IN ITA NO.1483/2018, LD SR. COUNSEL SUBMITTED THAT THE IMPUGNED ADDITION WAS NOT BASED ON THE SATISF ACTION NOTE PREPARED FOR THE PURPOSES OF INITIATION OF PROCEEDINGS AGAINST THE ASSESSEE UNDER SECTION 153C OF THE ACT. HE ALSO CONTENDED THAT THE SO CALLED INCRIMINATING MATERIAL HAD TO HAVE SOME NEXUS WITH THE ADDITION ULTIMATELY MADE. THAT NOT HAVING B EEN ESTABLISHED BY THE ASSESSING OFFICER OR BY THE CIT(A), THE ADDITION SHOULD NOT HAVE BEEN MADE. THEREFORE, THE SOLE ADDITION OF RS.75 LAKHS MADE BY THE AO AND CONFIRMED BY THE CIT(A) FOR ASSESSMENT YEAR 2009 - 2010 AND ANOTHER ADDITION OF RS.1,26,10,000/ - MADE BY THE AO AND CONFIRMED BY THE CIT(A) FOR ASSESSMENT YEAR 2010 - 2011 IS NOT SUSTAINABLE. HE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS SINHGAD TECHNICAL EDUCATION SOCIETY ORDER DATED 29.8.2017, 397 ITR 344 (S C) , DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF PEPSI INDIAN HOLDINGS PVT LTD VS ACIT, (2014) 50 TAXMANN. COM 299 (DELHI), DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ARPIT LAND PVT LTD., CIT VS. M/S. ARPIT LAND (P) LTD. 78 TAXMANN .COM 300 (BOMBAY) AND IT(SS)A NOS.21 & 22/CTK/2019 ASSESSMENT YEARS :2009 - 2010 & 2010 - 11 P A G E 6 | 8 SUBMITTED THAT WHEN SEIZED DOCUMENTS DO NOT BELONG TO THE ASSESSEE, THEN ADDITION CANNOT BE HELD AS SUSTAINABLE. 8. FURTHER, P LACING RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PR. CIT VS. R.M. INVESTMENT & TRADING CO. PVT LTD., IN INCOME TAX APPEAL(IT) NO. 780 OF 2016 AND IN THE CASE OF CIT VS, CONTINENTAL WAREHOUSING CORPORATION, ORDER DATED 21.4.2015 IN INCOME TAX APPEAL NO. 523 OF 2013, LD COUNSEL SUBMITTED THAT WHEN THERE IS NO INCRIMINATING DOCUMENTS/MATERIALS SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, THEN THE ADDITION IN THE HANDS OF OTHER PERSONS U/S.153C R.W.S 143(3) CANNOT BE MADE AND SAME CANNOT BE HELD AS SUSTAINABLE. 9 . REPLYING TO ABOVE, LD CIT DR SUPPORTED THE ASSESSMENT AS WELL AS CIT(A) ORDER. HOWEVER, IN ALL FAIRNESS, LD CIT DR SUBMITTED THAT THE ADDITION MADE BY THE AO FOR BOTH THE ASSESSMENT YEARS HAVE NOT BEEN BASED ON INCRIMINATING DOCUMENTS OR MATERIAL FOUND AND SEIZED FROM THE SEARCH PERSONS AND SEIZED DOCUMENTS DO NOT BELONG TO THE ASSESSEE. 10 . IN VIEW OF FOREGOING DISCUSSION, WE ARE INCLINED TO HOLD THAT WHEN , UNDISPUTEDLY, SEIZED DOCUMENTS DO NOT BELONG TO THE ASSESSEE AND NO INCRIMINATING DOCUMENTS/MATERIALS HAVE BEEN SEIZED FROM OTHER PE RSONS, WH ICH ARE BEING ASSESSED U/S.153C R.W.S. 143(3), THEN NO SUSTAINABLE ADDITION CAN BE MADE IN THE HANDS OF OTHER PERSONS IN SUCH ASSESSMENT YEAR. OUR VIEW ALSO GETS A STRONG SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA), IT(SS)A NOS.21 & 22/CTK/2019 ASSESSMENT YEARS :2009 - 2010 & 2010 - 11 P A G E 7 | 8 DECISIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF PEPSI INDIAN HOLDINGS PVT LTD AND NAHID FINLEASE PVT LTD. (SUPRA) ,DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASE OF R.M. INVESTMENT & TRADING CO. PVT LTD. (SUPRA) , AND C ONTINENTAL WAREHOUSING CORPORATION (SUPRA)AS VEHEMENTLY RELIED BY LD SR. COUNSEL FOR THE ASSESSEE. THEREFORE, WE HAVE NO HESITATION TO HOLD THAT THE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) HAVE NO LEGS TO STAND ON THE PREMISES OF RELEVANT LEGA L PROVISIONS OF SECTION 153C OF THE ACT AND THUS, SAME ARE NOT SUSTAINABLE AND , HENCE, WE HOLD SO. ACCORDINGLY, ADDITIONAL GROUND NOS.4 TO 6 OF ADDITIONAL GROUNDS ARE ALLOWED. 1 1 . SINCE, NO ARGUMENTS WERE ADVANCED BY BOTH THE SIDES WITH REGARD TO OTHER GROUNDS OF APPEAL AND IN VIEW OF OUR DECISION IN THE EARLIER PART OF THIS ORDER IN ADDITIONAL GROUNDS IN GROUND NOS.4 TO 6 OF ADDITIONAL GROUNDS OF THE ASSESSEE , OTHER GROUNDS ON MERITS ARE NOT ADJUDICATED. ADDITIONAL GROUND NOS.4 TO 6 OF APPEAL IN A.Y. 2010 - 2011. 1 2 . SIMILAR ADDITIONAL GROUNDS NOS.4 TO 6 HAVE BEEN TAKEN IN ASSESSMENT YEAR 2010 - 2011 HAVING IDENTICAL FACTS AND CIRCUMSTANCES AND THUS IN VIEW OF OUR DECISION IN ASSESSMENT YEAR 2009 - 2010 (SUPRA) THE ADDITIONAL GROUNDS OF APPEAL TAKEN IN ASS ESSMENT YEAR 2010 - 2011 ARE ALSO ALLOWED. IT(SS)A NOS.21 & 22/CTK/2019 ASSESSMENT YEARS :2009 - 2010 & 2010 - 11 P A G E 8 | 8 1 3 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 21 / 10 /201 9 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 21 / 10 /20 1 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : UNICON MERCHANTS PVT LTD., P - 25, CIVIL TOWNSHIP, ROURKELA - 4 2. THE RESPONDENT. JCIT/ACIT, CENTRAL CIRCLE, SAMBALPUR 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//