ACIT, Cen. Cir-3(3), Kolkata, Kolkata V. M/s Imax Infrastructure Pvt. Ltd., Kolkata

ITSSA 22/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6404 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 31-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Document seized; Accommodation entries; Documents seized
• Section: 143(3); 133A; 153A; 40(a)(ia); 132; 15

Judgement Text

I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZO NE) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 ASSISTANT COMMISSIONER OF INCOME TAX,... ............APPELLANT CENTRAL CIRCLE-3(3), KOLKATA, AAYAKAR BHAWAN POORVA,E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 -VS.- M/S. IMAX INFRASTRUCTURE PVT. LIMITED,............. ................................RESPONDENT 41, B.B. GANGULY STREET, CENTRAL PLAZA, KOLKATA-700 012 [PAN: AABCI 6031 K] & C.O. NO. 78/KOL/2017 (IN ITA NO. 1312/KOL/2017) ASSESSMENT YEAR: 2008-2009 M/S. IMAX INFRASTRUCTURE PVT. LIMITED,............. .........................CROSS OBJECTOR 41, B.B. GANGULY STREET, CENTRAL PLAZA, KOLKATA-700 012 [PAN: AABCI 6031 K] -VS.- ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX,... ............RESPONDENT CENTRAL CIRCLE-3(3), KOLKATA, AAYAKAR BHAWAN POORVA,E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 & I.T.(S.S.)A. NOS. 20 & 22/KOL/2017 ASSESSMENT YEARS: 2009-2010 & 2012-2013 ASSISTANT COMMISSIONER OF INCOME TAX,... ............APPELLANT CENTRAL CIRCLE-3(3), KOLKATA, AAYAKAR BHAWAN POORVA,E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 -VS.- I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 2 M/S. IMAX INFRASTRUCTURE PVT. LIMITED,............. ................................RESPONDENT 41, B.B. GANGULY STREET, CENTRAL PLAZA, KOLKATA-700 012 [PAN: AABCI 6031 K] & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS)A NOS. 20 & 22/KOL/2017] ASSESSMENT YEARS : 2009-2010 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED,............. .........................CROSS OBJECTOR 41, B.B. GANGULY STREET, CENTRAL PLAZA, KOLKATA-700 012 [PAN: AABCI 6031 K] -VS.- ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX,... ............RESPONDENT CENTRAL CIRCLE-3(3), KOLKATA, AAYAKAR BHAWAN POORVA,E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 APPEARANCES BY: SHRI A.K. NAYAK, CIT (D.R.), FOR THE DEPARTMENT SHRI S.M. SURANA, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : MARCH 11, 2019 DATE OF PRONOUNCING THE ORDER : MAY 1, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THESE THREE APPEALS ARE PREFERRED BY THE REVENUE A GAINST THREE SEPARATE ORDERS, ALL DATED 24.03.2017 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA FOR ASSESSMENT YEA RS 2008-09, 2009-10 AND 2012-13 AND SINCE SOME COMMON ISSUES ARE INVOLV ED THEREIN, THE SAME HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSE D OF BY A SINGLE I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 3 CONSOLIDATED ORDER ALONG WITH THE CROSS OBJECTIONS FILED BY THE ASSESSEE BEING C.O. NOS. 78/KOL/2017, 74/KOL/2017 & 76/KOL/2 017. 2. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH ESE APPEALS ARE THAT THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE CASE OF VARIOUS ASSESSES BELONGING TO PRAKAS H GROUP OF COMPANIES ON 21.11.2013 AND ON SUBSEQUENT DATES. IN CONSEQUEN CE OF THE SAID ACTION, A SURVEY UNDER SECTION 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE, WHICH WAS CONNECTED WITH THE PRAKASH GROUP. DURING THE COURSE OF SURVEY, BOOKS OF ACCOUNT IDENT IFIED AS IIPL/13 TO IIPL/19 RELATING TO THE ASSESSEE-COMPANY WERE FOUND AND IMPOUNDED. THEREAFTER NOTICES UNDER SECTION 153 WERE ISSUED BY THE ASSESSING OFFICER ON 09.12.2015, IN RESPONSE TO WHICH THE COPIES OF R ETURNS OF INCOME REGULARLY FILED FOR THE YEARS UNDER CONSIDERATION W ERE SUBMITTED BY THE ASSESSEE. AS NOTICED BY THE ASSESSING OFFICER, THE ASSESSEE-COMPANY HAD RECEIVED SHARE CAPITAL AND SHARE PREMIUM AMOUNTS AG GREGATING TO RS.4,04,00,000/- DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2008-09 WHILE A SUM OF RS.2,30,00,000/- WAS RECEIVE D AS SHARE APPLICATION MONEY DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2009-10. DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSEE- COMPANY WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN THE SAID AMOUNTS REPRESENTING CASH CREDITS IN TERMS OF SECTI ON 68. AS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDERS, THE ASS ESSEE-COMPANY, HOWEVER, SUBMITTED INCOMPLETE AND INACCURATE PARTIC ULARS, ON THE BASIS OF WHICH NECESSARY ENQUIRY TO ASCERTAIN THE GENUINENES S OF THE TRANSACTIONS COULD NOT BE DONE. HE ALSO FOUND THAT CASH WAS DEPO SITED IN THEIR BANK ACCOUNTS BY THE SHARE SUBSCRIBER COMPANIES JUST BEF ORE MAKING THE PAYMENT TO THE ASSESSEE-COMPANY ON ACCOUNT OF SHARE CAPITAL/SHARE PREMIUM/SHARE APPLICATION MONEY. HE FURTHER FOUND F ROM THE DOCUMENTS I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 4 FOUND DURING THE COURSE OF SEARCH THAT VARIOUS AMOU NTS WERE PAID BY THE PROMOTERS OF THE ASSESSEE-COMPANY TO THE ACCOMMODAT ION ENTRY OPERATORS, WHICH WERE ROUTED BACK BY CHEQUES TOWARD S SHARE CAPITAL/SHARE PREMIUM/SHARE APPLICATION MONEY. AS N OTED BY THE ASSESSING OFFICER, THE ACCOMMODATION ENTRY PROVIDER S HAD ALSO ACCEPTED IN THEIR STATEMENTS RECORDED DURING THE COURSE OF S EARCH OF HAVING GIVEN ACCOMMODATION ENTRIES TO THE ASSESSEE-COMPANY IN TH E FORM OF SHARE APPLICATION MONEY. KEEPING IN VIEW ALL THESE FINDIN GS, THE ASSESSING OFFICER TREATED THE SHARE CAPITAL/SHARE PREMIUM/SHA RE APPLICATION MONEY OF RS.4,04,00,000/- AND RS.2,30,00,000/- RECEIVED B Y THE ASSESSEE IN THE PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS 2008-09 AND 2009-10 RESPECTIVELY AS THE UNEXPLAINED CASH CREDIT AND ADD ITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE FOR A.YS. 2008-09 AND 2009-10 IN THE ASSESSMENT COMPLETED UNDER SECTI ON 153C/143(3) OF THE ACT VIDE ORDERS DATED 29.03.2016. THE ASSESSING OFFICER ALSO COMPLETED THE ASSESSMENT UNDER SECTION 153C/143(3) OF THE ACT FOR A.Y. 2012-13 VIDE AN ORDER DATED 29.03.2016, WHEREIN HE MADE AN ADDITION OF RS67,28,150/- BY WAY OF DISALLOWANCE UNDER SECTION 40(A)(IA) ON ACCOUNT OF PAYMENTS MADE BY THE ASSESESE TO THE CONTRACTORS WITHOUT DEDUCTING TAX AT SOURCE. 3. AGGRIEVED BY THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTION 153C/143(3) OF THE ACT FOR ALL THE THREE YE ARS UNDER CONSIDERATION, APPEALS WERE PREFERRED BY THE ASSESS EE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDITY OF THE SAID A SSESSMENTS AS WELL AS DISPUTING THE ADDITIONS MADE THEREIN ON VARIOUS GRO UNDS. ONE OF THE GROUNDS RAISED BY THE ASSESSEE WAS THAT ALL THE ADD ITIONS MADE IN THE ASSESSMENTS COMPLETED UNDER SECTION 153C/143(3) WER E NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 5 SAME, THEREFORE, WERE NOT SUSTAINABLE. THE LD. CIT( APPEALS) FOUND MERIT IN THIS GROUND RAISED BY THE ASSESSEE AND DELETED T HE ADDITIONS MADE BY THE ASSESSING OFFICER FOR ALL THE THREE YEARS UNDER CONSIDERATION FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 8 OF HIS I MPUGNED ORDER, WHICH ARE IDENTICAL IN ALL THE THREE YEARS UNDER CONSIDER ATION:- 8. I HAVE CONSIDERED THE FINDINGS OF THE AO IN TH E ASSESSMENT ORDER, DIFFERENT CASE LAWS BROUGHT ON RECORD AND AP PEAL ORDERS PASSED BY MY PREDECESSORS ON THIS LEGAL ISSUE. I FI ND THAT IT SEEMS THAT DURING THE SEARCH AND SEIZURE OPERATIONS CONDU CTED U/S 132 OF THE I.T. ACT, 1961, IN THE CASE OF SRI BALAJI LOG P RODUCTS PVT LTD (SBLP) NO INCRIMINATING DOCUMENTS/PAPERS RELATED/PE RTAINING TO THE ASSESSEE WERE SEIZED AND I ALSO FIND THAT IN TH E CASE OF THE ASSESSEE A SURVEY U/S 133A WAS CONDUCTED IN WHICH S OME PAPERS/DOCUMENTS WERE IMPOUNDED. THERE WAS NO SEARC H IN THE CASE OF THE ASSESSEE. AT LEAST, ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 153C 143(3) ARE NOT BASED ON ANY I NCRIMINATING DOCUMENTS/PAPERS SEIZED DURING THE SEARCH OPERATION . IT WOULD ALSO NOT BE OUT OF CONTEXT TO MENTION HERE THAT IN THIS CASE, ON THE DATE OF SEARCH, NO ASSESSMENT FOR THIS YEAR WAS PENDING. THEREFORE, KEEPING IN VIEW THE RATIO DECIDED BY THE JURISDICTI ONAL BENCH OF KOLKATA TRIBUNAL IN CASES REFERRED ABOVE AND THE RA TIO DECIDED BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD (SUPRA) IN THE LIGHT OF CB DT'S DECIS ION OF NOT FILING SLP IN THIS CASE IN THE SUPREME COURT AND KEEPING I N VIEW THE APEX COURT'S DECISION TO DISMISS SLP ON SIMILAR ISSUE IN THE CASE OF PR CIT VS KURELE PAPER MILLS PVT LTD : SLP (C) NO.34554 OF 2015 DT.07-12- 2015, I AM OF THIS VIEW THAT IN ORDER TO MAINTAIN J UDICIAL CONTINUITY ON THIS ISSUE AND RESPECTFULLY FOLLOWING THE RATIO DECIDED BY THE HON 'BLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD (SUPRA), ASSESSEE'S APPEAL ON GROUNDS NO 1 AND 2 AR E ALLOWED. KEEPING IN VIEW THE RELIEF GIVEN BY HIM TO THE ASSE SSEE ON THE ABOVE GROUND, THE LD. CIT(APPEALS) DID NOT ADJUDICATE UPO N THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE APPEALS ON MERIT. AGG RIEVED BY THE ORDERS OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THE SE APPEALS BEFORE THE TRIBUNAL, WHILE THE ASSESEE-COMPANY HAS ALSO FILED ITS CROSS OBJECTIONS. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN ITS CROSS OBJECTIONS FILED FOR ALL I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 6 THE THREE YEARS UNDER CONSIDERATION, THE ASSESSEE-C OMPANY HAS RAISED A COMMON PRELIMINARY ISSUE CHALLENGING THE VALIDITY O F THE ASSESSMENTS MADE BY THE ASSESSING OFFICER UNDER SECTION 153C/14 3(3) OF THE ACT ON THE GROUND THAT PROPER SATISFACTION WAS NOT RECORDE D BY THE ASSESSING OFFICER AS REQUIRED BY SECTION 153C AND IN THE ABSE NCE OF THE SAME, THE INITIATION OF THE PROCEEDINGS UNDER SECTION 153C FO R ALL THE THREE YEARS UNDER CONSIDERATION WAS BAD-IN-LAW. IN THIS REGARD, THE LD. D.R. HAS PLACED ON RECORD THE SATISFACTION RECORDED BY THE ASSESSIN G OFFICER FOR ALL THE THREE YEARS UNDER CONSIDERATION, WHICH IS AS UNDER: - 09.12.2015- A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE PRAKASH GROUP OF CASES ON 21/22-1 1- 2013. THE ASSESSEE NAMED M/S. IMAX INFRASTRUCTURE P VT. LTD. IS CONNECTED WITH THIS GROUP. DURING THE COURS E OF SEARCH/SURVEY OPERATION, SEVERAL BOOKS OF ACCOUNT A ND DOCUMENTS WERE FOUND AND SEIZED/IMPOUNDED SUCH AS IIPL/13 TO IIPL/19. ON PERUSAL OF THE SEIZED/IMPOUN DED DOCUMENTS, IT IS SEEN THAT SOME DOCUMENTS ARE RELAT ED TO M/S. IMAX INFRASTRUCTURE PVT. LTD. THUS IT IS REASON TO SATISFY THAT THIS CASE IS CONS IDERED TO BE A FIT CASE FOR ISSUING A NOTICE U/S 153C OF THE ACT. HENCE, NOTICE U/S 153C IS ISSUED TO THE ASSESSEE FO R COMPLIANCE. ON PERUSAL OF THE SATISFACTION RECORDED BY THE ASSE SSING OFFICER AS ABOVE, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE SAID SATISFACTION APPEARS TO HAVE BEEN RECORDED BY THE ASSESSING OFFI CER OF THE ASSESSEE AND NOT BY THE ASSESSING OFFICER OF THE SEARCHED PE RSON AS SPECIFICALLY REQUIRED BY SECTION 153C. HE HAS ALSO CONTENDED THA T THE SAID SATISFACTION IN ANY CASE IS VERY VAGUE AND NOT SPECIFIC, INASMUC H AS, THERE IS NO REFERENCE PARTICULARLY TO ANY DOCUMENT FOUND AND SE IZED WHICH BELONGED TO THE ASSESSEE. HE HAS POINTED OUT THAT WHAT IS RE CORDED BY THE ASSESSING OFFICER IN THE SATISFACTION IS ONLY THAT CERTAIN DO CUMENTS BELONGED TO THE ASSESSEE WITHOUT POINTING OUT SPECIFICALLY SUCH DOC UMENTS AND THE I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 7 SATISFACTION RECORDED BY THE ASSESSING OFFICER THUS IS NOT PROPER OR SUFFICIENT. RELYING ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- M/S. N.S. SOFTWARE (I.T.A. NO. 79 1/2017 DATED 18.04.2018), HE HAS CONTENDED THAT IN THE ABSENCE O F PROPER AND SUFFICIENT SATISFACTION RECORDED BY THE ASSESSING O FFICER, THE INITIATION OF PROCEEDINGS UNDER SECTION 153C ITSELF WAS INVALID A ND THE ASSESSMENTS COMPLETED IN PURSUANCE THEREOF ARE LIABLE TO BE CAN CELLED BEING BAD-IN- LAW. THE LD. D.R. ON THE OTHER HAND HAS RELIED ON T HE SATISFACTION RECORDED BY THE ASSESSING OFFICER TO CONTEND THAT IT SATISFI ES THE REQUIREMENT OF SECTION 153C. 5. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF T HE HONBLE DELHI HIGH COURT IN THE CASE OF M/S. N.S. SOFTWARE (SUPRA ) CITED BY THE LD. COUNSEL FOR THE ASSESSEE. IN THE SAID CASE, THE SAT ISFACTION NOTE RECORDED BY THE ASSESSING OFFICER WHILE INITIATING THE PROCE EDINGS UNDER SECTION 153C WAS AS UNDER:- 23.07.2010 A SEARCH OPERATION WAS CONDUCTED ON RAJDURBAR GROUP OF CASES ON 31.07.2008. DURING THE COURSE OF SEARCH OPERATION AT THE PREMISES OF PARTY A-20, RESIDENCE-CUM-OFFICE OF NARENDER KUMAR AGARWAL, 1 ST & 2 ND FLOOR, 7, WESTERN AVENUE, MAHARANI BAGH, NEW DELHI , VARIOUS PAPERS WERE FOUND AND SEIZED BELONGING TO M /S. N.S. SOFTWARES PVT. LTD. THE SAME ARE MARKED AS ANN EXURE- A/26, HARD DISK CONTAINING BOOKS OF ACCOUNT OF M/S. N.S. SOFTWARES PVT. LIMITED. THUS THE PROCEEDINGS UNDER SECTION 153C READ WITH SECTION 153A OF THE INCOME TAX ACT, 1961 ARE BEING INITIATED IN THE ABOVE CASE. I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 8 IN THE APPEAL FILED AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 153C READ WITH SECTION 143(3), THE VA LIDITY OF SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER WAS CHALLENG ED BY THE ASSESSEE. THE LD. CIT(APPEALS), HOWEVER, DID NOT FIND MERIT I N THE CASE OF THE ASSESSEE AND UPHELD THE VALIDITY OF SATISFACTION NO TE. ON FURTHER APPEAL, THE ITAT FOUND THE SATISFACTION NOTE UNDER SECTION 153C TO BE INADEQUATE, INTER ALIA, ON THE GROUND THAT THE ASSESSING OFFICE R HAD NOT EVEN INDICATED AS TO HOW THE VAGUELY REFERRED DOCUMENTS IN THE SAT ISFACTION NOTE WERE FOUND TO BE BELONGING TO THE ASSESSEE WITHIN THE ME ANING OF SECTION 153C OF THE ACT. THE TRIBUNAL ALSO FOUND THAT THERE WAS NO RECORDING/REFERENCE ABOUT THE CONTENTS OF THESE DOCUMENTS ALLEGEDLY PER TAINING TO THE ASSESSEE. WHEN THE MATTER WAS TRAVELLED TO THE HON BLE DELHI HIGH COURT, THEIR LORDSHIPS CONCURRED WITH THE VIEW OF THE ITAT . IT WAS OBSERVED BY THE HONBLE DELHI HIGH COURT THAT THE ASSESSING OFF ICER HAD NOT EXPLAINED THE STEPS TAKEN BY HIM TO DETERMINE THAT THE SEIZED MATERIAL BELONGED TO THE ASSESSEE-FIRM. IT WAS FURTHER OBSERVED THAT THE SATISFACTION NOTE HAD BEEN PREPARED IN A STANDARD MECHANICAL FORMAT AND D ID NOT PROVIDE ANY DETAILS ABOUT THE BOOKS OF ACCOUNT, WHICH ALLEGEDLY BELONGED TO THE ASSESEE-FIRM. IT WAS HELD THAT THE ASSESSING OFFICE R AT THE STAGE OF SENDING NOTICE UNDER SECTION 153C WAS REQUIRED TO RECORD A SPECIFIC REASON OR REASONS WHY THE MATERIAL SEIZED FROM THE OTHER PERS ON HAS A NEXUS TO THE ASSESSEE TO WHOM THE NOTICE UNDER THAT PROVISION IS ADDRESSED. IT WAS HELD THAT THE FAILURE OF THE ASSESSING OFFICER TO R ECORD A SPECIFIC SATISFACTION AS TO HOW THE RECOVERED MATERIAL BELON GED TO THE ASSESSEE IN THE NOTE THAT PRECEDED THE NOTICE ISSUED UNDER SECT ION 153C VITIATED THE ASSESSMENT. IT WAS HELD THAT SINCE THE SATISFACTION RECORDED BY THE ASSESSING OFFICER IN TERMS OF SECTION 153C(1) WAS C LEARLY INADEQUATE, THE ASSESSMENT COMPLETED IN PURSUANCE THEREOF WAS ALSO INVALID. I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 9 6. IN ARRIVING AT A CONCLUSION AS DISCUSSED ABOVE I N THE CASE OF M/S. N.S. SOFTWARES (SUPRA), HONBLE DELHI HIGH COURT RE LIED HEAVILY ON ITS EARLIER DECISION RENDERED IN THE CASE OF PEPSI FOOD S PVT. LIMITED [52 TAXMANN.COM 220 (DELHI), WHEREIN IT WAS CLARIFIED T HAT SECTION 132(4A) CREATES A GENERAL PRESUMPTION THAT THE DOCUMENTS FO UND IN THE CONTROL AND POSSESSION OF A PERSON BELONG TO HIM OR HER AND TO REBUT THIS PRESUMPTION, THE ASSESSING OFFICER SHOULD PROVIDE C LEAR AND COGENT REASONS WHICH EXPLAIN WHY THE SEIZED MATERIAL BELON GS TO SOMEBODY ELSE. IN THE SATISFACTION NOTE RECORDED IN THE SAID CASE, APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONER AND THE AS SESSING OFFICER WAS SATISFIED THAT IT WAS A FIT CASE FOR ISSUANCE OF NO TICE UNDER SECTION 153C, THERE WAS NOTHING WHICH WOULD INDICATE AS TO HOW TH E PRESUMPTIONS WHICH WERE TO BE NORMALLY RAISED AS INDICATED ABOVE , HAD BEEN REBUTTED BY THE ASSESSING OFFICER AND KEEPING IN VIEW THE SA ME, IT WAS HELD BY THE HONBLE DELHI HIGH COURT THAT THE NOTE WOULD NOT ME ET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 15 3C OF THE ACT. IT WAS OBSERVED BY THE HONBLE DELHI HIGH COURT THAT THE S ATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSIO N THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT TH E SEIZED DOCUMENTS BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. IT WAS HELD THAT THE SATISFACTION OF THE KIND REQUIRED UNDER SECTION 153 C WAS NOT DISCERNABLE FROM THE CONTENTS OF THE SATISFACTION NOTE AND THE SAID NOTE, THEREFORE, WAS NOT VALID. 7. IN THE PRESENT CASE, THE SATISFACTION NOTE WAS A PPARENTLY RECORDED BY THE ASSESSING OFFICER OF THE ASSESSEE AND NOT BY THE ASSESSING OFFICER OF THE SEARCHED PERSON AS REQUIRED BY THE PROVISION OF SECTION 153C. A PERUSAL OF THE SAID NOTE, WHICH IS REPRODUCED HEREI NABOVE, SHOWS THAT THE DOCUMENTS REFERRED THEREIN AND IDENTIFIED AS IIPL/1 3 TO IIPL/19 WERE I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 10 FOUND AND IMPOUNDED DURING THE COURSE OF SURVEY OPE RATION CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE AND THERE IS NO SPECIFIC REFERENCE IN THE SAID SATISFACTION NOTE TO ANY DOCUMENTS FOUN D DURING THE COURSE OF SEARCH AND SEIZURE ACTION CONDUCTED IN PRAKASH GROU P OF CASES. THERE IS NOTHING EVEN TO INDICATE AS TO HOW THESE VAGUELY RE FERRED DOCUMENTS WERE FOUND TO BE BELONGING TO THE ASSESSEE. THERE I S NO RECORDING ABOUT THE CONTENTS OF THESE DOCUMENTS ALLEGEDLY PERTAININ G TO THE ASSESSEE AND THE ASSESSING OFFICER NOWHERE HAS EXPLAINED THE STE PS TAKEN BY HIM TO DETERMINE THAT THE SEIZED MATERIAL BELONGED TO THE ASSESSEE. THERE IS NO SPECIFIC SATISFACTION RECORDED BY THE ASSESSING OFF ICER AS TO HOW THE SEIZED MATERIAL BELONGED TO THE ASSESSEE. THERE IS A FAILURE ON THE PART OF THE ASSESSING OFFICER TO PROVIDE CLEAR AND COGENT R EASONS, WHICH CAN EXPLAIN WHY THE SEIZED MATERIAL BELONGED TO THE ASS ESSEE APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE ASSESSEE AND HE WAS SATISFIED THAT IT WAS A FIT CASE FOR ISSUING OF NOTICE UNDER SECTION 153C. IF ALL THESE FACTS OF THE CASE ARE CONSIDERED IN THE LIGHT OF TH E DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF N.S. SOFTWARES (SUP RA) AND PEPSI FOODS PVT. LIMITED (SUPRA), WE FIND THAT THE SATISFACTION RECORDED BY THE ASSESSING OFFICER IS NEITHER ADEQUATE NOR PROPER AN D SINCE IT DOES NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C OF THE ACT, WE HOLD THAT THE INITIATION OF PRO CEEDINGS UNDER SECTION 153C ITSELF WAS BAD-IN-LAW AND THE ASSESSMENTS COMP LETED IN PURSUANCE OF SUCH INITIATION ARE LIABLE TO BE CANCELLED BEING INVALID. WE ACCORDINGLY UPHOLD THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE FOR ALL THE THREE YEARS UNDER CONSIDERATIO N, ALTHOUGH ON A DIFFERENT GROUND. 8. KEEPING IN VIEW OUR DECISION RENDERED ABOVE ON T HE PRELIMINARY ISSUE RAISED BY THE ASSESSEE-COMPANY IN ITS CROSS O BJECTIONS CANCELLING I.T.A. NO. 1312/KOL/2017 ASSESSMENT YEAR: 2008-2009 & C.O. NO. 78/KOL/2017 (IN ITA N O. 1312/KOL/2017) ASSESSMENT YEAR : 2 008-2009 & IT(SS) NOS. 20 & 22/KOL/2 017 (A.Y. 2009-10 & 2012-13) & C.O. NOS. 74 & 76/KOL/2017 [IN IT(SS )A NOS. 20 & 22/KOL/2017] ASSESSM ENT YEARS: 2009-10 & 2012-2013 M/S. IMAX INFRASTRUCTURE PVT. LIMITED 11 THE ASSESSMENTS MADE BY THE ASSESSING OFFICER UNDER SECTION 153C/143(3) OF THE ACT FOR ALL THE THREE YEARS UNDE R CONSIDERATION BY HOLDING THE SAME TO BE INVALID, THE OTHER ISSUES RA ISED BY THE ASSESSEE- COMPANY IN ITS CROSS OBJECTIONS AS WELL AS BY THE R EVENUE IN ITS APPEALS HAVE BECOME INFRUCTUOUS OR ACADEMIC. WE, THEREFORE, DO NOT CONSIDER IT NECESSARY OR EXPEDIENT TO DECIDE THE SAME. 9. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED WHILE THE CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 01, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 1 ST DAY OF MAY, 2019 COPIES TO : (1) ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(3), KOLKATA, AAYAKAR BHAWAN POORVA,E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 (2) M/S. IMAX INFRASTRUCTURE PVT. LIMITED, 41, B.B. GANGULY STREET, CENTRAL PLAZA, KOLKATA-700 012 (3) COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLK ATA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.