Addplast Agencies, Surat V. The ACIT.,Cent.Circle-3, Surat

ITSSA 503/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0776 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 23-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: SHAH
• Keywords: Search and seizure; Principle of natural justice; Deemed dividend; Block assessment; Documents seized
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL VICE PRESIDENT AND SHRI S.S. GODARA JUDICIAL MEMBER IT (SS) A NO S . 503 & 504 /AHD/ 201 1 A. Y S .20 0 6 - 07 & 2007 - 08 ADDPLAST AGENCIES, GHANTIWALA COMPOUND, NEAR A.S. MOTORS, A .K. ROAD, SURAT. PAN: AAFFA 5103P VS ACIT, CENTRAL CIRCLE - 3, SURAT. (APPELLANT) (RESPONDENT) REVENUE BY : S HRI O.P. VAISHNAV, CIT - D.R. , ASSESSEE(S) BY : SHRI M.R. SHAH , A.R. / DATE OF HEARING : 21 / 0 5 /201 5 / DATE OF PRONOUNCEMENT: 19 / 0 6 /201 5 / O R D E R PER S.S. GODARA , JUDICIAL MEMBER TH ESE TWO ASSESSEE S APPEAL S FOR A.Y. 200 6 - 0 7 & 2007 - 08 , ARISE FROM ORDER S OF CIT(A) - II, AHMEDABAD DATED 15.06.2011 PASSED I N CASE NO . CIT(A) - II/C.3/167/2010 - 11 & CIT(A) - II/C.3/168/2010 - 11 , IN PROCEEDINGS U / S . 153C R.W.S. 143(3 ) OF THE INCOME TAX ACT , 1961 IN SHORT THE ACT . 2. THE ASSESSEE S PLEADINGS IN THE FORMER APPEAL CHALLENGE DEEMED DIVIDEND ADDITION U/S.2(22)(E) OF THE ACT AMOUNTING TO RS.11.50 LACS. AND IN THE LATTER APPEAL, ITS GRIEVANCE AGAINST IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 2 - IDENTICAL ADDITIONS OF RS.36,38,108/ - AND RS.2,58,175/ - . THE CASE FILES ALSO REVEAL THAT THE ASSESSEE HAS PREFER RED IDENTICAL ADDITIONAL GROUNDS IN BOTH CASES AS UNDER: 1. ASSESSEE FILED THE APPEAL IN ITA NO. 503/A/2011 FOR A.Y. 2006 - 07 BEFORE HONOURABLE BENCH 'B' ON 23.08.2011. THE GROUND OF APPEAL IS RAISED FOR THE FIRST TIME BEFORE HONOURABLE TRIBUNAL AS UNDER: ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE ID. ASSESSING OFFICER HAS ERRED IN ISSUING NOTICE U/S. 153C AND PASSING ASSESSMENT ORDER U/S.143(3) R.W.S. 153C WHEN NO VALUABLE /MATERIAL WAS FOUND IN THE COURSE OF SEARCH OF THE THIRD PERSON. IT IS THEREFORE PRAYED THAT THE ASSESSMENT MADE U/S.143(3) R.W.S. 153C MAY PLEASE BE QUASHED. 2. YOUR HONOURS ARE REQUESTED TO KINDLY ADMIT THE ABOVE ADDITIONAL GROUND IN THE INTEREST OF NATURAL JUSTICE, EQUITY AND FAIR PLAY AS ITS OMIS SION IN THE MAIN GROUND OF APPEAL ATTACHED WITH FORM 36 IS PURELY UNINTENTIONAL. AS THE SAID GROUND PERTAINS TO LEGAL ISSUE THE SAME MAY KINDLY BE ADMITTED IN VIEW OF HONOURABLE SUPREME COURT DECISIONS IN CASE OF NTPC V. CIT [229 ITR 383] AND JUTE CORPORAT ION OF INDIA LTD. V. CIT [187 ITR 688]. THE ASSESSEE SHALL ALWAYS REMAIN GRATEFUL FOR THE ACT OF KINDNESS. 3. THE ASSESSEE SUBMITS IN THE COURSE OF HEARING THAT ITS ABOVESAID ADDITIONAL GROUNDS ARE LIABLE TO BE ADMITTED BEING A LEGAL PLEA AS PER THE ABOV ESTATED CASE LAWS . THE REVENUE STRONGLY OBJECTS ADMISSION OF THE ASSESSEE S ADDITIONAL GROUND. 4. WE HAVE HEARD BOTH SIDES. THE ASSESSEE S ONLY ENDEAVOUR IS TO GET SECTION 153C PROCEEDINGS QUASHED ON THE GROUND THAT THERE IS NO INCRIMINATING MATERIAL AS ENVISAGED THEREIN SO AS TO FORM THE BASIS OF THE INSTANT PROCEEDINGS. ALL NECESSARY FACTS ARE ALREADY ON RECORD. THE ASSESSEE HAD RAISED A CORRESPONDING GROUND IN THE LOWER APPELLATE PROCEEDINGS AS WELL. THE CIT(A) DID NOT SPECIFICALLY DEAL WITH THE SAME. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 3 - ASSESSEE S ADDITIONAL GROUND CHALLENGING VALIDITY OF SECTION 153C PROCEEDINGS GOES TO THE ROOT OF THE MATTER. WE ADMIT THE SAME IN THESE CIRCUMSTANCES AND PROCEED TO DECIDE IT HEREUNDER. THE PARTIES AR E IN UNISON THAT FACTS INVOLVED IN BOTH CASES ARE IDENTICAL. WE TREAT IT(SS)A 503/AHD/2011 FOR A.Y. 2006 - 07 AS THE LEAD CASE. 5. THE ASSESSEE - FIRM TRADES IN PVC RESIN AND OTHER ADDITIVES. IT FILED ITS RETURN ON 13.7.2006 ADMITTING INCOME OF RS.39,84,788/ - . THE ASSESSEE IS AN ASSOCIATE OF M/S. MANISH GROUP OF COMPANIES. THE DEPARTMENT CONDUCTED A SEARCH/SURVEY ON 24.9.2008 IN CASE OF THIS GROUP. THIS CULMINATED IN ISSUANCE OF A SECTION 153C NOTICE DATED 18.02.2009 AS UNDER: NOTICE U/S 153C OF TH E INCOME TAX ACT. 1961 OFFICE OF THE ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 3, ROOM NO.507, AAYAKAR BHAVAN, MAJURAGATE, SURAT. DATE: - 18/02/2009 TO ADDPLA ST AGENCIES GHANTIWALA COMPOUND, NR. A.S. MOTORS, A. K. ROAD, SURAT . SIR/MADAM, A SEARCH U /S . 132 OF THE IT. ACT WAS CONDUCTED M YOUR CASE/IN THE CASE OF RADHA MADHAV GROUP OF VAPI & MANISH GROUP OF SURAT ON 24/09/2008. WHEREAS I AM SATISFIED THAT MONEY / BULLION / JEWELLERY / OTHER VALUABLE ARTICLES OR THINGS AND / OR BOOKS OF ACCOUNT / DOCUMENTS SEIZED BELONGS TO YOU. THEREFORE, YOUR INCOME SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHICH THE SEARCH WAS C ONDUCTED I.E. FROM A.Y. 2003 - 04 TO A.Y. 2008 - 09 IS REQUIRED TO BE ASSESSED/REASSESSED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153C OF THE ACT. YOU ARE, THEREFORE, REQUIRED TO FURNISH RETURN OF THE COMPANY S INCOME U /S . IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 4 - 153C OF THE IT. ACT 1961 FOR A.Y . 2006 - 07 BEING ONE OUT OF THE ABOVE SIX ASSESSMENT YEARS IN RESPECT OF WHICH YOU ARE ASSESSABLE UNDER THE INCOME - TAX ACT, 1961. THE RETURN SHOULD BE FILED IN THE APPROPRIATE FORM AS PRESCRIBED IN RULE 12 OF THE INCOME - TAX RULES, 1962. IT SHOULD BE DULY VERIFIED AND SIGNED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 140 OF THE SAID ACT AND DELIVERED AT MY OFFICE AS MENTIONED ABOVE WITHIN THIRTY DAYS FROM THE SERVICE OF THIS NOTICE. YOURS FAITHFULLY, [ P.V. YADAV] ASSTT. COMMISSIONER OF INCOME - TAX CENT RAL CIRCLE - 3, SURAT 6. THE ASSESSEE FILED A FRESH RETURN ON 13.3.2009 REITERATING THE INCOME ALREADY ADMITTED. THE ASSESSING OFFICER COMPLETED A REGULAR ASSESSMENT ON 31.12.2010 ADDING DEEMED DIVIDENDS QUA AN UNSECURED LOAN RECEIVED FROM THE SEARCHED ENT ITY. THE ASSESSEE PREFERRED APPEAL CHALLENGING VALIDITY OF SECTION 153C PROCEEDINGS IN ABSENCE OF ANY INCRIMINATING MATERIAL AS WELL AS ON MERITS. THE CIT(A) IN HIS ORDER HAS UPHELD THE IMPUGNED ADDITION TO THE EXTENT INDICATED HEREINABOVE. AND ALSO OBSERV ED THAT IN CASE OF A SEARCH, REGULAR ASSESSMENT PROCEEDINGS ABATE AND ONLY THE IMPUGNED PROCEEDINGS HAVE TO BE TAKEN RECOURSE TO U/S.153C OF THE ACT. THIS LEAVES THE ASSESSEE AGGRIEVED. 7. WE HAVE HEARD RIVAL CONTENTION S AND GONE THROUGH THE CASE FILE. RELEVANT FACTS AS WELL AS THE ASSESSING OFFICER S SATISFACTION NOTE BEFORE PROCEEDING U/S.153C AGAINST THE ASSESSEE ALREADY STAND NARRATED / REPRODUCED HEREINABOVE. WE ARE NOT REPEATING THE SAME FOR THE SAKE OF BREVITY. THE ASSESSING OFFICER S REASONS NOWH ERE PIN IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 5 - POINT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED TO BE BELONGING TO THE ASSESSEE/OTHER PERSON AS ENVISAGED U/S.153C OF THE ACT. THE SAME FACTUAL POSITION CONTINUES IN A SSESSMENT ORDER AS WELL AS LOWER APPELLATE PROCEEDINGS. WE MADE A SPECIFIC QUERY TO THE REVENUE TO PRODUCE ON RECORD ANY INCRIMINATING MATERIAL IN THE NATURE OF ABOVESAID EVIDENCE. IT FAILS TO PRODUCE THE SAME. IT ONLY JUSTIFIES THE LOWER APPELLATE ORDER T HAT ONCE A SEARCH IS CONDUCTED THE ONLY OPTION AVAILABLE IS TO PROCEED U/S.153C R.W.S.153A OF THE ACT SINCE REGULAR ASSESSMENT PROCEEDINGS ABATE. WE TEND TO DISAGREE WITH THIS REASONING. WE ARE OF THE OPINION THAT DISCOVERY OF AN INCRIMINATING MATERIAL IN THE NATURE ABOVESAID FORM S IS SINE QUA NONE BEFORE ANY SATISFACTION NOTE IS DRAWN U/S.153C OF THE ACT. THE SAME IS NOWHERE FORTHCOMING THE PRESENT CASE. IN THESE CIRCUMSTANCES, WE DRAW SUPPORT FROM A CO - ORDINATE BENCH DECISION IN ACIT VS. GAMBHIR SILK MILLS (2011 ) 45 SOT 20 (AHD) SUBSEQUENTLY AFFIRMED BY HON BLE JURISDICTION HIGH COURT IN TAX APPEAL NO.1493 OF 2010 DECIDED ON 21.12.2011 HOLDING ON IDENTICAL LINES. THE REVENUE FAILS TO POINT OUT ANY DISTINCTION ON FACTS INVOLVED THEREIN. THEREFORE, THE ASSESSEE S A DDITIONAL GROUNDS SUCCEEDS. THERE IS ONE MORE LEGAL ASPECT OF THE INSTANT CASE. A PERUSAL OF SECTION 153C NOTICE REVEALS THAT IT IS THE ASSESSEE S ASSESSING OFFICER WHO HAS EXPRESSED SATISFACTION BEFORE INITIATING THE CORRESPONDING PROCEEDINGS UNDER CHA LLENGE AND NOT THE ONE OF THE IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 6 - SEARCHED PARTY (SUPRA). THE REVENUE SUBMITS THAT ASSESSING OFFICER OF THE ASSESSEE AS WELL AS THE SEARCH PARTY IS THE SAME. IN THESE CIRCUMSTANCES, WE FIND THAT IN A RECENT DECISION DATED 12.06.2015 IN CASES TITLED AS SMT. REK HABEN THAKKAR VS. ACIT IN ITAS 3088 TO 3093, WE HAVE HELD THAT EVEN IF THE ASSESSING OFFICER HAPPENS TO BE THE SAME IN CASE OF THE SEARCHED PARTY AND THE OTHER PARTY, HE HAS TO RECORD SUCH REASONS IN THE CASE FILE OF THE SEARCHED PARTY THAT THE MONEY, BULL ION, JEWELLERY OR OTHER OTHER ARTICLES BELONG TO THE OTHER PERSON FOR THE PURPOSE OF SECTION 153C PROCEEDINGS. OUR OBSERVATION IN THE SAID GROUP OF CASE ARE READ AS FOLLOWS: 8. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED T HE MATERIAL PLACED BEFORE US. SECTION 153C OF THE INCOME - TAX ACT, 1961 READS AS UNDER: - '153C. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SAT ISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOM E OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A:].' 9. FROM THE ABOVE, IT IS EVIDENT THAT ACTION UNDER SECTION 153C CAN BE TAKEN IN RESPECT OF ANY OTHER PERSON THAN THE PERSON SEARCHED IF THE ASSESSING OFFICER OF THE PERSON SEAR CHED IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED. IN SUCH CIRCUMSTANCES, HE SHALL HAND OVER TO THE ASSESSING OFFICER OF SUCH OTHER PER SON MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS. THEREAFTER, THE ASSESSING OFFICER OF SUCH OTHER PERSON SHALL PROCEED IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 7 - AGAINST THE SAID PERSON TO ASSESS OR REASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 153A. THEREFORE, RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE PERSON SEARCHED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED BELONG TO THE PERSON OTHER THAN THE PERSO N SEARCHED IS A SINE QUA NON FOR INITIATING ACTION UNDER SECTION 153C. 10. THE LD. DEPARTMENTAL REPRESENTATIVE HAS CONTENDED THAT THOUGH THE ASSESSING OFFICER OF THE PERSON SEARCHED SHOULD BE SATISFIED THAT MONEY, BULLION, JEWELLERY OR ANY OTHER VALUABLE ARTICLE OR THE BOOKS OF ACCOUNTS OR DOCUMENTS BELONG TO THE PERSON OTHER THAN THE PERSON SEARCHED, BUT THERE IS NO REQUIREMENT OF RECORDING OF A FORMAL SATISFACTION BY HIM. WE ARE UNABLE TO AGREE WITH THIS CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE . WHILE TAKING THIS VIEW, WE DERIVE SUPPORT FROM THE DECISION OF HON BLE APEX COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT AND ANOTHER, REPORTED IN (2007) 289 ITR 341 (SC), WHEREIN THEIR LORDSHIPS AT PAGE 348 HELD AS UNDER: - 'THE CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMENT 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 OU T 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 PRECEDENT WHEREFOR A RE : (I) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OF THE ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON; AND (III) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PR OVISIONS OF SECTION 158BD, THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTION 132A OF THE ACT.' IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 8 - 11. THOUGH THE ABOVE DECISION WAS GIVEN BY THEIR LORDSHIPS OF THE HON BLE APEX COURT WITH REFERENCE TO SECTION 158BD OF THE INCOME - TAX ACT; HOWEVER, THE LANGUAGE OF SECTION 158BD AND SECTION 153C OF THE INCOME - TAX ACT ARE ALMOST SIMILAR. THEREFORE, IN OUR OPINION, THE RATIO OF THE DECISION GIVEN WITH REFERENCE TO SECTION 158BD WOULD BE SQUARELY APPLICABLE WHILE INTERPRETING SECTION 153C. 12. IN THE ABOVE LEGAL BACKGROUND, LET US NOW EXAMINE THE FACTS OF THE ASSESSEE S CASE SO AS TO FIND OUT WHETHER THE JURISDICTION ASSUMED U/S 153C IS VALID. THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER READS AS UNDER: - NAME OF THE ASSESSEE : SMT. REKHABEN K. THAKKAR PROP. M/S. DURGA FINANCE A.Y. : 1999 - 00 T O 2004 - 05 SATISFACTION NOTE FOR ISSUING NOTICE U/S 153C OF THE ACT SEARCH AND SEIZURE PROCEEDINGS U/S WERE CARRIED OUT ON 04.03.2005 AT THE RESIDENTIAL / BUSINESS PREMISES IN THE KABHAI CHAUHAN GROUP OF CASES. DURING THE COURSE OF SEARCH, CERTAIN INCRIM INATING DOCUMENTS WERE FOUND AND SEIZED. ON SCRUTINY OF THE DOCUMENTS SO SEIZED, IT IS NOTICED THAT CERTAIN DOCUMENTS WERE FOUND TO BE PERTAINING TO THE ABOVE ASSESSEE, INCLUDING THE FOLLOWING DOCUMENTS: UNDATED CHEQUE ISSUED BY M/S. DURGA FINANCE IN FAVO UR OF SHRI VIJAY K. CHAUHAN SEIZED FROM THE PREMISES OF SHRI BRIJESH K.CHAUHAN. SINCE, THE ABOVE DOCUMENTS, PERTAINING TO THE ABOVE NAMED ASSESSEE HAVE BEEN FOUND, I AM SATISFIED THAT THE PROVISIONS OF SECTION 153C OF THE ACT APPLY IN THIS CASE AND, THERE FORE, NOTICE U/S 153C IS BEING ISSUED. BARODA (AMAL GARG) DATE : 08.11.2005 DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 1, BARODA 13. FROM THE ABOVE, IT IS EVIDENT THAT THE SATISFACTION IS RECORDED IN THE CASE OF SMT. REKHABEN K. THAKKAR, PROPRIETOR OF M/S. DURGA FINANCE. THUS, THE SATISFACTION IS RECORDED IN THE CASE OF THE PERSON OTHER THAN THE PERSON SEARCHED. AS WE HAVE ALREADY MENTIONED THAT AS PER SECTION 153C, THE ASSESSING OFFICER OF THE PERSON SEARCHED SHOULD BE SATIS FIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 9 - OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED. ADMITTEDLY, IN THIS CASE, THE SATISFACTION IS RECORDED NOT BY THE ASSESSING OFFICER OF THE PERSO N SEARCHED BUT BY THE ASSESSING OFFICER OF THE PERSON TO WHOM SUCH DOCUMENT CLAIMED TO BE BELONGING. IT WAS CONTENDED BY THE LD. COUNSEL THAT SINCE THE ASSESSING OFFICER OF THE PERSON SEARCHED AS WELL AS THE ASSESSING OFFICER OF SUCH OTHER PERSON IS THE S AME; THEREFORE, THE SATISFACTION RECORDED BY THE ASSESSING OFFICER SHOULD BE CONSIDERED AS THE PROPER COMPLIANCE OF SECTION 153C. WE ARE UNABLE TO AGREE WITH THIS VIEW OF THE LD. DEPARTMENTAL REPRESENTATIVE. EVEN IF THE ASSESSING OFFICER ASSESSING THE P ERSON SEARCHED AS WELL AS OTHER PERSON WHOSE ASSETS, BOOKS OF ACCOUNT OR DOCUMENTS WERE FOUND AT THE TIME OF SEARCH IS SAME, THEN ALSO, FIRST WHILE MAKING THE ASSESSMENT IN THE CASE OF THE PERSON SEARCHED, HE HAS TO RECORD THE SATISFACTION THAT THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS BELONG TO THE PERSON OTHER THAN THE PERSON SEARCHED. THEN, THE COPY OF THIS SATISFACTION NOTE IS TO BE PLACED IN THE FILE OF SUCH OTHER PERSON AND THE RELEVANT DOCUMENT SHOULD ALSO BE TRANSFERRED FROM THE FILE OF PERSON SEARCHED TO THE FILE OF SUCH OTHER PERSON. THEREAFTER, IN THE CAPACITY OF THE ASSESSING OFFICER OF SUCH OTHER PERSON, THE ASSESSING OFFICER HAS TO ISSUE THE NOTICE UNDER SECTION 153C. THE ASSESSING OFFICER OF THE PERSON SEARCHED AND SUCH OTHER PERSON MAY BE THE SAME BUT THESE ARE TWO DIFFERENT ASSESSEES AND, THEREFORE, THE ASSESSING OFFICER HAS TO CARRY OUT THE DUAL EXERCISE, FIRST AS THE ASSESSING OFFICER OF THE PERSON SEARCHED IN WHICH HE HAS TO RECORD TH E SATISFACTION, DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED. AFTER RECORDING SUCH SATISFACTION NOTE IN THE FILE OF THE PERSON SEARCHED, THE SAME IS TO BE PLACED IN THE FILE OF SUCH OTHER PERSON. THEN, IN HIS CAPACITY AS THE ASSESSING OFFICER OF SUCH OTHER PERSON, HE SHOULD TAKE COGNIZANCE OF SUCH SATISFACTION NOTE AND THEREAFTER ISSUE NOTICE UNDER SECTION 153C. IN THIS CASE, THIS EXERCISE OF RECORDING THE SATISFACTION DURING THE ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED HAS NOT BE EN CARRIED OUT. ON THE OTHER HAND, THE ASSESSING OFFICER RECORDED THE SATISFACTION IN THE CASE OF SUCH OTHER PERSON WHICH DOES NOT SATISFY THE CONDITION OF ASSUMING JURISDICTION UNDER SECTION 153C. ACCORDINGLY, WE HOLD THAT NEITHER THERE EXISTED ANY IN CRIMINATING MATERIAL AS CONTEMPLATED U/S.153C OF THE ACT NOR IS THE PRESENT A CASE OF A VALID SATISFACTION RECORDED THEREIN. WE REITERATE THAT THIS IS A CASE OF SEARCH PROCEEDINGS WHEREIN THE REVENUE S POWERS HAVE TO IT (SS) A NO S . 304 & 305 /AHD/20 1 1 ADDPLA S T AGENCIES FOR A.Y S . 200 6 - 0 7 & 2007 - 08 - 10 - BE STRICTLY INTERPRETED. WE CONCLUDE AC CORDINGLY THAT THE INITIATION OF SECTION 153C PROCEEDINGS AGAINST THE ASSESSEE UNDER CHALLENGE IS LIABLE TO BE QUASHED. THE ASSESSEE S LEGAL GROUNDS SUCCEEDS. ITS APPEAL ITA 503/AHD/2011 IS ALLOWED. 8. SAME ORDER TO FOLLOW IN ITA 504/AHD/2011. 9. THE AS SESSEE S BOTH APPEALS ITAS 503 AND 504/AHD/2011 ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 19 TH JUNE , 201 5 AT AHMEDABAD . SD/ - SD/ - ( G.D. AGRAWAL ) ( S.S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 19 / 06 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD