ACIT CEN CIR 24 & 26, MUMBAI V. SUDHIR WAHI, MUMBAI

ITSSA 55/MUM/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0005 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-01-2014
• Assessment Year: misc
• Appeal Filed On: 12-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N M PORWAL IZRFKHZ DH LS
• Keywords: Search and seizure; Document seized; Block assessment; Documents seized
• Section: 143(3); 133A; 132

Judgement Text

- 1 - VK;DJ VIHYH; VF/KDJ.K BZ U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI JH VKJ JH VKJ JH VKJ JH VKJ- -- - LH LHLH LH- -- - 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA MK0 ,L MK0 ,L MK0 ,L MK0 ,L- -- - VH VHVH VH- -- - ,E ,E,E ,E- -- - IOYU IOYU IOYU IOYU] U;KF;D LNL; DS ] U;KF;D LNL; DS ] U;KF;D LNL; DS ] U;KF;D LNL; DS LE{K LE{K LE{K LE{K BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND DR. S.T. M PAVALAN, JUDICIAL MEMBER ITSS(A) NO. 55/MUM/2011 BLOCK ASSESSMENT YEAR 01.04.1990 TO 31.08.2000 ACIT CENTRAL CIR 24&26 ROOM NO. 404, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020. CUKE@ VS. SUDHIR WAHI A/2, PARIJAT NAYAK WADI, GOREGAON (EAST) MUMBAI 400 063. PAN:- AAPW4364P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VIHYKFKHZ DH VKSJ LS @ ASSESSEE BY SHRI N.M. PORWAL IZR;FKHZ DH VKSJ LS @ REVENUE BY SHRI GIRIJA DAYAL VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER R.C. SHARMA, AM. THIS IS AN APPEAL, FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 11.7.2011 FOR THE BLOCK PERIOD 01.04.1990 TO 31.08. 2000, IN THE MATTER OF ORDER PASSED U/S 254 R.W.S 158BD OF THE INCOME TAX ACT. 1 961. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE. A. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE AO NO JURISDICTION TO INVOKE THE PROVISIONS OF SECTION 158BD OF THE IT AC T. LQUOKBZ DH RKJH[K@ DATE OF HEARING 13-01-2014 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT 13 - 01 - 2014 - 2 - B. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE AO HA D NO JURISDICTION TO INVOKE THE PROVISIONS OF SECTION 158BD OF THE IT AC T, INSPITE OF THE FACTS MENTIONED IN PARA 2.1 OF THE ORDER OF THE CIT (A) TO THE EFFECT THAT RELEVANT DOCUMENTS WHICH LED THE DEPARTMENT TO CONDUCT SURVEY, WERE FOUND AND SEIZED FROM THE RESIDENCE OF SHRI SA LMAN KHAN DURING THE COURSE OF SEARCH & SEIZURE PROCEEDINGS U/S 132 OF THE IT ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PE RUSED. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE SHRI SUDHIR WAHI IS THE PROPRIETOR OF M/ S. ROYAL ARTS AND WAS PERSONAL SECRETARY OF MR. SALMAN KHAN. THE ASSE SSEE WAS ALSO ENGAGED IN CO- PRODUCTION OF FILMS/SERIALS. A SEARCH ACTION U/S 13 2. WAS CONDUCTED IN THE CASE OF SHRI SALIM KHAN ON 26.09.2000. AS A SEQUEL TO THE S EARCH, SURVEY U/S 133A WAS CONDUCTED AT THE PREMISES OF THE APPELLANT AS CERTA IN DOCUMENTS SEIZED FROM THE POSSESSION OF SHRI SALIM KHAN, FATHER OF MR. SALMA N KHAN SUGGESTED THAT THE APPELLANT IS ACTIVELY INVOLVED IN THE BUSINESS AND FINANCIAL AFFAIRS OF MR. SALMAN KHAN AND HIS FAMILY MEMBERS. IN RESPONSE TO NOTICES U/S. I58BD R.W.S. 158BC OF THE L.T. ACT THE ASSESSEE FILED THE RETURN FOR THE BLOCK PER IOD ON 18.11.2004 DISCLOSING THE NIL UNDISCLOSED INCOME. AS AGAINST THE NIL UNDISCLOSED RETURN, THE A.O. FINALIZED THE UNDISCLOSED INCOME AT RS. 1,55,86,000/-. THE ASSESS EE FILED AN APPEAL BEFORE THE CIT(A) AND CIT(A) PASSED THE APPELLATE ORDER ON 28. 10.2005 NO. CIT(A)/CENTRAL IV/IT 131/2004-05. AGAINST THIS ORDER OF CIT(A)S, THE AS SESSEE FILED THE APPEAL BEFORE THE HONBLE ITAT AND THE HONBLE ITAT PASSED THE ORDER ON 23.3.2009 IN IT(SS) A. NO. 12/MUM/ 2006. THE HONBLE ITAT REMITTED THE ISSUE B ACK TO THE A.O, PRECISE OBSERVATION WAS CONTAINED IN PARA 15 & 16 WHICH RE ADS AS UNDER: 15. WE HEARD BOTH THE PARTIES. WE ADMIT THE ADDITI ONAL GROUNDS OF THE I ASSESSEE AND WE ARE OF THE VIEW THAT THE RATIO OF T HE DECISION OF THE - 3 - SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT(SC) IS APPLICABLE TO THE APPELLANTS CASE. IT HAS TO BE DE TERMINED WHETHER ON THE BASIS OF ANY MATERIAL SEIZED AT THE TIME OF SE ARCH THE A.O. HAS RECORDED HIS SATISFACTION THAT ON THE BASIS OF MATE RIAL SEIZED AT THE TIME OF SEARCH ANY UNDISCLOSED INCOME HAS BEEN UNEARTHED AND THE SAME BELONGS TO THE ASSESSEE. THE UNDISCLOSED INCOME CAN NOT BE DETERMINED ON BASIS OF THE MATERIAL FOUND IN THE COURSE THE SUBSEQUENT SUR VEY. WE FIND THAT THESE ISSUES HAVE NOT BEEN ADDRESSED BY T HE ASSESSING OFFICER OR THE FIRST APPELLATE AUTHORITY. 16. IN THESE CIRCUMSTANCES, WE REMIT THE MATTER TO THE FILE OF THE A.O. TO DECIDE THE ISSUE AFRESH IN LIGHT OF THE DECISION OF MANISH MAHESHWARI VS. AC1T (SUPRA) AND OTHER DECISIONS REFERRED TO ABOVE AND IN PARTICULAR WHETHER THE A.O HAD RECORDED HIS SATISFACTION THAT UNDISCLOSED INCOME OF THE ASSESSEE WAS DETERMINABLE ON THE BASIS OF SU CH RECORDS DURING THE SEARCH, AFTER GIVING A REASONABLE OPPORTUNITY TO THE APPELL ANT: 3. IN THE SET ASIDE PROCEEDINGS, THE AO OBSERVED TH AT SEARCH AND SEIZURE WAS CONDUCTED IN THE CASE OF SHRI SALMAN KHAN U/S 132 ( 1) ON 26 TH SEPT. 2000, FOLLOWING DOCUMENTS SEIZED AND FOUND AT THE RESIDEN CE OF SHRI MR. SALMAN KHAN LED THE DEPARTMENT TO CONDUCT THE SURVEY U/S L33A O F THE INCOME TAX ACT, 1961 ON 22-11-2000. A) THE PAY IN SLIP OF BANK FILLED IN BY THE ASSESSE E (MR. SUDHIR WAHI) AS MARKED ANNEXURE A/3 PAGE NO. 73 TO 82 FOUND AND S EIZED FROM RESIDENCE OF MR. SALMAN KHAN ON 26-09-2000. (PRESUM ED BY THE DEPARTMENT THAT CASH DEPOSITS MADE B.Y ASSESSEE (MR . SUDHIR WAHI) FOR MR. SALMAN KHAN. - 4 - B) THE RECEIPT OF RS. 15,00,000/- ISSUED TO M/S ASS OCIATED FILM INDUSTRIES PVT. LTD. ON BEHALF OF MR. SALMAN KHAN AND SIGNED BY THE ASSESSEE I.E. MR. SUDHIR WAHI AS AUTHORIZED SIGNATORY. 3.1 THE ASSESSEE SUBMITTED BEFORE THE A.O. THAT IN THE ASSESSMENT ORDER PASSED U/S 158 BD THE AO HAS MADE ALL THE ADDITIONS ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SURVEY U/S 133A AT THE OFFICE CUM RESIDENTIAL PREMISES OF THE ASSESSEE. THE ASSESSEE FURTHER SUBMITTED THAT T HE NONE OF THE ADDITIONS HAS BEEN MADE IN THE HANDS OF THE ASSESSEE FROM THE MAT ERIAL SEIZED, DURING THE SEARCH & SEIZURE CONDUCTED IN THE CASE OF SHRI MR. SALMAN KHAN U/S 132 (1) OF THE INCOME TAX ACT, 1961 ON 26TH SEPT. 2000 THUS QU ESTION OF RECORDING THE SATISFACTIONS BY THE AO HAS NOT AROSE. 3.2 THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FI LLED UP THE BANK DEPOSIT SLIP AND SIGNED THE SAID RECEIPT ISSUED TO M/S ASSOCIATE D FILM INDUSTRIES PVT. LTD. ON BEHALF OF MR.. SALMAN KHAN GROUP AS HE WAS WORKING WITH MR. SALMAN KHAN AS A SECRETARY. 3.3 THE ASSESSEE ALSO INVITED THE ATTENTION OF THE A.O. TO THE FOLLOWING OBSERVATIONS AS MADE BY THE HONOURABLE ITAT IN ITS ORDER: WE HEARD BOTH THE PARTIES. WE ADMIT THE ADDITIONA L GROUNDS OF THE ASSESSEE AND WE ARE OF THE VIEW THAT THE RATIO OF T HE DECISION OF THE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS A CIT (SC) IS APPLICABLE TO THE APPELLANTS CASE. IT HAS TO BE DE TERMINED WHETHER ON THE BASIS OF ANY MATERIALS SEIZED AT THE TIME OF SEARCH THE AO HAS RECORDED HIS SATISFACTION THAT ON THE BASIS OF MATERIAL SEIZED A T THE TIME OF SEARCH ANY - 5 - UNDISCLOSED INCOME HAS BEEN UNEARTHED AND THE SAME BELONG TO THE ASSESSEE. THE UNDISCLOSED INCOME CANNOT BE DETERMIN ED ON THE BASIS OF THE MATERIAL FOUND IN THE COURSE THE SUBSEQUENT SUR VEY. 3.4 THE ASSESSEE ALSO ENCLOSED COPIES OF THE FOLLOW ING PAPERS / DOCUMENTS: A) ASSESSMENT ORDER PASSED U/S 158BD BY THE HONOURA BLE DCIT CC24&26 B) MATERIAL SEIZED DURING THE COURSE OF SEARCH & SE IZURE ACTION IN THE CASE OF MR. SALMAN KHAN U/S 132 (1) OF THE INCOME T AX ACT, 1961 ON 26TH SEPT. 2000 ALONG WITH COPY OF PAPER BOOK FILED BY THE DEPARTMENT. AND SUBMITTED THAT ALL THE ADDITIONS WERE MADE AS UNDISCLOSED INCOME ON THE BASIS OF THE MATERIAL FOUND IN THE COURSE OF SURVEY AND NOT ON THE BASIS OF THE SEIZED MATERIAL AND HENCE THE ORDER PA SSED WAS WRONG AND CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT, 1 961, THUS THE ASSESSEE REQUESTED THE 0 TO SET ASIDE THE SAID ADDITIONS AS DIRECTED BY THE HONOURABLE ITAT. 3.5. THE ASSESSEE FURTHER SUBMITTED BEFORE THE A.O THAT THE LETTER WRITTEN TO THE HONOURABLE ADDL. CIT - CENTRAL RANGE -5 BY T HE A.O FOR OBTAINING PERMISSION TO ISSUE NOTICE U/S 158BD TO THE ASSESSE E ITSELF WAS WRONG BEING BASED ON THE WRONG FACTS AND CONTRARY TO THE PROVIS IONS OF THE INCOME TAX ACT, 1961. BECAUSE THE LETTER HAD NARRATED ABOUT TH E DETAILS REFLECTED IN THE DOCUMENTS / PAPERS FOUND DURING THE COURSE OF SURVEY U/S 133A A T THE OFFICE CUM RESIDENTIAL PREMISES OF THE ASSESSEE. - 6 - 3.6 THE ASSESSEE FURTHER SUBMITTED BEFORE THE A. O THAT ON READING OF THE SAID LATTER ONE CAN EASILY COME TO A CONCLUSION T HAT NOTHING HAD BEEN NARRATED / MENTIONED OR REFERRED REGARDING THE MATERIAL SEIZED FROM THE SEARCH & SEIZURE CONDUCTED IN THE CASE OF MR. SALMA N KHAN WHICH WAS DIRECTLY OR INDIRECTLY RELATED TO THE ASSESSEE I.E. THE LETT ER WAS TOTALLY SILENT ABOUT THE MATERIAL RELATED TO THE ASSESSEE FOUND DURING THE S EARCH AND SEIZURE IN THE CASE OF MR. SALAMAN KHAN WHICH WAS PRIMARY / MANDATORY REQUIREMENT FOR ISSUING NOTICE U/S 158BD. THE ASSESSEE SUBMITTED TO THE A.0 THAT NOT A SINGLE ADDITION WAS MADE IN THE ASSESSMENT ORDER U/S. 158 BD R.W.S. 143(3) OF THE I.T. ACT BARED ON THE MATERIAL SEIZED IN THE SEARCH & SEIZURE CONDUCTED IN THE CASE OF MR. SALMAN KHAN AND THIS FACT PROVES THE POINT O F VIEW OF THE ASSESSEE. THE ASSESSEE FURTHER SUBMITTED THAT THE O RDER PASSED U/S 158BD IS MOSTLY ON THE BASIS OF DOCUMENTS IMPOUNDED DURING S URVEY U/S 133A OF THE INCOME TAX ACT, 1961. FURTHER THE ASSESSEE SUBMITTE D THAT THE A.O HAD ADMITTED THAT THERE WAS NO SEPARATE SATISFACTION WR ITTEN BY THE A.O OF MR. SALMAN KHAN TO THE A.O OF MR. SUDHIR WAHI . THE ASSESSEE BROUGHT TO THE NOTICE OF THE A.O THE CONCLUSION OF THE A.O AS NAR RATED IN THE LAST PARA OF THE AFORESAID REPORT WHICH IS REPRODUCED BELOW. THE PRINCIPAL QUESTION THAT WE MAY ADDRESS HERE IS , WHETHER THE MERE FACT THAT INCRIMINATING DOCUMENTS RELATED TO UNDISC LOSED TRANSACTION WERE FOUND DURING THE SURVEY AND NOT SEARCH CAN CHA NGE THE NATURE OF SUCH TRANSACTION, MORE SO WHEN THE SURVEY ACTION HA D ITS ROOTS IN THE DOCUMENTS FOUND DURING THE SEARCH. 3.7 THE ASSESSEE FURTHER SUBMITTED THAT CLEAR ADM ISSION OF THE FACTS THAT FOR ISSUING NOTICE U/S 158BD AND SUBSEQUENTLY ADDIT IONS MADE IN THE ORDER PASSED U/S 158BD WAS TOTALLY BASED ON THE MATERIAL/ DOCUMENTS IMPOUNDED - 7 - DURING SURVEY U/S. 133A AT THE OFFICE CUM RESIDENTI AL PREMISES OF THE ASSESSEE DOESNT REQUIRE FURTHER EXPLANATIONS WHAT SO EVER I T MAY BE ON ASSESSEES PART TO PROVE THAT ALL THE ADDITIONS HAD BEEN MADE ON TH E BASIS OF THE DOCUMENTS IMPOUNDED DURING SURVEY U/S L33A OF THE ACT. 3.8 THE ASSESSEE SUBMITTED THAT IN VIEW OF THE AFO RESAID FACTS AND AS DIRECTED HONBLE ITAT THAT THE RATIO OF THE DECISIO N OF THE HONBLE SUPREME IN THE CASE OF MANISH MAHESHWARI VS ACIT (SC) IS APPLI CABLE TO THE APPELLANTS CASE. IT HAS TO BE DETERMINED WHETHER ON THE BASIS OF ANY MATERIALS SEIZED AT THE TIME OF SEARCH THE AO HAS RECORDED HIS SATISFAC TION THAT ON THE BASIS OF MATERIAL SEIZED AT THE TIME OF SEARCH ANY UNDISCLOS ED INCOME HAS BEEN UNEARTHED AND THE SAME BELONGS TO THE ASSESSEE. THE ASSESSEE SUBMITTED TO THE A.O THAT THE UNDISCLOSED INCOME CANNOT BE DETER MINED ON THE BASIS OF THE MATERIAL FOUND IN THE COURSE THE SUBSEQUENT SUR VEY, THUS IT CAN/BE CONCLUDED THAT THE ADDITIONS MADE IN THE ORDER PASS ED U/S 1583D ON THE BASIS OF THE MATERIAL IMPOUNDED DURING THE COURSE OF SURV EY U/S 133A OF THE INCOME TAX ACT. 1961. WERE WRONG AND CONTRARY TO TH E PROVISIONS OF THE INCOME TAX ACT, 1961, AND DESERVE TO BE SET ASIDE. 4. HOWEVER, AO DID NOT ACCEPT THE ASSESSEES CONTEN TION AND HELD THAT ONCE PROCEEDINGS ARE INITIATED U/S 158BD, THE PROVISIONS OF SECTION 158BC GETS INVOKED AND ASSESSMENT OF UNDISCLOSED IN COME IS REQUIRED TO BE MADE UNDER THE PROVISION CONTAINED IN CHAPTER XI V-B OF THE INCOME TAX ACT. THE AO FURTHER OBSERVED THAT THE SECTION R EQUIRES TO COMPUTE THE UNDISCLOSED INCOME IN ACCORDANCE WITH THE PROVI SIONS OF THE ACT ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH O R REQUISITION OF BOOKS OF ACCOUNTS OR OTHER DOCUMENTS AND SUCH OTHER MATER IAL OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER AND REL ATING TO SUCH EVIDENCE. - 8 - HAVING ALL THE ABOVE OBSERVATIONS THE AO CONCLUDED THAT THE ORDER PASSED U/S 158BC R.W.S 158BD IS WITH IN THE AMBIT O F THE PROVISIONS CONTAINED UNDER CHAPTER XIV-B OF THE INCOME TAX ACT 1961. THE AO HELD THAT THE UNDISCLOSED INCOME OF THE ASSESSEE DETERMI NED IN THE ORIGINAL ORDER U/S 158BC R.W.S 158BD OF RS. 1,55,87,000/- ST ANDS REVIVED AND ASSESSED THE SAME ACCORDINGLY. 4.1 ASSESSEE APPROACHED CIT(A) AGAINST THIS ORDER O F AO. 5. BY IMPUGNED ORDER CIT(A) HELD THAT THE ASSESSEE S CASE IS SQUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT (289 ITR 341), ACCORDINLGLY THE AO HAS NO JURISDICTION TO INVOKE THE PROVISIONS OF SECTION 15 8BD, ACCORDINGLY THE ASSESSMENT FRAMED BY THE AO LACK JURISDICTION. CIT( A), THEREFORE, DELETED THE ENTIRE ADDITION. PRECISE OBSERVATION OF CIT(A) WAS AS UNDER:- [5.. I HAVE GONE THROUGH THE ISSUE. THE HONBLE ITAT IN THE APPELLANTS CASE REMITTED THE MATTER TO THE FILE OF THE A.O WITH THE FOLLOWING DIRE CTIONS: 15. WE HEARD BOTH THE PARTIES. WE ADMIT THE ADDITI ONAL GROUNDS OF THE ASSESSEE AND WE ARE OF THE VIEW THAT THE RATIO OF T HE DECISION OF THE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT(SC) IS APPLICABLE TO THE APPELLANTS CASE. IT HAS TO BE DETERMINED WHETHER ON TH E BASIS OF ANY MATERIAL SEIZED AT THE TIME OF SEARCH THE A.O. HAS RE CORDED HIS SATISFACTION THAT ON THE BASIS OF MATERIAL SEIZED AT THE TIME OF SEA RCH ANY UNDISCLOSED INCOME HAS BEEN UNEARTHED AND THE SAME BELONGS TO TH E ASSESSEE. THE UNDISCLOSED INCOME CANNOT BE DETERMINED ON THE BASIS O F THE MATERIAL FOUND IN THE COURSE THE SUBSEQUENT SURVEY. WE FIND THAT THESE ISSUES HAVE NOT BEEN ADDRESSED BY THE ASSESSING OFFICER THE FIRST APPELLATE AUTHORITY. - 9 - 16. IN THESE CIRCUMSTANCES, WE REMIT THE MATTER TO THE FILE OF THE A. Q. TO DECIDE THE ISSUE AFRESH IN LIGHT OF THE DECISION OF MANISH MAH ESHWARI VS. ACJT (SUPRA) AND OTHER DECISIONS, REFERRED TO ABOVE AND IN PARTICULAR WHET HER THE A.O HAD RECORDED HIS SATISFACTION THAT UNDISCLOSED INCOME OF THE ASSESSEE WAS DETERMI NABLE ON THE BASIS OF SUCH RECORDS DURING THE SEARCH AFTER GIVING TO 31.8.2000. 5.1 THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESWARI VS. ACIT 289 1W 341(SC) HAS HELD AS FOLLOWS:- THE CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMENT AS 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 BEE N CARRIED OUT UNDER SECTION 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISIT IONED UNDER SECTION 132A. SECTION 158.BD, HOWEVER PROVIDES FOR TAKING REC OURSE TO A BLOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITIONS PRECEDENT WHEREFORE ARE (1) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME BEL ONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WA S MADE UNDER SECTION 132 OF THE ACT; (II) THE BOOKS OF ACCOUNT OR O THER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON; A ND (III) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 1 58BC AGAINST S UCH OTHER PERSON. THE CONDITION PRECEDENT FOR INVOKING THE PROVISIONS O F SECTION 158BD, THUS ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS O F THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PER SON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTION 132A OF THE ACT, A 5.2 IN THIS CASE, THE AO COULD NOT IDENTIFY ANY OF THE SEIZED DOCUMENTS SEIZED - 10 - DURING THE SEARCH IN THE CASE OF SALMAN KHAN. GROUP INDICATING.. ANY. UNDISCLOSED INCOME OF THE APPELLANT. SECTION 158BD OF THE I.T. ACT READS AS FOLLOWS; WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO W HOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOC UMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SECTION 132A, THEN, THE BOOKS O F ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESS ING OFFICER SHALL PROCEED [UNDER SECTION 158BC] AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THE CHAPTER SHALL APPLY ACCORDINGLY. 5.3 FROM THE ABOVE, ACTION U/S. 158 BD R.W.S. 158 B C OF THE I.T. ACT CAN BE TAKEN ONLY IF THE AO IS SATISFIED THAT SOME UNDISCLOSED INCOME BELONG S TO OTHER PERSON (HERE IN THIS CASE THE APPELLANT) WHILE GOING THROUGH THE BOOKS OF ACCOUNT S, DOCUMENTS SEIZED IN THE CASE OF SALAM KHAN GROUP. NO SUCH FINDING WAS GIVEN BY THE A.O ON THE BASIS OF SEIZED MATERIALS FOUND DURING THE SEARCH. THE AO HAS RELIED ONLY ON THE IMPOUNDED MATERIALS FOUND IN THE SURVEY CONDUCTED IN THE APPELLAN TS CASE. SO IN VIEW OF THE ABOVE STATED FACTS THE HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF MANISH MAHESHWARI (SUPRA) AND THE HONBLE ITATS DECISION I N THE CASE OF APPELLANT, I HOLD THAT THE AO HAS NO JURISDICTION TO INVOKE THE PROVISI ONS OF SECTION 158BD OF THE I.T.ACT. I HOLD THAT THE ASSESSMENT MADE BY THE AO LACKS JURISDICTION AND IN VIEW OF THIS, I DIRECT THE A0 TO DELETE THE ENTIRE ADDITION 5.1 AGAINST THE ABOVE ORDER OF CIT(A), REVENUE IS IN APPEAL BEFORE TRIBUNAL. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. FROM THE R ECORD WE FOUND THAT ADDITIONS HAVE BEEN MADE BY THE AO ON THE BASIS OF DOCUMENTS IMPOUNDED DURING THE COURSE OF SURVEY. IN THE FIRST ROUND OF APPEAL, THE TRIBUNAL HAVE RESTORED THE MATTER BACK TO THE FILE OF AO WITH CERTAIN - 11 - SPECIFIC DIRECTIONS TO FIND OUT WHETHER PROPOSITION LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI (SUP RA) IS APPLICABLE TO THE FACTS OF THE CASE AND TO DETERMINE WHETHER ON T HE BASIS OF ANY MATERIAL SEIZED AT THE TIME OF SEARCH, THE AO HAS R ECORDED HIS SATISFACTION THAT ON THE BASIS OF SUCH MATERIAL SEI ZED AT THE TIME OF SEARCH. ANY UNDISCLOSED INCOME HAS BEEN UNEARTHED A ND THE SAME BELONGS TO THE ASSESSEE. FURTHER OBSERVATION AND DI RECTION OF THE TRIBUNAL WAS THAT THE UNDISCLOSED INCOME CANNOT BE DETERMINED ON THE BASIS OF MATERIAL FOUND IN THE COURSE OF SUBSEQUENT SURVEY. HOWEVER WHILE GIVING EFFECT TO THE ORDER OF TRIBUNAL, THE A O EXCEEDED HIS JURISDICTION AND AGAIN CONFIRMED THE ADDITION MADE IN THE ORIGINAL ASSESSMENT. AFTER APPRECIATING THE FACTS OF THE INS TANT CASE THAT THE PROPOSITION LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA), CIT(A) HAS RECORDED A FINDING T O THE EFFECT THAT PROPOSITION LAID DOWN BY HONBLE SUPREME COURT IN T HE CASE OF MANISH MAHESHWARI (SUPRA) IS APPLICABLE TO THE FACTS OF TH E ASSESSEES CASE, WHERE NO SATISFACTION WAS RECORDED NOR ANY ADDITION WAS MADE WITH REFERENCE TO THE SAID MATERIAL FOUND DURING THE COU RSE OF SEARCH AT PREMISES OF MR. SALMAN KHAN. IT IS CLEAR FROM THE P ROPOSITION LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF MANISH MAHE SHWARI (SUPRA) THAT THE PROVISIONS OF SECTION 158BC WOULD APPLY IN CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT U/S 132 A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED U/S 132A. HOWEVER SE CTION 158 BD, PROVIDES FOR TAKING RECOURSE TO A BLOCK ASSESSMENT IN TERMS OF SECTION 158BD IN RESPECT OF ANY OTHER PERSON, THE CONDITION S PRECEDENT WHEREFORE ARE (1) 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 S ECTION 132 OF THE - 12 - ACT. FURTHER MORE THE BOOKS OF ACCOUNTS OR OTHER DO CUMENTS OR ASSETS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER BY THE AO HAVING JURISDICTION OVER SUCH OTHER PERSONS AND THE AO HA S PROCEEDED U/S 158BD AGAINST SUCH OTHER PERSONS. IN THE INSTANT CA SE THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF SECTION 15 8BD HAVE NOT BEEN FULFILLED. WHILE FRAMING ASSESSMENT THE AO HAD RELI ED ONLY ON THE IMPOUNDED MATERIAL FOUND DURING SURVEY CONDUCTED IN THE ASSESSEES PREMISES. HOWEVER NO ADDITION WAS MADE WITH REFEREN CE TO DOCUMENTS IF ANY FOUND AT THE PREMISES MR. SALMAN KHANS DURI NG THE COURSE OF SEARCH. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR CONCLUDING THAT PROPOSITION LAID DOWN BY HONBLE SU PREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT(SUPRA) IS APPLICABLE TO THE FACTS OF THE ASSESSEES CASE 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED ON 13 /01/2014 SD/- SD/- ( DR. S.T.M. PAVALAN ) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 13 /01/2014 SKS SR. P.S COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI