M/s Sweta Agents (P) Ltd., Kolkata V. A.C.I.T, Central Circle-XXIV, Kolkata

ITSSA 70/KOL/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3294 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 01-05-2017
• Assessment Year: misc
• Appeal Filed On: 24-05-2013
• Court: TRIBUNAL
• Department Lawyers: GOULEN HANGSHING
• Keywords: Unexplained cash credit; Search and seizure; Document seized; Share purchase agreement; Assessment record; Block assessment; Documents seized
• Section: 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI M.BA LAGANESH, AM] I.T.(SS)A NO. 70/KOL/ 2013 BLOCK PERIOD 01.04.1996 TO 07.05.2002 M/S. SWETA AGENTS (P)LTD. -VS.- A.C.I.T. , CENTRAL CIRCLE-XXIV, KOLKATA KOLKATA [PAN : AAECS 0524 N] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI RAVI TU LSIYAN, FCA FOR THE RESPONDENT : SHRI GOULEN HANGSHING, C IT(DR) DATE OF HEARING : 02.05.2017. DATE OF PRONOUNCEMENT : 12.05.2017. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 21.03.2013 OF C.I.T.(A)-CENTRAL-III, KOLKATA RELATING TO BLOCK P ERIOD 01.04.1996 TO 07.05.2002 2. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THI S APPEAL BY THE ASSESSEE ARE AS FOLLOWS : THERE WAS A SEARCH AND SEIZURE OPERATION CON DUCTED U/S 132 OF THE INCOME TAX ACT, 1961 (ACT) ON 07.05.2002 AT THE OFFICE PREMISE S OF M/S. UIC WIRES LTD, 227, A.J.C.BOSE ROAD, ANANDLOK, 1 ST FLOOR, KOLKATA. IN THE COURSE OF SEARCH 2,00,000 S HARE CERTIFICATES BEARING DISTINCTIVE NOS. 490301 TO 690 300 OF FACE VALUE OF RS.10/- EACH ACQUIRED ON 12.08.2000 FOR CONSIDERATION OF RS.2,60 ,000/- WERE FOUND AND SEIZED. THE SHARE CERTIFICATES WERE ISSUED BY M/S. UIC WIRES LT D AND EVIDENCED THE ASSESSEE AS THE HOLDER OF THE SHARES. THESE SHARES HAD BEEN PURCHAS ED BY THE ASSESSEE DURING THE FINANCIAL YEAR 2000-01 AND WERE SOLD DURING THE FIN ANCIAL YEAR 2001-02 MUCH PRIOR TO THE DATE OF SEARCH IN UIC GROUP OF CASES. THE ASSES SEE HAD SOLD THE SHARES DURING THE FINANCIAL YEAR 2001-02 AND RECEIVED A SUM OF RS.26, 00,000/-. THE MONEY ON SALE OF SHARES WAS TRANSFERRED IN A BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH FEDERAL BANK 2 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 2 OF INDIA, BURRABAZAR BRANCH NAMELY A/C. NO.5274. TH E SUM OF RS.62,50,000/- SO DEPOSITED IN THE ASSESSEES BANK ACCOUNT WAS BY WAY OF TRANSFER BY ACCOUNT PAYEE CHEQUE FROM THE ACCOUNTS OF FOUR PERSONS FROM THE V ERY SAME BANK NAMELY FEDERAL BANK OF INDIA, BURRABAZAR BRANCH, KOLKATA HELD IN T HE NAME OF SHANKARLAL GHODH, SURENDRA KR. HIRAWAT, SUNIL KR. JAIN AND RAJENDRA K R. SURANA. THE FOLLOWING WERE THE DETAILS OF THE BANK ACCOUNT FROM WHICH THE SUM OF R S.62,50,000/- WAS TRANSFERRED IN THE BANK ACCOUNT OF THE ASSESSEE. (I) FROM A/C NO.4934 OF SHANKAR LAL GODH RS.10,00,000/ - (II) FROM A/C NO.4933 OF SURENDRA KR.HIRAWAT RS. 11,00,0 00/- (III) FROM A/C NO.4914 OF SUNIL KR. JAIN RS. 2,50,000 /- (IV) FROM A/C NO.4886 OF RAJENDRA KR.SURANA RS. 2,50, 000/- TOTAL RS. 26,00,000/- IT TRANSPIRED THAT ONE OR TWO DAYS PRIOR TO THE ISS UE OF CHEQUES BY THE AFORESAID FOUR PERSONS CASH DEPOSITS WERE MADE INTO THEIR BANK ACC OUNTS AND THIS CASH DEPOSITS WERE ULTIMATELY THE SOURCE OUT OF WHICH THE SHARES WERE PURCHASED BY THE AFORESAID FOUR PERSONS BY ISSUING CHEQUES. TO VERIFY THE SOURCE OF SUCH CASH DEPOSITS AND CREDITWORTHINESS OF THE AFORESAID FOUR PERSONS SUMM ONS U/S 131 OF THE ACT WERE ISSUED ON 06.03.2006 BUT THESE SUMMONS COULD NOT BE SERVED ON THOSE FOUR PERSONS AS THEY WERE NOT AVAILABLE AT THE ADDRESS GIVEN TO THE BANK AUTHORITIES. IT WAS ALSO NOTICED THAT THE PERSON WHO INTRODUCED THE AFORESAID FOUR PERSON S FOR OPENING THE BANK ACCOUNT WITH FEDERAL BANK OF INDIA, BURRABAZAR BRANCH, KOLK ATA WAS SHRI SANDIP KR. SINGH, ONE OF THE DIRECTORS OF THE COMPANY. IT IS IN THIS SCENARIO THAT PROCEEDINGS U/S 158BD OF THE ACT WERE INITIATED AGAINST THE ASSESSEE ON THE ASSUMPTION THAT THE SUM OF RS.26.00 LACS WAS ASSESSEES OWN MONEY WHICH WAS RECEIVED IN THE GARB OF SALE CONSIDERATION RECEIVED ON SALE OF SHARES. THE FURTHER CASE OF THE REVENUE WAS THAT 1% OF THE SUM OF RS.26.00 LACS WAS COMMISSION THAT WOULD HAVE BEEN P AID FOR THE PERSONS WHO ACTED AS INTERMEDIARIES IN THE TRANSACTION. 3 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 3 3. THE ABOVE-NAMED 4 PERSONS WHO PURCHASED SHARES FROM THE ASSESSEE WERE INTRODUCED TO THE BANK BY SANDEEP KR SINGHEE, DIREC TOR OF THE ASSESSEE-COMPANY WHEN THEY OPENED THEIR BANK ACCOUNT WITH FEDERAL BANK OF INDIA, BURRABAZAR BRANCH, KOLKATA. THESE FOUR PERSONS WERE PRODUCED BEFORE TH E DDIT(LNV) BY SANDEEP SINGHI DURING POST SEARCH ENQUIRIES AND THEIR DEPOSITION W AS TAKEN. BUT LATER ON, THESE PERSONS COULD NOT BE TRACED. HENCE, ACCORDING TO THE A. O. FICTITIOUS BANK ACCOUNTS WERE OPENED IN THE NAMES OF THESE PERSONS. SINCE HUGE CASH HAD TRAVELED FROM THE SAID ACCOUNTS TO THE ASSESSEE COMPANY AND THE SAME WAS USED TO PURCH ASE THE SHARES OF THE UIC GROUP OF COMPANIES, IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTIONS REMAINED DOUBTFUL, AND THEREFORE PROCEEDINGS U/S 158BD WERE INITIATED AGAINST THE ASSESSEE. ACCORDING TO THE A.O., HE HAD STRONG REASONS TO BEL IEVE THAT THE COMPANIES CONTROLLED BY RAJESH KUMAR JAJODIA AND SANDEEP KR SINGHI HAVE A ROLE IN CHANNELING THEIR OWN MONEY THROUGH THESE BANK ACCOUNTS. 4. THE ASSESSEMENT WAS COMPLETED BY THE AO U/S 158B D R.W.S. 144 OF THE ACT BY MAKING A BEST JUDGMENT AS THE ASSESSEE DID NOT PART ICIPATE IN THE ASSESSMENT PROCEEDINGS. THE AO MADE ASSESSMENT OF A SUM OF RS. 26,00,000/- AND RS.26,000/- BEING 1% COMMISSION AS UNEXPLAINED CREDITS U/S 68 O F THE ACT. 5. BEFORE CIT(A) THE ASSESSEE QUESTIONED THE VAL IDITY OF INITIATION OF PROCEEDINGS U/S 158BD OF THE ACT AGAINST THE ASSESSEE. THE CONTENTI ON OF THE ASSESSEE BEFORE CIT(A) WAS THAT U/S 158BD OF THE ACT WHERE THE ASSESSING O FFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THA N THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SECTION 132A, T HEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL B E HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED UNDER SECTION 158BC AGAINST SUCH OTHER PERS ON AND THE PROVISIONS OF THIS 4 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 4 CHAPTER SHALL APPLY ACCORDINGLY. ACCORDING TO THE ASSESSEE SECTION 158BD CAN BE INVOKED AGAINST A PERSON OTHER THAN THE SEARCHED PE RSON ONLY IF HE IS SATISFIED THAT UNDISCLOSED INCOME BELONGS TO SUCH PERSON I.E., THE PERSON OTHER THAN THE SEARCHED PERSON. THUS THE ASSESSING OFFICER CANNOT PROCEED A GAINST 'SUCH OTHER PERSON', WITHOUT HAVING THE REQUIRED SATISFACTION. THE REQUIREMENT O F SATISFACTION IS, THEREFORE, A PRE- REQUISITE CONDITION FOR INITIATING ASSESSMENT PROCE EDINGS AGAINST 'ANY OTHER PERSON', UNDER SECTION 158BD. THE WORD 'SATISFACTION' APPEAR ING IN SECTION 158BD CLEARLY DENOTES THAT IT SHOULD BE BASED UPON THE MATERIAL F OUND DURING THE COURSE OF SEARCH AND SUCH SATISFACTION SHOULD BE BROUGHT ON RECORD. IT W AS CONTENDED THAT THERE WAS NO INCRIMINATING MATERIAL FOUND AS RESULT OF SEARCH. T HE DISCOVERY OF SHARE CERTIFICATES FOUND DURING THE COURSE OF SEARCH AND BANK ACCOUNTS STANDING IN THE NAMES OF FOUR PERSONS CANNOT BE SAID TO BE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH WHICH SHOWED EXISTENCE OF ANY UNDISCLOSED INCOME BECAUSE (I) THE SHARES IN QUESTION WERE SOLD BY THE ASSESSEE MUCH PRIOR TO THE DATE OF SEAR CH, (II) THE BANK ACCOUNTS HAVE NOT BEEN FOUND PURSUANT TO SEARCH (III) THE BANK ACCOUN TS FROM WHICH CHEQUES HAVE BEEN ISSUED TO THE ASSESSEE NEITHER BELONG TO IT NOR ARE OPERATED BY IT OR ANY PERSON AUTHORIZED BY IT NOR THEY WERE DISCOVERED PURSUANT TO SEARCH. 6. IT WAS FURTHER SUBMITTED THAT SEC. 158BD OF THE ACT CONTEMPLATES THAT MATERIAL FOUND DURING THE COURSE OF SEARCH OUGHT TO BE HANDE D OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON TO PROCE ED AGAINST THE LATTER. IF THERE IS NO EVIDENCE FOUND IN THE SEARCH BELONGING TO THE ASSES SEE THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON CANNOT HAND OVER THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED, TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE. NO REFERENCE HAS BE EN MADE TO ANY DOCUMENTS FOUND DURING THE COURSE OF SEARCH EITHER BELONGING TO THE ASSESSEE OR FROM WHICH, INFERENCE CAN BE DRAWN THAT CERTAIN INCOME BELONGED TO THE AS SESSEE. SUCH HANDING OVER OF BOOKS OF ACCOUNTS AND OTHER DOCUMENTS IS A PRE-REQUISITE TO INVOKE PROCEEDINGS UNDER SECTION 5 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 5 158BD. IT WAS SUBMITTED THAT THE ASSESSMENT ORDER U/S 158BD DOES NOT ESTABLISH THAT THE DETAILS OF BANK ACCOUNTS CONSIDERED BY THE A.O ., WERE FOUND AS A RESULT OF SEARCH AND THAT THE SAME WERE HANDED OVER TO THE A.O. MOR EOVER, THE SHARE CERTIFICATES FOUND DURING THE COURSE OF SEARCH DID NOT BELONG TO THE ASSESSEE AND WERE ALSO NOT HANDED OVER TO THE A.O. HAVING JURISDICTION OVER THE ASSES SEE. HAD THERE BEEN ANY INCRIMINATING EVIDENCES, THE SAME SHOULD HAVE BEEN HANDED OVER TO THE A.O. HAVING JURISDICTION OVER THE ASSESSEE AND PLACED ON RECORD . A CONSEQUENTIAL INFERENCE WOULD BE THAT NO INCRIMINATING MATERIAL WAS FOUND WHICH COUL D BE HANDED OVER AND ON THE BASIS OF WHICH PROCEEDINGS U/S 158BD COULD HAVE BEEN INIT IATED. ACCORDING TO CHAPTER XIV B OF INCOME TAX ACT, 1961, UNDISCLOSED INCOME IS TO BE COMPUTED ON THE BASIS OF DOCUMENTS AND MATERIALS FOUND AS A RESULT OF SEARCH . ANY DOCUMENT OR MATERIAL WHICH HAS NOT BEEN FOUND DURING SEARCH AND SEIZURE OPERAT ION CANNOT FORM PART OF THE BLOCK ASSESSMENT PROCEEDING U/S 158BD IN THE INSTANT CASE THE FOLLOWING FACTS EMERGE: I. THE BANK ACCOUNTS HAVE NOT BEEN FOUND PURSUANT T O THE SEARCH AND SEIZURE OPERATION II. NO IOTA OF MATERIAL FOUND DURING THE COURSE OF SEARCH SUGGESTING UNDISCLOSED INCOME BELONGING TO THE ASSESSEE III. THE SATISFACTION RECORDED BY THE A. O. IS NOT BASED ON ANY INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH WHICH SUGGESTED P RESENCE OF UNDISCLOSED INCOME BELONGING TO THE ASSESSEE IV. BOOKS OF ACCOUNTS AND OTHER DOCUMENTS FOUND DUR ING THE COURSE OF SEARCH WERE NOT HANDED OVER TO A. O. HAVING JURISDICTION OVER THE A SSESSEE V. THE A. O. WRONGLY ASSUMED JURISDICTION U/S 158BD MERELY ON THE BASIS OF THE ABOVE SHARE CERTIFICATES WHICH DID NOT BELONG TO THE ASSE SSEE AND THE BANK ACCOUNTS WHICH WERE NOT A PART OF THE DOCUMENTS FOUND DURING THE C OURSE OF SEARCH 7. THE TWIN CONDITIONS LAID DOWN IN SECTION 158 BD HAVE NOT BEEN SATISFIED BY THE A.O. AND HENCE, THE PROCEEDINGS U/S 158BD OF THE AC T ARE WRONGLY INITIATED AGAINST THE 6 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 6 ASSESSEE. THE ACTION OF THE A.O. IN INITIATING PROC EEDINGS U/S 158BD IS THEREFORE NOT JUSTIFIED AND BAD IN LAW. 8. IT WAS ALSO CONTENDED BEFORE THE CIT(A) THAT T HE A. O. HAS HIMSELF ACCEPTED THAT THE AMOUNT OF RS. 26,00, 000/- WHICH HAS BEEN TRANSFERR ED FROM THE BANK ACCOUNTS OF THE FOUR PERSONS IS NOT THE ASSESSEE'S ACTUAL INCOME BE CAUSE THE ULTIMATE BENEFICIARY IS FINALLY THE UIC GROUP. THE ASSESSING OFFICER HAS MA DE THE ADDITION ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE AND ON SUBSTANTIVE BAS IS IN THE HANDS OF THE UIC GROUP. HAD THE A. O. BEEN FULLY SATISFIED THAT THE SAID C ASH BELONGED TO THE ASSESSEE, HE WOULD HAVE MADE THE ADDITION ON SUBSTANTIVE BASIS AND NOT PROTECTIVE BASIS. THE A.O. HIMSELF IS DOUBTFUL AND UNCERTAIN IN THIS RESPECT. ACCEPTAN CE BY THE A.O. THAT THE SAID AMOUNT IS NOT THE REAL INCOME OF THE ASSESSEE CLEARLY ESTABLI SHES THE UNCERTAINTY IN THE MIND OF THE ASSESSING OFFICER. IN VIEW OF THE ABOVE, THE PROCEE DING INITIATED BY THE A. O. U/S 158BD OF THE ACT BECOMES VOID AB INITIO AND REQUIRE S TO BE QUASHED. 9. AS REGARDS STATEMENTS OF THE FOUR PERSONS IT W AS SUBMITTED: I. COPY OF THE SAID STATEMENTS WAS NEVER MADE AVAILABLE TO THE ASSESSEE . II. EVEN OTHERWISE THE STATEMENT GIVEN BY SUCH PERSONS DOES NOT VEST THE A.O. WITH J URISDICTION AS SUCH STATEMENTS RECORDED DURING THE COURSE OF SEARCH OR DURING POST SEARCH PERIOD CANNOT BE EVIDENCE 'FOUND AS A RESULT OF SEARCH' THOUGH THE SAME MAY B E OBTAINED DURING SEARCH. IF THE A. O. RELIED UPON SUCH STATEMENT IT WAS HIS DUTY TO PR OVIDE COPY OF THE SAME AND THEN ALLOW THE APPELLANT TO CROSS-EXAMINE THE PARTIES BE FORE ANY RELIANCE CAN BE PLACED ON ANY SUCH STATEMENT. BEFORE INVOKING JURISDICTION ON THE BASIS OF SUCH STATEMENTS, IT HAS TO BE PROVED THAT THESE STATEMENTS ARE RELATABLE TO EVIDENCE FOUND AS A RESULT OF SEARCH. IN OTHER WORDS, ADDITIONS CANNOT BE MADE ON THE BAS IS OF STATEMENT UNLESS SOME CORROBORATIVE MATERIAL IS BROUGHT ON RECORD TO SUBS TANTIATE THEM. IT WAS SUBMITTED THAT ON THE BASIS OF STATEMENT OF THE 4 PERSONS THAT CA SH HAS BEEN GIVEN TO THEM BY 7 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 7 EMPLOYEES OF THE UIC GROUP ON THE INSTRUCTION OF TH E DIRECTOR OF THE ASSESSEE, ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. 10. THE ABOVE CONTENTIONS RAISED BY THE ASSESSEE BEFORE CIT(A) DID NOT FIND FAVOUR WITH THE CIT(A) AND HE HELD AS FOLLOWS :- I DO NOT FIND ANY SUBSTANCE IN THE CLAIM OF THE A /R. THE SHARES MIGHT HAVE BEEN SOLD BEFORE THE SEARCH TOOK PLACE IN UIC GROUP BUT THE EVIDENCE OF THE SAME HAVING BEEN SUBSCRIBED TO BY THE APPELLANT BEFORE T HE DATE OF SEARCH WAS FOUND DURING THE COURSE OF SEARCH IN THE UIC GROUP. SECTION 158 OF THE ACT READS AS FOLLOWS: 'UNDISCLOSED INCOME OF ANY OTHER PE RSON. 158BD . WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SE CTION 132A, THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURI SDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCE ED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY.' WHAT SECTION 158BD REQUIRES FOR INITIATION OF BLOCK -ASSESSMENT PROCEEDINGS IN CASE OF PERSON OTHER THAN THE SEARCHED PERSON IS TH AT THE AO. SHOULD BE SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO SUCH OTHER P ERSON. IN THE INSTANT CASE, EVIDENCE WAS FOUND AS A RESULT OF SEARCH THAT DURIN G THE BLOCK-PERIOD UNDER APPEAL THE APPELLANT-COMPANY HAD INVESTED IN A PART OF THE SHARE CAPITAL OF CERTAIN COMPANIES OF THE UIC GROUP, ABOUT THE SOURCES OF WH ICH THE A.O. WAS NOT SATISFIED. SINCE, THE AO. WAS NOT SATISFIED ABOUT T HE SOURCES OF THE MONEY INVESTED BY THE APPELLANT IN THE SHARES OF THE COMPANIES OF THE UIC GROUP, HE RECORDED HIS SATISFACTION THAT SUCH MONEY WAS UNDISCLOSED INCOME OF THE APPELLANT. THE A.O. INITIATED PROCEEDINGS ULS 158BD AFTER BEING SATISFI ED THAT THE AMOUNT OF MONEY INVESTED BY THE APPELLANT IN THE SHARE CAPITAL OF C OMPANIES OF THE UIE GROUP WAS THE UNEXPLAINED INCOME OF THE APPELLANT, THEREFORE, IT IS HELD THAT PROCEEDINGS ULS.158BD OF THE ACT HAD RIGHTLY AND VALIDLY BEEN I NITIATED AGAINST THE APPELLANT. THE CASE-LAWS RELIED UPON BY THE A/R IN HIS SUBMISSIONS ARE NOT APPLICABLE TO THIS CASE SINCE, THE FACTS OF THOSE CASES ARE DI STINCT AND DISTINGUISHABLE FROM THOSE OF THE INSTANT CASE. THEREFORE, GROUND NO. 1 OF THE APPEAL IS WITHOUT ANY MERITS, HENCE, THE SAME IS DISMISSED. 8 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 8 11. EVEN ON MERITS CIT(A) CONFIRMED THE PROTECTIV E ASSESSMENT MADE IN THE HANDS OF ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSE SSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 12. THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIO NAL GROUNDS OF APPEAL BEFORE THE TRIBUNAL: 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSMENT ORDER PASSED U/S. 158BD/144 OF THE ACT D ATED 30.11.2006 IS VOID AB INITIO INASMUCH AS NO SATISFACTION U/S. 153C OF THE ACT WAS RECORDED BY THE A.O. OF THE SEARCHED PERSON ABOUT ANY UNDISCLOSED INCOME OF 'OTHER PERSON', ALTHOUGH SATISFACTION WAS RECORDED IN THE ORDER PASSED U/S. 158BD, AND THE LD. C.LT.(A) ACTED ILLEGALLY IN HAVING UPHELD SUCH AN ORDER WHIC H WAS UNTENABLE IN LAW. 13. IT WAS CONTENDED BY THE AFORESAID ADDITIONA L GROUND ARISES OUT OF THE ORDER DATED 25.03.2013 OF LD. C.I.T.(A), CENTRAL-III, KOLKATA A ND IS PURELY LEGAL ISSUE NO ENQUIRY ON FACTS IS REQUIRED AS ALL THE FACTS ARE ALREADY O N RECORD. THE ASSESSEE RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF NA TIONAL THERMAL POWER CORPN. LTD., 229 ITR 383 (SC) WHEREIN IT WAS HELD THAT A PURE Q UESTION OF LAW ARISES FOR WHICH FACTS ARE ON RECORD OF THE AUTHORITIES BELOW, THE QUESTIO N SHOULD BE ALLOWED TO BE RAISED IF IT IS NECESSARY TO ASSESS THE CORRECT TAX LIABILITY. THE ASSESSEE, THEREFORE, PRAYED FOR ADMISSION OF ADDITIONAL GROUND. 14. SINCE THE ADDITIONAL GROUND OF APPEAL RAISED IS A LEGAL QUESTION WITH REGARD TO ASSUMPTION OF JURISDICTION U/S 158BD OF THE ACT THE SAME IS ADMITTED FOR ADJUDICATION. THIS TRIBUNAL HAS EARLIER ON 29.06.2016 DIRECTED TH E LD. DR TO PRODUCE THE ASSESSMENT RECORD AND SHOW THE SATISFACTION RECORDED BY THE AO OF THE PERSON WHO WAS SEARCHED U/S 158BC OF THE ACT CONSEQUENT TO WHICH THE PRESEN T PROCEEDINGS AGAINST THE ASSESSEE HAVE BEEN INITIATED. THE OPPORTUNITY WAS GRANTED FO R THE DEPARTMENT ON 01.12.2016, 09.03.2017 AND 01.05.2017. IT WAS MADE CLEAR TO THE LD. DR THAT IN THE EVENT OF NON 9 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 9 PRODUCTION OF THE RELEVANT SATISFACTION NOTE, THE TRIBUNAL WILL DRAW ADVERSE INFERENCE AGAINST THE REVENUE. THE LD. DR COULD NOT PRODUCE T HE REQUIRED SATISFACTION. 15. TODAY WHEN THE CASE WAS CALLED FOR HEARING THE LD.DR SUBMITTED THAT HE HAS PERUSED THE ASSESSMENT RECORDS AND THE RECORD DOES NOT CONTAIN THE SATISFACTION OF THE AO OF THE PERSON WHO WAS SEARCHED AND PURSUANT TO WHICH THE PRESENT PROCEEDINGS U/S 158BD OF THE ACT WERE INITIATED AGAINST THE ASSESSE E. IN THIS SCENARIO WE ARE OF THE VIEW THAT THE ASSUMPTION OF JURISDICTION U/S 158BD OF THE ACT IN THE CASE OF THE ASSESSEE HAS TO BE HELD TO BE BAD IN LAW. 16. THE HONBLE SUPREME COURT IN THE CASE OF MAN ISH MAHESHWARI VS ACIT 289 ITR 341 (SC) HAS CLEARLY HELD THAT SATISFACTION CONTEMP LATED U/S 158BD OF THE ACT SHOULD BE BASED ON THE MATERIAL FOUND IN THE COURSE OF SEA RCH AND SUCH SATISFACTION SHOULD BE BROUGHT ON RECORD. SUCH SATISFACTION MUST BE ARRIVE D AT BY THE AO OF THE PERSON WHO WAS SEARCHED U/S 132 OF THE ACT. THE AO OF THE SEA RCHED PERSON U/S 132 OF THE ACT MUST HAND OVER THE SEIZED DOCUMENTS AND OTHER ASSET S ON THE BASIS OF WHICH HE HAS RECORDED THE SATISFACTION TO THE AO HAVING JURISDIC TION OVER SUCH PERSON OTHER THAN THE SEARCHED PERSON. IT HAS ALSO BEEN HELD THAT IN THE ABSENCE OF SUCH SATISFACTION BEING SO RECORDED THE ASSESSMENT U/S 158BD OF THE ACT IS LIA BLE TO BE HELD AS BAD IN LAW. SINCE THIS MANDATORY CONDITION CONTEMPLATED U/S 158BD OF THE ACT HAS NOT BEEN COMPLIED IN THE PRESENT CASE WE ARE OF THE VIEW THAT THE VERY A SSUMPTION OF JURISDICTION AS AGAINST THE ASSESSEEE BY THE AO SHOULD BE HELD TO BE BAD I N LAW. CONSEQUENT ASSESSMENT FRAMED BY THE AO U/S 158BD OF THE ACT IS ALSO HELD TO BE BAD IN LAW AND THE SAID ORDER OF ASSESSMENT IS HEREBY ANNULLED. IN VIEW OF THE AB OVE CONCLUSION WE DO NOT WISH TO GO INTO THE OTHER ISSUES RAISED BY THE ASSESSEE IN THE OTHER GROUNDS OF APPEAL. 10 IT(SS)A.NO.70/KOL/2013 M/S. SWETA AGENTS (P)LTD. BLOCK PERIOD 01.04.1996 TO 07.05.2002 10 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 12.05.2017. SD/- SD/- [M.BALAGANESH] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12.05.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1. M/S. SWETA AGENTS (P)LTD., 133, CANNING STREET, 3 RD FLOOR, KOLKATA-700001. 2. A.C.I.T., CENTRAL CIRCLE-XXIV, KOLKATA. 3. CIT(A)-CENTRAL-III, KOLKATA 4. C.I.T. -CENTRAL-III, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES