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Where books of account and other documents belonging to other person, i.e., the assessee as recovered from searched party did not indicate receipt of unaccounted money by the assessee, such books and documents could not be considered as incriminating material for initiation of proceedings under section 153C against the assessee.
Shri Balaji Builders Kakinada Vs ACIT (ITAT Visakhapatnam) Merely because books of account could not be traced at the time of survey/search, it could not be presumed that the books of account were not maintained unless all the efforts were made by AO. Further As per the provisions of section 153C of the Act, it […]
While dismissing the appeal filed by the revenue the Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that assessment under Section 153C of the Income Tax Act without jurisdiction when documents seized not belonged to the assessee is invalid.
Assumption of jurisdiction over assessee under section 153C on the basis of statement of searched person, however, seized documents making no reference of either the assessee or any transaction entered into by it, was highly misplaced and, therefore, set aside.
In the present case, the fact that the entire ‘undisclosed income’ was declared by the appellant in the statement recorded during search and the same was also disclosed in the return filed pursuant to notice issued under section 153A, clearly goes to show the bona fides of the appellant, not warranting imposition of penalty under section 271 (1)(c) of the Act.
There is no dispute that the search was conducted in the previous year relevant to the assessment year under consideration therefore the provisions of Section 153C are not applicable for the assessment year under consideration however, the mention of this Section in the order is only a mistake which is covered under the provisions of Section 292BB of the Act.
Since satisfaction note was recorded by AO of searched person who also happened to be AO of assessee (other person) as well to effect that seized documents belonged to assessee, issuance of notice under section 153C on basis of such note was justified.
The purpose of initiating proceedings under Section 153C of the Act, the seized documents had to be shown to belong to the other person and not merely pertaining to such other person. The change brought about in this regard in Section 153 C of the Act by way of amendment has been given prospective effect from 1st June 2015.
Supraja’s Sandy Lane Bar & Restaurant Vs. ACIT (ITAT Visakhapatnam) As per 153C of Income Tax Act for invoking jurisdiction, there must be incriminating material found and seized during the course of search in form of money, bullion, jewellery or the evidences indicating the inflation of e expenditure or undisclosed investments or suppression of Income.etc. […]
There is, therefore, nothing to contradict the categorical finding of the ITAT that the document which formed the main basis for initiation of the proceedings under Section 153C of the Act does not belong to the Assessee. One of the principal conditions for attracting Section 153C of the Act is, therefore, not fulfilled in the present case.
