Aqua Guard Marketing Pvt. Ltd., New ... vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'A', NEW DELHI Before Sh. N. K. Saini, AM And Sh. C. M. Garg, JM ITA No. 4944/Del/2013 : Asstt. Year : 2003-04 ITA No. 4945/Del/2013 : Asstt. Year : 2004-05 ITA No. 4946/Del/2013 : Asstt. Year : 2005-06 ITA No. 4947/Del/2013 : Asstt. Year : 2006-07 ITA No. 4948/Del/2013 : Asstt. Year : 2007-08 & ITA No. 4949/Del/2013 : Asstt. Year : 2008-09 M/s Aqua Guard Marketing Pvt. Vs ACIT, Central Circel-21, Ltd., (Now Known as Sarish New Delhi Marketing Pvt. Ltd.), F-90, Jagatpuri, Gali No.-17, Post- Krishna Nagar, New Delhi-110051 (APPELLANT) (RESPONDENT) ITA No. 5424/Del/2013 : Asstt. Year : 2003-04 ITA No. 5425/Del/2013 : Asstt. Year : 2004-05 ITA No. 5426/Del/2013 : Asstt. Year : 2005-06 ITA No. 5427/Del/2013 : Asstt. Year : 2006-07 ITA No. 5428/Del/2013 : Asstt. Year : 2007-08 & ITA No. 5429/Del/2013 : Asstt. Year : 2008-09 DCIT, Central Circel-21, Vs M/s Aqua Guard Marketing Pvt. New Delhi Ltd., (Prop. Aqua Agencies), F-90, Jagatpuri, Gali No.-17, Post- Krishna Nagar, New Delhi-110051 (APPELLANT) (RESPONDENT) PAN No. AAGCA3175R Assessee by : Sh. Salil Agarwal, Adv. & Sh. Shailesh Gupta, CA Revenue by : Smt. A. Misra, CIT DR

Date of Hearing : 23.02.2015 Date of Pronouncement : 27.02.2015 2 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

ORDER

Per Bench:

These cross appeals by the assessee and the department are directed against the separate orders each dated 26.07.2013 for the assessment years 2003-04 & 2004-05 and dated 29.07.2013 for the assessment years 2005-06 to 2008-09 of ld. CIT(A)-II, New Delhi.

2. In these appeals some issues involved are common and the appeals were heard together so these are being disposed off by this consolidated order for the sake of convenience.

3. First we will deal with the appeal of the assessee in ITA No. 4944/Del/2013. Following grounds have been raised in this appeal:

"1. That on the facts and circumstances of the case and the provision of law the Ld. CIT(Appeals) has failed to appreciate that the notice issued u/s 153C and assessment order passed by the Ld. AO u/s 153C is illegal, bad in law, time barred and without jurisdiction.

2. That the Ld. CIT(Appeals) has failed to appreciate that on the facts and circumstances of the case and the provisions of the law, the proceedings initiated u/s 153C is illegal, bad in law and without jurisdiction and as such the assessment order passed in consequence thereof also becomes illegal, bad in law and without jurisdiction.

3 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

3. That the Ld. CIT(Appeals) has failed to appreciate that on the facts and circumstances of the case and the provisions of the law the assessment framed is against the statutory provisions of the act and without complying the procedures prescribed under section 153C of the act and as such the assessment being bad in law deserves to be quashed.

4. That the Ld. CIT(Appeals) has failed to appreciate that assessment framed is against the scheme of the Act whereby the reassessment in such search cases is to be confined to the additions and disallowances consequent to the material found during the course of the search and the material collected/available with the AO and relatable to such evidences and does not give power to the AO to re-appraise the already settled issues and the completed assessment.

5. That the Ld. CIT(Appeals) has failed to appreciate that impugned assessment order passed by the learned assessing officer is against the principles of natural justice and has been passed without affording reasonable opportunity of being heard.

6. That the Ld. CIT(Appeals) has failed to appreciate that on the facts and circumstances of the case, the various observations and findings of the learned assessing officer in the impugned assessment order is irrelevant and vitiated in the law.

7. That on the facts and circumstances of the case and the provision of law the Ld. CIT(Appeals) has erred in holding that the audited books notwithstanding, the book results are required to be rejected, since the 4 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

entries are artificial, sham and not reflective of actual business/commercial transactions.

8. That on the facts and circumstances of the case and the provision of law the Ld. CIT(Appeals) has erred in disregarding the purchase, the sales the expenses and the increase in share capital claimed by the appellant and directing the AO to work out the peak from the entries in the cash book and make a singular addition of the said amount as unexplained investment/expenditure.

9. That on the facts and circumstances of the case the learned assessing officer has erred in initiating the Penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961.

10. That on the facts and circumstances of the case the interest charged u/s 234A and 234B is excessive and has been wrongly and illegally charged.

11. That the Appellant craves the right to amend, append, delete any or all grounds of appeal."

4. The assessee mainly challenged validity of the assessment order passed u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as the Act). The facts related to this issue in brief are that a search operation on 20.10.2008 was conducted on Sh. B. K. Dhingra, Smt. Poonam Dhingra, M/s Madhusudan Buildcon Pvt. Ltd., M/s Mayank Traders Pvt. Ltd. and M/s Horizons Solutions Integrations Pvt. Ltd. During the 5 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

course of search on the above said persons certain incriminating documents belonging to the assessee were seized and proceedings u/s 153C r.w.s 153A of the Act were initiated. The assessee in response to the notice u/s 153C of the Act filed a return on 02.11.2010 for the assessment year under consideration declaring Nil income. However, the assessment was framed by the AO at an income of Rs. 38,96,700/- vide order dated 31.12.2010.

5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the validity of the initiation of the proceedings u/s 153C of the Act. The ld. CIT(A) did not find merit in the submissions of the assessee by observing that the recording of satisfaction was irrelevant in so far as the determination of this assessment years in respect of which assessment is to be made u/s 153A r.w.s 153C of the Act. However, on merit, the ld. CIT(A) allowed part relief.

6. Now the assessee is in appeal and the department has also filed the cross appeal. The ld. Counsel for the assessee submitted that the AO had not recorded satisfaction which is the basic requirement in initiating the proceedings in the case of searched person. He drew our attention towards page no. 23 of the assessee's compilation which is the copy of the letter 6 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

dated 10.06.2013 written to Sh. B. K. Dhingra by the DCIT, CC-17, New Delhi stating therein vide para 2 as under:

"2. From the assessment records of Sh. Bhupesh Kumar Dhingra, which is covered under section 153A, for the assessment years from 2003-04 to 2008-09 (Block period) it is noticed that there is no 'satisfaction note' available/recorded in respect of other entities."

7. It was further stated that since there was no satisfaction in the case of the searched person. The assessment framed u/s 153C of the Act in the case of the assessee was not valid. It was further stated that information under RTI Act was sought by the searched person and it was informed by the department that there was no "satisfaction note" available/recorded in respect of other entities. Our attention was drawn towards page nos. 24 to 27 of the assessee's paper book. It was further stated that the present issue is squarely covered in favour of the assessee vide order dated 16.01.2015 of ITAT Delhi Bench 'H', New Delhi in ITA No. 2421/Del/2014 for the assessment year 2003-04 in the case of M/s Tanvir Collections Pvt. Ltd. Vs ACIT, CC-21, New Delhi (copy of the same is placed at page nos. 296 to 314 of the assessee's paper book).

7 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

8. The reliance was also placed on the following case laws:

Ø CIT Vs Manju Finance Corporation, ITA No. 339/2002 order dated 26.11.2014 of Hon'ble Delhi High Court Ø Shettys Pharmaceuticals & Biologicals Ltd. Vs DCIT, ITA Nos. 930 & 931/Del/2013 order dated 28.05.2014 of ITAT Hyderabad Bench 'B', Hyderabad Ø ACIT Vs Inlay Marketing Pvt. Ltd., ITA Nos.4200 to 4202/Del/2012 order dated 14.11.2014 of ITAT Delhi Bench 'C', New Delhi Ø DCIT Vs Aakash Arogya Mandir Pvt. Ltd., ITA Nos. 5437 to 5442/Del/2013 order dated 28.11.2014 of ITAT Delhi Bench 'A', New Delhi Ø Pepsico India Holdings (P.) Ltd. Vs ACIT, (2014) 50 Taxmann.com 299 (Del.) Ø DCIT Vs Devi Dayal Petrochemicals Pvt. Ltd., ITA Nos. 5430 to 5436/Del/2013 order dated 10.09.2014 of ITAT Delhi Bench 'B', New Delhi Ø Trishul Hi-Tech Industries Vs DCIT, IT(SS)A Nos. 82, 84 to 86/Kol/2011 order dated 24.09.2014 of ITAT Kolkata Bench 'A', Kolkata Ø DCIT Vs Kurele Paper Mills Pvt. Ltd., ITA No. 3761/Del/2011 order dated 14.11.2014 of ITAT Delhi Bench 'D', New Delhi Ø CIT Vs Bharati Vidyapeeth Foundation, ITA Nos. 36, 37 & 39 of 2012 order dated 10.06.2014 of Hon'ble Bombay High Court Ø Dr. D. Y. Patil Pratishtan Vs DCIT, ITA Nos. 1587 to 1611/PN/2011 order dated 07.09.2012 of ITAT Pune Bench 'B', Pune Ø Natural Products Bio Tech Ltd. Vs DCIT, ITA Nos.

3086 to 3089/Del/2013 order dated 28.11.2014 of ITAT Delhi Bench 'E', New Delhi 8 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

Ø Nageshwar Investment Ltd. Vs DCIT, ITA Nos. 5393 to 5396/Del/2012 of ITAT Delhi Bench 'E', New Delhi Ø Global Heritage Venture Ltd. Vs DCIT, ITA No. 3196/Del/2013 order dated 26.12.2014 of ITAT Delhi 'C', New Delhi Ø CIT Vs DSL Properties Pvt. Ltd., ITA 585/2013 order dated 05.12.2014 of Hon'ble Delhi High Court Ø Sanjay Agarwal Vs DCIT, ITA No. 3184/Del/2013 order dated 16.06.2014 of ITAT Delhi Bench 'G', New Delhi Ø Tanvir Collections Pvt. Ltd. Vs ACIT, ITA No. 2421/Del/2014 order dated 16.01.2015 of ITAT Delhi Bench 'H', New Delhi Ø Sh. Bhupinder Pal Singh Sarna Vs ACIT, ITA Nos. 3037 & 3695/Del/2013 order dated 06.01.2015 of ITAT Delhi Bench 'A', New Delhi

9. In her rival submissions the ld. CIT DR supported the impugned order passed by the ld. CIT(A) and further submitted that the basic requirement for assuming jurisdiction u/s 153C of the Act is that the AO should be satisfied, however, it has no where been prescribed that the AO should record his satisfaction in writing or the manner in which the satisfaction is to be recorded. It was further stated that in the information supplied under RTI Act, it was only stated that the satisfaction note was not available in the file of the searched person but this reply did not demonstrate that no satisfaction was recorded by the AO of the searched person. It was further 9 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

stated that the cases relied by the ld. Counsel for the assessee are distinguishable on facts.

10. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that an identical issue having similar facts was a subject matter of the adjudication by the ITAT Delhi Bench 'H', New Delhi in the case of M/s Tanvir Collections Pvt. Ltd., Indira Park, Palam Colony, New Delhi Vs ACIT, CC-21, New Delhi in ITA No. 2421/Del/2014 (supra), in the said case also the proceedings u/s 153C of the Act were initiated on the basis of incriminating documents found during the course of search conducted on 20.10.2008 in the case of Sh. B. K. Dhingra, Smt. Poonam Dhingra etc. (supra), in assessee's case also the proceedings u/s 153C r.w.s 153A of the Act were initiated on the basis of certain incriminating documents found during the course of aforesaid search conducted on 20.10.2008. Therefore, the facts are similar in assessee's case vis-à-vis the case of M/s Tanvir Collections Pvt. Ltd. In the said case the issue has been decided in favour of the assessee and the relevant discussion and findings have been given in paras 12 to 27 of the order dated 16.01.2015 which are reproduced as under:

10 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

"12. Let us examine the facts of the instant case more elaborately. It is seen that some satisfaction was recorded, a copy of which is available on page 4 of the paper book, as under :-

"Satisfaction Note for issuing Notice u/s 153C of the I.T. Act, 1961 in the case of M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar Park, New Delhi, PAN: AACCT6679D for A.Y. 2003-04 to 2008-09.

08.09.2010 In the case of Sh. B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., search & seizure took place u/s 132 on 20.10.2008. The undersigned is the jurisdictional AO of this case. During the course of search & seizure documents/papers at pages 101 to 132 of Annexure A-30, Page 144 of Annexure 7 and pages 33 to 48 of Annexure 22 seized by Party R-2, are found to belong to M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar park, New Delhi. I have examined the above mentioned documents/papers and provision of section 153C is invokeable in this case. As the undersigned is also the jurisdictional AO of M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar Park, New Delhi. This satisfaction note is recorded and is placed in the file before issuing notice u/s 153C.

ACIT, Central Circle - 17, New Delhi"

11 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

13. It can be seen from the assessment order that notice u/s 153C was issued to the assessee by the ACIT, Central Circle-17 on 08.09.2010, being the same date on which the above satisfaction was recorded. It is apparent that it was : ' Satisfaction Note for issuing Notice u/s 153C of the I.T. Act, 1961 in the case of M/s Tanveer Collection Pvt. Ltd.' It is further noticeable from the above that : 'This satisfaction note is recorded and is placed in the file before issuing notice u/s 153C.' The contents of the above satisfaction note leave nothing to doubt that it was recorded by the AO of the assessee before taking up the assessment u/s 153C of the Act pursuant to the search conducted on Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd. Pages 5-7 of the paper book are the copies of the reply furnished by the Dy. Commissioner of Income-tax, Central Circle-17, New Delhi to Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., under the provisions of RTI Act, 2005. The relevant part of the reply dated 10.6.2013 given to Sh. B.K. Dhingra, is as under:-

"2. From the assessment records of Sh. Bhupesh Kumar Dhingra, which is covered under section 153A, for the Asst. years from 2003-04 to 2008-09 (Block period) it is noticed that there is no 'satisfaction note' available/recorded in respect of other entities."

14. Similar replies have been given to Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd. On a consideration of the above replies given by the Department to the persons searched, it is manifest that there is 'no satisfaction note available/recorded in respect of other entities'. On a conjoint reading of the Satisfaction note and replies given by the Department to the persons searched under the RTI Act, it clearly emerges that no satisfaction was recorded by the AO in the cases of the persons searched u/s 132(1) of the Act (i.e. Shri 12 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd.) that some books of account or documents etc. belonging to the assessee were found which were handed over to the AO of the 'other person' (i.e. the assessee). The Satisfaction note as reproduced above has been prepared by the AO of the assessee.

15. The ld. DR vehemently accentuated on the point that since the AO of the persons searched and the assessee is same, it does not make any difference whether the satisfaction is recorded in the case of the persons searched or other person. She emphasized on the factum of recording satisfaction by the AO, which condition in her opinion stood satisfied, by virtue of it having been recorded by the common AO.

16. In our considered opinion, this contention advanced on behalf of the Revenue is devoid of merit. We fail to comprehend as to how the requirement of recording satisfaction by the AO of the person searched provided by the statute can be substituted with anything else. There is an underlying rationale in providing for recording of such satisfaction by the AO of the person searched. As the money, bullion, jewellery, books of account or documents etc. always come to the possession of the AO of the person searched who has to frame assessment, it is only he who can find out that which of such documents etc. do not belong to the person searched and are relevant for the assessment of the other person. It is not as if all the books of account and documents etc. found during the course of a search are evaluated by a separate authority to figure out that which of these documents belong to the person searched and to the others and thus handed over to the concerned AOs of the person searched and others for making assessment. As it is only the AO of the person searched who can reach a conclusion that some of the documents etc. do not belong to the person searched but to some other person, the legislature has provided for recording of such satisfaction by the AO of the person 13 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

searched. It is not permissible under the law to require the AO of the other person to record such satisfaction by the AO.

17. As regards the other argument of the ld. DR that since the AO of both the persons searched and the assessee is the same person, hence the requirement of recording satisfaction by the AO of the persons searched should be deemed to have been fulfilled with the recording of satisfaction by the AO of the assessee. We are again unable to appreciate this contention that the commonness of the AO would make no difference in so far as the recording of satisfaction in the case of the persons searched is concerned. What is relevant for this purpose is not the identity of the person assessing but his position and the capacity. When the law requires the AO of the person searched to record the necessary satisfaction, it is the AO having jurisdiction over the person searched who is obliged to record such satisfaction in the capacity of that AO and that too in the case of the person searched. The mere fact that the AO of the person searched and the assessee is the same person, does not, in any manner, obliterate the requirement of law necessitating the recording of satisfaction in the case of the person searched that money, bullion, jewellery, etc., found from the person searched belongs to the 'other person.' What is crucial to note is capacity of the AO and not his identity. In view of the fact that when the statutory stipulation is for recording the satisfaction by the AO of the person searched, then, it cannot be substituted with the satisfaction of the AO of the 'other person.' This contention also fails.

18. At this stage, it is relevant to note that the legislature has substituted the latter part of section 153C(1) by the Finance (No.2) Act, 2014 w.e.f. 1.10.2014. The hitherto part of sub- section (1) : "and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess 14 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

the income of the other person .........referred to in sub-section (1) of section 153A.' has been substituted as under : -

'and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section.'

19. The above substitution has the effect of now making it mandatory for the AO of the 'other person' also to record satisfaction that the books of account or documents, etc., have a bearing on the determination of the total income of such 'other person' before embarking upon the exercise of his assessment or reassessment. Therefore, now under the law, w.e.f. 1.10.2014 it has become obligatory not only for the AO of the person searched to record satisfaction before handing over books of account or documents, etc., to the AO of the 'other person', but, such AO of the 'other person' is also required to record satisfaction that the books of account or documents, etc. have a bearing on the determination of the total income of such other person. In the pre-substitution era of the relevant part of sub-section (1) of section 153C covering the period under consideration, the jurisdictional condition remains that the satisfaction is required to be recorded by and in the case of the person searched so as to enable the AO of the 'other person' to start with the proceedings for making assessment or reassessment.

20. The ld. DR contended that recording of satisfaction by the AO of the assessee at the most can be treated as a technical 15 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

mistake and hence should not eclipse the assessment. Relying on certain judgments, the ld. DR submitted that the technicalities cannot be allowed to prevail in the course of indulgence of justice.

21. We agree in principle that technicalities cannot come in the way of dispensation of justice. However, it is important to note that the lack of jurisdiction by the AO cannot be put under the carpet in the guise of a technical defect. It goes without saying that no assessment or other proceedings can be lawfully taken up and completed unless the concerned authority has jurisdiction to do so. Lack of jurisdiction goes to the very root of the matter and cuts the tree of assessment if the foundation of jurisdiction is missing.

22. The ld. AR has brought to our notice two orders passed by the Delhi Benches of the Tribunal, namely, ACIT vs. Inlay Marketing Pvt. Ltd. (ITA No.4200/Del/2012), etc. and DCIT vs. Aakash Arogya Mandir Pvt. Ltd. (ITA No.5437/Del/2013), etc., in which the notices and the consequential assessments u/s 153C, under identical circumstances, have been quashed. The ld. DR contended that the above referred two Tribunal orders are per incurium and should not be followed. The main reason for declaring the tribunal orders as per incurium was the non- consideration of the judgment of the Hon'ble jurisdictional High Court in judgment in the case of SSP Aviation Ltd. VS. DCIT (2012) 252 CTR (Del) 291.

23. Let us examine the case of SSP Aviation Ltd. (supra) for evaluating the contention that the instant assessment be declared as per law. The Hon'ble High Court in that case has held that the Assessing Officer having jurisdiction over the searched person should be satisfied that the valuable article or books of account or documents seized during the search belong to a person other than the searched person and there is no 16 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

requirement in section 153C(1) that the Assessing Officer should also be satisfied that such valuable articles or books of account or documents belonging to the other person must conclusively reflect or disclose any undisclosed income. We find that there is no such controversy before us as was there before the Hon'ble High Court. It is not the case of the assessee before us in this ground that the documents etc. found from the persons searched did not positively indicate the existence of some income in the hands of the assessee. The argument is simply confined to non-recording of satisfaction by the AO of the persons searched. Instead of supporting the Department's case, we find that this judgment strengthens the assesasee's case by making it clear in no uncertain terms that the AO of the person searched is obliged to record the satisfaction. The relevant observations of the Hon'ble High Court contained in para 15 merit reproduction as under: -

'It needs to be appreciated that the satisfaction that is required to be reached by the Assessing Officer having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other than the searched person. There is no requirement in Section 153C(1) that the Assessing Officer should also be satisfied that such valuable articles or books of account or documents belonging to the other person must be shown to show to conclusively reflect or disclose any undisclosed income.'

24. It is pretty clear from the above extraction that the satisfaction as referred to it in this case is that of the Assessing Officer having jurisdiction over the searched person. As such, we are of the considered opinion that this judgment does not support the Revenue's case. Resultantly, the characterization of the above Tribunal orders as per incurium by the ld. DR, is absolutely without any legally sustainable basis.

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25. Even otherwise, the judicial discipline requires a subsequent bench to the follow an earlier order of a co- ordinate bench on the point. It is only if the subsequent bench feels itself unable to concur with the view taken earlier that it is required to refer the case for consideration by a special bench. In our considered opinion, these two orders of the co-ordinate benches are perfectly in accordance with law.

26. Coming back to facts of the instant case, it is palpable that the AO of Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., did not record any satisfaction that some money, bullion, jewellery or books of accounts or other documents found from these persons belonged to the assessee. The absence of such satisfaction, in our considered opinion, failed to confer any valid and lawful jurisdiction on the AO of the assessee to proceed with the matter of the assessment u/s 153C of the Act. We, ergo, set aside the initiation and the ensuing assessment on the assessee as void ab initio.

27. The reliance of the ld. DR on some decisions on other legal issues or merits is of no consequence in view of the lack of jurisdiction of the AO to proceed with the assessments u/s 153C of the Act. In view of our decision on the first legal issue, there is no need to espouse the other grounds taken by the assessee dealing with other legal issues or merits."

11. Since the facts of the present case are identical to the facts involved in the case of M/s Tanvir Collections Pvt. Ltd. Vs ACIT. So, respectfully following the aforesaid referred to order dated 16.01.2015 in ITA No. 2421/Del/2014 for the assessment year 2003-04, the legal issue is decided in favour 18 ITA Nos. 4944 to 4949 & 5424 to 5429/Del/2013 Aqua Marketing Pvt. Ltd.

of the assessee and accordingly, it is held that the initiations of the proceedings u/s 153C of the Act are set aside on the ensuing assessment on the assessee is void ab initio. Therefore, there is no need to adjudicate the other issues agitated on merit by the assessee in this appeal and the department in its appeal i.e. ITA No. 5424/Del/2013. For the remaining assessment years i.e. the assessment years 2004-05 to 2008-09, the facts are similar and even the rival contention were the same, therefore, our findings given in the former part of this order shall apply mutatis mutandis for these years.

12. In the result, appeals of the assessee are allowed and that of the department are dismissed.

(Order pronounced in the open Court on 27/02/2015).

Sd/- Sd/- (C. M. Garg) (N. K. Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/02/2015 *Subodh*

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR