Meena Rani , New Delhi vs Assessee

ITA no. 256/Del/2013 A.Y. 2006-07 Smt. Meena Rani, Vs. ACIT CentralCircle-19, A-7, Ist Floor, South Extn., Jhandewalan, New Delhi. Part-II, New Delhi. PAN: AAWPR 6753 E

( Appellant ) ( Respondent )

Appellant by : Shri Raj Kumar CA & Shri Sumit Goel CA Respondent by : Shri Gunjan Prashad CIT(DR)

Date of hearing : 21-04-2015 Date of order : 29-04-2015.

ORDER

PER S.V. MEHROTRA, A.M:-

This appeal, by the assessee, is directed against the order dated 29-11-2012 passed by the ld. CIT(A)-XXXIII, New Delhi in appeal no. 536/10-11/183 relating to A.Y. 2006-07.

2. A search and seizure operation was carried out in RH Agro Group of cases. Notice u/s 153A read with section 153C of the Act was issued on 31- 12-2009 requiring the assessee to file return of income for assessment year under consideration. The assessee filed photo copy of the return declaring total income at Rs. 2,17,762/-. The AO completed the assessment at a total 2 ITA 256/Del/2013 Meena Rani Vs. ACIT

income of Rs. 11,69,190/- after making addition of Rs. 9,51,428/- on account of long term capital gain.

2.1. Ld. CIT(A) confirmed the AO's action dismissing the assessee's appeal. Aggrieved, the assessee is in appeal before us.

3. The assessee, inter alia, has taken following effective grounds of appeal:

"2. That assumption of jurisdiction u/s 153 cannot be had in the absence of finding any valuable or records belonging to the assessee during search on a 3rd person as envisaged u/s 153C(1), hence, the complete proceedings are illegal being without jurisdiction.

3. That in the absence of recording any satisfaction for finding any valuable or records belonging to the assessee during search on a 3rd person by the AO of searched person or otherwise, as envisaged u/s 153C(1), the complete proceedings are illegal and without jurisdiction.,

4. Ld. counsel for the assessee submitted that no satisfaction was recorded by the AO in the case of searched persons but was recorded in the case of assessee and, therefore, in view of the decision of Hon'ble Delhi High court in the case of Pepsi Foods (P) Ltd. Vs. ACIT 367 ITR 112, the entire proceedings were illegal. Ld. counsel also relied upon following decisions:

- Pepsico India Holdings (P) Ltd. Vs. ACIT (Delhi High Court order dt. 7-8-2014);

- Vijaybhai N. Chandrani Vs. ACIT 333 ITR 436 (Guj.);

- CIT Vs. Meghmani Organics Ltd. 221 Taxman 25 (Guj.) (Mag.)

- CWT ?Vs. Bishwanath Chatterjee 103 ITR 536 (SC).

- V.K. Fiscal Services (P) Ltd. Vs. DCIT (Delhi ITAT order dated 27- 11-2013);

- SSP Aviation Ltd. Vs. ADIT 70 DTR (Del.) 275;

3 ITA 256/Del/2013 Meena Rani Vs. ACIT

- DCIT Vs. DCM Shriram Industries Ltd. (ITA nos. 1648 to 1653/D/2013).

- DCIT Vs. ASP Software Solutions (P) Ltd. 84 DTR (Hyd.) (Trib.) 35 TTJ 152 (Hyd.)(Trib.) 739.

- P.Srinivas Naik Vs. ACIT 117 ITD 201 (Bang.).

5. We have considered the submissions of both the parties and have perused the record of the case. At page 41 of the PB, the satisfaction note recorded by DCIT, Central Circle,19, New Delhi is contained, which is reproduced hereunder:

"Satisfaction note for initiating proceedings u/s 153C of Income Tax Act, 1961in the case of Smt. Meena Rani, A-7, Ist Floor, South Extension-II, New Delhi.

31.12.2009: Search and seizure operation under section 132 of Income Tax Act, 1961 in Daawat Group (L.T. Foods Limited) of cases including M/s R.H. Agro Group was conducted on 10-02-2009 at the business premises and at the residential premises of the Directors. During the course of search action various documents were found and seized. While examining the seized documents of this group, I have come across with the following documents:

S.No. Premises from where Annexure Remarks seized no. & page no.

1. A-7, Ist Floor, South Annexure Form no. 32 which contains the Extension Part-II, New A-3, page particulars of appointment of Delhi. 46 Mrs. Meena Rani as Add Directors pursuant to section 303(2) of the Companies Act, 1956 in M/s Flair Furniture pvt.

Ltd.

2. A-7, Ist Floor, South Annexure A- This document contains the copy Extension Part-II, 1 Page 94 of capital account of Smt. Meena New Delhi. Rani with M/s R.S. Rice & Gen Mills, Bhikhiwind (Amritsar) 4 ITA 256/Del/2013 Meena Rani Vs. ACIT

I have gone through the above documents and from the examination of the same I am satisfied that these documents belong to Mrs Meena Rani and therefore, action u/s 153C of the Income tax Act is attracted in this case. Notices u/s 153A read with section 153C of Income Tax Act, 1961 for the assessment years 2003-04 to 2008-09 are being issued."

5.1. A perusal of the satisfaction note makes it clear that this has been recorded in the records of assessee and not in the records of the searched persons because notice u/s 153A read with section 153C was issued by the AO after examining the documents mentioned in the satisfaction note. Therefore, this satisfaction note does not meet the requirements of law. Therefore, respectfully following the decision of Hon'ble Delhi High court in the case of Pepsi Foods (P) Ltd., ground no. 3 is allowed and the assessment order is cancelled.

6. In the result, assessee's appeal is allowed.

Order pronounced in open court on 29-04-2015.

Sd/- Sd/- (H.S. SIDHU) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 29-04-2015. MP: Copy to : 1. Assessee 2. AO 3. CIT 4. CIT(A) 5. DR