Income Tax Appellate Tribunal - Delhi
Acit, New Delhi vs M/S Grand Venice Developers Pvt. Ltd.,, ... on 24 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'F', NEW DELHI
Before Sh. Satbeer Singh Godara, Judicial Member
&
Sh. M. Balaganesh, Accountant Member
ITA No. 5579/Del/2016 : Asstt. Year: 2012-13
ACIT, Vs M/s Grand Venice Developers Pvt.
Central Circle-2, Ltd., 28, Raja Garden,
New Delhi New Delhi
(APPELLANT) (RESPONDENT)
PAN No. AADCG3516F
Assessee by : None
Revenue by : Ms. Monika Singh, CIT-DR
Date of Hearing: 09.03.2026 Date of Pronouncement: 24.03.2026
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee's appeal for Assessment Year 2012-13, arises against the CIT(A)-2 3, New Delhi's order dated 09.08.2016 in case No. 67/15-16, in proceedings u/s 153C r.w.s . 143(3) of the Income Tax Act, 1961 (in short "the Act").
2. Case called twice. None appears at the assessee's behest.
It is accordingly procee ded ex-parte.
3. It next transpire s during the course of he aring that the learned CIT(A)'s lower appellate discussion has quashe d the impugned assessment itself dated 30.03.2015 as not sustainable in law; reading as under:
2 ITA No. 5579/Del/2016Grand Venice Developers Pvt. Ltd.
3. S h. Vik ash Jain, Advocate & AR of the asses see atte nded with Sh. Ravi K . Rampal, filed written submiss ion (WS) and othe r documents rele vant to the case. The submissions filed on be half of the appellant are repro duce d he reunder:
Legal Issues: No tice U/s 153C o f the act is illegal, bad in law and witho ut jurisdic tion
1) No documents belonging to the appellant w as fo und from the premises of searched pers on (Addl. Ground No.
8) Document found during the course of search and se izure operation we re never confronted to the appellant.
However after loo king at the material shown/give n by the AO at the time of assessment a nd assessment order, the appe llant fo und that alleged materi al did no t belonged to the assessee company.
Section 132(4A)(i) and 292C(1)( i) clearly stipulates that when, inter alia , any document is fo und in the possession or contro l of any person in the course of a search it may be presumed that such document belongs to such person. It is fo r the Assessing Office r to rebut that presumption and come to a conclusion o r "satisfac tion" that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Office r be fore he/ she arrives at the satisfaction that the seized document does not be long to the searched person but to somebody e lse.
Case Law s Relie d Upon:
(i) Pepsi Food Pvt. Ltd. vs ACIT (2014) 367 ITR 112 (Del.)
(ii) PepsiCo India Ho ldings Pvt. Ltd. vs ACIT and Anr.
(2015) 370 ITR 295 ( Del.)- The AO should not confuse the expr ession "belongs to" with the expressions "relates to" or " refe rs to".
(iii) CI T vs. Mechmen 11-C [ 2015] 60 taxmann.com 484 (MP)
2) No satisfactio n wa s recorded by the AO of searched person (Addl. Gro und No.7) In the present case alle ged satisfaction was not reco rded in the file of the searched pe rson. The satisfaction w as 3 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
recorde d in the file of Bhasin Info te ch and Infrastructure Pvt. Ltd...The AO of the searched person sho uld reco rded the s atisfaction in the file o f searched pe rson.
Case Laws
(i) DSL Properties (P) Ltd. (ITAT Delhi) 60 SOT 88
(ii) ACIT vs. Inlay Marketing (P.) Ltd. 60 taxmann.com 431 (Delhi T rib.)
(iii) CI T vs. Mechmen 11-C [ 2015] 60 taxmann.com 484 (MP)
(iv) CI T vs. Gopi Apartment [2014] 46 taxmann.com 280 (Allahabad)
(v) PCIT vs . Aak ash Arogya Mandir (P.) Ltd. [2015] ITA 509/15 (De l)
3) No incriminating material fo und during the course of search which w ill have be aring o n the total income of the assessee (A ddl. Ground No. 6) As pointed o ut abo ve all the mater ial found dur ing se ar ch does not be long to the appellant. Even no information was fo und fro m the search material disclosing unacco unted transactio n e ntered by the appellant.
(i) CI T vs Kabul Cha wla in ITA 707/2014 dec ide d on August 28, 2015:
Complete d assess ments can be interfered with by the A O while making the assessment under Section 153A o nly on the basis of some incriminating material unearthe d during the course of search or requisitio n of documents or undisclose d incom e or property disc overed in the course of search which were no t pr oduced or not already disclosed or made known in the cour se of original assessment" .
(ii) CI T v. M/s. Murli Agro Products Ltd. dated 29th October, 2010
(iii) Jai Steel (India) v. ACIT [2013] 36 Taxmann.Com 523 (Raj.)
(iv) CI T v. Continental Warehousing Co rporatio n Ltd.
374 ITR 645 (Bom )
(v) CI T vs RRJ Securities Ltd (2015) 62
Taxmann.com 391 (Del.) - No addition can be made U/s 153C if no incriminating material w as found.4 ITA No. 5579/Del/2016
Grand Venice Developers Pvt. Ltd.
4) Additio n is based on surmises and conjectures It is a settled law that any docume nt not confro nted to the assessee co uld not be used a gainst him. The AO did not confront any document used by him against the assessee in his assessment o rder .
(i) Dhirajpal Girdhari Lal v. CIT [1954] 26 ITR 726 (SC);
(ii) Dhakeshwari Cotton Mills Ltd. v . CIT [1954] 26 ITR 775 (SC);
(iii) Laichand Bha gat Ambica Ram v . C IT [1959] 37 ITR 288 (SC);
(iv) Umacharan Shaw & Bros. v. CIT [1959] 37 ITR 271 (SC);
It is prayed tha t appe llant wishes to make further submiss ions o n the othe r issues and abo ve discussed issues afte r obtaining documents from the Assessing Office r as mentioned in the le tter dated 9.02.2016. Kindly grant further time to obtain the documents.
4. I have cons idere d the submissions made and the assessment order .
4.1 In the 6th ground and the 8th additional ground the appe llant has challe nged the iss uance of no tice and initiation o f proceedings u/s 153C o f the Act eve n w hen no incrim inating document/ i nfo rmation belonging to the appe llant wa s found from the premises of the searched person at the tim e of search u/s 132 and the refo re the impugne d additio n is against the settled law that in assessment u/s 153C r.w.s. 153A no addition can be made in the absence of incriminating document. This additional ground has been take n vide their letter dt.08.02.2016 which has been forwarde d to the AO vide this office letter F.No.CIT(A)-23/ Addl. Grounds/2015- 16/324 dt. 09.02.2016. In view o f the fact that this additional ground is the legal ground go ing to the roo t of the case s ince the recording of satisfaction and very initiation of proce edings u/s 153C of the Act have been challenged, these are taken up for consideratio n and adjudic atio n first.
4.1.2 Considering the challenge to the is suance o f notice and assumption of jurisdiction u/s 153C of the Act by the AO , vide this office letter F.No.CIT(A)-23/Addl.
5 ITA No. 5579/Del/2016Grand Venice Developers Pvt. Ltd.
Grounds/2015-16/ 324 dt. 09.02.2016 the AO was ask ed to submit
(i) "send legible copies of the "satis faction" notes in the case of the "searche d" person as well as that in the case of the assessee whose appeal is under conside ra tion, by 15.02.2016.
(ii) provide copies of he seized documents and statements o f persons recorded during, or pos t, search, and which have been refer red in or utilized in the assessment orders of the assesses whose appe al is unde r conside ratio n, to the assessee, provide re asonable opportunity to the assessee and submit our remand re port by 20.04.2016."
Since the AO did not comply to the abo ve directions for three months, vide this office letter F.No.CIT(A)-23/Addl. Grounds/2015-16/ 63 dt. 10.05.2016 the AO was asked to provide the copies of do cuments as per the above le tter dt. 09.02.2016. T he letter dt. 10.05.2016 is re produced hereunder:
"Vide letter dated 09.02.2016 you were directe d to provide co py of the seized docume nt and statements of persons recorded during, or post, search, and which have been refer re d in the assessment orders of the assessee whose appeal is unde r co nside ration, to the assessee, provide reasonable o pportunity to the assessee and submit the re mand repo rt by 20.04.2016, but o n the date of hear ing o n 06.05.2016 the appellant infor med that these were not pro vided to them and inspection o f the files have bee n allo wed only towards the e nd o f the last wee k.
2. Since you have not availed o f the oppo rtunity provide d to you to give reasonable oppor tunity to the assessee a nd submit the rema nd report, you are no w direc ted to simply ensure tha t the copies o f the seize d documents e tc. as mentioned abo ve be pro vided lates t by 13.05.2016as per talk with you over te lephone on 06.05.2016 and I should be informe d accordingly."
Since the AO once again did no t comply to the abo ve direc tio ns, v ide this o ffice le tter F.No.CIT(A)-23/Addl. Grounds/2016-17/ 95 dt. 03.06.2016 the AO was o nce aga in aske d to pr ovide the copies of documents as per 6 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
the a bove lette r dt. 09.02.2016. The le tte r dt. 03.06.2016 is re produced he reunder:
"Vide abo ve le tte rs you were directed to pro vide copy of the seized do cument and state ments of perso ns recorde d during, o r post, search, and which have been referred in the assessment orders of the assessee whose a ppeal is under co nsideratio n, to the assessee. provide re asonable opportunity to the assessee and submit the remand repo rt by 20.04.2016, but, once aga in, on the date of hearing on 03.06.2016 the appe llant info rmed that the se were not pro vided to them even though I had personally talked to the then AO, Smt. Ek ta C hadda on 06.05.2016, and though inspec tio n of the files we re allowed, ultimate ly, towa rds the end o f the first week o f May 2016.
2. F urther , you w ere also directe d to submit legible copies of the "satisfaction" notes in the case of the "searc hed" per son as well as in the case the assessee whose appeal is under consideration, but you had forw arded copy of satisfaction in the case o f the assessee only, that too only for AYs 2012- 13 and 2013-14, and therefore you were directe d to forward copies of the "satisfaction" notes in the case of the "searc hed" person for all the years under conside ration as w ell as the "satisfac tion" no tes in the case the assessee whose appe al is under consideration for the AYs 2010-11 and 2011- 12, but even copies have no t been submitted.
.........
4. you are now directed to simply ensure that the copies of the seized documents e tc. as mentioned above be provided la test by 10.06.2016....."
The AO, finally , vide his letter F.No.A CIT/CC-2/2016- 17/934 dt. 13.07.2016 submitted co py of the satisfaction drawn in the case of the sea rched person (M/s Bhasin Infotec h & Infrastructure Pvt. Ltd.) and that i n the c ase of the appellant, and also pro vided copies of the satisfaction and the seized material to the appe llant. It needs to be mentio ned that the proforma in both satisfaction is the same, dt. 23.12.2014 and at co lumn- 6(v) ( the brief reason on the basis o f w hich the AO reache d to the conclusion that the re levant seized asset/pape r belongs to the other pe rson) it is mentio ned "as per Annx.- A, a nd that the Annx.-A enc losed with 7 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
both proforma are similar upto pa ra-1.5 and in the last par a o f the second proforma it is mentio ned as under:
"I am satisfied that the document viz. Annexure A-24 seized by the Search Par ty VG- 1 in the case of M/s Bhas in Infotech & Infrastructure Pvt. Ltd., the searche d person belo ngs to M/s Grand Venezia Developers Pvt. Ltd. (PAN: AA DCG3516F) and having bearing on incom e of it. S ince , I am the Assessing Office r of both the companies, acco rdingly, proceedings u/s 153C of the Act will be initiated in the case o f M/s Gr and Venezia Develo pers Pvt. Ltd."
4.1.3 The co pies of the satisfaction notes so received from the AO was forwarded to the appellant vide this office letter F.No .CIT(A)-23/2016-17/142 dt. 15.07.2016. The Ld. AR of the appellant has, vide his written submiss ion dt. 05.08.2016, submitte d as under in res pect of these two grounds:
1. Notice U/s 153C is invalid, illegal and witho ut juris dictio n w hen the seized document do no t belong to the appe llant (Ground No . 8):
It is submitted that se arch and seizure operation U/s132 of the Inco me Tax Act, 1961 was carrie d out on 18.10.2012 in M/s Bhas in I nfo tech & Infrastructure Pvt. Ltd. The case o f the appellant is centr alize d U/s127 of the Act o n 16.04.2013 and Notice U/s 153C was issued on 23.12.2014 and alle ged satisfactio n for initiation of 153C was also recorde d on the same date . The appellant company was incorporate d on 7.01.2009 and is engaged in the business of real estate development. The appe llant case was selecte d U/s 153C on the basis of a RTGS fund transfer applica tion by the M/s Venezia Golf City Pvt. Limite d to Abhijat Projects Ltd. (Enclosed). The Assessing Officer also rece ive d info rmation from Mr. Himanshu Verma (who alle gedly do ing business of providing bogus accommodation entries) that M/s Venezia Golf City Pvt. Ltd. had obtained accommodati on entries from him. Fur the r, the AO recorde d that M/s Venezia Golf city is no t involved in any bus iness activity, therefore the case of Assesse e Company is conside red for ini tiatio n of actio n U/s 153C of the Act.8 ITA No. 5579/Del/2016
Grand Venice Developers Pvt. Ltd.
Before press ing legal ground, we are re producing the Section 153C o f the Act re levant at that per iod which gives the po wer to the AO to reopen the case U/s 153C of the Ac t:
153C. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, sectio n 149, section 151 and section 153, where the Assess ing Office r is satisfie d that any money, bullion, jewelle ry or other va luable article or thing o r books of account nr documents seized or requisitione d belongs or be long to a perso n other than the person re ferre d to in section 153A, then the books of account or documents or assets se ized or r equisitioned shall be handed o ver to the Assessing Office r having jurisdiction over suc h other person [and that Assessing Office r shall procee d aga inst each such other person and issue notice and assess o r re assess the income of the other person in accordance with the pro visions of section 153A, if, that Assessing Office r is satisfied that the books of account or doc uments o r assets seized o r requis itioned have a bearing on the determination o f the to tal income of such other pe rson for the relevant assessment ye ar or years referred to in sub-section (1) of sec tion 153A] : ] The first and fo re most conditio n which is require d to be satisfied fo r assuming the jur is diction U/s 153C of the Act is that the document which is the basis for satisfaction should belong to the person other than searche d pe rson. In the present case it abso lute ly clear that the document i.e . Page 20 of A nnexure A-24 did not belong to the assessee company and in fact it didn' t even mentions the name of the assessee company. The appe llant name is no w here mentioned in the alleged document. F urther, the AO did not eve n alle ge any undisclose d transactio n entered into by the appe llant company in his satisfac tio n no te. The AO only suggest the undisc losed transaction betwee n M/s Venezia Golf City Pvt. Ltd. and entities of Himanshu Verma from s uch document. In any event the c ase o f a ppellant co uld not be reopened U/s 153C in the abse nce of any docum ent belonging to the s earched person.
In the case of Pe psi Food Pvt. Ltd. vs ACIT (2014) 367 ITR 112 (De l.) it was he ld by the Hon'ble Delhi High Court that:9 ITA No. 5579/Del/2016
Grand Venice Developers Pvt. Ltd.
"6. On a plain reading o f Section 153C, it is evide nt that the Assessing Office r of the searched perso n must be "s atisfied" that i nte r alia any document seize d o r "belo ngs to " a person othe r than the searched per son.
It is only then that the Assessing Officer of the searche d person can handove r such document to the Assessing Officer having jurisdictio n over s uch othe r person (other than the searched pers on). Furthe rmore, it is only after such handing o ver that the Assessing Office r of such other person can issue a notice to that person and assess or re-assess his income in accordance with the provisions of Section 153A. Therefore, be fore a notice under Se ction 153C can be issued two steps have to be ta ken. The first ste p is that the Assessing Officer o f the perso n w ho is searche d must ar rive at a clear satisfactio n that a document seized from him does not belong to him but to some other per son. The seco nd step is - afte r such satisfaction is ar rive d at - that the doc ument is handed ove r to the Assessing Office r of the person to whom the said document "belongs". In the present cases it has bee n urged o n behalf of the pe titioner that the first step itself has not been fulfilled. Fo r this purpose it wo uld be necessary to examine the provisio ns of presumptio ns as indicated above . Section 132(4A)(i) cle arly stipulates that when inter alia any document is found in the possession or control o f any person in the course of a search it may be presumed that such document belo ngs to such perso n. I t is similarly provided in Section 2920(1)( i). In other words , whene ver a document is found from a perso n who is being searched the normal presumption is that the s aid document belo ngs to that person. It is fo r the Assessing Office r to rebut that presumptio n and come to a conclusion o r "satisfaction" that the document in fac t belongs to somebody else . There must be some cogent ma terial a vaila ble with the Assessing Office r before he/she ar rives at the satisfac tion that the seized document does no t be long to the searched person but to som ebody else . Surmise and conjecture canno t take the place of "satisfactio n".
In the present case Assessing Officer did not re but the presumptio n that document belo ng to somebody else. Similarly in the case of Commissio ner of Income-tax vs. Mechmen 11-C [ 2015] 60 ta xmann.com 484 (Madhya Pradesh), Hon'ble M.P. High Co ur t he ld as under:
10 ITA No. 5579/Del/2016Grand Venice Developers Pvt. Ltd.
"14. Thus, as envisa ged by Section 158BD, "satis faction" of the Assessing Office r be fore he transmits the material/records to other Assess ing Office r having jurisdiction over such othe r pe rson is sine qua non. S a ns suc h satisfaction, the As sessing Office r canno t validly take recourse to the machinery provisio n.
15. We may no w turn to Section 153C. No doubt, the form of Section 153C is diss imilar to that of Section 158BD. I t is also tr ue that the two pro visions are embedde d under different chapters. For, Sectio n 153C is in Chapter XIV providing for procedure fo r assessment, whe reas Section 158BD is fo und in Cha pter XIV-B providing fo r special proce dure for assessment o f search cases. Further, Section 153C opens with non-o bstante clause . However, the non- obstante clause in Section 153C is necessitated to give power to the Assessing Officer having jur isdiction to proceed against the perso n other than the perso n referred to in Section 153A, inspite of the ac tio n unde r Section 139, 147, 148, 149, 151 and 153 o f the LT. Act. However , on closer scrutiny o f the two provisions, it is indisputa ble that, these provisions are machiner y provisio ns and have been provided for in the s tatute book fo r the purpose of car ry ing out assessment o f a person other than the searched per son under Section 132 or 132A o f the I.T . Act in relation to Sectio n 158BD; and Section 153A in relatio n to Section 153C. Notably, the purpose unde rlying bo th these provisio ns is similar, eve n though Section 153C does no t specific ally refe r to the expression " undisc losed"
income. Ho weve r, in bo th the situations, the Assessing Office r engaged in carrying on search of the assessee within his jurisdi ction, if seizes or requisitio ns the items (books o f account or other documents o r any assets fo r Section 158BD; and money, bullion, jewelle ry o r other valuable article or thing o r books of account or documents fo r Section 1530), is expecte d to hando ver those items to the Assessing Officer hav ing jurisdiction over such other perso n and thereafter the Ass essing O fficer havi ng juris dic tio n has to proceed against such othe r person within his juris dic tio n. Even for the purpose of Sectio n 1530, the Assessing Office r before handing over the items to the Assessing Office r having jurisdict ion must be "satis fied" that the items belongs or belo ng to the person other than the person refer red to in Section 11 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
153A. That sa tisfactio n of the concerne d Assessing Office r is a sine qua no n. The co nsequences flo wing from the action to be taken on the bas is of suc h info rmation handed over to the Assessing Offic er hav ing jurisdictio n, for the assessee , who is a person other than the person re ferre d to in Section 153A , is dras tic of assessment or reassessment of his inco me falling within six a ssessment years.
16. Suffice it to obse rve tha t the dissimilarity of the fo rm of two provisions would make no differe nce to the purpose underlying. The po wer bestowed o n the Assessing Officer having jur isdiction be it unde r Section 1530 or Section 158BD is identic al.
17. We are not inclined to accept the ar gument of the Department that the purpose unde rlying the two provisio ns is different. We also find that e ven the procedure is not different. T he subject matter of the actio n wo uld differ in the co nte xt of the machiner y provisio n invoked, in the give n case. That, ho wever, canno t be the basis to extricate the Assessing Officer, who reso rts to power unde r Section 153C of handing over the items r eferre d to in Section 153C to the Assessing Office r having jurisdictio n, of his duty to be satisfied abo ut the jur isdictional fact that the items belongs or belong to a pe rson other than the person referred to in Section 153A."
It is respec tfully submitted that section 153C affects the substantive rights of a person in so far as a pe rson, who has not been searche d is made to face the harsh conseque nces of reopening of six ye ar cases. This sec tion thus c annot be given a liberal interpretation s ince if it is so done, the n the proceedings unde r this sec tion can be initiate d against a person-no t-searched merely o n the ground tha t some account or even a bank statement of the person has be en found in a search actio n. If in such a case invoking of section 153C is he ld to be jus tifie d, then this section can become a re ady tool fo r reope ning six year cases on any prete xt of a person, who had so me dealing with the person-searche d. I t is further submitted that be fore invoking section 1530 there has to be so me material on reco rd to come o ut o f the presumptio n of sec. 2920 and which is possible only afte r confronting the impugne d mate rial to the person- searche d. But no such finding o f presumptio n no t being applicatio n has be en give n befo re invo king section 153C .
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The minimum requirement to justify the invok ing o f sec. 153C is that at least it should be possible to gather a satisfaction-there should be some seized record belonging to the assessee which had been fo und i n a search action. Further the same should have also be en confro nte d to the assessee . But during the assessment proceedings no seized recor d pertai ning to the assessee was confro nted to him. In view of these fac ts , it is held that the invok ing of section 153C against the assessee was bad in law. The procee dings so initiate d, the refo re, are void ab-initio and all the assessments there fore, should be declared ab-initio null and void.
2. The assessment order passe d U/s 153C is invalid, ille ga l and without jur isdiction (Ground No . 6):
The appe llant file d return of incom e on 16.02.2013 and accordingly last date o f se lecti ng the case fo r regular assessme nt was expired on 30.09.2013. Since the case of the appellant was never selected for sc rutiny through notice U/s 143(2), the re turn stands a ccepte d and procee ding are not pending. Therefore the case of the appellant could only be reopened if some incriminating material was fo und during the course of search. Notice U/s 153C was issued o n 23.12.2014 and allege d satisfaction fo r initiation of 1530 was also recorded on the same date . Ex facie, the document i.e. Page 20 of Annexure A-24 does not contain any info rmation about the appellant what to say o f incriminating material. Recently, Hon'ble High Court of Delhi (Juris dictiona l) in the case of CIT vs Kabul Chawla in ITA 707/2014 decide d on Augus t 28, 2015 held that "iv . Although Section 153 A does not say that additions should be strictly ma de on the basis o f evide nce fo und in the course o f the search, or other post-sea rch material or info rmation avail able with the AO which can be re late d to the evidence found, it does not mean that the assessment "can be arbitrary o r made without any rele vance or nexus with the se ized material. Obviously an assessment has to be made under this Sectio n only on the bas is of se ize d material."
v. I n a bsence of any incriminating material, the completed assessment can be reiterated and the 13 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
aba ted assessment or reassessment can be made. The word ' assess' in Section 153 A is relatable to aba ted proceedings (i.e . those pe nding on the date of search) and the word 'reasses s' to completed assessment pro ceedings.
vii.........
vii. Comple ted assessments can be interfered w ith by the AO w hile making the ass essment under Section 153 A only on the basis o f some incriminating materia l une arthed during the course of search or requisitio n of documents or undisc losed income or property discovere d in the course o f search which wer e not produced or not already disc losed or made known in the co urse of original assessment" .
The Delhi High Co urt relied o n the earlier decis ion in CIT v. M/s . Murli Agr o Products Ltd. date d 29th Oc tober, 2010 of the Bombay High Court in ITA No.36/2009 and the Jai S teel (India), Jodhpur v. ACIT [2013] 36 Taxmann.Com 523 (Raj .) Recently , In CIT v. Continental Warehousing Co rporation (Nhava Sheva) Ltd. [2015] 374 ITR 645 (Bom) the question addressed by the Bombay High Court was whether the scope of assessment unde r Section 153A encompasses additions , not based on any incr iminating material fo und during the course of search? It was held that no addition could be made in respect of the assessments that had become final in the event no incriminating material was fo und during se arch.
In DCIT vs. Qualitron Commodities (P.) Ltd. [2015] 54 taxmann.com 295 (Delhi - Trib.) it was held that there was no inc rimina ting material found dur ing the course of search and the assessment was not pending or abated to justify the assessment framed. Sim ilar view is taken in the following matters:
a) Sanja y Agarw al v. Dy . CIT [ITA No.3184 (De l) of 2013, dated 16- 06-20141;
b) ACIT vs. Inlay Marketing (P.) L td. [2015] 60 taxmann.com 431 (Delhi T rb.) c) Asstt. CIT v. Manoj Na rayan Agarw al [2014] 151 ITD 286
c) ACIT v. Pre adeep Kumar [IT Appe al No.4016/Del/2011 16-06-2014];14 ITA No. 5579/Del/2016
Grand Venice Developers Pvt. Ltd.
d) V.K. Fiscal Serv ices Ltd. vs DCIT ITA No. 5460- 65/Del/2012 27.11.2013 Hence addition of Rs. 30,97,19,800/ - made by the AO in the sea rch assessment in the absence of incr iminating material is illegal, bad in law and without juris dictio n.
4.1.4 The Ld. AR of the appe llant vide his submiss ions dt. 05.08.2016 submitte d copy of the same satisfaction alongwith copy o f seize d document page-20 o f Annx. A- 24/Party VG-1 seized during the search from the premises of M/s Bhasin Infotech & Infrastructure Pvt. Ltd. pro vided to the appellant by the AO vide his le tter F.No.A CIT/CC-2/2016-17/ 1019 dt. 26.07.2016 copy of whic h has been filed. On perusal o f the said page- 20 it is observed that the said page , duly certified by the AO, mentions M/s Venezia Golf City Pvt. Ltd. (VGCPL), w ritten in c apital bold le tters at the top, and is RTGS trans fer applic ation form submitted by V GCPL to the AGM , Punjab & Sind Bank, R ajouri Garde n, New Delhi- 27 fo r transfer of Rs .50.00 lakh to M/s Abhijeet Projects L td. having account w ith Canara Bank, Princep Street, Kolk ata. In this-view of the matter I am in agreement with the appe llant that the document which is the basis for satisfaction drawn by the AO that the s aid docum ent "belo ng to" the appellant company in fact does not have any relatio n to the appella nt company . The AO has not referred to any o ther seize d document in the satisfaction note or in the assessment order. Interestingly, even the assessment o rder talks about o nly VGCPL at paras-5.1 to 5.7.25 a t pages-02 to 39 and apparently these paras are copies taken from the assessment order o f M/s VGC PL , and only at the end at para- 5.7.25 it is mentione d that out of the sha re capital of R s.37,75,00,000/- rece ived by VGCPL, Rs .30,97,29,800/- was distributed/transferred by VGCPL to the appellant company and the same has been adde d to the inco me of the appellant. Obvio usl y, the said seized page "be longs to " or "rela te to" or "pertain to"
VGCPL and not to the appellant company as held in the decis ions of the Hon'ble Delhi High Court in PepsiCo India Holdings ( P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi) & Pepsi Foods Pvt. L td v ACIT [2014] 52 taxmann.com 220 (Delhi) , CIT vs RRJ Securities 62 taxmann.com 39, CIT vs Nikk i Drugs 64 taxmann.c om, 367 ITR 112, 270 CTR 467. Fo llow ing the abo ve r atio the Honorable Delhi High Co urt have uphe ld or ders of the Hon'ble ITAT in many othe r cases inc luding M/s Nageshwar Investment Ltd (Order Dt. 20.07.2015 in ITA 15 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
406/2015,407/2015,408/ 2015 & 409/2015), M/s Natural Product Bio Tech Ltd (Order Dt 14.08..2015 in ITA 569/2015, 570/ 2015, & 571/2015) and M/s Glo bal Heritage Ve nture Ltd for the AY 2008-09 (Orde r Dt. 08.07.2015 in ITA 373/2015) and the abo ve principles have been fo llo wed in many other decisions by the juris dic tio nal ITAT of De lhi - Deputy Commissione r of Income-tax v . Aak ash Arogya Mindir (P.) Ltd. [2015] 58 taxmann.com 293 (Delhi - Trib.); T anvir Collectio ns (P.) Ltd. v. Assistant Commissioner of Income Tax, Ce nt ral Circ le-21, New Delhi [2015] 54 taxmann.com 379 (Delhi
- Trib.); Deputy Commissioner of Income-tax , Central Circ le-5, New De lhi v. Qualitro n Commodities ( P.) Ltd. [2015] 54 taxmann.com 295 (De lhi - Trib.) . In Director of Income-tax (IT )- II v. Ingram Micro (India) Exports (P.) Ltd [2015] 60 ta kmann.co m 57 (Bombay) the Hon'ble Bombay High Court have also he ld that once it was found that there was nothing in assessment o rder whic h would indicate tha t Assessing O fficer arrived at satisfaction that seized mate rial perta ined to asses see, Tribunal was justified to nullify proceedings.
4.1.5 Moreover, the written o f income was e-filed by the appe llant u/s 139 of the Act on 16.02.2013 and no tice u/s 143( 2) could have been issue d by 30.09.2013 while the satis faction is dt. 23.12.2014. Therefore, in terms of the judgment of the Hon'ble De lhi High Co urt in R RJ Securities Ltd. 62 taxmann.com 39, CIT vs. Jasjit S ingh ITA No. 337 of 2015 decided on 11.08.2015 and Bhupinder Pal Singh ITA No. 772 of 2015 decided on 12.10.2015 wherein the Hon'ble High Court, following the judgment in SSP Avia tio n Ltd. v. Dy. CIT: [2012] 346 ITR 177/207 Taxma n 260/20 taxmann.com 214 (De lhi), have held that, "in SSP Aviation L td (supra) it was categoric ally held that, in the case of the other perso n, the ques tion of both pendency and abatement o f the proceedings of assessment or re assessment would be examined with refere nce to the date o f handing over the books of account or document to assessing officer having juris dic tio n over such othe r person", and in terms of the provisio ns of the Pro viso to s.153C(1) of the Act re d with second Pro viso to s.153A(1) o f the Act the assessm ent of the appellant company for the assessment ye ar under consideration stood "complete d" and re assessment could not be made 16 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
without a ny incriminating seized material relevant to the undisclose d incom e of the appe llant.
4.1.6 Under these facts and circumstances, in terms of the de cis ions o f the Hon' ble Delhi High Court in Pe psico India Holdings P. Ltd. (supra) , Pe psi Foo ds Pvt. Ltd. (supra), RRJ Securities Ltd. (supr a), as also in Kabul Chawla (supra) and other judgments cite d abo ve and also relied upon by the appellant's AR, the assessment u/s 153C r.w.s. 143( 3) of the Act canno t be sustained. Respectfully follo wing these de cisions the re assess ment order u/s 153C of the Act is accordingly quashed. These grounds are accor dingly allowed."
4. That being the case, lear ned CIT-DR vehe mently argues that the learned CIT(A) herein has erred in law a nd on fa cts in quashing the impugned assessment itself which deserves to be revived by the tribunal. We make it clear tha t the learned departmental authorities had carried out the search in iss ue on 18.10.2012 in M/s Washim Info tech and Infrastructure Pvt. Ltd.
And that all this followed centralization of the assessee's case as well as initiation of section 153C proceedings after recording the correspo nding satisfactio n and the notice issue d on 23.12.2014. We further wish to emphasize here that going by section 153C (1) 1 s t proviso, the date o f search is such an instance has to be the date of receipt of the relevant records by the jurisdictio nal Assessing Officer or the date o f satisfa ction;
as per PCIT vs. Ojjus Medicare Pvt. Ltd. (2024) 465 ITR 101 (Del.), CIT Vs. RRJ Securities Ltd. (2016) 380 ITR 0612 and 17 ITA No. 5579/Del/2016 Grand Venice Developers Pvt. Ltd.
PCIT vs. Jasjit Singh (2024) 336 CTR 634 (Delhi).
5. It is in this factual backdro p that the Revenue could hardly dispute that the impugned asse ssment year 2012-13 turns out to be an "unabated" o ne where in any addition is to be made in the assessee's hands is to be based on the specific seized material only going by PCIT vs. Abhisar Buildwell Pvt. Ltd.
(2023) 454 ITR 212 (SC). A perusal of the learned Assessing Officer's assessment discussion at page 2 in para 5 reveals that he had picked up the addition amount of Rs.30.97 (in crores) as per the assessee's balance sheet only than from the corresponding incriminating material. We thus conclude that the learned CIT(A) has rightly quashed the impugned asses sment for want of any incriminating material which stands upheld in very terms. The Revenue fails in it's instant so le substantive ground as well as in the main appeal.
6. This Revenue's appeal is dismissed.
Order Pronounced in the Open Court on 24/03/202 6.
Sd/- Sd/- (M. Balaganesh) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 24/03/2026 *Subodh Kumar, Sr. PS*