Income Tax Appellate Tribunal - Kolkata
Balaji Trade Link(P)Ltd., Kolkata vs Assessee on 27 April, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA BENCH "A" KOLKATA
Before Shri Waseem Ahmed, Accountant Member and
Shri S.S.Viswanethra Ravi, Judicial Member
IT(SS)A No.65/Kol/2013
Block Period 01.041996 to 07.05.2002
M/s Balaji Trade (P) Ltd., V/s. ACIT, Central Circle-
133, Canning Street, 3 r d XXIV, 110,
Floor, Kolkata-700 001 Shantipally, E.M.Bye
[P AN No. AACCA 1362 Q] Pass, Kolkata-700107
अपीलाथ /Appellant .. यथ /Respondent
अपीलाथ क ओर से/By Appellant Shri S.K.Tulsiyan, Advocate
यथ क ओर से/By Respondent Shri Rajat Subhra Biswas, CIT-DR
सन
ु वाई क तार ख/Date of Hearing 30-03-2016
घोषणा क तार ख/Date of Pronouncement 27-04-2016
आदे श /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by the assessee is against the order of Commissioner of Income Tax (Appeals), Central-III, Kolkata dated 21.03.2013. Block assessment was framed by ACIT, CC-XXIV, Kolkata u/s 158BD/144 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') vide his order dated 30.11.2006 for the block period from 01.04.1996 to 07.05.2002. Grounds raised by assessee are as under:-
"1. The orders passed by the lower authorities are arbitrary, erroneous, without proper reasonings, invalid and bad in law, to the extent to which they are prejudicial to the interests of the appellant.
2. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding the validity of the proceeding initiated u/s 158BD of the Income- tax Act, 1961, in case of the appellant company, in spite of the fact that during the course of the Search proceedings at the premises of the UIC Group, no incriminating materials against the appellant company had been found.
IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 2
3.(a) On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding the addition of the sum of ₹63,30,000/- u/s 68 of the Act,, by considering the receipt of the said amount as unexplained in spite of there being ample evidences about the genuineness of the said receipt of money by the appellant.
3.(b) On the facts and in the circumstances of the case, the learned CIT(A) erred in not taking into consideration the fact that the appellant had not been provided with opportunity by the learned AO to cross-examine the depositions of four witness; and thereafter in relying on such unverified depositions."
Shri S.K.Tulsiyan, Ld. Authorized Representative appearing on behalf of assessee and Shri Rajat Subhra Biswas, Ld. Departmental Representative appearing on behalf of Revenue.
2. First we take up assessee's ground no. 2 regarding the validity of the proceedings initiated under section 158BD of the Act on the ground that there was no incriminating material found at the time of search.
2.1 Before carving out the specific issue of the appeal let us understand in brief the history of the case. There was a search and seizure operation in the corporate office of UIC group of companies on dated 7th May 2002. During search share scripts allotted in the name of various companies including assessee by UIC group were found and seized. The assessee has made investment in the form of share capital in the companies of UIC group. After search the enquiries were conducted for ascertaining the source of cash in the assessee company which was invested in the UIC group. As a result of enquiry it was revealed that the part of the share money was received by the assessee from the following 4 persons as detailed under :
S.No. Name of the person A/c No.Bank Name Amount
1. Shri Rajendra Kumar Surana, 4886 Federal Bank Burra Bazar Branch-Kolkata Rs.17,00,000/-
2. Shri Sunil Kr. Jain, 4914 Federal Bank Burra Bazar Branch-Kolkata Rs. 1,00,000/·
3. Surendra Kr. Hirawat 4933 Federal Bank Burra Bazar Branch-Kolkat Rs.29,00,000/.
4. Shri Shankarlal Godh, 4934 Federal Bank Burra Bazar Branch-Kolkata Rs.16,30,000/-
Total Rs.63,30,000/-. IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 3
The aforesaid four persons deposited substantial cash in their respective bank accounts and subsequently transferred the money to various companies including the present assessee. Finally in turn these companies and the assessee transferred the fund to the group of UIC companies. It was also revealed that Mr. Sandip Kr. Singhee, the director of the assessee company acted as introducer in the opening of the aforesaid bank accounts. The aforesaid 4 persons were produced before the DDIT (Inv) (unit III) (4) by Mr. Sandip Kr. Singhee and their depositions were taken, but later these persons could not be traced in spite summons issued under section 131 of the Act and the summons were also not served at the given addresses. Accordingly the AO could not verify identity, genuineness and credit worthiness of the parties in relation to the aforesaid shares transaction, so he initiated proceedings under section 158BD against the assessee after recording the satisfaction note which is reproduced below:-
"A search and seizure operation was conducted in the UIC Group of cases on 7/5/2002. In the course of search in the corporate office of these Group share scripts worth Rs.11,63,75,000/- issued by different companies by these Group were found. Out of these scripts it was found that a large number of shares have been allotted in the name of various companies controlled and managed by outsiders viz. Shri Rajesh. Kumar Jajodia and Shri Sandip Kumar Singhi. In the course of post search enquiry launched in connection. with ascertaining the source of the share capital contributed by these outside companies, it was gathered that a part of the funds of the following share holding companies had come from four bank accounts i.e. Account no. 4886, 4914, 4934 and 4933 maintained with Federal Bank of India, Sura Bazar Branch, Kolkata and standing in the name of Shri Rajendra Kumar Surana, Shri Surtil Kumar Jain; Shri Shankarlal Godh and Shri Surendra Kumar Hirauiai and Shri Shankarlal Godh respectively Apart from the above mentioned companies there exists some other companies (not shareholders in UIC Group of Companies) controlled by Shri Sandip Kumar Singhi which have also received money from the bank accounts of the aforesaid four persons. The names of these companies are indicated below:-
Balaji Trade Links (P) Ltd.52, Weston Street Kolkata -700012 Enquiry has further revealed that the aforesaid four persons deposited substantial cash in their four bank accounts and that these four persons are not traceable. Summons u/s. 131 of the IT Act, 1961 could not be served in their given addresses. It establishes that fictitious bank accounts were opened in the name of those name of those four persons. It was further observed that bank accounts were introduced by Shri Sandip Kumar Singhi. Since the cash IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 4 from these four accounts had traveled to the above named companies of Shri Rajesh Kumar Jajodia and Shri Saridip Kumar Sinqni, I have strong reasons to believe that the above named companies controlled by Shri Rajesh Kumar Jajodia and Shri Sandip Kumar Singhi have role in channeling their own money through these bank accounts. Under the circumstances proceedings u/s. 158BD of the I T. Act, 1961 are required to be initiated in the hands of the above named twenty companies (13 + 7 = 20) for bringing the undisclosed income of those companies into the tax net'.
In view of above the AO issued notice u/s 158BD of the Act for filing the income tax return of its total income including undisclosed income for the Block Period from 01.04.96 to 07.05.2002. In response to the notice the assessee challenged that there was no undisclosed income and requested the Department to provide the copies of books of accounts, other documents and detailed information on the basis of which notice under section 158BD of the Act has been issued. Accordingly the AO communicated the reasons for initiating proceedings u/s.158BD of the Act to the assessee vide letter No. ACIT/CC- XXIV/158BD/2006-07i46 dated 04.05.2006 which is reproduced below.
1. "A search & seizure operation was conducted in the UIC Group of cases on 07/05/02. In course of search in the corporate office of UIC Group, huge share scripts allotted in your name was found and seized. In the course of post search inquiry launched in connection with ascertaining the source of the share capital it was gathered that a part of the fund had come from 4 (four) bank accounts i.e. A/ c. No. 4886, 4914, 4933 & 4934 maintained with Federal Bank of India, Burra Bazar Branch, Kolkata and standing in the name of Shri Raiendra Kumar Surana, Shri Sunil Kr. Jain, Surrendra Kr. Hirwawat and Shri Shankarlal Godh respectively.
2. On further inquiry it was revealed that the aforesaid four persons deposited substantial cash in their respective bank accounts and these four persons were not traceable. Summons u/s. 131 of the IT. Act, 1961 could not be served in their given addresses. It establishes that fictitious bank accounts were opened in the name of those four persons.
3. Since huge cash from. these four accounts had traveled to your company which was ultimately used to purchase the shares of the UIC; Group (which were seized) and identity, genuineness as well as creditworthiness of these transactions remained doubtful, I had reasons to believe that disclosed fund of your company had traveled to the UIC Group. Accordingly, proceedings u/s. 158BD were initiated'.
Besides the above the AO also observed that on the day of the search & seizure operation conducted u/s 132 on 07/05/02 at the office premises of M/s IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 5 UIC Wires Ltd., 227 AJC Bose Road, Anandlok (1st Floor), Kolkata, 2 Lacs share certificates bearing distinctive numbers 490301 to 690300 allotted to assessee company on 12/08/2000 with a face value of Rs.10/- amounting to a total value of Rs. 20 lacs, were found and seized from its office premises. The UIC Wires Ltd. failed to explain why the shares sold to the assessee in the year 2000 were still lying at the office premises. This invoked the AO that UIC group in connivance with the assessee was channeling unaccounted cash in the form of bogus purchase/sale of shares. It was also observed that the aforesaid 4 persons from their bank accounts have transferred to the assessee bank account after depositing cash amount in their respective account just prior to one or two day before transfer.
2.2 As the aforesaid four persons were not traceable, so the genuineness of the transactions remained doubtful. Accordingly the AO issued notice to the assessee to justify the source of the above cash in the account of above said four persons. In compliance to notice the assessee submitted that the investment by the company in UIC group was made in the year 1999 to 2000 and the same was sold to the aforesaid parties in the year 1999 to 2001 which was duly recorded in the books of account. As such there is no undisclosed income and assessee requested to drop the proceedings under section 158BD of the Act. However the AO requested the assessee to provide the following details :
1. Name of companies of which shares were purchased.
2. No. of shares purchased
3. Rate at which shares were sold.
4. Total consideration.
5. Annual report of the company
6. Copy of bank a/c No. 5274 maintained in Federal Bank, Burrabazar branch for the relevant period.
7. Investment made in UIC groups either directly or through Rajesh Jajodia group companies.
IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 6
8. Nature of transactions with date, party names and amount specifically to be mentioned.
The AO also issued notice u/s 131 of the Act for the personal appearance of the director. However the above required details were not furnished but the director of the company Mr. Sandip Kumar Signhee appeared on dated 13/11/2006 and his statement was recorded under section 131 of the Act which is reproduced below :
5. Name the persons who have invested in shares of the companies of which you are director? Did these four persons namely, Shankar Lal Godh;
Surendra Kr. Hirauiat, Sunil Kr. Jam and Rajendra Kr. Surana invest in your company?
A. Various corporates and individuals etc have invested in our company. However, we have sold our investments to these four persons and received money against sale of shares which are accounted for m our books of a/cs. Money received from these four persons have been invested in buying the shares of Rajesh Jajodia group companies and the UlC Group Companies.
6. Name the companies where your companies have made investment?
A. We have made investment in various companies including Rajesh. Jajodia (Nos. 1-7) and the UIC group (Nos. B-11).
1. Target Merchandise (P) Ltd. 2. Sigma Dealcom. (P) Ltd.
3. Sunshine Consultancy 4. Neelqiri Commercial (P) Ltd.
5. Orbital Suppliers (P) Ltd. 6. Sagar Trackon (P) Ltd.
7. Nikhar Merchandise (P) Ltd. 8. UIC Wires Ltd
9. UIC Holdings (P) Ltd. 10. UIC Industries Ltd.
11. UlC Finance (P) Ltd.
7. When were these investments made and have you received share certificates from these companies?
A. We have made these investments in the Fin. Year 1999-00 & 2000-2001 and we have not yet received any share certificates.
8. What was your role in investment made in the companies owned / controlled by Mr. Rajesh Jajodia and Mr. Rajiv Jajodia?
A. Our role was that of an investor.
IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 7
12. Is it true that money received as investment in your companies from the aforesaid four persons was invested partly in the companies controlled and managed by Rajesh Jajodia and partly as direct investment in the UIC group of companies?
A. Yes, it was invested partly in the companies controlled and managed by Rajesh Jajodia and partly as direct investment in the UIC group of companies.
13. Did the companies managed and controlled by you also invest in the UIC group directly?
Yes, certain investment were made directly with the UIC Group.
Deposition of the aforesaid four persons Shri Rajendra Kumar Surana, Shri Sunil Kr. Jain, Surendra Kr. Hirawat and Shri Shankarlal Godh holding the four bank accounts were also taken and they were produced by the Director, Mr. Sandeep Kr. Singhi. Deposition recorded of the aforesaid persons by the D.D.I.T.(lnv.) are reproduced below, "2) What are your source of Income?
Surender Kr. Hirawat:- My source of income is doing small job works and share dealings. My office was at 29A, Rabindar Sarani, 4th floor Room Ni. 10 and shifted to 91, N.S. Road, Kolkaia-1, Rajendra Kr.Surana;- My source of income are dealing in shares and commission on arranging finance. My source of income is not established Shankar Lal Godh :- My source of income is dealing in shares and securities.
Sunil Kr. Join:- My source of income is dealing in finance security from my office at 91, N.S. Road, 3rd floor, Kolkata-1
3) Details of Bank acount maintained by you?
Surender Kr. Hirawat :- I have S.B. A/c No. 4933 with Federal Bank of India, Burra Bazar, Kolkata.
Rajendra Kr.Surana :- I have S.B. A/c No. 4886 with Federal Bank of India; Burra Bazar, Kolkata.
Shankar Lal Godh :- I have S.B. A/c. No. 4934 with Federal Bank of India, Burra Bazar, Kolkata.
Sunil Kr. Jain:- I have S. B. A/c. No. 4914 with Federal Bank of India, Burra Bazar, Kolkata.
4) Sources of deposits in bank accounts?
IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 8
Same answer for all:- Sources of deposits in my S.B. A/c. No. at Federal Bank, Burra Bazar branch is the cash received from various persons viz. Mohan Lal Agarwal and Mahendar Jajodia through Mr. Sandip Singhi with a direction to issue cheques in favour of companies managed by Sandip and Rajesh: 1 am a person having very low income.
5) How can you justify the source as given in reply to Q. No. 4?
Same, answer for all:- I do not have any evidence to prove that the cash amount deposited in my above bank account has been received from them However it can be seen that cheques favouring Sandip or Rajesh companies have been issued and debited on the same dates on which cash deposited. I have not even filled cash deposit slips and cheques, these were prepared by other persons and brought to me for my signature.
7) Why cash deposits in your account should not be treated as your money?
Same answer for all :- This is not my money and I am speaking the truth. It can be assessed by my financial status.
8) Why cash deposits should not be treated as unexplained and appropriate action is taken under the I T. Act, 1961 to assess the escaped income?
Same answer for all :- As stated earlier this is not my money and it is true".
However after deposition, the aforesaid four persons were not traceable in spite of the summons issued u/s 131 of the act. The AO after considering the all the facts of the case held that the purpose of the sale and purchase of shares was to convert the unaccounted money of the UIC group in accounting form and for this purpose the services of Mr. Sandip Kr. Singhee were availed. Accordingly the amount of Rs.63.30 lakhs received by the assessee company for the sale of the shares of UIC group to the aforesaid four persons was in actually the money of the UIC group. The assessee was just acting as a conduit for channelizing the money of UIC and for which it must be getting some form of commission. Therefore, the amounts in question should be rather taxed on protective basis in the hands of the assessee company and on substantive basis in the hands of the UIC Group. Hence, this amount is taxed on a protective basis in the hands of the assessee company.
4. Aggrieved assessee preferred an appeal to Ld.CIT(A) where it was submitted that as under :
IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 9
The investments of the assessee was sold to the to the above-mentioned four persons for sale consideration of Rs.63.30 lakhs which was duly received by the assessee through account payee cheques. The sale transaction was duly recorded in the books of accounts and income tax return was filed after incorporating the above details. On the date of search the share certificates were not the property of the assessee and the right of the assessee was duly relinquished thereon by way of sale much before the date of search. Accordingly, the assessee challenged the validity of the proceedings initiated u/s158BD of the Act on the ground that no incriminating material was found by the assessee during search against the assessee. The assessee paid tax on capital gain on the sale of investment in the shares of UIC group of companies. The A.O. has put reliance on the statement given by the four persons but these statements have never been made available to the assessee for cross examination. It is submitted that in absence of such cross examination by the assessee what significance can be attributed to the same.
5. Similarly the provisions of the Section 68 of the Act cannot be applied in the instant case as it applies 'Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the AO, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. But in the instant case, it is an accepted position that the above amount has been received by the assessee company through account payee cheque against sale of investment and all the disclosure were made in the income tax return.
5.1 As per the provisions of section 158BD of the Act the materials found during search should have been handed over to the AO having jurisdiction over such other person to initiate the action in terms of the aforesaid section. But in the instant case no such procedure has been followed by the IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 10 authorities. The share certificates found during the search were not handed over to the AO having jurisdiction over the assessee.
However the ld. CIT(A) after considering all the facts of the case disregarded the plea of the assessee by observing as under :
"I do not find any substance in the claim of the AIR that 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 the 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 person.
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 section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed 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 that the A.O. should be satisfied that any undisclosed income belongs to such other person. In the instant case, evidence was found as a result of search that during 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 which the A.O. was not satisfied. Since, the A.O. was not satisfied about the 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 u/s 158BD after being satisfied that the amount of money invested by the appellant in the share capital of companies of the UIC Group was the unexplained income of the appellant therefore, it is held that proceedings u/s. 158BD of the Act had rightly and validly been initiated against the appellant.
The case-laws relied upon by the AIR in his submissions and the rejoinder are not applicable to this case since, the facts of those cases are distinct and distinguishable from those of the instant case. Therefore, ground no. 1 of the appeal is without any merits, hence, the same is dismissed."
Being aggrieved by this order of Ld CIT(A) assessee came in second appeal before us.
IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 11
6. Before us Ld. AR has taken the stand that the AO has not recorded his satisfaction as required under section 158BD of the Act. He further submitted that in the instant case there is no undisclosed income of the assessee. All the transaction for the sale of shares to the aforesaid 4 persons were duly accounted for in the books of accounts and offered to tax. The proceeding under section 158BD doesn't apply as the assessee has no undisclosed income. The AO has made the addition on the basis of the statements recorded under section 132 of the Act of the aforesaid 4 persons were not made available for the purpose of cross examination. On the other hand, Ld DR vehemently supported the orders of lower authorities.
7. From the aforesaid discussion we find that the AO has initiated and completed the assessment proceedings u/s 158BD / 144 of the Act on the basis of documents found at the time of search from the place of UIC group of companies where the search was conducted. However the assessee claimed that there was no undisclosed income of the assessee and the documents which were found at the time of search were duly disclosed in the books of accounts of the assessee and the income thereon was offered to tax. The assessee before us has challenged the validity of the proceedings under section 158BD of the Act on the ground that the in the instant case the satisfaction was to be recorded by the AO of the UIC group where the search was conducted but in the case in hand the satisfaction has been recorded by the AO having jurisdiction over the assessee. In our considered view, we find lot of force in the argument made by Ld. AR before us with regard to the satisfaction recorded as per the provisions of section 158BD of the Act. In this connection, we rely in the decision of Hon'ble Gujrat High Court in the case of CIT vs Champakbhai Mohanbhai Patel [2015] 370 ITR 700 (Guj) where it was held that:-
"5. On having heard the learned counsel and on examination of the material on record, we could notice that the assessee had raised essentially the issue of assessment under section 158BO read with section 158BC for the block period from April 1, 1995, to December 19 2001, as bad in law since no satisfaction was recorded by the Assessing Officer having jurisdiction over the IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 12 non-searched person. It is to be noted that in the case of Lalitkumar Patel (supra), as also in the case of the present assessee-respondent, common reasons were recorded by the Assessing Officer for issuance of notice under section 158BD of the Act. In the case of Lalitkumar Patel, when the matter had reached this court challenging the order of the Tribunal, the same was sustained by this court, extensively dealing with the various provisions as also taking into consideration the case laws on the subject particularly relying on case of Manish Maheshwari v. Asst.CIT [2007] 289 ITR 341 (SC) - It was held that for taking recourse to the block assessment under section 158BC in relation to the person not searched, whenever search has been conducted under section 132 or the documents have been requisitioned under section 132A, the Assessing Officer of the searched person needs to record is satisfaction that undisclosed income belongs to the person other than the person with respect to whom search was carried out under section 132 of the Act. He is also required to hand as per the books of account or other documents or assets seized to the Assessing Officer having jurisdiction over such non-searched person and, thereafter, the Assessing Officer who has jurisdiction would proceed under section 1588C, against the person who has not been searched."
Further, we are also relying in the judgment of Hon'ble Supreme Court in the case of Manish Maheshwari v. ACIT And Another Indore Construction P. Ltd. v. CIT (2007) 289 ITR 341 (SC) where the Hon'ble Court has held that:-
"The condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. the said provision would apply in the case of any person in respect of whom search has been carried out under section 132A or documents or assets have been requisitioned under section 132A. section 158BD, however, provides for taking recourse to a block assessment in terms of section 158BC, in respect of any other person, the conditions precedent wherefor are; (i) satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act;
(ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person; and (iii) the Assessing Officer has proceed under section 158BC against such other person.
The conditions precedent for invoking the provisions of section 158BD, thus, are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under section132A of the Act."
Form the above, it is clear that the AO of UIC group was to record the satisfaction before initiating the proceeding under section 115BD of the Act.
IT(SSA No.65/Kol/2013 B.P. 1/4/96 to 07/05/02 M/s Balaji Trade (P) Ltd. v. ACIT CC-XXIV, Kol. Page 13
But in the instant case the AO having the jurisdiction over the assessee has recorded the satisfaction which is incorrect as per law. Taking the consistent views in the decisions of Hon'ble Supreme Court in the case of Manish Maheshwari (supra) and the judgment of Hon'ble Gujarat Hon'ble High Court in the case of Champakbhai Mohanbhai Patel (supra) we reverse the orders of Authorities Below and this ground of assessee's appeal is allowed.
8. As we have already allowed assessee's main issue u/s. 158BD of the Act in favour of assessee hence, remaining grounds of assessee do not require any adjudication.
9. In the result, assessee's appeal stands allowed.
Order pronounced in the open court 27/04/2016
Sd/- Sd/-
(S.S.Vishwanethra Ravi) (Waseem Ahmed)
(Judicial Member) (Accountant Member)
*Dkp
दनांकः- /04/2016 कोलकाता ।
आदे श क
त ल प अ े षत / Copy of Order Forwarded to:-
1.अपीलाथ /Appellant-M/s Balaji Trade (P)Ltd.,133,Canning Street,3rdFloor, Kol-01
2. यथ /Respondent-ACIT,CC-XXIV, 110, Shantipally, E.M.Bye Pass, Kolkata-107
3. संबं$धत आ यकर आ यु'त / Concerned CIT Kolkata
4. आ यकर आ यु'त- अपील / CIT (A) Kolkata
5. (वभागीय +त+न$ध, आ यकर अपील य अ$धकरण, कोलकाता / DR, ITAT, Kolkata
6. गाड- फाइल / Guard file.
By order/आ दे श से, /True Copy/ उप/सहायक पंजीकार आ यकर अपील य अ$धकरण, कोलकाता ।