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November 2016

Search and seizure- Assessment of third person- Section 153C – A. Ys. 2003-04 to 2008-09- Condition precedent – Cheque book pertaining to assessee reflecting issue of cheques only document seized during search – No other evidence of undisclosed income – Proceedings u/s. 153C not valid

By K. B. Bhujle
Advocate
Reading Time 1 mins
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CIT vs. Refam Management Services P. Ltd.; 386 ITR 693 (Del)

Pursuant to a search and seizure
operation undertaken u/s. 132 of the income-tax act, 1961 in the case of a
third party, cheque books of the assessee reflecting issue of cheques were
found. Assessments were made for the assessment years 2003-04 to 2008-09 u/s.
153C of the act. Certain additions u/s. 69C and certain disallowances were
made. The CIT(a) and the tribunal deleted the additions and disallowances. In
view of such deletion assesee’s ground that assessments were illegal and
invalid were not decided.

On appeal by the revenue, the
assessee raised the ground that the assessments u/s. 153C were illegal and
invalid.

The Delhi High Court held as
under:

“The  only document seized during the search was a
cheque book pertaining to the assessee which reflected the  issue 
of  cheques  during 
the  period august  2008 to october  2008, relevant to the A. Y. 2009-10. Since there was no other evidence
of undisclosed income, the proceedings u/s. 153C were not valid.”

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