TaxTMI 
TaxTMI 
2008 (9) TMI 424
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....e operations were conducted on 18-8-2004 which concluded on 31-8-2004 in the premises of business concern and residential premises of the directors of Rajat group of cases engaged in manufacturing and sale of silver articles and jewellery as well as gold jewellery, etc. The Assessing Officer issued notices under section 153A for the assessment years under appeals and the assessee filed return of income in pursuance to the notice declaring the amount of income noted in the assessment orders. The assessee was a member of National Board of Trade (NBoT) carrying on business of forward trading. The Assessing Officer considering the material on record made the additions on merit on account of disallowance of other expenses and depreciation. The assessee challenged the initiation of the proceedings under section 153A as well as additions on merit. It was briefly submitted that neither a search was initiated nor any books of account, other documents or assets, etc., were requisitioned. Only survey was conducted in the business premises of the assessee on 182004 and some books of account were impounded. In the case of the assessee-company, no panchnama was ever drawn and further no books of....
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....x Act. Besides in Chapter 2 of such report containing name and address of group members covered under section 132, the first item reads as under: "1. M/s. Rajat Gems & Jewellers P. Ltd.; & M/s. Rajat Trade India. Com. G-35/F-138, City Centre, 576, MG Road, Indore" 4.1-2 Thus, the facts on record clearly indicate that a joint authorization was issued in the case of the appellant together with the main concern of the group 'Rajat Gems & Jewellery P. Ltd.'. It is not denied by the appellant that the address F-138, City Centre, 576, MG Road, Indore was not the official business premise of the appellant-company nor it is denied that it was not covered during search and seizure operation. The only emphasis thus placed is that no authorization and in the least no separate authorization was issued in the name of the appellant-company. It may be further stated that once search and seizure operations are carried out in various entities of the search group having common business premises it is always not necessary and possible to prepare separate panchnama as very often books of account, documents as well other valuables pertaining to various entities of the group are found from c....
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....ntre, 576, MG Road, Indore, was, therefore, subjected to search on the basis of the warrant and that panchnama was drawn in respect of both the above premises which includes the premises of the assessee. Ld. DR filed the report of Shri Hareshwar Sharma, ADIT (Investigation), Indore, in which, it was explained that warrant of authorization is issued in the name of assessee also and that panchanama was drawn in the case of the assessee but in column A of panchnama, the name of M/s. Rajat Gems & Jewelleries (P.) Ltd. is mentioned and since the name of the assessee was second in the warrant of authorization, therefore, its name was not mentioned due to oversight. It is also stated that warrant of authorization was issued and executed in the case of the assessee which was sharing the same premises with M/s. Rajat Gems & Jewelleries (P.) Ltd. Ld. DR, therefore, submitted that since warrant of authorization is issued in joint names of assessee and connected group and warrant is executed and panchnama is drawn therefore, requirements of section 153A are satisfied. Ld. DR submitted that even in the appraisal report, the name of the assessee and its premises is mentioned which is subjected t....
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....be chargeable at the rate or rates as applicable to such assessment year." Section 132 of the Act provides - "132. (1) Where the [Director General or Director] or the [Chief Commissioner or Commissioner] [or any such-[Joint Director] or [Joint Commissioner] as may be empowered in this behalf by the Board], in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax ....
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.... other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business;] (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing: [Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the area of jurisdiction of any [Chief Commissioner or Commissioner], but such [Chief Commissioner or Commissioner] has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in section [120], it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation from the [Chief Commissioner or Commissioner] having jurisdiction over such person may be prejudicial to the interests of the revenue:] [Provided further that where it is not possible or....
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....of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section. [Explanation.-For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other valuable article or thing under clause (iii) of sub-section (1).] (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. [Explanation.-For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proc....
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....authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) seized under that sub-section shall be handed over by the authorised officer to the Assessing Officer having jurisdiction over such person within a period of sixty days from the date on which the last of the authorisations for search was executed and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Assessing Officer.] (10) If a person legally entitled to the books of account or other documents seized under sub-section (1) [or sub-section (1A)] objects for any reason to the approval given by the [Chief Commissioner, Commissioner, Director General or Director] under sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents [and the Board may, after giving the applicant ....
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....ncome in accordance with provisions of Chapter XIV-B for making assessment for block period but in the block assessments, the question of assessing an undisclosed income in relation to any assessment year was restricted to the incriminating material on undisclosed assets discovered during the course of search and seizure or in the post-search inquiry the material was relatable to such evidence discovered in search. The income assessed in the regular assessments was not to be considered in the block assessments. However, in the present provisions under section 153A, there is no such provision provided in the Act. Once warrant of authorization is issued and the search is conducted and panchnama is drawn, the assessments for all the seven years including the current year have to be completed under sections 153A, 153B and 153C. Even the assessments which are completed before the date of search shall get reopened and those assessments where the proceedings are pending at the time of search shall abate. The Assessing Officer, therefore, shall assess or reassess such income for all these years. 8. The above provision, therefore, provides for reopening of the completed assessment or aba....
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....on to account for the books of account or documents, seize any such books of account or documents, money, bullion, jewellery, etc., or things found as a result of such search and may place mark of identification on any books of account or other documents or take copy thereof and to prepare inventory of the same. The purpose of section 132 for issue of warrant of authorization is to unearth, detect and to take possession of the unaccounted/undisclosed income or property. The mere issue of warrant of authorization without there being search of the premises mentioned in the warrant of authorization would be meaningless and would not serve the purpose of section. 132 of the Act. It may be illustrated by taking an example that if warrant of authorization under section 132 is issued in the name of "A" after 31-5-2003 but his premises is not searched for the purpose of executing the warrant of authorization and the warrant of authorization is kept unexecuted, the question arises whether the Assessing Officer still should proceed under section 153A of the Act for the purpose of framing the assessment or reassessment of the six assessment years immediately preceding the assessment years rel....
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.... into play only when the books of account or other documents or assets are actually received by the Assessing Officer pursuant to the requisition made under section 132A. It was held- "Held, that no search under section 132 had been conducted by the Income-tax Department. The search, if any, was conducted on June 7/8 of 2001 by the Central Excise Department. The Income-tax Department had sent a requisition on 27-3-2002 under section 132A of the Act requisitioning the books of account and other documents seized by the Central Excise Department. The record of the proceeding dated 18-4-2002 showed that the requisition was not fully executed as all the books of account and other documents had not been delivered to the requisitioning authority. The proceedings initiated under section 148 were valid. However in the proceedings for reassessment under section 148 of the Act, material or evidence relatable to the documents for which the requisition had been sent under section 132A could not be taken into consideration." 10. Considering the above provisions as noted above in the light of the provisions of section 153A of the Act, it would be clear that once the warrant of authorization....
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....e authorization could not be accepted." 12. It is, therefore, established on record that joint search warrant was issued in the name of the assessee and M/s. Rajat Gems & Jewelleries (P.) Ltd. Ld. DR also filed copy of panchnama drawn on execution of the search warrant which clearly mentioned that the premises of the assessee was subjected to search. It would, therefore, prove that search warrant is issued in the name of the assessee and search is conducted in its premises and panchnama is also drawn, therefore, requirements of section 153A are satisfied in this case. The ADIT (Inv.), Indore in his report also submitted that warrant of authorization in the case of assessee is executed which was sharing the same premises with M/s. Rajat Gems & Jewelleries (P.) Ltd. This fact is not disputed by ld. counsel for assessee. Considering the above discussion, we do not find any substance in the arguments of ld. counsel for assessee. There is no infirmity in the findings of the ld. CIT(A). We confirm his findings and dismiss this ground of appeals of the assessee in both the years. This issue is, therefore, decided against the assessee. Issue No. 2 13. On ground No. 2, assessee cha....