TaxTMI 
TaxTMI 
2012 (12) TMI 13
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.... in all the three appeals: AY: 1999-2000 The assessee has raised five grounds wherein grounds No.1 and 5 are general in nature and require no adjudication. The other grounds are reproduced herein below: 1. The learned AO has erred in law and on facts to pass order u/s 147 of the Act without pointing any lapses on the part of the appellant. 2. The learned CIT(A) has erred in law and on facts to upheld additions made by the learned AO for Rs.12,00,000/- under the head unexplained advances from customers. 3. The learned CIT(A) has erred in law and on facts to uphold additions made by the learned AO for Rs.10,70,592/- as unexplained credits. AY:2000-01 The assessee has raised four grounds in her appeal wherein ground No.1 is general in nature and does not survive for adjudication. Ground No.4 is related to ground No.3. Thus, the surviving two grounds are reproduced herein below: 1. The learned AO has erred in law and on facts to pass order u/s 147 of the Act without pointing any lapses on the part of the appellant. 2. The learned CIT(A) has erred in law and on facts to uphold additions made by the learned AO for Rs.3,29,410/- as unexplained credits. ....
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....available on record. The entire assessment proceedings u/s 148 of the Act was instituted aftermath of the survey action u/s 133A of the Act carried out in the business premises at Ganesh Hall, near Kasturba Hospital, Valsad on 3-1-2006. Several incriminating documents were found and impounded u/s 131(3) of the Act during the course of survey proceedings. During the course of the survey proceedings it was stated that four projects viz. Bimal Complex, Bharucha Complex, Siddhi Vinayak - A & B and Triloknath Complex were constructed. Further, it was found from the documents impounded u/s 131 (1) of the Act and from the statement of Shri Tarunbhai Mody and from the statement of his partner Shri Shivpal J. Mistry that there were several shops and flats which were accounted for in the books of accounts. In the case of Triloknath Complex in which the assessee is a partner, the returns of income have not been filed for the last five years although they were selling flats and shops year after year as per the information gathered orally. There was also a saleable land in the name of Triloknath Complex. The assessee was also a partner in the firm M/s. Anukul Builders, Valsad which had construc....
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....f material impounded during the course of survey action at the business premises of the appellant. In 3rd Para of the assessment order, the AO has made a mention that the copy of the reasons recorded was provided to the appellant and therefore, the AO has acted within the spirit of the provisions of section 147 and 148. 4.2 During the appellate proceedings, the appellant contended that there was no materials in the possession of the AO in connection with escapement of income and the AO has re-opened the assessment based on a statement of the third party and therefore, according to the AR, the notice issued u/s. 148 required to be quashed. The AR further argued that copy of the reason recorded was not issued by the AO prior to finalizing the assessment and therefore, the assessment is invalid. The AO has observed that notice u/s. 148 was issued after recording the reasons for the same and the AO had adequate material on the record in the form incriminating materials impounded during the course of survey action carried out at the business premises of the appellant. The AO did supply copy of the reasons recorded to the appellant as the AO has mentioned the facts on the face of t....
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....s section .........." Thus, it is observed that Learned Assessing Officer can assess other income which escaped assessment and which was noticed by him during the course of reassessment only along with the income which has escaped assessment for which reason to believe was formed and recorded under section 148(2) of the Act. Our above view finds support from the decision of the Hon'ble Rajasthan High Court in the case of Commissioner of Income Tax Vs. Shri Ram Singh (2008) 306 ITR 343 (Raj.). We therefore, set aside the order of the Learned Commissioner of Income Tax (Appeals) and quash the reassessment framed by the Learned Assessing Officer on 29.12.2006 in all the years under considerations. Thus, the ground of appeal of the assessee is allowed in all the years under consideration." 7. The learned AR also pointed out the decision rendered in the related case of M/s. Triloknath Corporation in ITA No.3613, 3614 and 3615/Ahd/2007 for AYs 2000-01, 2002-03 and 2003-04 wherein it was held as follows: "4. We have carefully considered arguments of both the sides and perused the material placed before us. The copy of the reasons recorded as submitted by the assessee at page no.2....
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....ening the assessment of A.Y.2000-2001 under Section 147 of the Income Tax Act. Accordingly, the notice issued for reopening of the assessment under Section 148 for A.Y.2000-2001 is quashed and consequential assessment order for A.Y.2000-2001 passed in pursuance to notice u/s.148 is also quashed." 8. Further the learned AR relied upon the decision in the case of CIT-V, Mumbai Vs Jet Airways India Ltd. of the Hon'ble Bombay High Court reported in 195 Taxman 117 (2010) wherein it was held that after insertion of Explanation (3) to section 147 by Finance (No.2) Act, 2009 with effect from 1-4-1989, section 147 has an effect that Assessing Officer has to assess or reassess income ("such income") which escaped assessment and which was basis of formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which comes to his notice during course of proceedings. Further, it was held if after issuing a notice u/s 148, he accepts contention of assessee and holds that income, of which he had initially formed a reason to believe that it had escaped assessment, has, as a matter of fact, not escaped assessment, it is not open to him t....
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.... and the flats are being sold by them year after year. However, on verification of records it is found that no returns are being filed in the case of M/s. Anukul Builders. I have, therefore, reason to believe that income chargeable to tax to the extent of the investment made in the land and building, flats and shops either in his name or in the name of somebody else whose ownership appears to be of the assessee escaped assessment and I propose to assess/reassess the income of the assessee for A. Y. 1999- 2000/2000-01." On perusing the reasons for reopening recorded by the learned AO dated 03-02-2006 as referred above, it is evident that there is no whisper of any irregularities committed by the assessee Mrs. Shardaben K. Mody. Further, no incriminating documents pointing out the assessee suppressing any materials to establish escapement of income in her hands was found during the course of survey proceedings which is evident from the reasons recorded u/s 148 of the Act. Further, it is pertinent to note that the assessee is a proprietor of (1) M/s. Ganesh Hall & Decorators and (2) M/s. Gunjan Corporation. These names also do not find place in the reasons recorded by the learne....
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....irst ground is relating to Board Circular F. No. 286/2/2003 dated 10-03-2003 and the other grounds pertaining to addition of Rs.36,00,000/- the breakup of which are as follows: (i) Income from other source on protective basis Rs.22,70,592/- (ii) (a) Furniture & fixtures at Ganesh Hall Rs.10,00,000/- (b) Sundry Creditors Rs. 3,29,408/- Rs.13,29,409/- Rs.36,00,000/- The entire addition of Rs.36,00,000/- was made due to the statement recorded u/s 133A of the Act from Shri Tarunbhai Mody, son of the assessee. From the statement it was also apparent that the assessee stood by the side of her son Shri Tarunbhai Mody for the declaration of Rs.36,00,000/- made on account of her undisclosed income. At the time of survey this declaration was made voluntarily. The learned CIT(A) also concurred with the view of the learned AO and sustained the addition. Now, the assessee is in appeal before us. 13. At the outset of the hearing, the learned AR referred to the Board Circular F. NO.286/2/2003 dated 10-03-2003 which reads as under: "Instances have come to the notice of the Board, where assessees have claimed that the....