TaxTMI 
TaxTMI 
2013 (1) TMI 162
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.... of the assessee regarding receipt of service charges as income from house property? (c) Whether the I.T.A.T. was correct in law in deleting disallowance of expenses with regards to earning of service charges made by the Assessing Officer by treating the service charges as income from house property? (d) Whether the I.T.A.T. was correct in law in deleting addition of Rs. 17,17,263/- on account of enhancement of Notional Annual Letting Value? (e) Whether the I.T.A.T. was correct in law in allowing the assessee to set off the loss amounting to Rs. 1,76,52,477/- on sale of shares?" 3. Before we examine as to whether any of these questions arise for consideration and/or are substantial question of law, it would be necessary to set out the facts. 4. A search under Section 132 of the said Act was conducted in respect of the Mody Group of cases. Particularly, on 22.11.1996 the premises of M/s Hindustan Development Corporation Limited which was a Mody group company was being searched. On that date books of accounts of the respondent assessee were also found and seized. The details of the seized books of accounts are as under:- "Details of seized books of accounts: 1. L....
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.... New Delhi and ADIT (Inv.) Calcutta, it has been noticed that a search operation u/s 132 of the I.T. Act was conducted in Mody Group of companies at Calcutta on 21.11.96. The search was also conducted in the office of M/s HDCL, a company of Mody Group on 21.11.96 at 15, Hansalaya, Barakhamba Road, New Delhi which in books of account of M/s Inter Continental Trading & Investment Co. Ltd. were also seized. Even the correspondence received from ADI (Inv.) Calcutta and DCIT, SI. Range-15, New Delhi is noticed that certain transactions of shares were done by the assessee M/s Intercontinental Trading & Investment Co. Ltd. In these circumstances notice u/s 158BC read with section 158BD of the I.T. Act may be issued to the assessee calling for the return in form No. 2B for the Block period asstt. Year 1987- 88 to 2.11.1996. Submitted Pl issue. Sd/- (D.C.I.T)" 7. On the same date that is on 21.01.1998 a notice under Section 158BD read with Section 158BC of the said Act was issued to the respondent/assessee. In response to the said notice, the respondent / assessee filed its return on 16.09.1998 and indicated its undisclosed income to be Nil. Thereafter, the assessment was ....
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....A(SS) 110/Delhi/2002. By an order dated 11.09.2003, the Tribunal set aside the said assessment order. The Tribunal, inter alia, held as under:- "6.1 We have also found, as it has not been disputed that all the transactions entered by the assessee, in the course of business, had been found duly recorded in its books of account maintained in the regular course establishing that any transaction entered into by the assessee had either been not recorded by it in the books of account or was meant not to be recorded. In our opinion, as such, the initiation of proceedings on the assessee, on the basis of the books of accounts maintained by it, by itself could not be held to be legal, valid and proper basis. All what we find, from the communication of the learned Assessing Officer, having jurisdiction over the Mody Group of cases, to the assessing officer having jurisdiction over the assessment of the assessee, that the books of account of the assessee found and seized have merely been forwarded to him. In our considered opinion, mere forwarding of such books of accounts by itself is insufficient to conclude that the learned Assessing Officer, having jurisdiction over the Mody Group of c....
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....son and that assessing officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly." 12. The Supreme Court considered the said provision and held as under:- "11. 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 132-A. The said provision would apply in the case of any person in respect of whom search has been carried out under Section 132 or documents or assets have been requisitioned under Section 132-A. Section 158-BD, however, provides for taking recourse to a block assessment in terms of Section 158-BC in respect of any other person, the conditions precedents 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 accounts 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 proceeded under Section 158-BC against s....