TaxTMI 
TaxTMI 
2013 (1) TMI 213
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....ian Bank, T. Nagar, Madras (locker No.663) and another locker with Karur Vysya Bank, Madras (Locker No.200) were also searched, thus resulting in seizure of cash, jewellery, shares and investments. Based on the seized materials, notice under Section 158BC was issued. After giving an opportunity to the assessee, the assessment was completed. 3. Aggrieved by this, the assessee went on appeal before the Income Tax Appellate Tribunal. The assessee raised an issue regarding the jurisdiction to make assessment under Section 158BC, contending that there was no search warrant shown in the assessee's name to result in a block assessment. As far as this contention is concerned, the Tribunal held that on a perusal of the search warrant, it was clear that the warrant of authorisation was in the name of the assessee. Based on the search material, the assessment was taken up under Chapter XIVB. Thus, the Tribunal rejected the assessee's contention that there was no search warrant in the name of the assessee, as without any basis. 4. As regards the merits of assessment, the assessee challenged the value of the demolished material taken at Rs.50,000/- as against the value of Rs....
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....rder of the Tribunal and that of the Assessing Officer, that during the course of search proceedings, the Authorised Officer found the share certificates in the name of the assessee, his wife and other relatives in M/s. Talent Alloys (P) Ltd. and M/s. Talent Steel Industries Pvt. Ltd. These share certificates were found from Locker No.663, maintained with the Indian Bank, Chennai, in the name of the assessee. The assessee contended that the allotment of the shares in the name of the assessee and his family members were in consideration of certain property belonging to the mother and sister-in-law of the assessee being provided as under collateral security to the said companies, so as to enable them to obtain bank finance. In the circumstances, the assessee had not invested any money on the shares allotted to him or to his family members. 9. The assessee made an alternative submission that there was no case for making addition at the hands of the assessee in respect of the shares standing in the name of the family members. The assessee took the plea that there were no materials to show that the shares held in the name of his family members were in the nature of benami hold....
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.... M/s. Anchor Breweries Limited, a folder containing the original documents of the property at Arcot Road, Madras owned by M/s. Anchor Breweries Limited, application of the assessee in Form No.29 to the Registrar of Companies, giving consent to act as Director of M/s. Anchor Breweries Limited, were found and seized. The register of transfer of shares clearly indicated that the assessee had acquired 300 shares from one V.R. Venkatachalam and 330 shares from Mrs. Radha Venkatachalam on 21.12.1995. His sister Alamelu acquired 330 shares from R. Kamalam, wife of N.P.V. Ramaswamy Udayar and another set of 330 shares from S. Arundhathi, wife of K. Shanmugam on 21.12.1995. The share transfer register also showed that the assessee's brother-in-law Srinivasan acquired 360 shares on 21.12.1995 from N.P.V. Ramaswamy Udayar and also from A.S. Thillainayagam to the extent of 330 shares on the same date. Mrs. Jamuna, on 21.02.1995, had acquired 330 shares each from C. Padma and also T. Amutha. Mrs. V. Manjula, his brother's wife, had acquired 330 shares from R. Andal on 21.12.1995. Thus, 3000 shares, for which forms were issued, were acquired by the members of the assessee's family. Even though t....
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....stances, the Tribunal viewed that while valuing the shares of M/s. Anchor Breweries Ltd., valuation by referring to the assets would be the justifiable method. Thus, the break-up value method was considered as the first method for computing the value of the shares. It is seen that M/s.Anchor Breweries Ltd. owned a property in Arcot Road. The value was declared by the company in the balance sheet as on 31.03.1991 as Rs.90,738/-. The Valuation Officer, however, arrived at the value at Rs.298/- per sq.ft. on an area of 2 acres 90 cents at Rs.3,76,44,552/-. Taking note of the sale of 1.25 acres, he arrived at the value at Rs.2,19,20,801/-. Deducting the liability, the value of each share was taken at Rs.6,732/-. In the circumstances, the Tribunal confirmed this value and accordingly, the assessee's case was rejected. Thus, on the investments, the case of M/s. Talent Alloys (P) Ltd., M/s. Talent Steel Industries Pvt. Ltd. and M/s. Anchor Breweries Ltd., the Tribunal upheld the order of assessment, both on the question of assessment to be assessed at the hands of the assessee as well as the valuation thereto by the assessee. Aggrieved by this, the assessee is on appeal before this Cou....
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....ng Officer, Chennai, addressed a letter to the Assistant Commissioner of Income Tax, Coimbatore, forwarding the files of the assessee and R.Venkatakrishnan relating to the assessment year 1996-97. On despatch of the said file, under notice dated 01.08.1996, the Assistant Commissioner of Income Tax, Coimbatore, called upon the assessee to file the return of income in the prescribed form within ten days from the date of service of notice dated 01.08.1996. Admittedly, the assessee addressed a letter dated 07.10.1996. Seeking time to file the return, the assessee also prayed for transfer of file to Madras, since the business activities were based at Madras. 17. With reference to the request of the assessee for retransfer to Chennai, on 11.10.1996, the Assistant Commissioner of Income Tax, Coimbatore, replied to the assessee, directing him to approach the Commissioner of Income Tax Central-I, Madras-34 and called upon the assessee to file the return. On 29.12.1996, the assessee once again wrote a letter to the Assistant Commissioner of Income Tax, Central Circle-I, Coimbatore, reporting filing of the return and as to the discharge of the liability of tax, the assessee agreed t....
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.... given as collateral security to M/s.Talent Alloys (P) Ltd. and M/s.Talent Steel Industries Pvt. Ltd., for the purpose of enabling the said companies to obtain finance from the Bank. However, the fact, as had been stated in the order of the Tribunal, is that the shares were allotted only in consideration of a collateral security furnished by the assessee's relatives, in which event, the allotment has to have some relevance to the extent of value of the security furnished, to enable these two companies to have financial accommodation from the Bank. In the circumstances, we do not find any justifiable ground to accept the assessee's contention that there were no money flowing from the assessee for the purpose of having the shares allotted to the assessee and his family members. Thus the investment aspect of the contention fails. It may however be noted that the shares of these two companies were seized from the assessee's locker maintained with the Indian Bank, T.Nagar Branch, Madras. Except for the assessment of these certificates from the Bank, we do not find that there was no enquiry at all to find out the details as to the source of income of other members of the family. We may p....
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....ly name lenders. The fact remains that the share transfer register shows the shares standing in the name of the assessee, his wife and other family members. Even though the assessee contended that there was no consideration passed on and there were no grounds for assessing the share value at the hands of the assessee, yet, going by the available material which are indicative of allotment of the shares in the name of the assessee and his family members, we reject the plea of the assessee. However, as regards the valuation of shares, it is seen from the order of the Tribunal that it had approved the break-up value method of valuation, taking the market value of the property, by placing reliance on the decisions reported in [1971] 82 ITR 540 (CIT Vs. Durgaprasad More), [1972] 86 ITR 621 (CWT Vs. Mahadeo Jalan and others) and [1980] 122 ITR 38 (CGT Vs. Smt.Kusumben D.Mahadevia). Even herein, apart from the method of valuation adopted, the serious contention of the assessee is that the report of the Valuation Officer, not being a seized material, could not lead to an assessment under Chapter XIVB. The said contention was based on the order of the Tribunal deleting the addition made in t....
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....er XIVB has to be raised on the seized material only. The report of the Valuation Officer could not be treated as a seized material and hence, the value adopted based on this, is incorrect. In this connection, he placed reliance on the decision of the Gujarat High Court reported in [2011] 337 ITR 187 (Guj) (Commissioner of Income-tax Vs. Kantilal B. Kansara (HUF)) and that of this Court reported in [2010] 329 ITR 342 (Commissioner of Income-tax Vs. Sri Krishna Saraf). We reject this contention straight away, for the reason that even in respect of the assessment under Chapter XIVB, the procedure for assessment has to necessarily go through the procedure which is contemplated under the provisions of the Act. The only difference one can find between the regular assessment and the assessment under Chapter XIVB is that while under the regular assessment, the period of assessment could be only one year, in the case of block assessment, it is the block period, as defined under the Act and the assessment should be fixed in respect of the block assessment. Barring that, the procedure for considering an assessment as contained under Section 158BC shows that the Officer has to determine the u....