TaxTMI 
TaxTMI 
2014 (1) TMI 396
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.... which are common in all the assessment years under consideration: "1. The CIT(A) erred in deleting addition made by the Assessing Officer, without going into the merit of the additions made on the ground that no addition can be made u/s 153A unless the addition so made is supported by any seized material. 2. The CIT(A) erred in deleting the addition made by the Assessing Officer by failing to appreciate the law and fact that provision of section 153A requires assessment or reassessment of the 'total income' of the assessee in contradistinction to the assessment of 'undisclosed income' as per section 158BB that existed hitherto. 3. The CIT(A) erred in deleting the addition made by the Assessing Officer, on the ground that since section 153A required the assessment or reassessment of total income which is defined in section 2(45) to be read with section 5 of the IT Act, a strict construction of the taxing statute is necessary. 4. The CIT(A) erred in deleting the addition made by the Assessing Officer having failed to appreciate that the operation of section 153A is distinct and separate from section 147 r.w.s. 148 and that assessment made u/s 153A is not merely a change ....
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....) Disallowance of depreciation 6. When the assessee carried the matter to the CIT(A), the CIT(A) quashed the assessment order on the reason that the additions cannot be made u/s 153A of the Act, unless there is a support of seized material suggesting the income of the assessee. 7. Against the order of the CIT(A), the revenue is in appeal before us for the assessment years under consideration and raised the following grounds of appeal, which are common in all the appeals: "1. The CIT(A) erred in deleting addition made by the Assessing Officer, without going into the merit of the additions made on the ground that no addition can be made u/s 153A unless the addition so made is supported by any seized material. 2. The CIT(A) erred in deleting the addition made by the Assessing Officer by failing to appreciate the law and fact that provision of section 153A requires assessment or reassessment of the 'total income' of the assessee in contradistinction to the assessment of 'undisclosed income' as per section 158BB that existed hitherto. 3. The CIT(A) erred in deleting the addition made by the Assessing Officer, on the ground that since section 153A required the assessment o....
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....he warrant was issued in the name of M/s Lahari Constructions and M/s Lahari Infrastructure Ltd and Others. Further he submitted that the consequential warrant was issued by the Addl DIT (Inv.), Unit- II, Hyderabad to search the premises of the assessee and this clearly indicates that the search was not initiated in the case of the assessee. It was submitted that the assessment u/s 153A is possible only when the search was initiated in the case of the assessee and to this effect the assessee has not taken a ground in the grounds of appeal filed that the order u/s 153A is not valid. Accordingly, he submitted that there is no valid warrant in the name of the assessee and in this connection he invited our attention to the Form No. 45, which is Warrant of Authorisation under section 132 of the IT Act, 1961 and Rule 112(1) of the Income-tax Rules, 1962. 11. The learned counsel submitted that the contents in the Warrant of Authorisation clearly mentioned that the search warrant was issued in the name of M/s Lahari Constructions and M/s Lahari Infrastructure Ltd and Others and the place mentioned therein as Plot No. 244, Phase-III, Road No. 78, Jubilee Hills, Hyderabad. He, therefore, ....
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....dditional ground raised by the assessee is purely legal in nature and goes to the root of the matter. This issue can be decided on the basis of the facts already on record and no new facts are required to be verified or investigated for the purpose of deciding the issue raised in the additional ground. Accordingly in view of the decision of honourable Supreme Court in case of NTPC Ltd., 229 ITR 383(SC) and in the facts and circumstances of the case we admit the additional ground raised by the assessee for adjudication. 15. In this case, admittedly the CIT(A) deleted the additions for the assessment years 2002-03 to 2005-06 on the ground that the additions made by the Assessing Officer are not on the basis of any seized material. However, before us, the assessee has raised additional ground stating that the framing of assessment u/s 153A is bad in law as there is no valid search warrant in the name of the assessee. The learned DR tried to impress upon us that warrant u/s 132 was issued jointly in the name of M/s Lahari Constructions, M/s Lahari Infrastructure Ltd and Others and Mr. M.P.B. Kutumba Rao, the assessee. In this connection, we refer to the operative portion of Warrant ....
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....earched is the assessee herein in the case of M/s Lahari Constructions, M/s Lahari Infrastructure Ltd and Others. Thus, it cannot be said that this is a common warrant in respect of all these assessees. There is no separate warrant in the name of M.P.B. Kutumba Rao, the assessee u/s 132(1)(c) of the Act. The warrant was issued in the joint names of M/s Lahari Constructions, M/s Lahari Infrastructure Ltd and Others to search the place at Plot No. 244, Phase - III, Road No. 78, Jubilee Hills, Hyderabad. 17. In order to answer the question raised in the instant appeal, it would be appropriate to deal with the provisions of s.132(1)(c) and other connected provisions. The relevant provisions of s. 132(1)(c) are reproduced as under : "Sec. 132. (1) Where the Director General or Director or the Chief CIT or CIT or any such Jt. Director or Jt. CIT as may be empowered in this behalf by the Board, in consequence of information in his possession, has reason to believe that-- (a) ............... (b) ............... (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or th....
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....er the person referred to in cl. (a) or cl. (b) or cl. (c), then, notwithstanding anything contained in s. 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 CIT or CIT having jurisdiction over such person may be prejudicial to the interests of the Revenue : Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under cl. (iii)." 18. On perusal of the provisions of s. 132(1)(c), it reflects that the officer empowered by the Board has reason to believe that "any person" who is in possession of any money,....
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....person", it will be necessary to comprehend the meaning of "any person". It is pertinent to mention here that the definition of word "any" has not been defined under the IT Act, 1922 but the meaning of word "person" has been defined under s. 2(31) of the IT Act. For the purpose of resolving the controversy, it is necessary to have meaning of word "any" though as mentioned above, there is no meaning of word "any" under the IT Act. The word "any" has a diversity of meanings and may be employed to indicate "all" or "every" as well as "some" or "one" and its meaning in a given statute depends upon the context and the subject-matter of the statute. It is often synonymous with "either", "every" or "all". Its generality may be restricted by the context. 21. Now, let us consider a few particular cases when the General Clauses Act would assist in the interpretation of the IT Act, 1961. The word "person" as defined under s. 2(31) of the IT Act, 1961 includes-- "(i) an individual, (ii) an HUF, (iii) a company, (iv) a firm, (v) an AOP or a BOI, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of ....
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....ires--CIT vs. Shri Krishna Bandar Trust (1993) 201 ITR 989 (Cal). 25. "Family" connotes a group of people related by blood or marriage. According to Shorter Oxford English Dictionary, 3rd Edn., the word "family" means the group consisting of parents and their children, whether living together or not; in a wider sense, all those who are nearly connected by blood or affinity; a person's children regarded collectively; those descended or claiming descent from a common ancestor; a house, kindred, lineage; a race; a people or group of people. According to Aristotle's Politics I, it is the characteristic of man that he alone has any sense of good and evil, or just and unjust, and the association of living beings who have this sense make a family and a State. The word "family" always signifies a group. Plurality of persons is an essential attribute of a family. A single person, male or female, does not constitute a family. He or she would remain, what is inherent in the very nature of things, an individual, a lonely wayfarer till per chance he or she finds a mate. A family consisting of a single individual is a contradiction in terms. Sec. 2(31) of the 1961 Act treats an HUF as an enti....
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....hey associate themselves in an income-producing activity that they become an AOP. They must combine to engage in such an activity; the engagement must be pursuant to the combined will of the persons constituting the association; there must be a meeting of the minds, so to speak. In a nutshell, there must be a common design to produce income. If there is no common design, there is no association. This interpretation of the expression "AOP" flows from the meaning of the word "association"--Deccan Wine & General Stores vs. CIT (1977) 106 ITR 111 (AP). 32. Joining together by the members of the association for the purpose of producing income is a pre-requisite for formation of an AOP. Such coming together or combining is a consensual act and depends upon the volition of the parties. Merely because certain persons are constituted joint owners, such as by inheriting the property of a person on his death, they do not become an AOP, for, in that event, the jointness is the result of operation of law and not of volition of parties-- CIT vs. T.V. Suresh Chandran (1980) 121 ITR 985 (Ker). 33. The expression "BOI" should receive a wide interpretation, perhaps not wide enough to include a....
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.... General Stores vs. CIT (supra). 37. It is possible to attribute any one of the following three meanings to the expression "BOI" occurring in the IT Act, 1961: (1) on the same basis as an "AOP", that is, the members of the body must have joined together for the purpose of producing income; (2) a conglomeration of individuals who happened to have come together but who carry on some activity with a view to earn income or profits or gains; and (3) any conglomeration of individuals whatsoever irrespective of the object which brought them together and irrespective of the activities which they carry on. 38. It is clear that if the first meaning were to be adopted, that would be the narrowest meaning and adoption of that meaning would mean attributing tautology( a repetition of the same meaning in different words) to the legislature and there would be no difference between an "AOP" and a "BOI". Acceptance of the meaning would mean that the legislature had used the words "BOI" in vain to describe one and the same group of individuals. On the other hand, if the third meaning is accepted, then the principle of noscitur a sociis(that the meaning of a word may be known from acco....
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....Kutumba Rao himself, he should have issued an independent warrant and search individually for conducting search in his case only. Since the warrant of authorisation has been issued in the joint name of first three persons to search the premises of Shri M.P.B. Kutumba Rao, the assessee, it is not open for the assessing authority to assess Shri M.P.B. Kutumba Rao u/s 153A of the Act on the basis of seized documents seized during the course of search pursuant to the warrant of authorisation dated 10/04/2008, which in the joint of names of M/s Lahari Constructions and M/s Lahari Infrastructure Ltd. and Others and not in the name of present Assessee and that too by invoking provisions of section 153A of the Act. Search cases arise on the basis of warrant of authorisation u/s 132 of the IT Act in pursuance thereof search is carried out in the case of M/s Lahari Constructions and M/s Lahari Infrastructure Ltd. and Others and the search warrant is not belonging to Shri M.P.B. Kutumba Rao, the assessee. In our opinion, in this case, the provisions of section 153A are not applicable as the warrant was not issued in the name of Shri M.P.B. Kutumba Rao. Therefore, assessment framed u/s 153A is....
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.... only amount received from K. Siva Rao is Rs. 30 lakhs of Rs. 15 lakh each on two occasions in the AY 2007-08 only and the said amounts received through banking channel and his account had been duly credited as on 31/03/2008 maintained in the books of assessee. After considering the submissions of the assessee, the CIT(A) observed that in the assessment order, the Assessing Officer had made a cryptic remark that the assessee had obtained loan from K. Siva Rao of Rs. 39 lakhs but no details had been brought on i.e. date of entry etc. He, therefore, directed the Assessing Officer to examine the sum of Rs. 15 lakhs received through bank transfer and delete the addition if it is found genuine. On the other hand, if the amount so received through bank transfer, as claimed, is not supported by any documentary evidence, the same may be assessed as unexplained income of the assessee in the AY 2007-08 and deleted the addition of Rs. 39 lakhs made in the AY 2008-09, if on verification found that no such entry appearing in the books or in the bank account of the assessee. 46. At the time of hearing before us, the learned counsel for the assessee has not pressed this ground, therefore, the ....
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....It may not be out of place to mention that this Tribunal uniformly estimating the profit from main contract at 8% to 12.5% depending upon the factual situation and 5% to 7% on the sub contract depending upon the factual situation. Therefore, in our opinion, estimation of profit at 8% by the CIT(A) on main contract and at 5% on sub contract is justified. We do not find any infirmity in the order of the lower authority. Accordingly the same is confirmed." 52. As regards depreciation, the coordinate bench held as follows: "13. We have carefully gone through the provisions of section 44AD of the Act. Now doubt this provision is applicable for those cases where the turnover/total contract receipt does not exceedRs.40 lakhs. However, by Finance (No.2) Act of 2009 with effect from 1.4.2011 the Legislature removed the restriction of the total contract receipts of Rs.40 lakhs. By taking a clue from the provision of section 44AD as is applicable for the assessment year under consideration and the provisions which are applicable with effect from 1.4.2011, we find that the deduction available u/ss. 30 to 38 shall be deemed to have been already given full effect and no further deduction u....
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.... 01/04/2007 to 31/03/2008 towards principal and interest paid by the assessee. The learned counsel submitted that only after completion of house, repayment has been started and therefore assessee is entitled for deduction towards housing loan interest. On the other hand, the learned DR has not controverted the submissions of the assessee nor brought any contrary material on record to suggest that the submissions made by the assessee are wrong. Being so, the claim of the assessee is to be allowed and accordingly, we direct the Assessing Officer to allow assessee's claim of deduction towards interest on housing loan. Thus, this ground of appeal of assessee is allowed. 57. Ground No. 5 is as follows: "The learned CIT(A) erred in holding that the part of the amount received on sale of lands aggregating to Rs. 50,30,000/- is assessable as income from other sources. The learned CIT(A) failed to see that the entire amount was received as a consideration on sale of capital assets and the source of receipts is known." 58. During the year under consideration, the total amount disclosed by the assessee on sale of land is t Rs. 50,30,000/-. When asked to submit the details of the land....
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....1/07/2007 2,85,000/- Swapna Lahari Films Pvt. Ltd. 01/08/2007 1,75,000/- Lahari Infrastructure Ltd. 03/08/2007 15,40,000/- Swapna Lahari Films Pvt. Ltd. 30/09/2007 30,30,000/- Swapna Lahari Films Pvt. Ltd. 50,30,000/- The learned counsel drew our attention to the copy of sale deed executed on 30/09/2007 in favour of Swapna Lahari Films Pvt. Ltd., which is placed at pages 216 to 221 of the paper book and another copy of sale deed executed by M. Rupesh (Assessee's son) on 30/09/2009 in favour of Swapna Lahari Films Pvt. Ltd., which is placed at pages 222 to 227 of the paper book. It was submitted that the entire amount is received on sale of agricultural property, which is situated in Patigunpur village near Patancheruvu, Medak District and the assessee having been carried out agricultural operations since long time and declaring agricultural income from AY 1997-98 onwards. Further, it was submitted that assessee's agricultural income has been accepted by the Department u/s 143(3) of the Act in earlier years and the land is not at all situated in the municipality and the Patigunpur Village is not notified by the Central Gover....