TaxTMI 
TaxTMI 
2014 (5) TMI 47
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....in the construction of residential complexes at Hyderabad. A search and seizure operation under S1.32 of the Act was conducted on 24.1.2001 at the residential premises of one Shri T.Prakash, one of the partners of the assessee firm, as part of the search operations conducted in Tirumala Group of cases. During the course of search operations conducted, certain papers containing the rates, i.e. sale price of flats in respect of ventures constructed by the asee0firm, viz. 'Victory Vihar' and 'Victory Vision' were found. In view of the above, a notice under S.158BD r.w..s. 158BC was issued to the assessee calling for the return of income for the block period, comprising of assessment years 1991-92 to 2000- 01 and from 1.4.2000 to 4.1.2001, on 1.11.2002, admitting undisclosed income at Rs.120.60 lakhs. T.Prakash, during the course of search operations conducted, confirmed the fact of non-maintenance of regular books of account and non-filing of returns of income for the assessment years 1991-92 to 2000- 01, in the statement given by him. 3. There was no compliances to the notices issued by the Assessing Officer under S.143(2) and 142(1) of the Act. Hence, proceeding on ....
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.... of cases. As can be seen from the assessment order, a notice u/s. 158BD was issued on1.11.2002, the firm filed a block return for the period 1.4.2000 to 4.1.2001 admitting an undisclosed income of Rs. 9,66,000; a notice u/s. 143(2)/142(1) were issued; final show cause notice issued on 31.7.2003; and since there was no response, the undisclosed income was computed basing on the information available in the seized material. 4. The learned AD estimated the total undisclosed income at Rs. 52,02,000/- by his assessment order dated 29.10.2003. 5. Shri. N. Surender Rao, erstwhile partner of the appellant firm, did not know anything about the assessment proceedings and receipt of the assessment order, since, according to the dissolution deed, the tax matters are to be looked after by another partner, Sri. Thota Prakash. And due to financial problems, this erstwhile partner of the appellant firm shifted his residence. It is only when his friend informed him that TRO of the IT Department was trying to locate his address in connection with tax arrears of the firm, this erstwhile partner of the appellant firm went to the Departmental Officers and found to his surprise that a huge demand of ....
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....of Income-tax Department were trying to locate his residence in connection with tax arrears of the firm, the matter was enquired with the Income-tax Department, only to come to know by surprise that assessment was made with huge tax demand. It was thus the claim of the assessee that while no return was claimed for any of the assessment years, consequent upon search action on the premises of the Shri Thota Prakash under S.132 of the Act on 4.1.2001, and subsequent initiation of the proceedings under S.158BD in the case of the assessee, the assessee had to filed block return admitting undisclosed income of Rs.9,66,000, as against which Assessing Officer estimated the undisclosed income at Rs.52,02,000. 6. The CIT(A), at the outset, took note of the fact that the assessment order was served by affixture. He also took note that that the show cause letter dated 25.9.2002, and other notices sent subsequently were properly served on the assessee, though even in response to the same, there was no response from the assessee, except filing of the block return. In the circumstances, he found no merit in the contention of the assessee that the assessment order was not served, and consequently....
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....ore us, learned counsel has also filed additional grounds of appeal, alongwith a petition seeking admission of the same. The said additional grounds read as follows- "1. The satisfaction as enjoined in Section 158BD of the ITA Act of 1961 that the appellant has undisclosed income not having been recorded by the Assessing Officer as laid down in the decision of the Supreme Court in Manish Maheshwari V/s. Asst. CIT and another reported in 289 ITR 341(SC) and the order passed u/s. 158BD r.w.Seciton158BC(c) of the IT Act of 1961 on 29.10.2003 is invalid and bad in law and is to be quashed. 2. Whether on the facts and circumstances of the case the CIT(A) VI Hyderabad was justified and correct in law in holding that the service of assessment order by "Affixture" at the premises bearing no- 403 Raghuram Apartments, Malakpet, Hyderabad only on Ex- Partner Mr.T.Prakash was valid and if not, whether the appeal filed by the Appellant through Ex-Partner, Mr.N.Surender Rao on 03/03/2008 was within the period of limitation as laid down by the jurisdictional High Court in the case of CIT V/s. Gangadhar Goud Ram Gowd and Co. reported in 158 ITR 0075(AP)." 11. Since the above additional grounds ....
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.... counsel also relied upon the decision of the Punjab and Haryana High Court in the case of CIUT V/s. Naveen Chander (323 ITR 49). We find merit in this contention of the assessee. In the case of CIT V/s. Gangadhar Gowd Rama Gowd and Co (supra), relied upon by the learned counsel for the assessee, it has been held, considering the fact of service of orders refusing the registration of the firm on one of the partners by name, after dissolution of the said firm, the appeal filed by the other partner, on obtaining certified copies of the relevant orders, was held to be within time and not barred by limitation. Facts and circumstances of the case being identical in the case on hand as well, we are of the view that there was no delay in the filing of the first appeal before the CIT(A), and consequently, the CIT(A) was not justified in holding the appeal before him as barred by limitation. We accordingly set aside the impugned order of the CIT(A) on this aspect. Assessee's grounds on this aspect are accordingly allowed. 16. Notwithstanding the fact that the appeal as held to be barred by limitation, since the CIT(A) has proceeded to dispose of the appeal of the assessee on merits as ....
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....y, without knowledge of the facts, apparently as a counter to the criminal complaint, cannot be relied upon for making an assessment. In support of these contentions, the learned counsel placed reliance on the decision of Delhi Bench of the Tribunal in the case of Dimsy Food & Chemicals (P) Ltd. Vs. DCIT(24 SOT 65)(Delhi)(URO), wherein it was held that impugned addition made by authorities on the basis of dumb documents only is liable to be deleted. Further, reliance is also placed on the decision of ACIT V.s. Dr.Kamala Prasad Singh (3 ITR (Trib) 0533), wherein observing that the documents found and seized and relied upon for making the addition, had neither date nor the name of the assessee, it was held that it was not known in what connection the notings were made and those documents being dumb document, addition could not be made on the basis of assumptions and presumptions. The Assessing Officer, therefore, is not justified in adopting the rates per sq. ft., based on such seized unsigned papers. 20. Without prejudice to the above contentions, learned counsel also submitted that the Assessing Officer is also not justified in estimating the profit at 15% of the receipt, since th....
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....n the basis of seized material and any enquiry made by the Assessing Officer thereafter relatable to such material, meaning thereby neither any enquiry report nor any document procured either before or after search can be considered while computing the undisclosed income of the assessee. Similarly, it is also settled position that any document found and seized during the course of search has to be interpreted literally and nothing can be added or subtracted. The material found and seized in the present case are two sheets of typed paper. They are simply unsigned and cannot be attributed to the assessee. Such unsigned papers are mere dumb documents and cannot be relied upon for making a block assessment. We are supported in this behalf by the decision of the Patna Bench of the Tribunal in the case of as in ACIT V/s. Dr.Kamla Prasad Singh (3 ITR (Trib) 533), relied upon by the learned counsel for the assessee before us. Consequently, the impugned addition made by the Assessing Officer on the basis of such unsigned papers in the present case cannot be sustained. We accordingly delete the same, setting aside the impugned orders of the Revenue authorities on this issue, and allowing the....