TaxTMI 
TaxTMI 
2012 (11) TMI 1114
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.... notice u/s.153A(a) dated 16-01-2007 to the assessee. Subsequently, notice u/s.142(1) dated 11-09-2007 was also issued to the assessee. Thereafter, the AO noted that there was no warrant issued in the name of the assessee. Therefore, after recording the following reasons the AO initiated proceedings u/s.148 of the Income Tax Act : "The assessee has entered into sham transaction in M/s. Database Finance Ltd. and Media Matrix Ltd. to book bogus long term capital gain of Rs. 11.33 lakhs. Key persons of the group Shri Moti Panjabi and Shri Ram Udharam Panjabi have admitted additional income in the hands of the entire group in this regard. The assessments u/s.153A of these persons were completed on 31-12-2007 and transactions in the shares done by the assessee were found bogus and additions were made accordingly. Hence, I have reason to believe that taxable income of Rs. 2,26,794/- has escaped assessment. Issue notice u/s.147". 3. The assessee vide its submission dated 10-12-2009 raised objections on proceedings u/s.148. However, the AO rejected such objections and proceeded to complete the assessment. The AO noted that the assessee has entered into sham transactions which was disclos....
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....was submitted that the contract notes/share certificates, demat statements etc. pertaining to the share transactions have been found and seized during the search action. Therefore, the comment of the AO that there were no incriminating documents found or seized of the assessee is patently wrong and false. The decision of the Amritsar Bench of the Tribunal in the case of ITO Vs. Arun Kumar Kapoor was relied upon by the assessee , according to which reassessment u/s.147 on the basis of incriminating material against the assessee found in search of third party and forwarded to the AO of assessee by the Search Officer was illegal, void ab-initio and in such situation assessment could be made only u/s.153C which specifically ousted the application of sections 147 and 148. 5. So far as the merit of the case is concerned it was submitted that the submission made in the lead case Shri Moti Panjabi is applicable to the facts of the present case. 6. Based on the arguments advanced by the assessee the learned CIT(A) called for a remand report from the AO. After considering the remand report and the reply of the assessee he dismissed the legal ground as well as the ground on merit of the cas....
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.... in case of search and requisition. Sec.153A deals with procedure for issuance of notice and assessment or reassessment in case of the person where a search is initiated under s.132 or books of account, other documents or assets are requisitioned under s.132A after the 31st day of May, 2003. Sec. 153B lays down the time limit for completion of assessment under s.153A. Sec.153C which is similarly worded to s.158BD of the Act, provides that where the AO is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to such other person other than the person referred to in s.153A he shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person. However, there is a distinction between the two provisions in as much as under s.153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under s.158BD if the AO is satisfied that any undisclosed income belongs to any person, other than the person....
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....e is not tenable in law. The addition made by the AO in this respect be detected. The appellant be granted just and proper relief as per provisions of law and facts prevailing in the case. 4. The appellant be granted all consequential relief as result of decision in the appeal. 5. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing". 9. The learned counsel for the assessee at the time of hearing before the Tribunal referred to page No.15 of the Paper Book and drew the attention of the Bench to the notice dated 16-01-2007 for A.Y. 2003-04 issued u/s.153A(a) of the Income Tax Act. Referring to the copy of the assessment order he submitted that in the very first paragraph itself the AO has dropped such notice and after more than a year of completion of search assessment had issued notice u/s.148 dated 13- 01-2008 which is nothing but a back door entry. The learned counsel for the assessee drew the attention of the bench to provisions of section 153C which reads as under : "153C. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where t....
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....ey, bullion, jewellery or other valuable article or thing or books of account of documents seized or requisitioned belong or belongs to a person other than the person referred to in s.153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO shall proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of s.153A". He accordingly submitted that since incriminating documents were found and seized by the department during the course of search, therefore, the proper course of action should have been issue of notice u/s.153C and not u/s.148. Therefore, in view of the decision cited above, the re-assessment proceedings initiated by the AO and upheld by the CIT(A) should be cancelled. 10. So far as the merit of the case is concerned the learned counsel for the assessee submitted that under identical facts and circumstances the Tribunal vide consolidated order in ITA No.659/PN/2011 and connected appeals dated 31-10- 2012 has restored the issue to the file of the AO with certain directi....
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.... by the department from the residential premises of the assessee. 14. We find the AO at Para 3.2 of the Assessment order has observed as under : "3.2 In the course of search operations, certain evidences were seized/impounded which go to show that the long term capital gains booked for various assessment years are not genuine and the same are based on fictitious documents created. Evidences gathered from stock exchanges and brokers are also in line with the evidences emanating from the material seized/impounded. In the course of search operation and assessment proceedings, certain statements, clearly bringing out crucial evidences going against the fact of purchase and sale of share transactions, were recorded from the key person, i.e. Shri Moti U. Panjabi and other family members." Similarly, we find the AO at Para 4.4 of the order has observed as under : "4.4 The statement of denial from the brokers and other evidences seized during the course of search operation conducted on 30-03-2006, 5 CDs containing the backup of laptops found in the residence of Shri Ram Udharam Punjabi were seized. These CDs show that assessee has himself created the entire correspondence between the b....
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....IT(A) was justified in following the ratio laid down by the Hon'ble Supreme Court in the case of Manish Maheshwari Vs. ACIT and another, reported in (2007) 289 ITR 341, wherein it has been held that if the procedure laid down in section 158BD is not followed, block assessment proceedings would be illegal. The CIT(A) has correctly observed that the provisions of section 153C are exactly similar to the provisions of section 158BD of the Act in block assessment proceedings. Thus, considering the entire facts and the circumstances of the present case, we hold that the CIT(A) was fully justified in quashing the reassessment order. We also do not find any merit in the submissions of the learned DR that during the course of search, it was found at premises of M/s.Today Homes & Infrastructure Pvt. Ltd. pertaining to M/s.P.R. Infrastructure Ltd. and not the assessee. In this regard, we may point out that the contention raised by the learned D.R. is factually incorrect and contrary to the available records of seized documents specifically mentioned in the assessment order dated 30-12-2008. In view of the above factual discussion, we do not find any merit and substance in the contention o....