TaxTMI 
TaxTMI 
2016 (9) TMI 604
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.... of Rs. 10,00,000/- based on presumptions and while ignoring errors in proceedings U/s 153A." 2. The brief facts of the case are that the assessee is engaged in the business of trading of marbles. The assessee filed his return of income for the year under consideration on 30/03/2005 declaring total income of Rs. 2,57,412/-. The assessee filed return of income in form No. 2D in response to the notice U/s 153C of the Income Tax Act, 1961 (in short the Act) read with Section 153A of the Act before the DCIT, Range- 7, Hyderabad disclosing income of Rs. 12,46,130/- on 29th May, 2009. The ld A.O. after reproducing the statement recorded in pursuance to the survey U/s 133A of the Act, has made the addition of Rs. 20.00 lacs in the original return of income and thus computed the total income for Rs. 20,95,905/-. 3. Against the said order, the assessee filed appeal before the ld CIT(A). Before the ld CIT(A), elaborate submissions were made by the assessee raising the issue that the satisfaction recorded by the ld. A.O. was not in accordance with law. Further, it was submitted that the provisions of Section 153 of the Act are not attracted as no incriminating material was found during the....
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....addition made for Rs. 20.00 lacs by the ld A.O.. After discussing the entire case, the ld CIT(A) has restricted the addition to Rs. 10.00 lacs in lieu of Rs. 20.00 lacs as done by the ld A.O.. The finding of the ld CIT(A) is reproduced hereunder:- "6.5 The argument of the appellant that the addition of Rs. 20,00,000/- was made merely on the basis of the statement recorded during the survey proceedings, and the amounts paid should be taken as purchases on which profits only can be arrived and in the light of the fact that the assessee has already accepted the profit to the extent of Rs. 10,00,000/- constituting rate of profit at 50%, is not acceptable, based on facts. The fact of the case is that the appellant was in the business of marble/granite carried in the name of M/s Suguna Marbles, a proprietory concern, found to have made payments of Rs. 25,00,000/- on various dates, during the A.Y. 2004-05 and Rs. 1,00,000/- during the A.Y. 2005-06, to M/s MGPL as per the entries made in diary seized during the course of search proceedings conducted in the case of M/s MGPL Group on 24/07/2008 and against the said payments, Rs. 5,00,000/- was shown to have been received back by the appella....
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....e appellant's submission on the subject was that the revised return was filed for A.Y. 2004-05 and not for A.Y. 2005-06 and the amount of payments as reflected in seized material, for the year under reference was only Rs. 1,00,000/- and not Rs. 10,00,000/-, as adopted by the Assessing Officer in the assessment order. 7.3 Perused the submissions of the appellant and the facts of the case. As brought out and indicated in the earlier part of this common order for A.Y. 2005-06, it was determined that the revised return of income was pertaining to A.Y. 2004-05 and it was wrongly adopted by the Assessing Officer for A.Y. 2005-06, due to incorrect adoption of total income as per the original returns of income, while furnishing the revised return. Having established that the revised return relates to A.Y. 2004-05, the addition resulting on account of adopting of the revised income, in the order U/s 153C for A.Y. 2005-06 is found to be unsustainable. Hence, the amount of addition of Rs. 10,00,000/- on account of adopting the revised returned income is held to be incorrect/unsustainable for A.Y. 2005-06. However, for the reasons given in the order for A.Y. 2004-05, the amount of Rs. 1,00,0....
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.... Court in the case of CIT VsGopi Apartment (2014) 365 ITR 0411 (iii) The Hon'ble Delhi High Court in the case of Pepsi Foods P. Ltd. Vs. ACIT [2014] 52 taxmann.com 220 (Delhi) (iv) The Coordinate Bench in the case of Shettys Pharmaceuticals and Biological Ltd. Vs DCIT [2014] 47 taxmann.com 85 (Hyderabad - Trib.) (V) Commissioner of Income-tax, III, Hyderabad Vs. Shettys Pharmaceuticals &BiologicalsLtd.[2015] 57 taxmann.com 282 (Andhra Pradesh). 6. On the basis of the above said contention and judgments, it was submitted that there was no application of mind by the A.O. of the company searched and also by the ld. A.O. of the assessee and the A.O. has mechanically and stereo type manner issued the notices U/s 153C of the Act. It was further contended that the ld. A.O. before issuing the notice U/s 153C must apply his mind on the documents seized and record his satisfaction in unequivocal manners that the documents seized belongs to none other than the assessee. In fact, the ld AR has submitted that the satisfaction recorded by the ld. A.O. is similar to the satisfaction recorded in case of SHETTY PHARMACEUTICALS & BIOLOGICAL LTD. (supra) wherein the Hon'ble Jurisdictional High Co....
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....resumption which are normal to be raised in favour of the persons searched but belongs to any other person. This satisfaction must be displayed from the reasons or the basis for conclusion of the A.O. that the documents searched belongs to the other than the searched person. If we examine the satisfaction/order sheet produced before us (reproduced hereinabove), there is no satisfaction in our view. It is not reflected from the note that the documents recovered do not belong to the M/s Midwest Granites P. Ltd. but belongs to the assessee before us. It is also not recorded as to which documents pertains to the assesse on the basis of which the additions can be made by the ld. A.O. In view thereof, the satisfaction recorded by the A.O. is lacking in material particulars and only the cryptic mechanical direction was issued for issuance of notice U/s 153C of the Act without recording of proper satisfaction. Ironically, in the present note, the word "satisfaction " has also not been used by the AO. Therefore, there is no question of even the cryptic of mechanical recording of satisfaction also. In the light of the above, we are left with no other option but to allow the appeal of the ass....
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....o withdraw the admitted tax liability accepted by him by filing the revised return of income. Furthermore, this issue is no more res integra as the Hon'ble Apex Court in its recent judgment in the case of CIT vs. Micro Nova Pharmaceutical (P.) Ltd.*[2014] 43 taxmann.com 379 (SC) has held that "Taxes paid pursuant to return filed in block assessment are not liable to be refunded". The Hon'ble Apex Court while deciding this issue in this judgment has relied upon the earlier judgment of the Supreme Court in the case of CIT vs. Shelly Products & Anr. (2003) 181 CTR (SC) 564 : (2003) 261 ITR 367 (SC) wherein it held as under "22. We find considerable force in the submission of the Revenue and it must be upheld. We have earlier noticed the scheme of the Act. Sec. 4 of the Act creates the charge, and provides inter alia for payment of tax in advance or deduction of tax at source. The Act provides for the manner in which advance tax is to be paid and penalises any assessee who makes a default or delays payment thereof. Similarly, the deduction of tax at source is also provided for in the Act and failure to comply with the provisions attracts the penal provisions against the person respons....