TaxTMI 
TaxTMI 
2017 (5) TMI 1406
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....ated in the year 1986 and SAEL in 1990. VLS has been carrying the business of financing, leasing, investments etc. as non-banking finance company. SAEL has been carrying the business of running amusement parts and leasing etc. It is stated that both Petitioners are income tax assessees filing returns on a regular basis on the basis of audited accounts. It is stated that VLS has been carrying on the business of leasing since its inception and has been claiming depreciation on the leased assets under Section 32 of the Act. 4. Search and seizure operations were carried out under Section 132 (1) of the Act on 22nd June, 1998 in the premises of both companies and their respective directors. Thereafter notices under Section 158BC(a) of the Act were issued to both VLS and SAEL on 26th July, 1999 proposing block assessment for the period 1st April 1988 till 22nd June 1998. Pursuant to the above notices both Petitioners filed their block returns on 10th September 1999. On 29th June 2000, notices under Section 142 (2A) of the Act proposing special audit of both Petitioners were issued. This was challenged by them by filing W.P. (C) No. 4685 of 2000 in this Court. In the said petition challe....
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....(i) those items of income which have already been disclosed and dealt with in the original assessment orders and therefore there is no escapement of income (ii) where the facts are incorrect both as regards the AYs in question and as regards the escapement of income and (iii) concern the rate of depreciation to be allowed which has already been dealt with in the original assessments. These are without prejudice to the broad general argument regarding the impermissibility of parallel proceedings under Section 147 of the Act when the block assessment proceedings under Section 158 BC (a) are pending. 8. The Petitioners contend that under Section 158BA of the Act, notwithstanding anything contained in any provisions of the Act, where after the 30th June 1995, a search was initiated under Section 132 of the Act in the case of any person, then, the AO should proceed to assess the undisclosed income in accordance with the provisions of Chapter XIV-B of the Act. It is contended that there was no justification for initiating any parallel proceedings under Section 147 read with Section 148 of the act as regards to the same question, whether it was a claim of depreciation or any other matter....
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....ssessment proceedings, the Petitioners filed a Special Leave Petition in the Supreme Court in which leave was granted and the appeal was registered as Civil Appeal No. 4667 of 2007. 13. The developments subsequent thereto have been referred to in this Court's order dated 9th March, 2016 in the present petition. It reads as under: "1. It is pointed by Mr. Ajay Vohra, learned Senior counsel for the Petitioners, that the reasons for reopening of the assessments for the three Assessment Years (AYs) 1994-95, 1995-96 and 1996-97 under Section 147/148 of the Income Tax Act 1961 ('Act') refer to the material purportedly recovered by the Income Tax Department during the search proceedings which took place on 22nd June, 1998 under Section 158 BC of the Act. One of the grounds urged to assail the said reopening of assessment is that since action under Section 158BC (a) of the Act is already taken in pursuance to search and seizure operations, no parallel proceedings can be started under Section 147 of the Act in relation to the same issue. 2. Mr. Vohra further states that the validity of the said search proceedings and the consequential notices issued to the Petitioners was the....
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....ction 245D (2C) of the Act. It appears that the Department has accepted the above order passed by the ITSC on 3rd August 2016. Submissions of counsel 16. Mr. Shashwat Bajpai, learned counsel for the Petitioners, submitted that since there was full and true disclosure of all materials by both Petitioners during the original assessments for AYs 1994-95, 1995-96 and 1996-97, their re-opening by the impugned notices under Section 147 of the Act, based on mere change of opinion, was unsustainable in law. He further submitted that question of parallel proceedings under Section 147 of the Act involving the same question of alleged claim of depreciation on cinematographic film or any other matter covered by the block assessment proceedings under Section 158 BC of the Act did not arise. In support of the above propositions, he referred to the decisions in Ramballah Gupta v. ACIT (2007) 288 ITR 347 (MP), Cargo Clearing Agency (Gujarat) v. JCIT (2008) 307 ITR 1 (Guj), Smt. Mira Ananta Naik v. DCIT (2009) 221 CTR 149 (Bom) and ACIT v. Sunil Kumar Jain (2014) 367 ITR 370 (Chattisgarh). 17. It is submitted by Mr. Rahul Chaudhary, learned Senior standing counsel for the Revenue, that all quest....
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....f the depreciation on account of the cinematographic films and the income attributable to lease rentals is also the subject matter of the said settlement applications before the ITSC. 21. It is not in dispute that the reasons for reopening of the assessment under Section 147 of the Act are more or less on the same grounds viz., the claim of depreciation on cinematographic films and income from lease rentals etc. In Ramballah Gupta v. ACIT (supra), it was held by the Madhya Pradesh High Court, that once a search was undertaken and a notice under Section 153A issued, then the question of issuing notice thereafter under Section 148 of the Act on the strength of the same material collected during the search did not arise. 22. In Cargo Clearing Agency (Gujarat) v. JCIT (supra), the Gujarat High Court examined the issue in detail and concluded that "one cannot envisage escapement of undisclosed income once a search has taken place and material recovered, on processing of which undisclosed income is brought to tax." The Gujarat High Court referred to the decision of the Supreme Court in CIT v. Suresh N. Gupta (2008) 297 ITR 322 (SC) and concluded as under: "In the light of this specifi....