TaxTMI 
TaxTMI 
2013 (5) TMI 948
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.... for condonation of delay of two days, to be due to courier, which is duly supported by an affidavit stating reasons for this delay in filing of the appeal. We find the stated reasons to be genuine and sufficient enough to condone the delay. Therefore, we condone this delay and admit the appeal at its original number. This appeal arises out of the assessment order passed under section 143(3) read with section 153A and 153B of the IT Act, 1961 (hereinafter referred to as the Act, for short) for assessment year 2007-08 dt. 31-12-2010 passed by the Dy. CIT, Central Circle, Bikaner. 2.1 Briefly stated, the facts of the case are that Shri Anil Kumar Tantia is engaged in the business of purchase and sale of jewellery. A search and seizure operation under section 132 of the Act and simultaneous survey under section 133A of the Act, were conducted by the IT Department at many of the business premises of this group on 27-2-2009. During these operations, numerous incriminating evidence in the form of documents, loose papers, cash, etc. were found and inventorised and some of them were seized/impounded. The assessee resides in the town of Sriganganagar and falls under that jurisdiction. Ho....
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.... are as under: (1) Tantia General Hospital/Sriganganagar CAT Scan & Heart Centre (P) Ltd., Main Road, Sukhadia Nagar, Sriganganagar (2) Residence of Shri J.R. Tantia Dr. Shyam Sunder Tantia, Main Road, Sukhadia Nagar, Sriganganagar (3) Residence of Shri Anil Kumar Tantia, 3-D, Jawahar Nagar, Sriganganagar (4) Tantia Jewellers, 23B, Sadar Bazar, Sriganganagar. 2.3 A survey action under section 133A was carried out in the business premises of the Tantia Higher Education Institution Campus and J.R. Tantia Charitable Trust, Hanumangarh Road near RICCO Bus Stand, Sriganganagar. During these operations, cash and jewellery were found and seized. 2.4 It was found that Shri Anil Tantia has been doing jewellery business in the name and style of M/s. Tantia Jewellers, Sriganganagar but was not disclosing the actual income and has been suppressing purchases/sales and was booking bogus expenses and was even making payments/expenses out of books. As per the assessing officer, the above modus operandi of the assessee is substantiated with the help of seized material. During the se....
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.... 2008-09 2009-10 2.5 From the return filed in response to notice under section 153A of the Act, the assessing officer noticed that the assessee has honoured and surrendered income earned from the undisclosed transactions and has paid taxes thereon but instead of offering them in the way these were admitted in his statement he devised a mechanism by preparing books of account reflecting all the unaccounted transactions and has claimed set off of various undisclosed expenses which has not been accepted by the assessing officer 2.6 The assessee is existing assessee of ITO, Sriganganagar. After conducting search on 27-2-2009, the CIT, Bikaner issued notice under section 127 dt. 13-5-2009. The order has been passed by the CIT under section 127 of the Act on 7-7-2009. The Dy. CIT Circle, Bikaner to whom the assessment record has been transferred by virtue of order under section 127 issued notice under section 153A of the IT Act dt. 24-8-2009. The assessee objected to the jurisdiction vide letter dt. 21-9-2009. The objections were rejected vide order dt. 25-9-2009. The assessee submitted returns of income under section 153A being the compliance of notice of the asses....
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....997) 142 CTR (Raj) 329 : (2000) 244 ITR 727 (Raj); (6) Sagarmal Spinning & Weaving Mills Ltd. v. CBDT & Ors. (1972) 83 ITR 130 (MP); (7) Anil Kumar Kothari v. Union of India & Ors. (2010) 232 CTR (Gau) 104 : (2010) 39 DTR (Gau) 19; (8) Manoj Didwania v. Union of India & Ors. (1987) 167 ITR 177 (Del); (9) Bhanwar Lal Jain 45 STC 92 (Raj). The crux of the argument and reliance placed by the Authorised Representative is mainly on the reasons recorded for transfer of assessment records from one place to another and where the administrative convenience and co-ordination and effective investigation can be a cause of transfer from one place to another. On the other hand the learned CIT-Departmental Representative placed reliance on the judgment of Rajasthan High Court delivered in case of J.R. Tantia Charitable Trust v. Du. CIT & Ors.: (2011) 245 CTR (Raj) 162 : (2011) 62 DTR (Raj) 313, judgment on which the learned Commissioner (Appeals) has also relied. Section 127 reads as under: (1) The Director General or Chief CIT or CIT may, after giving the assessee a reasonabl....
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....iving the assessee a reasonable opportunity of being heard in the matter of transfer of jurisdiction. But this is not an absolute right of the assessee in all the cases. It is mentioned in the section that opportunity of being heard is subject to possibility of doing so in a given case. It is obvious that for transferring jurisdiction the CIT is required to record reasons which he has done in this case and the reasons recorded vide order dt. 7-7-2009 passed under section 127 of the Act have been conveyed to the assessee. A copy of this order is enclosed at p. 65 of the APB. Reason for transfer is given as administrative convenience and co-ordinated investigation. All the group cases have been consolidated with one assessing officer and this order came into effect from 7-7-2009. Ground Nos. 3 and 4 stand rejected. 2.10 Ground Nos. 4 and 5 are common in all the years and relate to the method of valuation of closing stock. The case of the assessee is a case of search. The notice under section 153A has been issued by the Department therefore the assessee submitted return of income from the assessment year 2003-04 to 2008-09 under section 153A of the IT Act and return for the assessm....
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....at change of method of valuation is permissible in the Act itself, the claim can be made in the revised return, there was bona fide reason for change of valuation of closing stock. Besides, this also submitted the justification of method of valuation of closing stock as weighted average in place of market rate. The Authorised Representative also argued that real income has to be taxed and notional income cannot be taxed. It was argued that this change of method has been done to correct a mistake previously committed by him in respect of adoption of basis of valuation of closing stock. All the judgments referred to before the assessing authority and Commissioner (Appeals) have also been relied on before us. In addition to thereof certain judgments were also relied upon. The learned Commissioner (Appeals) while deciding the appeal has referred to three judgments in respect of rejection of claim but all the judgments as Goetze (India) Ltd. v. CIT (2006) 204 CTR (SC) 182 : (2006) 284 ITR 323 (SC), Abhay Kumar Shroff v. CIT (2007) 210 CTR (Jharkhand) 602 : (2007) 290 ITR 114 (Jharkhand), Suncity Alloys (P) Ltd. v. Asstt. CIT (2009) 124 TTJ (Jd) 674 : (2009) 27 DTR (Jd)(Trib) 139 are fou....
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....aluation of closing stock. There is amendment in the IT Act by introducing provisions of section 145A of the IT Act. The valuation as per the IT Act in the light of judicial pronouncements in force at the time has been dealt with. Therefore, any of the methods for valuation of stock can be as provided under AS-2. The Hon'ble Supreme Court in the case of Chainrup Sampatram v. CIT (1953) 24 ITR 481 (SC) and the Hon'ble Madras High Court in case of Indo-Commercial Bank Ltd. (supra) have also held that the valuation of stock has to be done either at the cost price or the market price, whichever is less. In case of ITO v. E.I.D. Parry (India) Ltd. (1991) 42 TTJ (Mad) 209 : (1993) 46 ITD 387 (Mad) the Bench of Tribunal at Madras has held that if the change in the method of accounting or in the method of closing stock is bona fide then the fact that such change results in the reduction in or a postponement of the tax liability, per se, is not relevant. If change was bona fide then it will have to be accepted. The Hon'ble Madras High Court in case of CIT v. Venkatesa Spinners (P.) Ltd. (2008) 296 ITR 205 (Mad) held that the basis of valuation of closing stock can be rejected if....
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....nd 2009-10 are accepted and allowed. 3. The ground No. 6 is common in the assessment year 2007-08 and 2008-09, being the interest payment of Rs. 6,81,333 for the assessment year 2007-08 and Rs. 6,44,000 in the assessment year 2008-09. In course of search one document was seized by the Department a copy of which is enclosed at page No. 51 of the paper book. On this paper investment of Rs. 60 lakhs in total is revealed. The amount of Rs. 60 lakhs was surrendered by the assessee while furnishing the, return of income. Copy of acknowledgement and computation of income is at pp. 31 to 34 of the paper book of the assessment year 2007-08. The assessee also submitted one copy of cash book prepared from the seized document and the same is at page No. 40 of the paper book wherein Rs. 60 lakhs were surrendered and against this purchases were shown in respect of silver and gold ornaments. The assessing officer made addition of Rs. 6,81,333 for the assessment year 2007-08 being interest there upon as has been mentioned on the page which is at page No. 51 of the paper book and Rs. 6,44,000 in the year 2008-09. The assessing officer made addition under section 68 of the IT Act whereas the asse....
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....57 of the paper book. The assessee after receiving the photostat copies compiled them in the shape of books of accounts by naming cash book, ledger. The copies of cash book and ledger so prepared were also produced before the Bench in course of hearing and is also in the paper book at page No. 502 for the assessment year 2007-08 and in the other years also the same type of books were prepared and also produced before the assessing authority. The assessing officer was requested to accept the books of accounts so prepared from the seized documents. The assessing officer while passing the order has considered the books but has not accepted seized documents. In support of maintenance of books of accounts so prepared by him one affidavit was filed which is at page Nos. 111 and 112 of the paper book. The assessing officer did not accept the books of accounts prepared from the seized documents and available at page 6 and 13 of the assessment order. In paras 3 and 4 it has been said that this is an afterthought document of the assessee in preparing the books of accounts in respect of unrecorded transactions and shown cash available as per these books. Similarly, he has shown purchases of s....
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....m. The loose paper seized and compiled by the assessee is definitely a books of accounts. Therefore, it cannot be said that the compilation of business affairs prepared from the seized documents is not books of accounts, although not maintained in regular course of business. 5. Now next issue is whether the books of accounts can be rejected or not? The assessing officer rejected the books of accounts at p. 6 para 1 of the assessment order on the ground that the assessee surrendered the amount but took shelter of setting off the expenses. Besides this at para 3 of the assessment order the assessing officer has not pinpointed out any defect in the books of accounts so prepared but rejected it by treating as a device taken in course of the hearing. Attention was drawn towards p. 80 in which the assessee mentioned that all the entries were in the said cash book. The version is as under: At the time of filing the return the assessee also submitted copy of the cash book prepared in respect of unexplained amount and the same was submitted along with the return of income. The assessee incorporated and entered all the unexplained entries in the cash book prepa....
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....re of the opinion that books of accounts cannot be rejected which is prepared from the seized papers. 6. The next ground is No. 9 of 2007-08 and ground No. 10 of 2008-09 and 2009-10 regarding expenses of section 69C. The assessing officer while deciding the case of the assessee made addition under section 69C. The observation of the assessing officer is at p. 15 that why the provision of section 69C of the Act be not applied, the assessee came forward with explanation in his reply. The Commissioner (Appeals) has sustained the addition. The assessee has also drawn our attention that ground No. 10 taken before the Commissioner (Appeals) was not adjudicated which is in respect of the fact that separate addition cannot be made. We have perused order. The addition of Rs. 6,81,333 and Rs. 6,44,000 have already been dealt with. 7. Ground No. 10 of assessment order for 2007-08 and ground No. 11 for 2008-09 and 2009-10 in respect of acceptance of the affidavit. The assessee submitted affidavit of his own and his wife Smt. Sarita which is at pp. 111 and 112 of the paper book. In the affidavit the assessee explained in respect of ornaments found at the time of search and in respect of m....
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....ime. If the circumstances are beyond the control in that case he can explain the reason for delay in submission of return of income and avail remedies as provided in the Act. In the present case the assessee is before the Hon'ble Bench and question is whether there was any reasonable cause which prevented the assessee from furnishing the return within stipulated time. In case of the assessee search has been conducted, books has been impounded and besides that the other loose papers were impounded in which there were entries in respect of unrecorded transactions. The assessee requested the Department to supply the information to enable the assessee to furnish the return of income. The documents, the books of accounts and the photocopies were finally given by the Department to the assessee which is evident from page Nos. 156 and 157 of the paper book. The evidence produced before us is a letter issued by the Dy. CIT dt. 14-10-2010. The assessee relied upon the judgment reported in Paras Bansilal Patel v. B.M. Jindal, Chief CIT (2004) 187 CTR (Guj) 613 : (2004) 135 Taxman 125 (Guj) which is in the identical circumstances in which the Hon'ble Court has held that the interest up....
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....this ground the additions were made. The learned Commissioner (Appeals) has sustained the addition as observed at p. 26 of the impugned order by stating that no specific separate explanation for the same has been filed by the appellant except the explanation that these entries are covered in the cash book. As the cash book has already been considered to be unreliable by the undersigned. The learned Authorised Representative argued that the learned Commissioner (Appeals) has misinterpreted the explanation in respect of available entries in the book of accounts regularly maintained in course of business. In this respect our attention was drawn towards the page No. 62 of paper book of assessment year 2009-10 in which the assessee has explained that these entries are explainable. It has been further mentioned in the letter to the Department that in case regular books of accounts are in your possession supply us copy thereof because the same is not available in the copies so supplied by the Department from the seized document/record. The learned Departmental Representative has relied upon the order of the lower authority. The learned Authorised Representative reiterated the arguments ta....
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....f cash book ledger so prepared from the books of accounts from the page No. 153 of paper book of assessment year 2007-08, that the assessee has prepared one chart in respect of the closing stock as on 31-3-2009 and the difference comes to 189.529 gms. which is more than the stock found. The assessee submitted two affidavits that is of his own and wife of the assessee in which the assessee submitted that part of the jewellery is lying at business premises. In the statement recorded originally, the assessee also explained that part of the jewellery is at the business premises. 10.2 We have considered the statement of the assessee the books of accounts prepared from the seized documents are already accepted. Therefore, the stock position is accepted. We are also making it clear that the benefit of Rs. 60 lakhs surrendered in the assessment year 2007-08 is given in the assessment year 2007-08 and treated that the gold and silver were purchased out of the amount of Rs. 60 lakhs surrendered by the assessee. The entire record does not reveal that the assessee is carrying on other business than the gold and silver. The Department also failed to prove that the amount of Rs. 60 lakhs was ....
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.... Smt. Sunita Wife Smt. Sarita (wife) Vishu Tania (Son) Mohit Tania (Son) Pankaj Tania (Son) Raaghav Tania (Son) Premises covered under search operation carried under section 132(1) of the Act 1. Tantia General Hospital/Sriganganagar CAT-Scan and Heart Centre (P) Ltd., Main Road, Sukhadia Nagar, Sriganganagar. 2. Residence of Shri J.R. Tantia, Dr. Shyam Sunder Tantia, Main Road, Sukhadia Nagar, Sriganganagar. 3. Residence of Shri Anil Kumar Tantia 3-D-17, Jawahar Nagar, Sriganganagar. 4. Tantia Jewellers, 23B, Sadar Bazar, Sriganganagar. Premises covered under survey under section 133A: Besides search in the cases of above persons/premises, survey action under section 133A was carried out at the business premises of Tantia Higher Education Institute campus/J.R. Tantia Charitable Trust, Hanumangarh Road near RIICO Bus stand, Sriganganagar. Cash and jewellery found and seized: Modus Operandi of the group as per AO: Dr. Shyam Sunder Tantia is providing his services to Sriganganagar CAT Scan & Heart Centre (P) Ltd., SG....
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....hus, the assessing officer has assessed the following income on substantive basis in the hands of the various assessees, as under: In assessment year 2007-08: Income declared by the assessee as per return 32, 07,010 Add: On account of undisclosed income as discussed above 37,14,117 Total income 69,21,127 In assessment year 2008-09 13.2 Having discussed the most relevant and common facts obtaining in the above captioned appeals of this group now we proceed to decide the appeals one by one. To start with we are taking up the appeals of the Trust--J.R. Tantia Charitable Trust, Sriganganagar. The final decision will cover five appeals in ITA Nos. 140, 141, 142, 143 and 144 filed by the assessee-trust for assessment year 2005-06 to 2009-10 and two appeals in ITA Nos. 126 and 127 filed by the Revenue for assessment year 2008-09 and 2009-10. 13.3 For assessment year 2005-06 to 2009-10, the assessee-trust filed its return of income (ROI) and incomes were assessed at different figures. The following chart will depict the date of filing of ROI, order passed under section 143(3) of the Act and the amount of assessed incom....
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....r. S.S. Tantia that he is executive trustee, is not correct. (7) That the substantive addition sustained by the CIT(A), in respect of the surrender made by S.S. Tantia is illegal because the alleged income does not belong to trust and belongs to S.S. Tantia therefore the income so surrendered should be accepted as belonging to Dr. S.S. Tantia. (8) That the Commissioner (Appeals) should have appreciated and accepted that for the fault/illegal act of the trustee, the trust cannot be penalized which is according to judgment of Supreme Court. (9) That the additions so made by the assessing officer as substantive is not justified especially when Dr. S.S. Tantia categorically accepted that the income belongs to him only and surrendered the same in his hand. (10) That the addition made by the assessing officer in respect of unaccounted receipt/income/payment is illegal and against the law. (11) That the provisions of section 69/69C are not applicable, therefore, the amount added by the Asstt. CIT, Central circle and confirmed by the Commissioner (Appeals) is not justified. (12) That the act of the Commissioner (Appeals) in respect of i....
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....tion 132(1), and therefore, the assessing officer has correctly assessed (sic--assumed) jurisdiction under section 153A on the basis of incriminating evidence found during the search operation. 14.1 The learned Authorised Representative has reiterated the submissions made before the learned Commissioner (Appeals). 14.2 On the other hand, it would also be appropriate to reproduce paras 4.1, 4.2 and 4.3 of the Commissioner (Appeals)s order, as under: 4.1 The assessing officer observed in his order that the assessee-trust filed a writ petition before the Hon'ble High Court, Jodhpur, Rajasthan regarding assessment proceedings initiated vide notice under sections 153A and 142(1). The Hon'ble High Court vide its order in the S.B. Civil Writ Petition No. 8932 of 2010 in the case of J.R. Tanita Charitable Trust v. CIT & Ors. dt. 14-10-2011 directed the assessing officer to decide the objections filed by the trust challenging the notice under section 153A. Regarding the objection of the assessee that no search warrant was issued against the trust and a copy of the search warrant was not provided to it and so the proceedings initiated under sectio....
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....para 3 above in brief facts of the case. The assessing officer himself has accepted the fact that survey under section 133A was carried out at the premises of the trust at Hanumangarh Road, Near RIICO Bus Stand Sriganganagar. Therefore, only because the address of the assessee trust is mentioned in one of the panchnama after the address of the premises for which there is warrant to search, it cannot be held that there is a warrant of search in case of the assessee trust. It may also be noted that assessee has specifically challenged the legality of the notice under section 153A stated vide letter dt. 29th Nov., 2011 (paper book 477-480) and stated that proceedings under section 153C can be initiated (by dropping the proceedings under section 153A but still the assessing officer has continued the proceedings under section 153A ignoring that there is no warrant in the name of the assessee. This warrant may, therefore, be called and examined in presence of assessee to ensure as to whether there is a warrant to search in the case of assessee trust or not. 4.3 I have carefully perused the order of the assessing officer and the submissions of the Authorised Representative along wit....
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....as really established that the trust was not searched and its name did not figure in the search-warrant. The learned Authorised Representative has tried to cherry pick certain tit-bits of observations narrations found made in the orders or records and has tried to say that no search was conducted in this case and only survey was conducted. Be that as it may, given the facts and the circumstances of this case we can safely conclude that even if the name of this assessee figured in the list of persons searched but, in fact, it was never searched. It was only surveyed under section 133A. With reference to search warrant, which was not exempted [sic] against this assessee and it was only surveyed, it cannot be said that it would be enough proof of the fact that assessee was searched. All the questions put to the assessee, as extracted above, by the Revenue clearly spell out that only survey had been conducted in this assessees case. The assessing officer has himself mentioned in the order regarding this fact. Because the main person namely Shri Dr. Shyam Sunder Tantia is the trustee of the assessee-trust his reference cannot suffice and is not enough to evidence this fact so as to arri....
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....solely for educational or charitable purpose. On the basis of the above observations he held that the trust was not eligible for exemption under sections 11 and 12 and was to be assessed as an AOP at the maximum marginal rate. Books were not complete, day to day transactions not recorded, there is difference in the figures as per the tally software and audited accounts, there is variation between the interest amount as per TDS certificate and as per income and expenditure account, interest has been paid to the trustees but interest free loan has been given to employees and others, papers found show financial irregularities, unexplained investment in construction is made. Therefore, books are to be rejected under section 145(3). Trust has several objects apart from education. This leaves scope for utilization of funds for objects, which are other than for educational purpose. Trust has not furnished complete details of fees to ascertain whether same is reasonable and in accordance with regulatory authorities. Assessee had taken capitation fees/donation for admission. Trust failed to furnish headw....
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....e evidence found and seized in the documents and admitted to by Shri S.S. Tantia, the executive trustee in his statements pertaining to the trust, I do not find any infirmity in the order of the assessing officer regarding not allowing exemption under sections 11 and 12 on such income and taxing it at the maximum marginal rate. 16.3 The learned Authorised Representative Shri Ojha has submitted that the above finding is erroneous in as much as that apart from it is being illegal, the fact that the entire undisclosed income found during the search from all the premises has been surrendered by Dr. S.S. Tantia, in his individual hands and has also paid due taxes thereon; so no addition is called for or warranted in other hands on the basis of incriminating evidence found during this search conducted in this Tantia Group. The learned Authorised Representative also argued that the provisions of sections 28 to 44 of the Act are not applicable to the assessment proceeding of a trust where provision of sections 11 to 13 only apply. According to him the assessee is a trust, may be AOP--trust, to which sections 11 to 13 apply, and the AO has committed an error in assessing the appellant ar....
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....han State. He also looks after a hospital namely, Sriganganagar EEG Centre (popularly known as the Tantia General Hospital) This hospital is run by a firm, in which mainly family members of Dr. S.S. Tantia are partners. This Tantia family also runs a diagnostic centre in the name and style of Sriganganagar CAT Scan & Heart Centre (P.) Ltd., in which Dr. S.S. Tantia is one of the directors. Dr. S.S. Tantia and other members of his family also run a public charitable trust by the name J.R. Tantia Charitable Trust, Sriganganagar, this assessee. During this search cash amount of Rs. 6,02,620, jewellery worth Rs. 92,80,000 and many loose papers were found. Statement of Dr. S.S. Tantia was recorded under section 132(4) of the Act on 27-2-2009. In post search enquiries also his statements on oath were recorded on 8-5-2009, 11-5-2009 and 15-5-2009. He was confronted with the incriminating documents found during the search. In reply to question, Dr. Tantia admitted that the undisclosed receipts/income and payments/expenses were his individual undisclosed income, and therefore, he surrendered the entire undisclosed income of Rs. 2,13,49,927 (Rs. 1,54,70,842 + Rs. 36,95,065 + Rs. 18,84,020 + ....
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....its office (new office). When the trust shifted to the new office, the old office cannot be tagged or related to the trust any longer. It is not the case of the Revenue that assessee-trust carries on its activities both from the old and the new office. When old office is abandoned and new office is assumed, the old office cannot be said to have any practical connection except for it becomes a fact of history. Even otherwise when the main person of the group has accepted and agreed that the entire discovered undisclosed income belonged to him, this fact cannot be ignored. Under identical set of facts we have recently taken a similar view in the case of Dinesh Tobacco Industries v. Dy. CIT in ITA No. 185/Jd/2011 order dt. 22nd Feb., 2013 [reported at: (2013) 155 TTJ (Jd) 189 : (2013) 88 DTR (Jd)(Trib) 329--Ed.]. 17.6 We cannot approve the theory of assessing officer in taxing both the receipts and the payments. The page Exhibit No. 73 of the seized documents contains a particular amount of money spent for getting registration, so how this amount can be added in her hands. Accordingly, we allow ground Nos. 7, 8 and 9 of appellants appeal. Ground No. 10 also stands decided in favour....
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....led by the assessee stand partly allowed and the appeals of the Revenue are dismissed. 19.1 Before parting, we may mention that the income surrendered by Dr. S.S. Tantia cannot be considered at all in any other hands. All additions so made by assessing officer on substantive basis has to deleted and the same has to be accepted in Dr. S.S. Tantias case on substantive basis. 20. In the result, the appeals of the assessee in ITA Nos. 140, 141, 142, 143 and 144/Jd/2013 are partly allowed and those of the Revenue in ITA Nos. 126 and 127/Jd/2013 are dismissed. Dr. Mahesh Maheshwari 21. This appeal of the assessee for assessment year 2007-08 is directed against the order of learned Commissioner (Appeals) dt. 19-1-2012. 21.1 Briefly stated, the facts of the case are that the assessee was being regularly assessed to tax at Jaipur under the PA No. ACTPM0288 (sic). There was a search in the Tantia group in which certain documents relating to Dr. Mahesh Maheshwari were found. Therefore, action under section 153C was taken by the assessing authority of Central Circle, Bikaner and assessment of the assessee has been completed under section 153C of the IT Act vide-order dt. 30-12-2....
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....mount in his statement recorded under section 132(4), a copy of which is placed on paper book at page Nos. 95, 96, 97 and 98. It was argued that in the case of Dr. S.S. Tantia, no adjudication is in respect of protective and substantive addition, only note has been given in the case of Dr. S.S. Tantia reproduced at p. 7 of written submission submitted before this Bench. Therefore, the addition is not valid. In support of the contention, the learned Authorised Representative relied on the decision in the case of S.J. & S.P. Family Trust v. Dy. CIT (2005) 198 CTR (Guj) 255 : (2005) 277 ITR 557 (Guj). He also relied on the judgment of jurisdictional High Court in the case of Hukamchand Shankarlal v. CWT & Anr.(1984) 43 CTR (Raj) 240 : (1987) 163 ITR 1 (Raj). Against the substantive addition it was argued that unless cross-examination of Dr. S.S. Tantia was allowed how such an addition can be made when the copy thereof was not provided to the assessee. In the light of these submissions, he has requested to delete the addition made by the assessing officer and sustained by the Commissioner (Appeals) Jaipur. 21.1 The learned CIT-Departmental Representative supported the order of the asse....
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....ri Ojha that the assessing officer is not invested with such ajjgjKer and therefore, he has correctly drawn support from the decision of the Tribunal in the case of ITO v. Baba Dhal Educational, Society of India in which it has been held that "grant of registration debars the assessing officer from making further probe in respect of objects of the trust". This view is bolstered by the decision of the Hon'ble Delhi High Court in the case of Director of IT (Exemptions) v. Vishwa Jagriti Mission (2013) 83 DTR (Del) 47, in which similar view has been taken. It has been held thus: The trust, as an entity and the trustees or the members of its governing body, as individuals, have their independent existence and have a fiduciary relationship with each other based on the assumption of a bona fide behaviour. Any criminal act of the trustee or member of the Government body cannot be attributed to the trust which is an independent entity. However, the position may be different if it is found that the trustees or the members of this governing body colluded or were conniving with each other and were using the trust as a platform to advance their nefarious agenda,....
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....nder the Societies Registration Act. The running of the school by the trust is thus subject to close monitoring and supervision of the Charity Commr. under the Public Trusts Act as well as the Registrar under the Societies Registration Act. Apart from this monitoring mechanism, the school is recognized by the Board of Secondary Education, Gujarat State, and is required to abide by the rules and regulations in the matter of fees structure as well fulfilling all the other requisites concerning the organizational infrastructure of the institution. From the facts on record, it is evidently clear that accounts of the school are being audited from year to year and audit reports along with the statement of accounts are duly filed with the returns of income by the assessee-trust from year to year. No allegations of embezzlement or misappropriation of funds by the trustees or principal appear to have been made either by the charity Commr. or by the Registrar of Societies. With regard to the veracity of the accounts also, audit reports prepared by the auditors do not bring out any such misappropriation on the part of the management. Regarding the reasons cited by the assessing officer in sup....
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....Court of Delhi also dealt with the same type of situation the reproduction given in the submission is reproduced hereunder: Individual activity of a trustee or a member cannot be termed to be the activity of the trust. The language used in the provision of section 12AA refers to genuineness of the activities of the trust or institution and not to the activities of an individual trustee. If any misappropriation is made, that will be only a breach of trust on the part of that particular trustee. Thus in our view it was necessary for the Director of IT (Exemption) to examine that aspect as all the relevant materials were placed before him. Without examining he cannot draw a presumption that other members of the governing body were also involved. (b) The trust as an entity and the trustees or the members of the governing body, as individuals, have independent existence and they have a fiduciary relationship with each other based on the assumption of bona fide behaviour. A criminal act of a trustee or member of the governing body cannot be attributed to the trust which is an independent entity. However, the position may be different if i....
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.... have decided the appeal of Shri Anil Tantia in whose hand this issue has been decided as such is applicable in the appellants hand also. 29. Ground No. 4 is also common in all the years in respect of rejection of books of account prepared on the basis of all the seized documents. We have discussed and have decided this issue earlier in the case of Anil Tantia. But we would like to add that the AO has given a finding by making observation, at pp. 10 and 11 of the assessment order. The AO has observed as under: Disclosure in respect of seized papers/documents--In the return filed by the assessee it was noticed that though the assessee has surrendered all the undisclosed transactions but instead of offering these undisclosed incomes in the return, he has devised a method by preparing the books of accounts in respect of unaccounted transactions and has claimed set off of various undisclosed expenditures which were consciously surrendered by him as his undisclosed income in this statements recorded during search and post search. The method devised by assessee is nothing but after thought as neither during the course of search nor in his statements recorded after about tw....
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.... of his contention has relied upon the orders of this Bench reported in: (1) 26 Tax World 289; (2) 28 Tax World 454; (3) Sagarmal Spinning & Weaving Mills Ltd. v. CBDT (supra); (4) 22 Tax World 399 (supra); (5) 72 Taxman 43 (supra). It was submitted by the learned Authorised Representative that the AO issued a show-cause notice in this direction, which was replied by the assessee. The reply dt. 24-12-2010 is enclosed at pp. 194 to 206. It was also argued that the assessee has honoured his surrender in its letters. All the amounts so surrendered are disclosed in the books of account prepared from the loose papers supplied by the Department. The assessee filed an affidavit to this effect but the AO has rejected the affidavit. The copy of the affidavit is at pp. 173 to 178 of the paper book. The affidavit is in respect of acquisition of jewellery as well as in respect of preparation of cash book. At pp. No. 184 to 186, in para 9 it has been mentioned that the assessee has prepared the cash book of unaccounted entries and all the entries having such a character which have be....
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....e circumstances, we are of the considered view that this statement has to be considered and accepted as a whole if the AO wants to use it in evidence. The AO cannot be allowed to blow hot and cold simultaneously. 30.6 In another case of ITO. v. Ghanshyambhai R. Thakkar (1996) 56 TTJ (Ahd) 460 Tribunal Ahmedabad-C Bench, has held as under: We agree with the learned counsel of the assessee that statement of the assessee should not be considered having chosen one part or other of it but that has to be considered in its entirety and when we have considered the various statements as noted above we find that at no stage she had.......... 30.7 In the case of Indore Malwa United Mills Ltd. v. State of Madhya Pradesh & Ors.: (1966) 60 ITR 41 (SC) it has been held as under: The assessee filed before the authorities concerned all its registers reflecting the process of the manufacture at the various stages. It was the duty of the authorities to definitely come to one conclusion or the other in regard to the reliability of every one of the relevant accounts filed by the assessee. In the absence of any such finding, it was not open to them to pick and choose some of the ....
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....ct was that of the respective institution. The additions were simply made by saying a single line without assigning any reason whereas there must be a reasoned order and conclusion should not be drawn without mentioning the reasons thereof. As in case of the assessee the order is a laconic order and unreasoned order cannot be sustained at all, furthermore, the reason for assessing as protective must be communicated but that part is missing. 30.10 The addition so reduced by the learned Commissioner (Appeals) but assessed as protective is deleted and treated as substantive in the hands of the assessee as declared, therefore, we accept this ground in favour of the assessee. 31. Ground No. 7 in asst. yrs. 2007-08 and 2008-09 and ground No. 8 in assessment year 2009-10 are in respect of not considering the affidavit without cross-examination. This issue has been decided in case of Anil Tantia that the affidavit cannot be discarded without cross-examination. Though in case of the assessee affidavit of Dr. S.S. Tantia was submitted which is at page Nos. 184 to 186 in which the assessee declared in respect, of preparation of books and other activities. The assessee also submitted thr....
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....was not accepted but the Commissioner (Appeals) estimated the weight out of said affidavit. In case of Jagdish Rai Tantia in the affidavit weight were 347.700 gms. against this the learned Commissioner (Appeals) has accepted only 100 gms., in case of Sakuntala Tantia that she possessed 1,410.350 gms. whereas the learned Commissioner (Appeals) estimated only 500 gms. In case of Sakuntla Tantia jewellery were shown 2498.900 gms in the affidavit against that only 200 gms. were accepted. It was also argued that from the cash book prepared from the seized document, entire jewellery is explainable and rather shall be surplus. 34. After hearing both the sides, we allow this issue in favour of the assessee. We have already decided that contents of the affidavit have to be accepted unless controverted. The contents of the affidavit were not accepted in case of the assessee. We accept the averments of this affidavit as correct. Furthermore, the learned Commissioner (Appeals) has not allowed the credit of income offered in respect of transaction with Dr. Mahesh Maheshwari. We have already decided the issue regarding protective and substantive addition as above. Therefore, after considering....
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....epted this ground. The amount so received was not admittedly in cash therefore even otherwise the addition cannot be made if received in the kind. But as provided in section 56, this addition cannot be sustained. About excess cash the AO made addition of Rs. 3,50,000 on the ground that the appellant has admitted the same for taxation in the course of the search. The learned Commissioner (Appeals) accepted the ground and Department is in the appeal. The learned Commissioner (Appeals) has rightly deleted the addition. Since the cash book maintained and prepared is accepted by us in the other ground therefore the addition deleted by the Commissioner (Appeals) is in accordance with the law. We also wish to add that in case of the assessee the assessment completed is not in accordance with the law. What we have been able to understand that in case of the assessee judgment referred before the AO as well as learned Commissioner (Appeals) was not appreciated properly. Furthermore, the statement of the assessee was also used in piece meal as well as on the basis of pick and choose theory which is not admissible. We also wish to add that addition of Rs. 50000 on the protective basis in case ....
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....Regarding other ground it was argued that when action under section 153A has been dropped by the AO himself and the action taken under section 147 has also been declared as illegal. All the other additions have been deleted then how the addition of Rs. 2,45,374 can be sustained. When the action under section 147/148 has been treated as null and void, no further addition can be made. The learned Authorised Representative has drawn our attention towards the observation of the learned Commissioner (Appeals) which reads as under: In view of above facts and law applicable to these facts the assessment proceedings should have been initiated under section 153C. Therefore, the first ground of appeal is decided in favour of the appellant. It was argued that when entire action was declared as illegal then there cannot be any question for sustaining any addition. 39.1 Per contra, the CIT-Departmental Representative has strongly supported the order of the Commissioner (Appeals). We have gone through the paper book submitted before the bench and have considered the arguments of the both sides. The addition sustained by the Commissioner (Appeals) is based on pap....
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....SGNR 4,98,283 Gold--Rs. 1,95,53.310 (15.283.646 gms) Silver 13,98,492 (79,709 gms) Nil 15,81,073 10.00,000 Nil 2,12,38,282 Nil Total Tantia General 2.82,480 Nil 2.09,55,802 Nil 2,12,38,282 Nil 11,400 Nil Nil Nil 11,400 Nil Hospital & Sriganganagar CAT Scan & Heart Centre (P) Ltd., Main Road, Sukhadia Circle Total 11,400 Grand total 19,79,290 Nil 13,50.000 Nil 3,07,34,285 74,97,300 Nil 11,400 3,27.13,575 Nil 88,47,300 Document 2 Assessment year ROI (date of filing) Date of assessment and Date of assessment assessed income under under section 153A and section 143(3) assessed income 2005-06 31-10-2005 (nil income) 31-12-2007 assessed at 29,83,971 23-12-2011 at 30,72,971 2006-07 31-10-2006 nil income 30-12-2008 at 28,33,425 23-12-2011 at 32,73,825 2007-08 20-8-2010 nil income. Was still pending and in the meantime 23-12-2011 at 1,40,49,868 notice under section 153A was issued on 24-8-2009 claimed exemption of Rs. 2,64,58,766 under section 11/12 of the Act 2008-09 20-8-2010 mil income 2009-....