TaxTMI 
TaxTMI 
2017 (11) TMI 1203
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....ioner (Appeals) has erred in law and in facts in not appreciating that no satisfaction was recorded as required under the provisions of section 158BD of the Act. Consequently, the assessment order passed by the Assessing Officer is bad in law and invalid. 2. The learned Commissioner (Appeals) has erred in law and in facts in not appreciating that the additions of Rs. 3,50,52,020 made by the Assessing Officer were incorrect and unjustified." 3. Seeking indulgence of the Bench to admit the additional grounds, the learned authorised representative submitted that the issue raised in the additional ground being purely legal and jurisdictional issues which can be decided on the basis of the facts available on record, should be admitted. In support of such contention, he relied upon the following decisions : (i) National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) ; (ii) Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688 (SC) ; and (iii) Ahmedabad Electricity Co. Ltd. v. CIT [1993] 199 ITR 351 (Bom). 4. The learned Departmental representative vehemently opposing admission of additional grounds submitted, the legal issue raised in t....
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....the Commissioner of Income-tax (Appeals) and can be decided on the basis of the facts on record. In view of the aforesaid, we admit the additional grounds for adjudication. 6. Advancing his argument on additional ground No. 1, the learned authorised representative submitted, as per the mandate of section 158BD of the Act, the Assessing Officer having jurisdiction in case of a person searched under section 132 of the Act, if is of the opinion that any undisclosed income belongs to a person other than the searched person, then after recording a satisfaction he must handover the seized materials/ documents/assets to the Assessing Officer having jurisdiction over such other person and that the Assessing Officer shall proceed to assess the other person after recording satisfaction before issuing notice under section 158BD of the Act. Therefore, the learned authorised representative submitted, before initiating proceeding under section 158BD of the Act, satisfaction has to be recorded at two stages, firstly by the Assessing Officer of the searched person before handing over the books of account, materials, etc. to the Assessing Officer of the other person and secondly, satisfaction ha....
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....ble Supreme Court in the case of CIT v. Calcutta Knitwears [2014] 362 ITR 673 (SC), and the Central Board of Direct Taxes Circular No. 24 of 2015, dated December 31, 2015*, satisfaction under section 158BD of the Act has to be recorded both in the case of the searched person as well as in the case of the other person sought to be assessed under section 158BD of the Act. However, he submitted, the satisfaction can be recorded at three stages, viz. (i) at the time of initiation of proceedings under section 158BC of the Act in the case of searched person ; (ii) in the course of assessment proceedings under section 158BC of the Act ; (iii) immediately after assessment proceedings are completed under section 158BC of the Act of the searched person. He submitted, in the present case, though, the Assessing Officer of both the searched person as well as the other person is the same, however, he has recorded satisfaction at both the stages. In this context, he drew our attention to the assessment order passed under section 158BC of the Act in the case of the searched person Ms. Hoor C. Jhurani, wherein the Assessing Officer has recorded satisfaction for initiation of proceedings under secti....
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....ques and pay-in-slips are in the handwriting of the assessee or Shri D. Chaturvedi. These two concerns are shown proprietary concerns of Shri Nirmal Jhurani, brother of the assessee. The bank account of Amit Traders was opened with Union Bank, Mandvi branch and account of Sai International was opened with Mercantile Bank P. D.'Mello Road Branch. Copies of these bank accounts were obtained from banks. The deposits made in these accounts are similar to the deposits made in the bank account of Safal Impex. The assessee has admitted in her statement that business on behalf of these concerns was being done by her. In one of the statements recorded, the assessee has stated that she was looking after the business of these two concerns as well as she can only explain the transactions pertaining to these concerns. In view of these statements and in absence of any documentary evidence that business of these concerns was done by Shri Nirmal Jhurani and funds were arranged by him, the source of funds deposited in the accounts of these concerns appear to be the undisclosed income of the assessee. However, the fact that Shri Nirmal Jhurani is an identifiable person and is being assessed to t....
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....fore issuance of notice under section 158BD of the Act to the assessee, the Assessing Officer has recorded satisfaction under the said provision. Notably, assessment proceedings of both persons were continuing simultaneously before the Assessing Officer. Therefore, keeping in view the ratio laid down by the hon'ble Supreme Court in case of Calcutta Knitwears (supra), the conditions of section 158BD stands satisfied. Therefore, the additional ground No. 1, raised by the assessee must fail. Hence, the said ground is dismissed. 10. In additional ground No. 2, the assessee has challenged the addition of Rs. 3,50,52,020, made on the basis of the credit entries in the bank account. 11. Brief facts are, as discussed earlier, in the course of search and seizure operation in case of Ms. Hoor C. Jhurani, certain bank accounts along with cheque books and pay-in-slip were found and seized. On the basis of such seized material, assessment proceedings under section 158BD of the Act were initiated against the assessee. In the course of assessment proceedings, since, the assessee did not respond to the statutory notices issued on several occasions, the Assessing Officer completed the ass....
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....ude of the assessee assessments were completed ex parte. He submitted, before the learned Commissioner (Appeals) the assessee appeared, however, he failed to properly explain the entries in the bank accounts. Therefore, the addition was rightly made. 14. We have heard rival contentions and perused the material on record. As could be seen from the facts on record, originally, assessment in case of the assessee was completed ex parte under section 158BD read with section 144 of the Act since the assessee failed to comply with the statutory notices issued by the Assessing Officer. Though, while deciding assessee's appeal in the first round the Tribunal restored the matter back to the file of the Assessing Officer for de novo adjudication of the issues, the situation did not improve due to the non-co-operative attitude of the assessee which ultimately resulted in completion of assessment ex parte under section 144 read with section 158BD of the Act. Thus, from the aforesaid facts, it becomes clear that the assessee was totally non-co-operative before the Assessing Officer during the original assessment as well as de novo assessment in pursuance of the directions of the Tribunal.....