TaxTMI 
TaxTMI 
2018 (12) TMI 1261
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....s conducted on 08-09-2010. Pursuant to it, a consequential search was carried out in the cases of NNK Constructions, Uniglory Infra Projects Pvt. Ltd., Devgiri Engineering and Shri Sopan D. Patil (the assessee in question) vide a single warrant on 17-09-2010 at the premises located at Room No.102 and 103, B-Wing, Parmar Trade Centre, Sadhu Vaswani Chowk, Pune - 01. The Assessing Officer (AO) has recorded that Uniglory Infra Projects Pvt. Ltd. is a sub-contractor of Shraddha Group and Shri Sushil Agarwal of Uniglory Infra Projects Pvt. Ltd. is associated with NNK Constructions, Devgiri Engineering and Shri Sopan D. Patil in some way or the other. A bundle of loose papers containing 33 pages was seized from the searched premises, that is, 102-103, B-wing, Parmar Trade Centre, Pune, which is the office of NNK Constructions (Sh. Nanak Krishnani is its proprietor) and Devgiri Engineering (Sh. Murlidhar Bubaji is its partner). The assessee got a contract in Sangamner from the Irrigation Department and such work of Sangamner Project was sub-contracted to NNK Constructions and Devgiri Engineering. The AO issued notice u/s.153A of the Act, in response to which the assessee furnished a....
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....ced in para No.7.3 of the assessment order that : `I am one of the persons covered under search action conducted on 08-09-2010 and 17-09-2010...'. It emerges from the above factual matrix that not only a valid search warrant was executed on the assessee but the same fact was also admitted by the assessee in his letter written to the AO apart from signing the statement u/s. 132(4) of the Act. 5. Section 153A of the Act provides that where a search is initiated u/s. 132 etc., the AO shall issue notice and complete the assessment for six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted. Thus it is unambiguous that initiation of search u/s 132 is sine qua non for framing of assessment u/s 153A. Section 132(1), in turn, provides that where Principal Director General etc., in consequence of information in his possession, has reason to believe that any person to whom one of the three circumstances given in clauses (a), (b,) or (c) apply, then the Principal Director General etc. shall authorize any Additional Director etc. to carry out search by one or more of the five means enumerated in the provision, inter alia....
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....ome of F.Y. 2009-10 not shown in the regular books of account'. He further stated that : `As evident from the seized papers and also statements recorded in respect of Shri Nanak B Krishnani, myself and Devgiri Engineering were jointly executing the Sangamner Project. Hence, on mutual consultation both of us have agreed to divide this unaccounted income of Rs. 307.84 lakhs in 40:60 ratio'. Ex consequenti, the assessee's share of Rs. 123.13 lakhs was offered for taxation in his return for the A.Y. 2010-11. 9. One of the papers seized from such premises, marked as page 25, is a record of certain transactions totaling up to Rs. 5,23,53,697/-, being, purchase of steel on different dates pertaining to the A.Yrs. 2009-10 and 2010-11. The Revenue claims this page to be a list of accommodation entries, which were recorded by the assessee in its books of account. At the time of search, Shri Murlidhar Bubaji, partner of Devgiri Engineering and Shri Nanak Krishnani, proprietor of M/s. NNK Constructions, who were working as sub-contractors of the assessee, admitted that the transactions at page 25 were a record of accommodation entries taken by the assessee in relation to the sub-contract....
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....the documents relating to the assessee's business were found at 102 and 103, B-Wing, Parmar Trade Centre, Sadhu Vaswani Chowk, Pune, but they were incriminating in nature and on the basis of such documents the assessee surrendered certain income as well. The name of the assessee also appears in the panchanama drawn for that premises. 11. Next is the case of Harsh deep Construction Vs. DCIT in ITA No.1941/Mum/2014, in which no such search was initiated or conducted in pursuance to the warrant. Even the warrant indicated the name of Harshad P. Doshi but not that of the assessee in that case. The Tribunal in para No.10 observed with concurrence that 'the ld. CIT(A) has expressed the view that the search need not take place at the business premises of the assessee itself but it can be conducted in any other place also'. There cannot be any dispute on such observations made by the ld. CIT(A) in that case. Though the facts in the case of Harsh deep Construction are different but the ratio as extracted above validates the search action taken upon the assessee in the instant case. 12. In the case of ACIT Vs. K.G. Finvest (P) Ltd. (2017) 57 ITR (T) 62 (Delhi-Trib), the search was held....
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....t work was looked after by the sub-contractors, namely, Murlidhar Bubaji and Nanak B. Krishnani and the material required for the project was purchased by them on his behalf, whose delivery was also taken by them alone. He, therefore, shifted the burden to prove the genuineness of the transactions by means of production of delivery challan, stock register, transport lorry receipts etc. on them by expressing his inability to produce the same. The reply of the assessee was confronted to M/s. Devgiri Engineering and NNK Constructions, represented by Murlidhar Bubaji and Nanak B. Krishnani, for comments. In response, both of them stated that they were working as sub-contractors along with the assessee to execute the Sangamner project and the material required for the project was procured by the assessee alone and the said material/goods were unloaded, stored, acknowledged by the supervisory staff of the assessee. The AO again confronted the version given by the subITA contractors to the assessee, who reiterated the earlier stand as to the genuineness of the transactions recorded on page no.25. Since the assessee could not lead any primary evidence to support the genuineness of the tran....
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....on Maharashtra Irrigation Scam, which took place during the relevant period for which the Govt. of Maharashtra directed its Anti Corruption Bureau to conduct an enquiry. This fact has been recorded on pages 30 onwards of the impugned order. The Hon'ble Bombay High Court, at the relevant time was monitoring the probe while dealing with the PILs filed on Irrigation Scam. When we consider the facts in totality, the inference drawn by the authorities regarding page 14 of the searched document cannot be interfered with that a sum of Rs. 307.8466 was paid to Sushil Agarwal as bribe for procuring contracts for the assessee and M/s. Devgiri Engineering. The factum of the assessee having offered for taxation an income of Rs. 123.13 lakhs in his income-tax return for the A.Y. 2010-11 @ 40% of Rs. 307.8466 lakhs paid to Sushil Agarwal, fortifies the conclusion drawn by the AO. Such a surrender has not been retracted nor the assessee has challenged the offering of his share as the income. This is one side of the story which shows that at least a sum of Rs. 307.8466 lakhs was an outgo from the unaccounted income of the assessee and M/s. Devgiri Engineering. 19. The second side is page no. 25....
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....of about 8%. Considering the percentage of Purchases to Contract receipts in the preceding years, it cannot be accepted that the assessee simply obtained accommodation entries and executed the work with nominal purchases of Rs. 2.25 crore. This implies that the assessee, in fact, procured some material at a lower prices and inflated the purchase cost with accommodation entries. This fact is further corroborated by the replies given by Devgiri Engineering and NNK Constructions dated 3.12.2012 and 6.12.2012 respectively, as have been reproduced verbatim in the assessment order to the effect that : `As per his (the assessee) instructions and supervision we were carrying out the project and the material required for the project were procured by Mr. Sopan D Patil and the said material/goods were unloaded, stored, acknowledged by the site supervisory staff of Mr. Sopan D Patil...'. Thus, there can be no difficulty in drawing an inference that the assessee, in fact purchased goods from other undisclosed sources and utilized the same in the execution of contracts, though inflated bills were received and recorded in the regular books of account as accommodation entries. 21. The Hon'ble G....