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2019 (3) TMI 1266
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....corded by the Assessment Officer of the searched person in the course of framing of the Block Assessment in his hands and further even though there were no seized materials indicating payment of on-money with a view to justify the addition of Undisclosed Income in this regard ? (2) Whether the Appellate Tribunal is correct in law in sustaining the action of the Respondent in framing the Block Assessment in terms of Section 158BD of the Act even though the decision of the Honourable Supreme Court and the decision of this Honourable Court were cited and noticed in the impugned order to support the propositions canvassed on the validity of the Block Assessment framed in the hands of the Appellant ? (3) Whether the Appellate Tribunal is correct in law in sustaining the action of the Respondent on the jurisdictional issue even though the directions of the Appellate Tribunal while passing the order in the hands of the searched person for initiating and framing of the assessment in the hands of the Appellant in terms of Section 158BD of the Act would not override the mandatory provisions in the said section for recording of satisfaction of Undisclosed Income assessable i....
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.... question. It is because of the Tribunal's findings in the case of the son, the present proceedings under Section 158BD of the Act were undertaken against the mother- Smt.V.Vijayalakshmi. 4. We have heard the learned Counsels for the parties and also given due consideration to their submissions. 5. The relevant findings of the learned Tribunal in the case of appeal of the son-Mr.S.V.Srinivasan- in I.T.(SS) A.No.98/Mds/2004 for Block Assessment Period from 01.04.1995 to 13.09.2001, decided on 03.01.2005, are quoted below for ready reference : "16. We have heard the rival submissions and gone through the case records and seen that the properties purchased in the name of assessee's mother, Smt.V.Vijayalakshmi and she is an existing income-tax assessee since 1991-92 declaring income from money lending and embroidery works etc. No doubt, the seller Shri K.N.Natarajan has admitted that the property was sold for a sum of Rs. 18,50,000/- and even the assessee admitted that he has purchased the property for a sum of Rs. 18,50,000/- as his mother has no sources of income. But despite all these, the Department has conducted search on the business as well as the resident....
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....13-09-2001 was issued to the assessee on 18-03- 2005. This was served on the assessee on 22-03-2005. In response to this notice the assessee filed her Block Return of Income on 20-02-2006 admitting the undisclosed Income at Rs.NIL. The case was posted for hearing. 2. In response to the notice Shri S.Janardhanan, Chartered Accountant, Pollachi was present. The case was discussed with the assessee's representative on different dates. After scrutinising the details filed by the assessee and after discussing the case with assessee's representative, the case is finalised as under :- 3. During the course of search in the case of Shri S.V.Srinivasan (son of the assessee), it was noticed that an immovable property being land and building was purchased by the assessee on 23.11.1996 from Shri K.N.Natarajan for a stated consideration of Rs. 4,60,000/-. It was also noticed from the seized documents that additional stamp duty of Rs. 1,00,739/- was paid for registering this property on 24- 03-1997. Thus the total stamp duty paid for the purchase of this property (including the stamp paper value) amounts to Rs. 1,95,739/-. On the basis of the stamp duty paid the market v....
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....roperty for 'on money' payment in the hands of the appellant. Thus in my opinion the initiation of 158BD proceedings are perfectly in order though the AO did not write this direction of ITAT in the order; rather he independently recorded the reasons for initiating 158 BD proceedings which are also not incorrect. Thus, in any case, the initiation of action under section 158BD in the case of the appellant is fully justified. 4.1. As regards appellant's claim that no material was found during the course of search relating to 'on money' payment except the statements of seller and purchaser in which there are many contradictions, no addition should be made based on these statements only, I find that AO has rightly mentioned in the order that in view of the decisions as cited by him, the statements recorded during the course of search can be used or making an assessment even though no documents are found during the course of search. In this regard Hon'ble ITAT Chennai Bench ''D'' in the case of Dr.N.Sadasivam and Smt. S.Nirmala Vs.ACIT, Central Circle, IV, Coimbatore in IT (SS) A No.36 and 37 (Mds)/2004, has observed that : '&....
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....ioned under section 132A, in the case of any person, then,- (a) the Assessing Officer shall- (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period : Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter : Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return; ....
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....ivasan - that the tax was to be levied on Undisclosed Income in the form of property sold, which was held in the name of mother- Smt.V.Vijayalakshmi. The observation that the assessment could be made only against the mother under Section 158BD of the Act was a reason sufficient to proceed against the present Assessee-mother - Smt.V.Vijayalakshmi. It is only after the Tribunal passed the order in the said appeal in the case of Shri S.V.Srinivasan on 03.01.2005 that the proceedings under Section 158BD of the Act were initiated against the present Assessee-Smt.V.Vijayalakshmi- on 18.03.2005 in the first instance, as is clear from the above quoted portion of the Assessment Order. Apparently, no objection was raised by the Assessee before the Assessing Authority regarding the necessity to record separate reasons by the Assessing Authority himself before initiating proceedings under Section 158BD of the Act. Even on issuance of letter on 08.09.2006, in Paragraph 4 of the order, the Assessee filed a reply on merits of the sale transaction, but, no question of jurisdiction on account of non-recording of reasons by the Assessing Authority for initiating proceedings under Section 158BD of th....
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....inally concluded the finding of fact in the case of persons against whom search was made that the transaction of sale of property in question was taxable in the hands of mother-present Assessee- Smt.V.Vijayalakshmi, non-recording of reasons independently by the Assessing Authority, assuming it to be so, though there is nothing on record to indicate otherwise, cannot be said to be fatal for initiating proceedings under Section 158BD of the Act against the mother-present Assessee. 12. A harmonious and combined reading of Sections 158BC and 158 BD of the Act is necessary to give effect to the Scheme of Assessment in the case of Search undertaken against the Assessee to bring to tax the Undisclosed Income under Chapter XIVB of the Act. 13. Therefore, as far as the First Question framed above is concerned, we answer the same in the aforesaid manner against the Assessee and in favour of the Revenue. 14. Adverting to other Questions relating to merits of Additions made in the hands of the present Assessee, we do not find any illegality or perversity in the same, as they remain findings of fact bringing to tax the Undisclosed Income in the hands of the present Assessee under Secti....