TaxTMI 
TaxTMI 
2019 (4) TMI 1110
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....n law and void-ab-initio in as much there was no justification to issue the warrant to search the premises of the appellant and the residential premises of the Directors and employees as the conditions specified in terms of Sec. 132[1][a], [b] and [c] of the Act did not exist and therefore the search action is illegal having regard to the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80 and the Hon'ble Karnataka High Court in the case of C. RAMAIAH REDDY reported in 339 ITR 210 and consequently the impugned assessment order deserves to be cancelled. 3. Without prejudice to the above, the learned CIT[A] is not justified in upholding the addition of Rs. 92,07,500/- in respect of certain cash payments alleged to have been made by the appellant outside the books of accounts, which was erroneously offered in the return of income filed but, later on withdrawn and clarified in course of assessment proceedings under the facts and in the circumstances of the appellant's case. 4. The learned CIT[A] is not justified in upholding a further addition of Rs. 1,57,86,900/- in respect of certain cash payments alleged t....
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....ith the details of issues in dispute and arguments of the assessee. He also submitted that Ground No. 1 in both years and Ground No. 6 in A. Y. 2010 - 11 and Ground No. 4 in A. Y. 2011 - 12 are general and hence, no separate adjudication is called for in respect of these grounds. About Ground No. 2 in A. Y. 2010 - 11, he submitted that this ground is not pressed. Regarding Ground No. 5 in A. Y. 2010 - 11 and Ground No. 3 in A. Y. 2011 - 12, he submitted these grounds are consequential. In respect of Ground No. 4 in A. Y. 2010 - 11, he submitted that on page nos. 60 and 61 of the paper book is the copy of statement recorded on oath u/s.131 of IT Act on 15.03.2011 from Shri Vivek .S. Hebbar, MD of the assessee company and in particular, our attention was drawn to question no. 3 and its reply. He submitted that this is admitted position of fact that as per this statement, MD of the assessee company has agreed for income from different sources and the same was offered for taxation to the extent of Rs. 2,49,94,400/- for Assessment Year 2010-11 and Rs. 113 Lakhs for Assessment Year 2011-12. Thereafter he drawn our attention to letter dated 29.03.2011 from assessee addressed to DDIT(Inv.)....
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....zed cash book page 7 and seized cash book page 41. He submitted that in this letter, the assessee has explained all pages of seized cash book but for the purpose of deciding these two appeals, only page 7 and 41 of the seized cash book are relevant. Thereafter he submitted that on 08.04.2011 also, statement of Shri Vivek S. Hebbar, MD of the assessee company was recorded and copy of the same is available on pages 96 to 97 of paper book and in particular, our attention was drawn to question no. 4 and its reply. He also drawn our attention to copy of letter dated 11.03.2013 addressed to the AO during the course of assessment proceedings copy available on pages 98 to 105 of paper book. He submitted that in the light of these documents and arguments, Ground No. 4 of the assessee's appeal for Assessment Year 2010-11 should be allowed. 5. In respect of ground no. 3 for Assessment Year 2010-11 and ground no. 2 for Assessment Year 2011-12, he submitted that these two amounts involved in these two grounds in these two years of Rs. 92,07,500/- and Rs. 80 Lakhs respectively were included by the assessee in return of income filed by the assessee but later on, it was noticed by the assessee th....
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....to which the assessee wrongly included the amount of turnover in dispute in the return filed by the assessee by showing that there was amendments as per which on non-ferrous metal scrap coming from outside State into local area for use, no entry tax was leviable w.e.f. 01.04.1995 and this was not known to the assessee immediately. He submitted that in the present case, the claim of the assessee is not on the basis of any amendment in the law and therefore, this judgment is not applicable in the present case. He submitted that ground no. 3 in Assessment Year 2010-11 and ground no. 2 in Assessment Year 2011-12 should be rejected because the assessee cannot plead for reduction in the returned income on the basis of vague arguments. 8. We have considered the rival submissions. We find that ground no. 2 in Assessment Year 2010-11 is not pressed by ld. AR of assessee. Accordingly, this ground is rejected. We also find that ground nos. 1 and 6 in Assessment Year 2010-11 are general and ground no. 5 in this year is consequential in respect of charging of interest u/s. 234A, 234B and 234D of IT Act. Similarly in Assessment Year 2011-12, ground nos. 1 and 4 are general and ground no. 3 is ....
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.... years. Hence we find no merit in ground no.3 for Assessment Year 2010-11 and ground no. 2 for Assessment Year 2011-12. These grounds are rejected. 11. In the result, the appeal of the assessee for Assessment Year 2011-12 is dismissed. 12. Now we are left with ground no. 4 in Assessment Year 2010-11. The amount of Rs. 1,57,86,900/- being disputed by assessee as per this ground is sum total of entries on two pages of seized cash book i.e. on page nos. 7 and 41 available on pages 54 and 57 of the paper book. We reproduce the relevant portion of these two pages of the seized material from page no. 54 and 57 of the paper book which is reproduced by the AO also on page nos. 7 and 10 of the assessment order. Cash Book Page 7 : Particulars as found in Cash Book Amount 1) 10,000.32 X 950 9,500,304.00 1144.35 X 850 972,697.00 10,473,001.00 Ch Payment 5,250,000.00 Balance 5,223,000.00 5,223,000.00 The seized page 41 reads as under; Ashwathrtarayan Singh & Co - Mahalaxmi 16,593-290 12,000-000 4593-000 x 2300 1,05,63,900.00 29/3/2010 Payment 1,05,63,900.00 000000 3/05/2010 20230.600MT....
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....,94,456/- and amount of advance paid to them was also adjusted. This argument of assessee has been rejected by the AO on this basis that the seized material shows entries only in respect of purchase of iron ore and there is no entry towards transportation charges. In our considered opinion, if we go by the entry in the seized material only, then there is no such narration against this amount of Rs. 52.23 Lakhs that this much amount was paid by cash although for the payment of Rs. 52.50 Lakhs, it is specifically stated that it is paid by cheque. This is admitted position of fact that the seized cash book available on page no. 51 of paper book is not a regular cash book although the book used is having printing of "Cash Book" but the nature and style of entries are not like a cash book. Hence, in our considered opinion, explanation of the assessee should not be rejected outrightly and should be examined on merit and if no merit is found therein then only it can be rejected. The AO has also stated that assessee has failed to establish that how the payment made to Saikrupa Minerals is related with the amounts paid in cash to Ashwathnarayan Singh & Co. The AO also says that ledger acc....