TaxTMI 
TaxTMI 
2018 (11) TMI 1747
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....the ex-managing partner of the firm, in whose name the authorization was issued, was present in the premises. He was the brother of the present partners. His statement on oath was recorded and certain books of accounts and other documents were seized in addition to unaccounted cash of Rs. 2,89,500/- and an imported Benz Car. 3. The assessee had been carrying on a sister-concern by name, M/s. Chekkattu Financiers in the very same premises. From the records and all the available information, the assessing officer found that the firm is actually managed by Sri. Alex C. Joseph. Admittedly, the assessee had not been carrying on any chitty business in the subject years and was involved only in the business of selling imported cars brought to the country in the name of Non Resident Indians (NRI). For both the years, the status of the assessee was found to be an Association of Persons. 4. For AY 1992-93, the following additions were made: (i) Cash credits amounting to Rs. 1,48,450/-were assessed under Section 68 of the Act as unexplained cash credit. (ii) Rs. 7,16,254.95 as unexplained credit balance available in the books of accounts, was added on as income. (iii) The assessee'....
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....-examined. The dis-allowance under Section 40A(3) of the Act was also set aside. 7. The questions of law arising in the appeal of the assessee for the year 1992-93, as available in the memorandum of appeal, are as follows; "(i) In the facts and circumstances of the case, ought not the Tribunal have held that the search conducted on 17.08.1992 in the partnership firm on the basis of warrant issued in the name of stranger was illegal? (ii) In the facts and circumstances of the case, ought not the Tribunal have held that the addition under Sec.68 of the Act was unwarranted, more so, when it was demonstrated that these were chitty amount received from subscribers? (iii) In the facts and circumstances of the case, ought not the Tribunal have set aside the addition of unexplained cash credit, more so after appreciating other evidence adduced by the appellant." 8. The Department in their appeal has raised the following questions of law; "1. Whether, on the facts and in the circumstances of the case and in the light of the reasons noted in the assessment order, the Tribunal is right in law and fact in interfering with the addition of Rs. 7,50,000/- made under Sec.40A(3) of the In....
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....is no cause shown for interference by us. The appeal filed by the assessee as I.T.A.No. 212 of 2012 for 1992-93 is, therefore, rejected and the questions of law are answered in favour of the Revenue. 11. As regards the appeals filed by the Department, the challenge is regarding dis-allowance under Section 40A(3) of the Act of Rs. 7,50,000/-, which was interfered with by the Tribunal. Rs. 7,50,000/- was allegedly paid to one Sri. Balan Pillai by the assessee for purchase of a car brought to India. The A.O. found from the books of accounts, including the ledger produced at the time of hearing, that the income derived from the dealing of vehicle was not commission as claimed by the assessee. The A.O. also found that an amount of Rs. 46,785/- was credited to the Profit & Loss Account as commission on vehicle transaction, which includes a sum of Rs. 25,000/- relating to the dealings in a car, which had been imported in the name of one Sri. Balan Pillai. The car was sold by the assessee for Rs. 18,25,000/-, out of which the value of car included Rs. 10,50,000/- paid as customs duty. The learned Standing Counsel appearing for the Department submits that the assessee failed to respond to ....
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....made under Section 40A(3) of the Act, then necessarily, the same should have been in the name of Sri. Arun Choksi, was the finding. 14. Admittedly, the car was imported to India on transfer of residence (T.R) of a Non-Resident Indian (NRI). There are certain conditions to be complied with on such transfer being effected one of which is the vehicle being continued in the name of the importer for a specific period. It is also not clear as to when the import was made and the transfer was effected in the name of Sri. Arun Choksi. If the import had been made by the NRI, then, necessarily, the customs duty would also have been paid by the NRI itself. There is no explanation as to why the assessee firm paid the customs duty for clearance of the imported car. The assessee's role, hence, cannot be said to be of a mere middle man. There are more details to be looked into as to when the import was made and the transfer was effected based on the Registration Certificate, if at all, issued in the name of Sri. Arun Choksi, who is said to be the purchaser. If the customs duty had been paid by the assessee firm or by the subsequent registered owner, then, necessarily, there is violation of th....
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.... handed over the draft and the same was encashed through the bank account of the assessee. The Tribunal has held that without any cross-examination by the assessee in this regard, the statement before the AD(I) cannot be a basis for making such an addition. We agree with that. We answer the said question of law also in favour of the assessee and against the Revenue. 16. The third question is on the very same addition on the onus of proof having been cast on the Department. We do not think that the said question arises since when Sri. M.K.A. George was examined by the AD(I), there should have been an opportunity to the assessee to cross-examine the said person. The same having been denied, there is violation of principles of natural justice. We do not think that there should be a remand in the issue for reason of the minimal addition, which was set aside by the Tribunal. The appeal of the Department for the year 1992-93 is partially allowed interfering with the order of the Tribunal and sustaining the addition of Rs. 7,50,000/- made by the A.O, on grounds stated herein. 17. In the year 1993-94, the very same issue of the validity of search and the additions made under Section 68 o....
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....found and seized during search? 3. Are not the findings of the Tribunal highlighted and challenged in the grounds raised or as grounds raised perverse and against law, logic and human conduct? 4. Whether, on the facts and in the circumstances of the case;- (a) did the assessee discharge the burden of proof? (b) Should not the assessee be put to proof?" 20. The unaccounted business receipts were totally deleted by the Tribunal. The Tribunal's reasoning was that the transactions were, in fact, those carried out by Sri. Alex C. Joseph, who was not even a partner of the business. Here we have to notice that there was no partnership firm registered as per the Income-tax Act and the assessment was carried out as an AoP. Alex C. Joseph, in whose name the warrant was issued was also present in person in the premises when the search was conducted. It was then found that the identical issue came up for consideration before the Tribunal on import of vehicles from various countries in the name of NRI's, in which Sri. Alex C. Joseph was found involved in the sale of those vehicles within India. Sri. Alex C. Joseph was found to have carried out the transactions by himself in oth....