TaxTMI 
TaxTMI 
2020 (3) TMI 427
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....these appeals are directed against two separate orders of learned CIT(A) - 2, Bengaluru dated 29.05.2012 in the case of Smt. Fasi Baig and Smt. Farah Rafi for the block period from 01.04.1995 to 28.03.2002. These appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. First, we take up the quantum appeal in the case of Smt. Farah Rafi in IT(SS)A No.43/Bang/2009. 3. In the course of hearing, learned AR of the assessee submitted that ground 1 is general and ground No.3 is not pressed and accordingly it is held that no separate adjudication is called for regarding ground No.1 and ground No.3 is rejected as not pressed. 4. He also submitted that as per ground No.2, the assessee's grievance is this that the order of block assessment passed by the AO under section 158BD of the Income Tax Act, 1961 is bad in law and void-ab-initio because no valid satisfaction has been recorded by the AO of the searched person before issuance of notice under section 158BD of the IT Act and therefore, the assessment order should be quashed by following the judgment of Hon'ble Apex Court rendered in the case of Manish Maheshwari as reported in 28....
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....isfaction satisfy the requirement of the law regarding issue of notice under section 153C of the IT Act. He submitted that provisions of section 158BD and 153C are para materia and therefore, these judgments are applicable in the present case also. 6. We have considered the rival submissions. We find that on pages 2 to 17 of the Assessment Order passed in the present case i.e., in the case of Smt. Farah Rafi, the AO has reproduced relevant portion of the Assessment Order passed under section 158BC of the IT Act in the case of Mr. Raffi Baig being one of the 4 co-owners of the property and business. On page No.4 of the Assessment Order, the AO has reproduced the relevant portion of the written reply of that assessee dated 05.03.2004 in which it is noted that the assessee possesses 1/4th share in the property now called Moin Commercials and it is also noted that M/s. Om Shakthi Enterprises initially consisted 4 members i.e., Mr. Raffi Baig, Mr. Fasi Baig, Smt. Farah Rafi and Smt. Fasi Baig. On page 17 of the Assessment Order, it is clear cut noted by the AO that 1/4th share of Rs. 103 lakhs computed at Rs. 25.75 lakhs with unexplained investment of Shri. Raffi Baig in whose case sea....
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....AO himself has noted on page 8 of the Assessment Order that liability due to Malik has been cleared through some property transactions and on that basis, the AO has held that the liability due to Mr. Malik has been cleared through this transaction of land settlement and no money is due to him as on the date of search. He submitted that in view of this finding in the Assessment Order, no addition can be made regarding this amount even if it is held that no amount is due to Malik because this becomes admitted position of fact that no money in cash was paid by the assessee to Mr. Malik to clear this liability. Learned DR of the Revenue supported the order of CIT(A). 9. We have considered the rival submissions. We find that the dispute is this in the present case that it is admitted position of fact that to the extent of Rs. 20 lakhs, the amount is explained by the assessee by way of liability payable to Mr. J. K. Malik but he AO has rejected this claim of the assessee on this basis that on the date of search, no such liability was in existence because the same was cleared on account of some property transaction. This is not the case of the AO that the property handed over to Mr. Mali....
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.... of Mr.Javed to Mr. Ramakrishna in this property transaction, which was taken over by the agent Mr. Akram Khan on behalf of the assessee and the three co-owners the same is found documented and appear prima facie reasonable. But to hold that the assessee has proved that the said creditor has not been cleared and continued till the date of search, the assessee had _promised to produce the said person for examination and he has not done so till date in spite of several opportunities allowed to him in this regard. Hence, I am constrained to hold that the assessee has not availed the opportunity allowed to him and produce the party for verification of factual position. In view of this, I am constrained to hold that this creditor is also not established as genuine as on the date of search. The above view has been taken by me in the back ground of the material available in seized documents that the assessee had received certain amounts from Mr. Mohammed Asadulla which the assessee will have naturally used it for discharging liabilities existing ad admitted by him before the DDI(Inv) and also before me." 12. From the above para reproduced from page 9 of the Assessment Order, it comes out....
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.... discussion, we hold that all the 3 amounts of Rs. 20 lakhs, Rs. 25 lakhs and Rs. 12 lakhs stand explained and the addition made by the AO in the present case to the extent of 1/4th thereof Rs. 14.25 lakhs is hereby deleted. 15. In the result, the assessee's appeal in the case of Mr. Raffi Baig is partly allowed. 16. Now we take up the second quantum appeal in the case of Smt. Farah Rafi in ITA No.43/Bang/2009. In this case, it was submitted by learned AR of the assessee that ground No.1 is general and ground No.3 is not pressed and accordingly we hold that for ground No.1, no separate adjudication is called for and ground No.3 is rejected as not pressed. Regarding ground No.2, the same arguments were advanced regarding absence of required satisfaction and it was agreed by both sides that the facts are identical in this case and in the case of Mr. Raffi Baig and this ground can be decided on similar line. In the case of Mr. Raffi Baig, we have rejected ground No.2 as per para No.6 above and on the same line in the case of Smt. Farah Rafi, ground No.2 is rejected. 17. Regarding merit, it was submitted by learned AR of the assessee that the issue in dispute on merit is similar to ....
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....peal in the case of Shri. Fasi Baig in IT(SS)A No.22/Bang/2010. It was submitted by learned AR of the assessee that the grounds raised by the assessee in the cases of Shri. Fasi Baig and Smt. Farah Rafi are identical and the same can be decided on similar line. Accordingly, we hold that no adjudication is called for regarding ground 1, ground No.3 is rejected as not pressed and ground No.2 is rejected on similar line as in the remaining two quantum appeals. Regarding merit of addition of Rs. 25.75 lakhs confirmed by learned CIT(A), we confirm the addition of Rs. 4 lakhs and delete the balance addition of Rs. 21.75 lakhs as in the case of Smt. Farah Rafi. 21. In the result, appeal of Shri. Fasi Baig is also partly allowed. 22. Now we take up two penalty appeals being the penalty imposed under section 158BFA (2) in case of Smt. Farah Rafi and Shri. Fasi Baig. As per two separate penalty orders passed by the AO under section 158BFA(2) of the IT Act, 1961, in these two cases, the AO has imposed penalty of Rs. 1575,900/- in each case on this basis that the addition of Rs. 25.75 lakhs have been confirmed in each of these two cases. Out of this addition of Rs. 25.75 lakhs in each of th....