TaxTMI 
TaxTMI 
2020 (3) TMI 497
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....Tribunal was justified in upholding the validity of assessment passed under Section 158BD read with Section 143(3) of the Act in the absence of valid satisfaction recorded by the assessing officer after application of his mind on the materials gathered in the course of search of partner of the appellant firm? (ii) Whether the Tribunal was justified in surmising that the alleged undisclosed income from transaction of used empty bottles belonged to the Appellant firm and whether the finding in this regard was not perverse and unsupported by evidence? (iii)Whether the Tribunal was justified in surmising that the document found in the partner's premises refers to an entity with 9 shares belonged to the appellant firm which has....
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....ises of aforesaid G.T.Krishna Murthy, from where one of the documents was seized and a panchanama was prepared. The aforesaid document as per the revenue contains the details with regard to sales, gross profit, net profit of the appellant and share of profit of G.T.Krishna Murthy at the rate of 9/105 pertaining to excise accounting year ending 31.01.1997, 31.07.1998 and 31.07.1999. The statement of G.T.Krishnmurthy was also recorded on 14.03.2009 and it is the case of the assessee that on the basis of the aforesaid statement, a notice under Section158BD of the Act was issued to the appellant on 10.02.2003, to proceed under Section 158BC of the Act. 3. The appellant furnished NIL return on the basis of commercial tax returns showing the r....
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....(hereinafter referred to as 'the tribunal' for short). The appellate tribunal has allowed the appeal preferred by the revenue. In the aforesaid factual background, this appeal has been filed. 5. Learned counsel for the appellant submitted that warrant was issued against G.T.Krishna Murthy and his residence was searched. However, no satisfaction has been recorded for initiating the proceedings under Section 158BC of the Act against aforesaid G.T.Krishna Murthy. It is further submitted that the aforesaid provision is held to be mandatory by the Supreme Court in the case of 'COMMISISONER OF INCOME TAX-III VS. CALCUTTA KNITWEARS', (2014) 362 ITR 0673 (SC) and recording of a satisfaction note is a prerequisite for the purpose of Section 158BD....
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.... G.T.Krishamurthy in support of thesubmission that four persons viz., Mallikarjuna, H.V.S., Vijay Kumar Shetty and Kareem Sab were being paid the profits. The aforesaid witness has further stated that he does notknow as to why the profits of the firm were being given to them. Learned counsel for the revenue has also invited our attention to trial balance sheet, in which names of aforesaid persons have been mentioned and percentage of profits have been shown. It is also pointed out that in the statement, G.T.Krishna Murthy has not stated that there is anotherpartnership firm, which is carrying on the same business with nine partners. It is also pointed out that the requirement contained in Section 184 of the Act has not been complied with an....
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.... Based on this, the profit of M/s Sree Venkatesha Bottles is worked out as follows: Year Ending Profit of G.T.Krishna Murthy Profit of M/s Sree Venkatesha Bottles 31.07.97 94,329 11,00,015 31.07.98 85,887 10,02,015 31.07.99 1,32,600 15,47,000 Total 36,49,520 Mr.G.T.Krishna Murthy also admittd this fact under oath in a statement recorded during the search. In order to bring this amount to tax, Notice under Section 158BC read with Section 158BD is issued. This case has been notified to this circle by the Commissioner of Income-Tax, Davanagere vide order No.F.No.Jurs/CIT/DVG/2001-02 dated 18.02.2001 from Ito, Ward-3, Shimoga. 8. Thus, from perusal of the aforesaid satisfac....
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....ine partners including the five partners of the assessee firm appear therein, which goes to prove beyond any shadow of doubt that assessee firm has been indulging in two types of business in the same line and parallel business was being carried out clandestinely with the active participation of four other persons. The aforesaid finding is a finding of fact which has been recorded by the Income Tax Appellate Tribunal on the basis of meticulous appreciation of material on record. Therefore, the substantial question of law Nos.(ii), (iii) and (viii) are answered against the assessee and in favour of revenue. 10. Section 184 of the Act deals with assessment as a firm. Section 184(1) provides that a firm shall be assessed as a firm for the pu....