TaxTMI 
TaxTMI 
2020 (3) TMI 497
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....y 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 only 5 partners to justify the impugned addition? (iv)Whe....
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....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 retail trade business on 17.10.2003. Notices under Section 142 as well as Section143(2) d....
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.... 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 of the Act. In this connection, reference has been made to Circular No.24/2015 dated 31.12....
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....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 and therefore, the appellant cannot be treated as firm and rightly been treated as Association....
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....ishna 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 satisfaction note, it is evident that the satisfaction note has been recorded in respect of the appellant and the profit ofG.T.Krishna Murthy as well as pr....
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....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 purposes of this Act if the partnership is evidenced by an instrument and the individual shares of the partners are specified in that instrument. In the....