TaxTMI 
TaxTMI 
2021 (1) TMI 994
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....peaking order. 2. The ld. CIT(A) failed to consider and decide the grounds of appeal no. 35, i.e. all the receipts and payments have been considered as undisclosed income and peak amount should have been considered. 3. The ld. CIT(A) failed to consider and decide the grounds of appeal no. 36, i.e. the undisclosed income has been determined even on the basis of documents seized from Ms. Asmita Aggarwal and Easan India Ltd. without there being any evidence to show the satisfaction of their respective AOs, as required by section 158BD of the Income Tax Act, 1961 (hereinafter referred to as "the Act") and handing over of the documents to the Ld. DCIT, Central Circle-12, New Delhi. 4. The assessment being time barred is null and void ab initio and deserve to be quashed. 5. Any valid notice u/s. 143(2) of the Income Tax Income Tax Act, 1961 (hereinafter referred to as "the Act"), 1961 was neither issued not served upon the assessee. 6. The Ld. Assessing Officer, who purportedly issued the various notice under the provisions of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), and made the assessment was not authorized to exercis....
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....ct, 1961 (hereinafter referred to as "the Act") is against the facts of the case as well as law and without prejudice is excessive. ASSESSEE'S IT(SS)A NO. 2/DEL/2011 3. The facts relating to the issues in dispute as narrated by the revenue authorities are that a search and seizure action as per provisions of Section 132 of the Income Tax Act, 1961 (in short "Act") was carried out at the residential premises of the assessee on 23.3.1999. The search was completed on 17.7.1999. The search as per the provisions of Section 132 of the Act was also conducted at the business premises of the assessee M/s Esam India Ltd. on 23.3.1999 which was concluded on 14.3.2000. Notice u/s. 158BC of the Act was issued to the assessee on 30.11.2000 requiring assessee to file block period return within 15 days of receipt of notice. The notice was served upon the assessee on 01.12.2000 through registered post. The letter containing notice u/s. 158BC of the Act was received back undelivered. Thereafter a notice was served at the then residential address of the assessee i.e. 141, North Avenue, New Delhi on 21.12.2000 through Notice Server. 3.1 In response to the same the assessee filed the reply dat....
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....ents supplied to the assessee earlier were incomplete and specific request for certain annexures and pages were made which was given to the assessee. On 6.7.2001 summons were issued to Sh. Abhishek Verma for compliance on 13.7.2001 so as to explain the seized documents. These summons were served on the assessee on 09.7.2001. Assessee did not attend at the given date and time nor any reply has been filed by the assessee stating reasons for his non-attendance. On 9.7.2001 assesee made another request through his letter dated 6.7.2001 requesting for returning the original seized material and assessee was allowed the opportunity to inspect and photocopies of seized material. But assessee did not inspect any seized material and filed another letters dated 10.7.2001 and 13.7.2001 stating that seized documents should be returned to the assessee. On 16.7.2001 assessee filed the Petition u/s. 144A of the Act before the Additional CIT, Central Range-3, New Delhi requesting for directions to AO to return in original seized material and without prejudice to this supply the certified copies of the seized material. The case was heard by the Addl. CIT, Central Range-3, on 18.7.2001. As per the di....
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....8 Unexplained expenditure (as per 8 above) 38,74,444 9 Unexplained deposits 7,24,71,120 10 Undisclosed income as per diary 1,42,10,625 11 Undisclosed investment in house hold and personal items. 79,68,269 12 Undisclosed investment for purchase of foreign exchange. 1,27,688 13 Undisclosed payment made to Rita Luther 2,00,000 14 Undisclosed payment to Sh. Sandeep Puri 1,00,000 15 Undisclosed profits of M/s Delhi Exports 2,77,00,000 16 Undisclosed profits of M/s Globetrotters 3,34,00,000 17 Undisclosed cash expenditure 1,05,250 18 Undisclosed income received through M/s Vino Veritas 7,67,30,400 19 Undisclosed income received through M/s European Capital Ltd. 1,33,00,000 20 Undisclosed cash payments received 8,06,800 21 Undisclosed receipts from Sh. SC Bharjatia 75,00,000 22 Bogus purchases 17,39,40,857 23 Undisclosed deposits made in General Credits Finance Ltd. 54,00,000 24 Undisclosed income as per 24 above. 1,19,03,000 25 Undisclosed income on account of payment made to Sh. Arjun Amla 3,20,40,000 26 Undisclosed income a....
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....the Act was executed. The explanation contained in the said section clarifies that the authorization for the search initiated u/s. 132 of the Act is considered to be executed when the search is recorded to be concluded by the search team in the panchnama drawn after such search. The word panchnama is not defined in the Act or Rules, even the Code of Criminal Procedure, 1973, the provisions of which relating to search and seizure are applicable to searches and seizure u/s. 132 of the Act, do not define the said word, however it prescribes the format in which the panchnama is required to be drawn. Ld. Counsel for the assessee stated that in the case of the assesse authorization / warrant of search was given on 22.3.1999, but in consequence thereof 03 panchnamas were drawn on three different dated at the same residential premises of the assessee i.e. dated 23.03.1999; 21.5.1999 and 16.7.1999. He stated that according to the Department the search was concluded on 16.7.1999, the date of limitation for passing the assessment order u/s. 158 BC of the Act was treated as 31.7.2001 and accordingly the order u/s. 158 BC of the Act was passed on 25.7.2001 i.e. within limitation period. But acc....
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....ct was passed. Lastly, on this legal issue of limitation, Ld. Counsel for the assessee stated that nothing further remained to be investigated at the search premises after 1st panchanama, the only reasons behind is not to conclude the search and keeping it pending for a long duration of approximately 4 months was, in only the gain time or, in other words, extend the period of limitation to complete the assessment upon the assessee, which is not permissible in law and therefore the assessment passed u/s. 158BC of the Act dated 25.7.2001 is time barred. In support of these arguments advanced by the Ld. Counsel for the assessee, he cited various judgments rendered by the Hon'ble High Courts which includes CIT vs. Sandhya P. Naik : 253 ITR 534 (Hon'ble Bombay High Court); CIT vs. Sarb Consultate Marine Products Pvt. Ltd. 294 ITR 444 (Hon'ble Delhi High Court); CIT vs. SK Katyal reported in 221 CTR 310 of the Hon'ble Delhi High Court; A Rakesh Kumar Jain vs. JCIT in ITA no. 1240/2016 of the Hon'ble Madras High Court; CIT vs. TS Chandrashekar : 221 CTR 385 of the Hon'ble Karnataka High Court; DCIT vs. Adolf Patric Pinto 284 ITR (AT) 207 of the ITAT, Mumbai Bench; Pr. CIT vs. PPC Business....
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....und at the time of drawing the 1st and 2nd panchnama in the month of March, 1999 and May, 1999 respectively. According to the 3rd panchnama dated 16.7.1999 Column 5(b)(i) various items were found that are Ann-2, Inventory of Credit Cards; Ann-3, Inventory of Foreign Visits; Ann-4, Inventory of Mobile. 6.1 He submitted that assessee has not placed in the paper book these documents, the copies of the Annexures Ann-2 to Ann-4, prepared at the time of drawing the 3rd and final panchnama dated 16.7.1999. But the comparison of the names of these annexures with the annexures prepared at the time of drawing the 1st panchanama dated 23.3.1999 which has been placed by the AR at page 1-4, alongwith the annexure 1 to 14 in assessee's paper book page 5 to 22 will reveal that above stated Annexures Ann-2 to Ann- 4, prepared at the time of drawing of third and final panchnama dated 16.7.1999 were entirely different than the Annexure Ann-1 to Ann-14, prepared at the time of drawing of first panchnama dated 23.3.1999. Ld. CIT(DR) stated that at the time of drawing of 1st panchanama dated 23.3.1999 no inventory was prepared in respect of mobiles and foreign visits, and such valuable were found on....
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....7. No other legal issues have been argued by both the parties. 8. We have heard both the parties on the legal issue raised by the assessee by stating that assessment order dated 25.7.2001 in the case of the assessee was passed u/s. 158BC of the Income Tax Act, 1961 is barred by limitation. We have gone through the orders passed by the revenue authorities alongwith the relevant provisions of law i.e. section 158BE of the Act as well as documentary evidences filed by the assessee and the Revenue especially three panchnamas as referred by both the parties in their written submissions. We are of the view that as pointed out by both the parties that 1st panchnama in pursuance of section 132 of the I.T. Act was drawn on 23.03.1999 at the searched premises of the assessee. Assessee has enclosed the same at pages 1-4 of the Paper Book Volume -I. As per the 1st panchnama various documents and books of accounts were found and seized by the Department that are Annexure A(A-1 to A-11); Annexure (A-2 to A- 14) which at page no. 6 to 21 of the Assessee's paper book Volume- 1. According to the second panchnama dated 21.5.1999 which is at pages 23-26 of the assessee's paper book volume no. 1 at....
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....ents and report of the AO and (11) letter dated 11.10.2010 of the AO. Assessee has also certified that all the documents at serial no. 1 to 7 were available before the AO and the CIT(A) and rest are part of proceedings / hearing before the CIT(A). 8.1 Keeping in view the aforesaid documentary evidences which the assessee has himself filed, we are of the view that as per the 3rd panchnama dated 16.7.1999 which the assessee has attached in the paper book at page no. 29, but at column no. 5(b)(i) following issues were found:- (i) Ann-2, Inventory of Credit Cards. (ii) Ann-2, Inventory of Foreign Visits. (iii) Ann-4, Inventory of Mobile. 8.2 At the time of drawing the 1st panchnama dated 23.3.1999 no inventory was prepared in respect of the mobile and foreign visits and such valuables were found only at the time of drawing of 3rd panchnama dated 16.7.1999. As the assessee himself admitted in the documentary evidences filed by the assessee that in three panchnamas the search team has taken in possession various valuables items which clearly establish the search carried out in the month of July, 1999 i.e. the last panchnama dated 16.7.1999 and various val....
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....itions on merits which were upheld by the Ld. CIT(A) i.e. total 25 additions which the assessee has mentioned in ground no. 7 at page 3-4 of the grounds of appeal. After hearing both the parties and perusing the orders of the revenue authorities, we are of the view that as regards to addition of Rs. 37 lacs on account of investment of M/s Esam India Ltd. as undisclosed income of the assessee, we have perused the seized material which at page 8, 11, & 12 to Annexure 4 seized from 4, Safdarjung Lane, New Delhi on 23.3.1999, mentioned by the AO. No doubt that assessee has denied these deposits, but as per the finding of the revenue authorities below supported by the seized material M/s Esam India Ltd. was incorporated on 10.1.1990.The assessee is No. 1 of the original subscriber to the Memorandum of Association of the company. The name of M/s Esam Trading Co. Ltd. was changed to M/s Esam India Ltd. and to M/s Alta Vista (India) Ltd. The assessee was the director of M/s Esam Trading India Ltd. till 21.11.1993, the balance sheet and profit and loss account for the year ending on 31.3.1993 signed by the assessee in the capacity of Director filed with the Registrar of Companies, New Delhi....
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....gards the addition of Rs. 4,02,557/- on account of foreign travels expenditure. After hearing both the parties and perusing the documentary evidences filed by the assessee which is at Annexure A2 & A-6. The assessee has not filed any evidence in support of his claim on this addition and by merely denying that assessee has not incurred any expenditure. Hence, this addition is liable to be made in the absence of any evidence filed by the assessee. We are of the view that amount of Rs. 16640 + 89465 + 226652 + 69800 totaling to Rs. 402557/- on account of foreign travel expense has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), because the assessee has not produced any documentary evidences supporting his claim. Hence, we uphold the impugned order on this issue. 9.5(i). As regards addition of Rs. 29,88,526/- on account of deposit in the bank. The Assessing Officer has provided opportunity to the assessee to explain this deposits, but the assessee has not availed the same and has not filed any evidence, even no explanation regarding this deposit has been given by the assessee. Therefore, the revenue authorities have rightly treated the same as undisclosed in....
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..... 9.8. As regards the unexplained expenditure of Rs. 38,74,444/-, the AO treated the same as undisclosed income of the assessee and the AO has made the addition on the basis of the seized documents and after giving the opportunity to the assessee to explain the same. Assessee neither attended the AO in response to the summons to explain the seized documents nor filed any reply stating the reasons for non-attendance in spite of the fact that photocopies of the documents were given to the assessee at the time of seized of these documents. After giving opportunity to the assessee and on the basis of the documentary evidence filed by the assessee alongwith the explanation, the Ld. CIT(A) in para no. 12.3 at page no. 53-54 of the impugned order held that opportunity given by the AO was not availed by the assessee and due to lack of evidences supporting the claim of the assessee, the Ld. CIT(A) has given the relief of Rs. 2,20,940/- and the balance of Rs. 36,53,504/- was rightly been upheld by the Ld. CIT(A) as undisclosed income of the assessee for this block period. In spite of the fact that the assessee remained non-cooperative before the revenue authorities, sufficient relief has ....
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....ns recorded in the diary alleged to be handed over by Ms. Asmita Aggarwal on 16.7.1999 and treated the same as undisclosed income of the assessee. Assessee has given the opportunity to the assessee to explain this amount and assessee has stated that Ms. Asmita Aggarwal having bitter relations with the assessee and finally resulted in legal divorce and there is no evidence or material to establish that the transactions recorded in the diary actually took place. After considering the reply filed by the assessee and detailed discussions, the AO has made the addition in dispute on the basis of documentary evidences as referred by the AO in the assessment order and the Ld. CIT(A) in the impugned order elaborately and finally upheld the addition on the ground that this addition has been made on the basis of the diary which was handed over to the Department by the wife of the assessee Mrs. Asmita Aggarwal. This addition has been made by the revenue authorities on the basis of documentary evidences and especially to the assessee who remained non-cooperative with the revenue authorities and for lack of evidence. Assessee has not discharged his burden of his onus laid upon him to prove that ....
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.... Ld. CIT(A) has rightly upheld the same, which does not require any interference on our part, hence, we uphold the same. 9.14. As regards the addition of Rs. 1 lac on account of payment to Sh. Sandip Puri and treating the same as undisclosed income of the assessee. The revenue authorities has made this addition on the basis of seized material mentioned in the impugned order and assessee has failed to explain the same therefore, this addition is upheld. 9.15. The AO has made the addition of Rs. 2,77,00,000/- on account of profit of M/s Delhi Exports and treated the same as undisclosed income of the assessee. According to the assessee, the AO has failed to appreciate the provisions of Income Tax Act, 1961 and particularly of Section 2(31) which defines person and further failed to appreciate that the income of partnership firm is separately assessable and without prejudice the assessee has submitted that AO has not in possession of any evidence or material to establish that M/s Delhi Exports earned a profit of Rs. 2,77,00,000/- and considered this profit for the block period upto 23.3.1999. The AO had made the addition in dispute on the basis of questionnaire dated 18.6.2001 as....
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....) which has been made on the basis of the seized material. Hence, we uphold the findings of the Ld. CIT(A) on this issue. 9.17. As regards addition of Rs. 1,05,200/- on account of cash expenditure incurred by M/s Delhi Exports. The Assessing Officer has disallowed the same by holding that the assessee is a real owner of M/s Delhi Exports and liable to pay the tax on income earned by M/s Delhi Exports and on the basis of page no. 5 Annexure A-28 seized from M/s Esam India Ltd. during the search operation on 23.3.1999 showing that the cash expenditure of Rs. 1,05,250/- was not booked in the books of M/s Delhi Exports. Assessee denied the same but without any evidence. Ld. CIT(A) has also upheld the same. After perusing the orders passed by the Revenue Authorities, we are of the view that the addition of Rs. 1,05,200/- made to the taxable income on account of expenditure incurred by M/s Delhi Exports. Assessee has not given any evidence or plausible explanation to controvert the version of the Assessing Officer. Therefore, the Ld. CIT(A) has rightly upheld the same, hence, we uphold the order of the Ld. CIT(A) on this issue. 9.18. As regards to the undisclosed income of Rs. 7....
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....n Capital Ltd. Therefore, the amount of Rs. 1,33,00,000/- has rightly been treated as the undisclosed income of the assessee by the revenue authorities, because this addition has been made on the basis of the seized documents in Annexure A-43 found from the premises of M/s Esam India ltd. and assessee could not furnish any evidence to support his contention, hence, we uphold the finding of the Ld. CIT(A) on this issue. 9.20 As regards the addition of Rs. 8,06,800/- on account of cash payment received from M/s Infocom Digital Systems Ltd.. After going through the orders of the revenue authorities, we are of the view that this addition has been made on the basis of the seized material Annexure A-48 from M/s Esam India Ltd. on 23.3.1999. No explanation has been given by the assessee to the revenue authorities. Therefore, this addition has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), hence, no interference is called for in the impugned order on this issue and we uphold the same. 9.21 The addition of Rs. 75,00,000/- on account of receipts from Sh. SC Bharjatia. According to the Assessing Officer M/s Infocom Digital Systems Ltd. to be a concern of ....
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....impugned order on this addition because for lack of evidence on the issue in dispute filed by the assessee, therefore, the addition of Rs. 17,39,40,857/- made by the Assessing Officer and confirmed by the ld. CIT(A) is as per law and record, hence, we uphold the same. 9.23 The Assessing Officer had made the addition of Rs. 54,00,000/- on account of deposits made with General Credits Finance Ltd. as undisclosed income of the assessee. During the assessment proceedings Assessing Officer issued the questionnaire dated 7.6.2001 to the assessee asking him to explain the undisclosed deposits. Assesee has denied the same and has not filed any evidence supporting his denial, hence, the Assessing Officer has made the addition in dispute and ld. CIT(A) has upheld the same by holding that the assessee had submitted in his statement recorded on 16.7.1999 that he has made the deposits of Rs. 54 lacs in the bank and that bank had gone into the liquidation and a claim had been lodged through the Bank of England and assessee has filed declaration under VDIS declaring such deposits, but has not made the payment of tax thereon. His application was not entertained and no certificate was issued. Th....
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....se deposits. The Assessing Officer has supplied all the documentary evidences to the assesee and the statements recorded on 16.7.1999 of the assessee was also given to the assessee in which the assessee has admitted that he was having bank account in Liechtenstein. During March, 1995, US dollar 2,67,500/- equivalent to Rs. 93,62,500/- have been deposited by assessee, the source of which assessee has not explained and Assessing Officer has made this addition as undisclosed income of the assessee. Similarly, as per the question no. 39(c) of Questionnaire dated 7.6.2001 Assessing Officer asked the assessee to explain the transfer of money from account no. 520062 made by him as per pages 30 to 46 of Annexure A-1 seized from the residence of Ms. Asmita Aggarwal during search operations on 23.3.1999. Assessee has not furnished any explanation of the amount in dispute and the Assessing Officer has made the addition of Rs. 3,58,60,300/- as undisclosed income of the assessee. Similarly, vide question no. 39(d) of questionnaire dated 7.6.2001 assessee was asked to explain the payment of totaling USD 5,00,000 to KD USA. Vide his reply dated 24.7.2001 assessee has stated that the pages r....
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....iating his claim on legal as well as on merits, but the assesee remained non-cooperative before the revenue authorities, hence, Assessing Officer has made the additions in dispute on the basis of the search material, after confronting the same to the assessee, but the assessee has not substantiated his claim by filing any evidence before the authorities below. Therefore, no interference is called for in the well reasoned orders of the revenue authorities, hence, we uphold the impugned order of the Ld. CIT(A) by dismissing the appeal filed by the Assessee. In the result, the IT(SS)A NO. 2/DEL/2011 filed by the assessee is dismissed. 11. The Revenue has raised the following grounds in IT(SS)A No. 03/Del/2011:- 1. The order of the Ld. CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the addition of Rs. 1,19,03,000/- made by the AO on the basis of seized documents without appreciating facts on record. 3. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 11.1 At the....