TaxTMI 
TaxTMI 
2021 (2) TMI 949
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.... the AY 2005-06 and 2009-10 are reproduced below: AY 2005-06 "1. BECAUSE the assessment proceeding initiated under section 153C without recording of any valid satisfaction note in the case of person who is subjected to search under section 132, is vitiated and liable to be annulled. 2. BECAUSE no incriminating material was found that could form the basis for initiation of reassessment proceeding under section 153C of the Income Tax Act, 1961. 3. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in holding that addition of 5,52,345/- made substantively in the hand of Shri Ajay Kumar & Vijay Kumar and protectively in the hands of appellant is to be examined on merit and sustaining addition of Rs. 2,76,171/- substantively in the hands of appellant and deleting the substantive addition made in the hand of Ajay Kumar and Vijay Kumar who was carrying the business of pump. 4. BECAUSE up to 07.08.2007 the business of the retail out let was carried out by Ajay Kumar and Vijay Kumar in terms of agreement made by the licensee of the pump, Shri Suresh Kumar and Gulab Chand who have been allotted the retail out le....
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....p) by Indian Oil Corporation Ltd. (IOCL) vide LOI dated 07.01.1994. There were two partners namely Shri Gulab Chand son of Shri Babu Lal and Shri Suresh Kumar Rakesh son of Sri Shyam Lal at the time of LOI and commencement of business of the assessee firm. Thereafter these two partners decided to handover the operation of the pump to Shri Ajay Kumar and Vijay Kumar vide general power of attorney dated 08.01.1999 and they have started the operation/business activities of the petrol pump from 15.10.1999. The original partners Shri Gulab Chand and Shri Suresh Kumar Rakesh also authorized to Shri Ajay Kumar and Vijay Kumar to operate bank accounts of the firm for smooth conducting of the business. They continue to do the business activities on behalf of the original allottees up to 07.12.2007 when the control and administration of the business was again taken back by the original allottees from Shri Vijay Kumar and Ajay Kumar. Thereafter there was a search and seizure action carried out u/s. 132 of the Act on 03.02.2011 at the residential and business premises belonging to Vaishwya Group of cases. During the search and seizure action certain papers and documents belonging to the assess....
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....sment. He has further contended that the assessee firm was constituted on 07.12.2007 and prior to that the income cannot be assessed in the hands of the assessee firm he has referred to the partnership deed dated 07.12.2007 as well as the PAN allotted to assessee on 01.12.2007 and submitted that prior to 07.12.2007 assessee firm was not in existence and hence assessments framed by the Assessing Officer in the name of the assessee are void ab initio. The ld. AR has submitted that the mandatory condition for invoking the provisions of Section 153C has not been satisfied in the case in hand and therefore the entire proceedings are illegal and without jurisdiction. He has also relied upon the decision of the Hon'ble Supreme Court in the case of Manish Maheswarivs. JCIT 289 ITR 341 as well as decision of Hon'ble Rajasthan High Court in the case of CIT vs. Smt. Saraswati Devi, 2012 ITR 445 and contended that the Hon'ble High Court has held that the protective assessment is practically no assessment in the eyes of law. Even otherwise the filing station was run by Shri Ajay Kumar and Vijay Kumar as per the attorney dated 11.01.1999 in the manner they deemed proper with their re....
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....sessee firm was very much in existence right from the beginning as it is evident from the LOI dated 07.01.1994, the power of attorney given by two partners namely Gulab Chand and Suresh Kumar Rakesh in favour of the Ajay Kumar and Vijay Kumar and also deed of mandate for operating the bank account by Shri Ajay Kumar and Vijay Kumar. The authorization for operating the bank account is signed by the partners of partnership firm namely Meja Filing Station as it is clear from the copy of the letter of mandate executed by the assessee firm through its partners on 02.11.1999. Thus, M/s. Meja Filing Station was a partnership firm as on the date when the letter of mandate was signed and executed by the assessee firm through partners Shri Gulab Chand and Suresh Kumar Rakesh in favour of Shri Ajay Kumar and Vijay Kumar. These documents have been reproduced by the Assessing Officer and are undisputed documents obtained from the Bank of Baroda, Meja Road, Allahabad. Therefore, the execution of partnership deed on 07.12.2007 is nothing but reconstitution of the partnership firm, which was already in existence having the same partners. Thus, there was no change either in the constitution or the ....
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....ot rent of Meja Filling Station @Rs. 15,000/- p.m. S-1 (Office of Arhatia Nagar& Co.) LP-6 Ramji Vaish Annexure Part-A, M/s Meja Filling Station, A.Y.2005-06 RA-1 {Reside nee at 86, New Bairhana) LP-7 Ramji Vaish Order of Commissioner, Allahabad ;n the case of Meja Filling Station Vs D.M., Alld RA-1 LP-8 Ramji Vaish In the books of Meja Filing Station. Ledger A/c of Kapoor Chand& Sons 10. Therefore, the above documents found and seized during the search and seizure action belongs to Meja Filing Station including ledger accounts of assessee in the books of Hotel Ajay International as well as certain vouchers in the name of Shri Ajay Kumar and Vijay Kumar, who were running the filing station as per the authorization at the relevant point of time. The documents found and seized pertains to the Financial Year 2007 and there is no ambiguity in the details as found recorded in the seized material that the assessee was doing the business of running filing station being retail dealership of sale of petrol and high speed diesel. Since there was no return of income filed by the assessee up to the AY 2008-09 till 07.12.2007 therefore, the seized material....
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....ncome from said business in the return of income filed u/s.139(1) then the said seized material which reveals the details of the transaction of the FY 2007 up to 07.12.2007 would not be considered as incriminating material to have any effect on determination of the total income of the assessee for these years. Therefore, the addition made by the Assessing Officer in the proceeding u/s. 153C for the Assessment year 2008-09 from 07.12.2007 to 31.03.2008 to AY 2010-11 are not based on any material revealing undisclosed income. Accordingly, the additions made by the Assessing Officer for these years is liable to be deleted. 14. As far as the AY 2011-12 since this is the year of search and the assessee was yet to file the return of income at the time of search and seizure action therefore, the assessment was completed u/s. 153B(1)(b) of the Act. Hence, this is a regular assessment though the assessment was framed after the search and seizure action. 15. I have heard the ld. AR as well as ld. D.R. and carefully perused the relevant material on record. Alleged seized material has no relevance to the assessment for the year under consideration but once the books of account of the ass....