TaxTMI 
TaxTMI 
2021 (11) TMI 920
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....es and the facts and circumstances in the Appellant's case. 2. The appellant denies itself liable to be assessed under section 143(3) r.w.s.153A of the Act under the impugned order on the ground that :- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132(1)[a], [b] & [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 [sc]] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajit Jain, reported in 260 ITR 80. iii. that the appellant contends that the revenue has to discharge its burden of proving that there is a valid initiation of search under section 132[1][a], [b] & [c] of the Act, its execution and its completion in accordance with law to render the proceedings valid and to assume jurisdiction to make an assessment under section 153A of the Act. Reliance is placed on the decision of the Hon'ble Karnataka High Court in th....
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....ly the impugned orders passed by the learned assessing officer requires to be cancelled: 2. It is submitted that during the course of appellate proceedings the learned CIT [A] called for the remand report of the learned assessing officer as regard to the question raised by the assessee on the validity of search u/s. 132 of the Act. The learned assessing officer submitted his report dated 29/01/2016 along with annexures giving his comments on the issues raised by the assessee in the appellate proceedings in connection to the validity of search u/s. 132 of the Act. A copy of the said report furnished by the learned assessing officer was provide to the assessee by the learned CIT[A] [Ref. Page 24 - 44 of the Index to Common Paper Book]. 3. It is submitted that from the copy of warrant produced by the learned assessing officer before the learned CIT[A], it is clear that the Warrant of Authorisation has been issued on two distinct separate persons, namely Smt. Radha Timblo a m/s Timblo Private Limited. [1] It is submitted an action of search is conducted as per the provisions of section 132 of the Act. As per the provisions of section 132 of the Act it can be ....
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....submitted that in all these five panhanams drawn each of the panachanams it is recorded as under: A. Panchanama dated 21/04/2010 [started at 6.50 PM and temporarily closed at 2-40 AM on 22/04/2010] a) Warrant in the name of : Radha S. Timblo. b) Warrant to search (Details & Ownership of place to search) : Timblo Private Limited Kadar Manzil, Near Hari Mandir, Margao. [The said copy of panchanama drawn on 21/04/2010 along with annexures is placed at page 78 to 86 of the common paper book] B. Panchanama dated 22/04/2010 [started at 12.45 PM and temporarily closed at 7.30 PM on 22-04-2010] a) Warrant in the name of : Radha S. Timblo. b) Warrant to search (Details & Ownership of place to search) : Timblo Private Limited Kadar Manzil, Near Hari Mandir, Margao. [The said copy of panchanama drawn on 22/04/2010 along with annexures is placed at page 70 to 77 of the common paper book] C. Panchanama dated 27/04/2010 [started at 12.15 concluded/temporarily closed at 10.30 PM on 27/04/010] a) Warrant in the name of : Radha S. Timblo. b) Warrant to sear....
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....rson signing the same 'for and on behalf of the assessee i.e. M/s. Timblo Private Limited'. In other words the warrant issued on M/s Timblo Private Limited has not been acted upon or executed till date and thus no Search u/s 132 of the Act has been conducted on the assessee i.e. M/s. Timblo Private Limited. As mentioned in the earlier paragraphs Smt. Radha S Timblo St M/s Timblo Private Limited are two different distinct separate persons as per the Act, Wherefore, in view of the above the assessee company humbly pray and submit that there is no search in the case of the assessee company i.e. M/s. Timblo Private Limited and consequently the notice issued under section 153A of the Act is bad in law and without jurisdiction and future proceedings are also bad in law for want of proper jurisdiction and the impugned orders passed by the learned assessing officer on the company, deserves to be cancelled. 4. Without prejudice if at all any assessment could be made on the assessee company i.e. M/s. Timblo Private Limited it ought to have been made under section 153 C of the Act & not under section 153A of the Act, as has erroneously been done in this case, after c....
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....g but only the contents in Form No. 45, Rule 112, being the Warrant of Authorisation under section 132 of the Income-tax Act, 1961, and Rule 112[1] of the of the Income-tax Rules, 1962, the same cannot be construed as satisfaction. If the said extract above is to be treated as satisfaction then the same is not in accordance with law and is very general and vague. The said satisfaction is not revealing as regard to the basis and materials to arrive at a satisfaction that the assessee has income which is not disclosed. Hence, the satisfaction recorded for the issuance of a warrant under no stretch is considered as satisfaction warranting an action of search under section 132 of the Act which is not in accordance with law and does not have legs to stand the test of law. It is submitted that the process for arriving at satisfaction has to be discernible from the reasons recorded for issuing Warrant of authorization. The reasons and satisfaction should not be vague and should be definite and should reveal the basis for arriving at such satisfaction that the ingredients and the legal requirements as contemplated under section 132 [1] [a], [b], [e] of the Act has been sa....
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....ed from panchanama fortifies the contention of the assessee that the said so called satisfaction is void of merits and not factually correct. Wherefore it is humbly submitted that, the satisfaction recorded is not in accordance with law and consequent proceedings are bad in law and void ab intio. It is humbly prayed that the impugned orders passed under section 143[3] r.w.s. 153A of the Act in the case of the assessee is bad in law and void-ab-into. It is further submitted that the learned assessing officer has to record his satisfaction as regard to the inference of liability before the issuance of notice under section 153A, as per the parity of reasoning of the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. IBC Knowledge Park, reported in 385 ITR 346. The relevant portion of the decision of the Hon'ble Court is reproduced hereunder: (i) Para 49 of the order: "On a conjoint reading of the aforesaid provisions, it becomes clear that a search can take place only when a concerned officer has information and reason to believe that any person is in possession of any valuable assets, which has not been or would not be disc....
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....sed income ................................. " In view of the above, it is evident that that a valid search is sine qua non for initiation of proceedings under section 153A of the Act and the satisfaction regarding an inference of liability must be recorded before the issuance of notice under section 153A of the Act, which has not been satisfied in the case instant and thus the impugned orders of assessment passed by the learned assessing officer under section 143[3] r.w.s. 153A of the Act do not stand the test of law. 8. The Warrant issued partakes the nature & character of a Joint Warrant & any assessment pursuant to a search conducted based on this warrant has to be made on an AOP consisting of the persons whose names are mentioned in the warrant & thus the entire proceeding in the case of this assessee M/s. Timblo Private Limited is bad in law, void ab initio. This contention is strongly urged as section 292 CC was not present in the statute on the date the warrant was authorised, despite the fact that the said section was introduced w.r.e.f 01/04/1976. 9. In view of the above submissions the assessee humbly pray before this Hon'ble Tribunal to ho....
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....Rs. 6,22,64,000/-. The assessee had explained that out of the said amount of Rs. 6,22,64,000/- a sum of Rs. 2 crore which was scribbled as "Legal - 2Cr" was not a payment and the same was only an estimate made by the assessee as regard to the likely expenditure that might be incurring by the assessee in the future considering various legal issues that the assessee was to meet in its regular business activity. This aspect was clarified by the assessee on various occasions but however the learned assessing officer failed to appreciate the same and erroneously made the addition of Rs. 2 crores which being an estimation ought not to have been considered by the learned assessing officer. Further, if at all any unexplained expenditure to be considered by the learned assessing officer a sum of Rs. 4,22,64,000/- alone should have been considered. To this effect the assessee had also filed an affidavit explaining these facts, which was not properly appreciated by the learned assessing officer. The learned assessing officer rejected the explanation offered by the assessee purely based on surmises and conjectures and his own imagination. [v]. It is submitted further that the assessee....
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....n 69C of the Act it must be conclusively established by evidence or material that the amount is actually spent fit that such amount spent is an expenditure incurred by the assessee and that the source for the same is not satisfactorily proven or explained. Thus, the primary onus is on the revenue. In the instant case it is submitted that the assessee has from the very beginning contending that the said amount of Rs. 2 Crore mentioned in the seized dairy is only an estimate and the assessee has not incurred the said expenditure. To this effect the assessee had also filed an affidavit explaining the same. [ix]. In the instant case also the assessee denies itself that it has not incurred any expenditure of Rs. 2 Crore which is only an estimate, but considered erroneously by the learned assessing officer as unexplained expenditure. It is also important to note the fact that the said seized dairy is unsigned. Further it is submitted that the learned assessing officer has not brought anything on record to demonstrate that the said alleged expenditure of Rs. 2 Crore has indeed been incurred by the assessee and has not made any enquiry as regard to the veracity of the loose and du....
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....ined expenditure is not warranted and the additions made deserves to be deleted for the advancement of substantial cause of justice. [xiv] . It is further prayed that since an amount of Rs. 2,28,54,314/- has been offered in the hands of different entities of the assessee for the assessment year 2007-08 the addition of the same amount which has suffered tax and wherein the taxes having been paid amounts to double taxation. Hence, the learned CIT[A] was justified in deleting the addition made amounting to Rs. 2,28,54,314/- which is just and proper. [xv] . In view of the above submissions the assessee humbly pray that the addition made by the learned assessing officer amounting to Rs. 4,22,64,000/- as unexplained expenditure under section 69C of the Act, which was rightly deleted by the learned CIT[A] requires to be confirmed by this Hon'ble Tribunal and dismiss the department appeal for the advancement of substantial cause of justice. 11. In view of the overall submissions made by the assessee on the legal issue for all the A.Y's i.e. 2006-07 to 2010-11 as well as on merits for the A.Y. 2010-11, the assessee humbly pray before this Hon'ble Tribu....
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....come Tax Authorities conducted a survey u/s 133A of the Income Tax Act, which was converted into search & seizure operation under section 132 of the Income Tax Act 1961 on the premises of our Company viz., Timblo Private Limited & myself, on the 21st of April 2010. In order to put the facts on record I swear this Affidavit on oath and state & submit as under: I am one of the Directors of M/S Timblo Private Limited, with its registered office at Kadar Manzil, P O Box 34, Opp; Hari Mandir, Margao Goa 403 601, (here in after referred to as TPL') and Managing Director of the said Company with 50% shareholding in the said TPL. I further state that TPL is entirely owned and managed by me & my family members. I am also one of the Directors of M/S Timblo Minerals Private Limited a Company, having its Office at Kadar Manzil P O Box 34 Opp: Hari Mandir Margao Goa 403601 ( hereinafter referred to as TMPL'), which is also entirely owned and managed by me & my family members. I say that Timblo Enterprises is a proprietary concern solely owned by me. The said Timblo Enterprises is having its Office at Kadar Manzil, POBox 34, Opp: Hari Mandir, Margao Goa 403 601....
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....y and submit that there has been a search & seizure operation u/s 132 of the I T Act on the premises of our Group of Companies & the residential premises of myself & other family members on 15.11.2006 (herein after referred to as the search dated 15.11.2006). On the date of the said search dated 15.11.2006 the search party found deficit of cash on hand as compared to the balance as per the books of accounts. After due reconciliation of the actual balance with the balance as per books of accounts, the above amounts viz, Rs,76,09,624/- in TPL, Rs,7,48,690/- in TMPL & Rs,1,44,96,000/- in TE (Rs,2,28,54,314/- in aggregate) were found to be short and the said shortage has been accounted as expenses unsupported, in the accounts for the year ended 31-03-2007, in TPL & TMPL Same has been treated as not being an allowable expense for income tax purposes and accordingly added back to the taxable income. And in TE (proprietary concern) it has been shown as capital withdrawal by me. I say that all of the above shortage amounting to Rs. 2,28,54,314/- in aggregate, is a resulting figure and is on account of and a part of this very unexplained expenditure, which has not been accounted, a....
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....G DIRECTOR OF TIMBLO PRIVATE LTD., KADAR MAZIL, MARGAO-GOA DURING THE COURSE OF SURVEY UNDER SECTION 133A OF THE I.T.ACT, 1961 RECORDED ON 21/4/2010 AT THE BUSINESS PREMISES OF M/S.TIMBLO PRIVATE LTD., MARGAO GOA: 403 601 21/4/10 "OATH ADMINISTERED" Taken. Q.No.1 Please identify yourself. Ans. I am Mrs. Radha S.Timblo and I am Managing Director of M/s.Timblo Private Ltd:, Margao and also the proprietor of M/s.Timblo Enterprises, Margao. Q.No.2 What are the different concerns operating from this business house? Ans. The following are the business concerns operating from this business House:- M/s.Timblo Pvt.Ltd. M/s.Timblo Minerals Pvt.Ltd. M/s.Timblo Enterprises M/s.Mandovi Shipyard Pvt.Ltd. M/s.Timblo Industrial Pvt.Ltd. M/s.Shree Balaji Concepts M/s.Badruddin Hussainbhai Mavani M/s.Timblo, Agro Development Pvt.Ltd. Q.No.3 What are the business activities of M/s.Timblo Pvt.Ltd. and M/s.Timblo Enterprises? Ans. M/s.Timblo Pvt.Ltd. is engaged in inter-alia extraction, trading, processing and export of mineral ore. Similarly, M/s.Timblo Enterprises is also engaged in extraction, processing, trading and export of iron or....