TaxTMI 
TaxTMI 
2022 (9) TMI 191
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....he Appellant is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the Appellant's case. 2. The appellant denies himself liable to be assessed on a total income of Rs. 7,90,91.O11/- as against the returned income of Rs. 1,05,63,790/- under the facts and circumstances of the case. 3. a) The order of the assessment is bad in law as the appellant is a person searched and thus the assessment ought to have been completed under section 153A of the Act under the facts and circumstances of the case. b) The learned CIT(A) erred in upholding the assessment completed under section 153C of the Act even though the appellant is the person searched under section 132 of the Act under the facts & circumstances of the case. c) Without prejudice, the order of assessment is bad in law as the mandatory condition of recording of satisfaction under section I 53 of the Act has not been complied with or having complied, copy of satisfaction note has not been provided to the appellant and thus the assessment has no legs to stand the test of law. 4. Without prejudice the orders of the authorities below are bad in law....
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....ities below failed to appreciate that there is no prohibition under any law for purchasing from the unregistered dealers and thus the entire addition is merely based on suspicion & surmises and hence the same is liable to be deleted on the facts of the case. 8. The orders of the authorities below are bad in law as the seized materials relied upon by the assessing officer was not put forth to the appellant for his rebuttal despite specific request being made under the facts and circumstances of the case. 9. The learned CIT(A) failed to take cognisance of the submissions made by the appellant and consequently erred in holding that the appellant has failed to prove the genuineness of the purchases under the facts and circumstances of the case. 10. Without prejudice, the addition made is highly excessive and needs to be substantially reduced under the facts of the case. 11. a) The copy of the approval of the Additional Commissioner was not obtained or having obtained, the copy of the same is not provided to the appellant which is in violation of the settled principles of natural justice and thus the order of assessment needs to be set aside under the....
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.....w.s 129 dated 14th September 2012, owing to the change in incumbency was served on the assessee. The assessee did not file his return of income and sought for time. Another opportunity was given to the assessee vide notice dated 18/10/2012 for filing return of income u/s 153C of the Act. Despite the another opportunity the assessee did not file return of income till 15th December, 2012. The show cause notice was issued to the assessee on 17/12/2012 for proposing that why assessment should not be completed ex-parte on the basis of material available on record. Thereafter the assessee filed letter dated 24/12/2022 stating that return filed u/s 139 on 29/9/2008 may be treated as return filed in response to notice u/s 153C of the Act thereafter statutory notice was issued to the assessee. The assessee did not comply the notice u/s 142(1) dated 4/2/2013 again show cause notice was issued to the assessee for completing assessment u/s 144 dated 8/3/2013. Accordingly, on 21/3/2013. the assessee filed replies but the assessee could not substantiate evidences and documents in support of the claim. 3.2 Accordingly, the AO completed the assessment, which is as under :- "During the....
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.... produce: and he has narrated the stories of poor farmers in the remote areas having been sold the iron ore after extracting it from their respective fields to earn their living. But the assessee neither produced the persons nor gave the list of name and full postal addresses of the farmers from whom the iron ore is purchased. It is a known fact that the iron ore is a mineral resource which is a wealth of the nation. If someone has to extract the iron ore, he needs to have proper license from the Department of mines and geology which will be granted after obtaining clearances from various departments like Environment and Forestry etc. In this line of business only the mine owners who are having the mining lease to extract a permitted quantity of iron ore from the Department of Mines and Geology are only supposed to extract the iron ore. On the permitted quantity of the iron ore, the transportation permits are also granted by the same department in accordance with the royalty paid by the mine owner. In the case of URD purchases made by the assessee, the entire quantity of iron ore is illegally extracted iron ore. Therefore the entire URD purchases can be disallowed under explanation....
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.... assessee has failed to establish the identity of the seller. 6. There are no purchase invoices in any of the transactions of URD Purchase - be it cash or cheque. 7. Most of the expenses debited are less than Rs.20,000Ireflected towards multiple parties, thus showing that the assessee has intentionally resorted to circumventing provisions of Section 40A(3) of the IT Act. During the search proceedings the assessee was asked to produce the unregistered dealers to prove the real, source of purch se. In response to this' the assessee vide his letter dated 06.01 .2011 has vaguely stated that the iron ore has been procured from poor formers who tend to dispose of any iron ore found in their forms. However he did not produce any substantiating evidence and documents with regard to the unregistered purchases as called for vide letters dated 28.12.2010 and 28.02.2011. During the scrutiny proceedings vide notice u/s.. 142(1) dated 08.03.2013, the assessee was asked to furnish substantiate evidence of the persons from whom the unregistered purchase is claimed to have made, by producing the following documents before the undersigned: 1. Full and....
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....otice dated 08.03.2013. The assessee has reiterated his response vide letter dated 25.03.2011 filed during the search proceedings stating that they are poor farmers who do not have bank accounts and they are all payment below to Rs.20,000/- . In the light of which disallowance is warranted, The above contention of the assessee is not acceptable because the assessee has in the primary instance failed to establish the genuineness of the' unregistered purchase itself. Therefore, it is not verifiable if the assessee has made payments less than Rs.20.000/- to persons claimed as unregistered dealers and the assessee has not been able to establish the same by producing documentary proof of identities of the persons claimed as unregistered dealers. In the light of the above the unregistered purchase is also disallowable u/s. section 40A(3) of the IT Act, 1961 Thus, it can also be concluded that the assessee has not complied with section 40A(3), as he has failed to establish the genuineness of the unregistered dealers. (III). Further, the assessee was also asked to substantiate why explanation to section 37(1) should not be invoked, by treating the unregistere....
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.....1 to 41 which is placed on the record. In addition to the above, he further submitted that the AO has wrongly completed the assessment u/s 153C. The assessment should have been made as per sec. 153A of the Act because the panchanama was drawn in the name of the assessee which is placed at page No.60 of paper book. 5.1 The ld.AR submitted that the search under section 132 of the Act was carried out in the assessee's premises on 25.10.2010 based on the warrant of authorisation dated 22.10.2010 issued in the name of the assessee. It is submitted that the warrant of authorisation was in the name of the assessee, the premises of the assessee was searched and thus the assessee becomes a person searched and thus the assessment proceedings ought to have been done under section 153A. However, the AO has completed the assessment u/s 153C of the Act which is not in accordance with law and thus the order of assessment needs to be quashed in the interest of equity and justice. 5.2 The ld.AR further submitted that the AO in his remand report dated 12.02.2015 had stated as follows: "The assessee 's contention that warrant was issued in his name is false. I am attaching copy of....
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....CIT(A) failed to appreciate that chapter XIV-B of the Act provides a special procedure and the AO is bound to comply with the procedure as stipulated under chapter XIV-B of the Act. The ld.AR reiterated that in the case instant the AO has not complied with the same. 5.6 On merits of the case, the ld.AR submitted that the books of accounts produced during the assessment proceedings u/s 153C of the Act was accepted the AO and no any other discrepancies were found. The AO has chosen the figure only from the books of account. The entry was made in the computer on tally accounting system as a cash purchase which was below Rs.20,000/- in each case therefore sec.40A(3) cannot be applied. The AO has observed that the assessee had purchased iron ore from the unregistered dealers is not prohibited under the Karnataka Value Added Tax 2003 as well as in the Income Tax Act also. The VAT Tax Department has accepted the purchase. There is no intention of the assessee to inflate the purchase value by making cash purchase entry in the books of accounts. The AO has not given details of the cash purchase which is more than Rs.20,000/- He also submitted that the assessee has not violated any of the....
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....ed that during the course of assessment proceedings, the assessee has stated before the AO that he has enclosed the list of people along with the address from whom the material is purchase but the submission letter was not enclosed with the same. The loose sheets found during the course of search and seizure, which has been used by the AO for completing the assessments. The assessee has purchased iron ores from the registered dealers is illegal, it requires licence from the concerned authorities for mining activities. Accordingly, the assessee has violated the provision of sec. 37(1) of the Act. 7. We have heard the rival submissions and carefully considered the same along with the order of the authorities below as well as the documents referred to and relied on before us during the course of the hearing. We found substance on the submissions made by the ld.DR. We did not find any merit on the objections raised by the ld.AR of the assessee in regard to the legal issue that the assessment should be framed u/s 153A of the Act. On observation of the documents submitted by the CIT(DR) containing page no.1-11, the Form No.45 placed at page No;.8 which is a warrant of authorization u/....
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....re no v valid permits for transaction of material. The assessee did not produce the persons from whom the material was purchased. The assessee neither produced the persons from whom the URD cash purchases are made nor assessee has stated that he has enclosed the list of people along with the addresses from whom the material is purchase, but the submission letter was not enclosed with the same." 7.2 From the AO observation of the AO, it has been stated that the details of the URD vendors of Iron Ore was not submitted before the AO and even it was not submitted before us. Considering the totality of facts and circumstances of the case for substantiating the URD purchase made by the assessee, we think it fit to send back the issue to the file of the AO for verifying from the list of the URD vendors as stated before the AO and AO shall decide the issue in accordance with law. The assessee shall be given reasonable opportunity of being heard and he is directed not to seek adjournment for early disposal of the case. 7.3 In the result, the appeal of the assessee is allowed for statistical purposes. ITA No.1734/Bang/2018 A.Y 2009-10 8. We observe from the order of the lower aut....