TaxTMI 
TaxTMI 
2007 (10) TMI 285
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....ars 1997-98 and 1998-99. 2. The petitioner is engaged in the business of distribution of Indian made foreign liquor. The petitioner ("the assessee" for short) carried on the business in the name of his proprietary concern M/s. Avadh Liquors. On August 12, 1998, a search action under section 132 of the Act was carried out at the business premises of the assessee. During the course of search, statement of the assessee was recorded under section 132(4) of the Act to the effect that the assessee has admitted undisclosed income of Rs. 1.25 crores for the block assessment year April 1, 1988, to August 12, 1998. The assessee retracted the said statement recorded on August 12, 1998, by filing an affidavit on August 13, 1998. However, on the basi....
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....llows : "Shri Rakesh Dutt - Assessment year 1997-98. The assessee is a proprietor of M/s. Avadh Liquors engaged in the business of distribution of IMFL. He is also one of the directors of M/s. Dutt Mktg. P Ltd. and M/s. Golden Cellar P. Ltd., mainly trading IMFL. There was a search action under section 132 of the Income-tax Act, 1961, on August 12, 1998, at the residence and business premises of the assessee. The block assessment for the period April 1, 1988, to August 12, 1998, was completed in this case on February 11, 2000, determining a total undisclosed income at Rs. 90 lakhs as against the nil return. In the block assessment, a sum of Rs. 90 lakhs had been treated as undisclosed income on the basis of the assessee's statement wh....
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....vision of law in a regular assessment under section 143(3). In view of this finding by the hon'ble Income-tax Appellate Tribunal, the investment made by the assessee in the abovementioned two companies in the form of share/share application money should be assessed in the hands of the assessee for the assessment year 1997-98. In view of the above, I have reason to believe that income charge-able to tax has escaped assessment coming within the meaning of section 147 read with the proviso thereto, by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment year 1997-98." 6. Similar reasons were recorded in respect of the assessment year 1998-99. 7. The assessee objec....
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.... to make additions in the hands of the assessee under section 150(1) of the Act, nor any such direction could be given beyond the period of limitation prescribed under the Act. Relying upon a decision of this court in the case of Lotus Investments Ltd. v. G. Y. Wagh, Asst. CIT [2007] 288 ITR 459, Mr. Inamdar submitted that the impugned notices issued under section 148 of the Act are liable to be quashed and set aside. 9. Mr. Gupta, learned counsel appearing on behalf of the respondents, on the other hand, submitted that the Income-tax Appellate Tribunal in its order dated April 21, 2005, has categorically held in paragraph 17 of its judgment that the income arising out of the transaction covered under sections 68 to 69C cannot be taxed i....
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....namely, M/s. Dutt Marketing P. Ltd. and M/s. Golden Cellar P. Ltd., in which the assessee is a director. 12. The Income-tax Appellate Tribunal held that the provisions of sections 68 to 69C may not apply to the block assessment proceedings and where the transactions recorded in the regular books/accounts are treated as non-genuine/bogus transaction of loan, etc., by applying the provisions of sections 68 to 69C, then income arising from such transactions may be added as the assessee's own money/income in the regular assessment under section 143(3) of the Act and not under the block assessment. The Income-tax Appellate Tribunal further held in paragraph 19 as follows : "There appears one more situation in favour of the assessee. As the....