TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1627
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....that assessee. 2. Further, there are 5 appeals by assessee against the order of CIT(A) dated 21.3.2018 for the assessment years 2008-09 to 201112. Since certain issues in all these appeals are common in nature and also relating to same assessee, these are clubbed together, heard together and disposed of by this common order for the sake of convenience. 3. First we take up the appeals in ITA Nos. 1658 to 1661/Bang/2018 for the A.Ys 2008-09 to 2011-12. Since issues in all these appeals are common in nature these are heard together and disposed of by this common order for the sake of convenience. ITA Nos. 1658 to 1661/Bang/2018 for the AYs 2008-09 to 201112: 4. The brief facts of the case are that the assessee company is a manufacturer of alcoholic beverages. The Search and seizure operation u/s 132 of the Income-tax Act, 1961 ['the Act' for short] was conducted in the premises of the assessee on 08.12.2011 and 16.12.2011. During the course of search certain incriminating documents were seized and the statement of the Finance Manager and the Executive Director of the Company were recorded. 5. The proceedings u/s 153A of the Act were initiated by, issuing notice dated 23.....
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.... account are for meeting several cash expenses that have to be incurred for business purposes. The cash that is returned back by these persons are used for labour payments made in cash and other miscellaneous payments. Q. 4 Several papers have been found which refer to "M.M. Payments". Please explain the same. Ans. These are Miscellaneous payments incurred in the course of business promotion and are according to the instructions of the management. Q.5 I am showing you ledger copies where the payments made to the concerns are as per list below: As per the replies submitted above, the payments made to the extent of Rs. 27,49,31,189/- for the various years listed against parties in whose name the same have been booked are bogus. Do you agree? Ans. I Agree. 6. The detailed statement of Sri. Suresh Gowda has been quoted in the Assessment Order. On analysis of such statement, Sri. Suresh Gowda was asked to produce Sri. Manjunath before the Assessing Officer for confirmation of the transactions. This was not done. However in response, Sri. Thimme Gowda filed a reply denying any liability arising out of the transaction recorded in the seized incriminating documents. 7. The AO h....
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....unts and documents and records pertaining to these business concerns at the premises of the assessee. This has been admitted by Sri. Suresh Gowda, Director of the Company in his sworn statement which has been extracted in page 12 of the impugned order (Q. No. 10). As stated earlier, the management of the Company were largely unaware of this act of Sri. V Janardhan and the stationery belonging to the assessee company was found to have been used for the book keeping tasks of these business entities. 10. The assessee submitted that the AO has also relied on such other factors like the withdrawal of cash by the business entities on the same day of receipt of funds from the assessee company, the presence of signatures of the Proprietors of these business entities on both sides of cheques evidencing cash withdrawal, presence of self-made cash vouchers belonging to these business entities, etc., to hold that the payments made to these entities were bogus. It is most respectfully submitted that all these factors had no bearing on the assessee Company as they merely pertained to the suppliers of the assessee. 11. The CIT(Appeals) observed that during the course of seizure proceedings, the....
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.... principles of natural justice as applicable to quasi judicial proceedings. 2. The order of the LAO and Ld. CIT(A) is bad in law and against the provisions of section 153A, since amongst others, the additions are not based on any incriminating material found during the course of search. 3. Without prejudice to above grounds, the order passed by the LAO is bad in law since the LAO has not provided an opportunity to the Appellant to cross examine certain personnel whose statements have been recorded on oath during the course of search. 4. For the above and other grounds that may be urged at the time of hearing of the appeal the appeal may be allowed and justice rendered. 14. The assessee filed petition for admission of additional ground explaining the reason for raising the additional ground and also placed reliance on the judgement of Hon'ble Supreme Court in the case of NTPC Vs. CIT 229 ITR 383 and also judgement of Hon'ble Karnataka High Court in the case of Gundappa Kunnappa & sons. The Ld. D.R. put strong oppose for admission of additional grounds. 15. We have heard the rival submissions and perused the record on the admission of additional grounds. The assessee explaine....
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.... iii. Chintels India Ltd v. DCIT (397 ITR 416) (Delhi HC); iv. CIT v. Continental Warehousing Corporation Ltd (374 ITR 645) (Bom HC); v. DCIT v. Saravana Stores (61 ITR ( Chennai Trib) 20) b. The assessment u/s 153A of the Act ought to be quashed since it is not based on any incriminating material but is based on: i. Books of account of the assessee - it is the purchase ledger copies of the Appellant that was shown to Sri Janardhan and no fresh material that was incriminating; and ii. Sworn statement / admission of Sri Janardhan where Sri Janardhan has stated that the expenditure on purchase of grapes and bottles from three vendors (Vinayaka Fruit Mandi, Srinivasa Bottle Traders and Venkateshwara Bottle Traders) is bogus. In this regard, reliance is placed on the following judgments :- (i) CIT v. IBC Knowledge Park (P) Ltd (69 taxmann.com 108) (Kar HC); (ii) PCIT v. Best Infrastructure (India) (P) (Ltd) (84 taxmann.com 287) (Del HC); (iii) Delhi HC in CIT v. Kabul Chawla (61 taxmann.com 412). c. No opportunity was given by the AO to cross examine Sri Janardhan who, without basis, had stated that the expenditure on purchase of grapes and bottles from three vend....
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....orded from Shri Suresh Gowda is also made part of Assessment order. 20. The ld.DR submitted that Shri Suresh Gowda, Executive Director of company was specifically asked to produce Shri A. Manjunath, Prop of M/s. Vinayaka Fruit Mandi and M/s. Venkateshwara Bottle Traders for examination. However, there was no response from Shri Suresh Gowda, Executive Director of the company. 21. A final show cause notice was issued in the month of January 2014 as the case was getting time barred by 31st March 2014. This was issued after analysing the incriminating documents seized during the course of search and on the basis of enquiries conducted thereafter. In compliance to the Show cause notice, Shri Thimmegowda, Director of company filed a reply contradicting the statement of Shri V. Janardhan, Internal Auditor and Finance Manager and Shri Suresh Gowda, Executive Director of company. Here it is pertinent to mention that:- (1) The statement of Shri V Janardhan and Shri Suresh Gowda was recorded u/s 132(4) of the IT Act. (2) The reply by Mr. Thimmegowda in compliance to show cause notice is without any supporting documents whatsoever. (3) There is no allegation of any undue influence, coe....
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....s also found in the seized material that the cheque leaves have been signed by Sri. A Manjunath on both the sides so that somebody can withdraw on his behalf. (c) The banks were requested to furnish instruments such as deposit slips and withdrawal slips used in depositing the cheque and withdrawing cash from the above mentioned accounts. (d) For all the transactions the deposit and withdrawal slips were not signed by Sri A Manjunath. (e) However in one case while mentioning it in the deposit slip it was mentioned as M/s SPR Group Holdings only. 25. According to the department, the other incriminating material found in the searched premises were as follows:- (a) Self-made cash vouchers were found where in payments, exceeding Rs 20,000 were booked in the name of M/s. Vinayaka Fruit Mandi, M/Venkateshwara Bottle Traders and M/Srinivasa Bottle Traders. (b) Certain vouchers contained payments which were made in violation of law which would attract Explanation to section 37(1) and were booked in the name of M/s. Vinayaka Fruit Mandi, M/Venkateshwara Bottle Traders and M/Srinivasa Bottle Traders. (c) The idea is to book these non-allowable expenditures in the above mentioned ....
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....sed enquiry with regard to location of these concerns and deputed the ITI, who furnished his report as follows:- "Enquiry Report As per direction by the DCIT-CC 1(3) open enquiry is made in the following addresses 1. Sri.A.Manjunath #.58/2,8th cross, 12th main, Nanjappa Layout, Adugodi, B'lore-30. 2. #.65, 2nd cross, 3rd main, Rajajinagar, B'lore-10 3. #.3866, 10th cross, 1st main, gayatheri nagar, B'lore. 4. #.214/5B,Nayandahalli,Kengri, Hobli, B'lore. 5. #.55/160,5th Main Rd, 8th Cross, Malleswaram, B'lore. 6. Smt.A.Susleelamma. #.55/160,5th main, 8th cross, Malleswaram, Bangalore. 7. Srinivas Bottle traders. #.67, Old.No.2, 3rd cross, Jolly Masjid Rd, Bangalore-53. As per the enquiry conducted by me on my personal visit on.16-01-2014, at the above mentioned address at serial No. 1 & 2 and on 2001-2014 I had visited at the above mentioned address at SI.No.3,4,& 5. Further, On 22-01-2014 I had visited the above mentioned address at SI.6&7. It was conveyed to me by the neighbors and the locals that there exists no person by that name in the above mentioned addresses or in the nearby locality." 27. From the above fac....
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.... A/SPRGHPL/3 consists of cash vouchers and ledger extracts of cash payments of the company SPR Group Holdings Pvt.Ltd., The same folder at page No. 54 to 64 also consists of cash vouchers debited to M/s. Srinivasa Bottle Traders. Q. No. 5.: I am showing you page Nos. 1 to 42 of the seized material marked as A/SPRGHPL/4 seized during the course of search u/s.132 of the I T Act at M/s. SPR Group Holding Pvt. Ltd., Wilson Garden, Bangalore. Please go through the same and explain the contents therein. Ans.: The page Nos 1 to 42 of the seized material marked as A/SPRGHPL/4 consists of bank statements for the financial year 200708 to 2009-10 bearing current account No. 0794201003505 of M/Srinivasa Bottle Traders maintained at Canara Bank, Seshadripuram Branch, Bangalore. Q. No. 6. The examination of the above account mentioned at Q. No. 5 shows that the money has been transferred by way of cheque from the bank account of M/s. SPR Group Holdings Pvt.Ltd., only. The same amounts have been withdrawn on the same day or the immediate next day by way of self cheque. Please explain the transactions. Ans. Shri. Manjunath was looking after the business of procuring bottles from various so....
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....ain why the bank statement of M/s. Vinayaka Fruit Mandi is found in the business premises of M/s. SPR Group Holdings Pvt. Ltd? Ans.: Shri. Janardhan, our accountant was also looking after the accounts of both the concerns viz., M/s. Srinivasa Bottle Traders and M/s. Vinayaka Fruit Mandi. I am told by Shri. Janardhan that he had collected all the details from the said Shri. Manjunath to update the accounts. This is the reason why some of the papers and documents relating to these concerns are found in our office. Q. No. 11.: I am showing you page Nos. 1 to 119 of the seized material marked as A/SPRGHPL/7 seized during the course of search u/s.132 of the I T Act at M/s. SPR Group Holding Pvt. Ltd., Wilson Garden, Bangalore. Please go through the same and explain the contents therein. Ans.: The page Nos 1 to 119 of the seized material marked as A/SPRGHPL/7 consists of cash vouchers of payments of the company SPR Group Holdings Pvt. Ltd. Q. No. 12.: I am showing you page Nos. 1 to 165 of the seized material marked as A/SPRGHPL/14 seized during the course of search u/s.132 of the I T Act at M/s. SPR Group Holding Pvt. Ltd., Wilson Garden, Bangalore. Please go through the same an....
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....eque leaves have been signed by Shri. A. Manjunath, Prop: M/s. Vinayaka Fruit Mandi. Q. No. 18 The details of the cheques already issued as per the counter-foil in the cheque book shows that all the cheques have been used as self cheque for withdrawal of cash. Please explain the reason for withdrawing' the cash as self cheque. Ans.: My answer to Q. No. 9 shall hold good for this question also. Q. No. 19.: Please explain the reasons why the entire cheque book consisting of signed cheque leaves of M/s. Vinayaka Fruit Mandi bearing current account No. 0794201003601 maintained at Canara Bank, Seshadripuram Branch is found in the business premises of M/s. SPR Group Holdings Pvt. Ltd. Ans: My answer to Q. No. 9 shall hold good for this question also. Q. No. 20.: I am showing you the 47 pages of the seized material marked as A/SPRGHPL/27 seized during the course of search u/s.132 of the I T Act at M/s. SPR Group Holding Pvt. Ltd., Wilson Garden, Bangalore. Please go through the same and explain the contents therein. Ans.: The 47 pages of the seized material marked as A/SPRGHPL/27 consists of signed cheque book of M/s. Srinivasa Bottle Traders bearing current account No. 07....
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....materials w.r.t. goods receipt note maintained by our company. Q. No. 23: I am now showing you some of the payment vouchers seized during the course of search proceedings at the office of M/s SPR Group Holdings Pvt. Ltd on 08/12/2011. The details of some of the sample cash vouchers are as follows: S.NO MATERIAL No. PAGE No. DATED AMOUNT 1 A/SPRGHPU2 6 25/08/2011 4,25,000 2 A/SPRGHPL/2 32 30/07/2010 10,00,000 3 A/SPRGHPL/2 48 25/09/2010 25,00,000 4 A/SPRG HPL/2 105 24/12/2009 10,00,000 5 A/SPRG HPL/5 61 24/12/2009 9,00,000 6 A/SPRGHPU5 70 26/09/2011 25,00,000 7 A/SPRGHPU5 78 22/09/2011 25,00,000 8 A/SPRGHPU5 82 03/08/2011 8,00,000 9 A/SPRGHPU5 84 04/08/2011 4,79,000 Since, the above payments are not allowable as per Sec.37(1) of the I T Act, and Sec.40A(3) of the I T Act, you are requested to offer your comments. Ans.: I am unable to answer to this question since it appears - to be a legal one. I would consult our Auditors and act according to the law at the time of filing of returns of income. Q. No. 24: Do you have anything else to say? Ans.: Nothing more to add to the above answers. The income of Rs. 15.00 crores would b....
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....u/s 153A of the Act. In our opinion, this argument of Ld. A.R. is devoid of merits. As seen from the case records there were seized materials found during the course of search and also the statement recorded u/s 132(4) of the Act from Janardhan v. and also from Suresh Gowda, Executive Director of the company. Sri Suresh Gowda, Executive Director offered additional undisclosed income at Rs. 9.96 crores for financial year 2008-09 to 2010-11 and another Rs. 3.6 crores for the financial year 2011-12 in his statement recorded u/s 132(4) of the Act. In another occasion, he offered additional income of Rs. 10.50 crores for the assessment year 2009-10 & Rs. 4.50 crores for the AY 2010-11 in answer to Q.Nos.22 & 24. Since there are seized materials and consequent to the panchanama so drawn where they admitted the various transactions with Vinayak Fruit Mandi, Venkateshwara Fruit Mandi and Venkateswara Bottle Traders. Being so, assessee's case is covered against the assessee by the judgement of Hon'ble Karnataka High Court in the case of PCIT Vs. Delhi International Airport in ITA No. 322/18 dated 29.9.2021, wherein the High Court held as under:- "8. We have carefully considered the rival ....
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....er Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The timelimit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. Therefore, it is clear even if an assessment order is passed under Section 143(1) or 143(3) of the Act, the Assessing Officer is empowered to reopen those proceedings and reassess the total income taking note of the undisclosed income, if any, unearthed during the search. After such reopening of the ass....
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....ng the search, in order to find out what is the "total income" of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction. 11. ......................... On the contrary, it is expressly provided under Section 153A of the Act the Assessing Officer shall assess or reassess the "total income" of six assessment years which means the said total income includes income which was returned in the earlier return, the income which was unearthed during search and income which is not the subject matter of aforesaid two income...." 11. In M/s Lancy Constructions supra, the Coordinat....
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....aw. Even in the case of the searched person, the same reason would hold good as in the case of any other person. It has been held that detection or the existence of incriminating material is a must for disturbing the assessment already made and concluded but at the same time, search can be at three stages: (i) when reassessment is reinitiated; (ii) at the stage during the course of reassessment; (iii) where reassessment is altered by a different assessment in respect of the searched person or in respect of a third party. 13. In Principal Commissioner of Income Tax and Another V/s. BMR Energy Ltd. (ITA No. 358/2018 and connected cases DD.08.01.2019), a coordinate bench of this Court has held that the judgment reported in the case of Canara Housing Development Company supra was not even considered in M/s Lancy Constructions supra and the latter decision was discussed at the stage of admission without even notice to the assessee. It has been observed that in M/s Lancy Constructions, the High Court was of the view that no substantial question of law would arise for consideration in the appeal and as such, the judgment reported in the case of M/s Lancy Constructions does not render th....
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....y the undisclosed income of the block period that was assessed, Section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the assessing officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under Section 132 or requisition under section 132A, as the case may be, shall abate. SubSection (2) of Section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-Section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment ....
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....departure from this proceeding. Under Section 153A of the Act, the Assessing Officer has been given the power to assess or reassess the total income of the assessment years in question in separate assessment orders. Consequently, there would be only one assessment order in respect of six assessment years in which total disclosed or undisclosed income would be brought to tax. Consequently, even though an assessment order has been passed under Section 143(1) (a) or under Section 143(3) of the Act, the Assessing Officer would be required to reopen these proceedings and reassess the total income taking notice of undisclosed income even found during the search and seizure operation. The fetter imposed upon the Assessing Officer under Sections 147 and 148 of the Act have been removed by the non obstante clause under Section 153A of the Act. Consequently, we are of the opinion that in cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed, which were subsisting when the search was made, the Assessing Officer would be competent to reopen the assessment proceeding already made and determine the total income of the assessee. ....
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.... the eye of law there was no order of assessment. It meant that the AO "shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year and then pass the assessment order." 27. It is important to note that Canara Housing was also a case where some material was unearthed during the search. Further, the High Court was clear that the addition to the income already disclosed would have to be based on some material unearthed during the search. This is clear from the observation in para 9 of the decision to the effect: "The AO is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search." It was further observed that in the facts of that case if the CIT had come across any income that the AO had not taken note of while passing the earlier order, "the said material c....
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....returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the. aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized ....
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....nt or reassessment that stood abated shall stand revived. 12. Once it is held that the assessment finalized on 29.12.2000 has attained finality, then the deduction allowed under section 80 HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-122000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 153A read with Section 143(3) of the IT. Act could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalised assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. 13. In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section 80HHC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalised on 29.12.2000 relating to Section 80HHC deduct....
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....any supra, in support of the contention that search under Section 132 of the Act is sine qua non for initiation of proceedings under Section 153A of the Act but it is not dependent on any undisclosed income being unearthed during search. There is no cavil on this proposition that search under Section 132 or requisition under 132A is a condition precedent for invoking Section 153A of the Act, the assessing officer can assess or re-assess the total income with respect to six assessment years separately immediately preceding the assessment year relevant to the previous years in which the search was conducted or requisition was made but the controversy rests on whether the incriminating material is a condition precedent for invoking Section 153A?. 27. It is discernable from the memorandum explaining the provisions in the Finance Bill 2003 [260 ITR [ST] 14 at page 219] that it is to overcome the difficulty leading to prolonged litigation inasmuch as "undisclosed income", the legislature by Finance Act, 2003, decided to discard Chapter XIV-B provisions and introduced Sections 153A, 153B and 153C in the Act. Section 153A would contemplate that on initiation of proceedings under said Sec....
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....on 153A. 30. Thus, it is clear that the Assessing Officer while passing the order under Section 153A read with Section 143[3] of the Act, ordinarily cannot disturb the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings establishes that the finalized assessments are contrary to the material unearthed during the course of 153A proceedings, as held by the Co-ordinate Bench of this Court in the case of IBC Knowledge Park (P) Ltd., supra. A concluded assessment could not be disturbed without there being any basis for doing so which is impermissible in law. Even in case of a searched person, the same reason would hold good. As observed in Canara Housing Development Company supra, the Assessing Officer is empowered to assess or reassess the total income of six assessment years i.e., the income which was returned in the earlier return, the income which was unearthed during search and also any income which was not disclosed in the earlier return or which was not unearthed during the search by separate assessment orders but in our considered view the completed assessments should be subject to the safeguards provided in ....
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....322/2018 to 324/2018, 354/2018 and 355/2018, substantial question of law No. 1 in ITA Nos. 380/2018, 382/2018 to 385/2018 and 197/2021 to 199/2021 and substantial question of law Nos. 1 and 2 in ITA No. 381/2018 are answered in favour of the assessee and against the Revenue. Substantial question of Law No. 2 in ITA Nos. 380/2018, 383/2018 to 385/2018 is squarely covered by the ruling of the coordinate Bench of this Court in ITA No. 352/2018 and connected matters (DD 25.05.2021) wherein the said substantial question of law has been answered in favour of the assessee and against the Revenue. Substantial question of law No. 2 in ITA No. 382/2018 and substantial question of law No. 3 in ITA Nos. 380/2018, 383/2018 to 385/2018 does not arise for our consideration since the same are not pressed by the Revenue. Appeals stand disposed of accordingly." 32. Being so, we confirm the issue of notice u/s 153A of the Act and framing of assessment u/s 153A r.w.s. 143(3) of the Act. Ground No. 2 of additional ground is dismissed. 33. The next common additional ground in all these appeals is ground No. 3 in which the assessee alleges that AO has not given opportunity of cross examination of certa....
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....essment year 2009-10 & Rs. 4.50 crores for assessment year 2010-11, which is evident from the following statement recorded from Suresh Gowda, Executive Director of the assessee company, in answer to Q.Nos.23 & 24, which reads as follows:- Q. No. 23: I am now showing you some of the payment vouchers seized during the course of search proceedings at the office of M/s SPR Group Holdings Pvt. Ltd on 08/12/2011. The details of some of the sample cash vouchers are as follows: S.NO MATERIAL No. PAGE No. DATED AMOUNT 1 A/SPRGHPU2 6 25/08/2011 4,25,000 2 A/SPRGHPL/2 32 30/07/2010 10,00,000 3 A/SPRGHPL/2 48 25/09/2010 25,00,000 4 A/SPRG HPL/2 105 24/12/2009 10,00,000 5 A/SPRG HPL/5 61 24/12/2009 9,00,000 6 A/SPRGHPU5 70 26/09/2011 25,00,000 7 A/SPRGHPU5 78 22/09/2011 25,00,000 8 A/SPRGHPU5 82 03/08/2011 8,00,000 9 A/SPRGHPU5 84 04/08/2011 4,79,000 Since, the above payments are not allowable as per Sec.37(1) of the I T Act, and Sec.40A(3) of the I T Act, you are requested to offer your comments. Ans.: I am unable to answer to this question since it appears - to be a legal one. I would consult our Auditors and act according to the law at ....
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....as follows:- AY Undisclosed income assessed 2008-09 16,74,23,150 2009-10 3,92,55,717 2010-11 4,22,50,000 2011-12 2,60,02,322 38. With regard to seized documents found in the premises of the assessee pertaining to Vinayaka Fruit Mandi, Venkateshwara Bottle Traders and Srinivasa Bottle Traders, these were confronted to Shri V. Janardhan, Internal Auditor & Finance Manager of SPR Group Holdings P. Ltd., who has admitted that there was no purchase of goods and services from FY 2007-08 onwards. This is the basis for the addition made by the AO. The statement of Shri V. Janardhan who has admitted that there were bogus purchases, his statement was confronted to the Director of the assessee company viz. Suresh Gowda. The statement of Suresh Gowda was also recorded by searched team. 39. Now the contention of the Ld. A.R. is that the statement recorded from the third parties were not confront to the assessee. This argument of the assessee's counsel is devoid of merit. The statement recorded from Janardhan V was rightly confronted to the assessee represented by Executive Director Suresh Gowda and he has given reply against various submissions made by Shri Janardhan V., in his stat....
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....rate that the purchases were bogus. g. The fact that Sri Janardhan was maintaining books of accounts of the vendors and hence, some papers of these entities were found in the Appellant's office is of no consequence to the Appellant. If anything, action should have been initiated by the AO against the vendors. h. The AO has not established any additional relationship between the Appellant and the vendors apart from the fact that the Appellant has had business relationship with these Vendors over the past many years. No other tangible connection has been mentioned by the AO. i. On the vendors not being available at the addresses mentioned, it is to be noted that the Appellant had business transactions with the vendors in the years of FY 2011-12 and those prior to these years. The enquiry was made by the AO in 2014, many years from the last business transactions. Hence, mere enquiry by the AO and absence of the vendor from the said address after 2 years is not conclusive of the existence of the vendors. 42. The Ld. D.R. strongly relied on the order of lower authorities. 43. We have heard the rival submissions. In our opinion, the addition is based on the seized material an....
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.... delete from or amend the grounds of appeal. 46.1. Assessee has filed additional grounds of appeal in ITA No. 127/Bang/2020, which are as follows:- 1. The order of the Learned Assessing Officer ('LAO') and Hon'ble Commissioner of Income-tax (Appeals) ('Ld. CIT(A)') is opposed to law and general principles of natural justice as applicable to quasi judicial proceedings. 2. The order of the LAO and Ld. CIT(A) is bad in law and against the provisions of section 153A, since amongst others, the additions are not based on any incriminating material found during the course of search. 3. Without prejudice to above grounds, the order passed by the LAO is bad in law since the LAO has not provided an opportunity to the Appellant to cross examine certain personnel whose statements have been recorded on oath during the course of search. 4. For the above and other grounds that may be urged at the time of the hearing of the appeal the appeal may be allowed and justice rendered. 47. Facts of the case are that a search action u/s 132 of the Act was conducted in the case of M/s SPR Spirits Pvt. Ltd. (erstwhile M/s SPR Group Holdings Pvt. Ltd.) to search of office at No. 33/1, Sapthagiri Arc....
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.... 46/2 16G Manph. halli 54 10 Manch. halli 47 2A 4G Manch. halli 14,88,915 54 38G Manch. halli 46/2 2A Manch. halli 47 21.5G Manch. halli 26,30,468 46/1 18.5G Manch. halli 46/1 1A 37G Manch. halli 50,63,379 47 1A 20G Manch. halli 39,45,606 TOTAL 1,85,22,224 9,16,00,000 7,30,77,776 48. From the above table, AO came to the conclusion that assessee earned a business income of Rs. 7,30,77,776/- treated as a business income in the hands of the assessee. Against this assessee went in appeal before Ld. CIT(A). Ld. CIT(A) confirmed the order of AO observed that the assessee has purchased 22 acres 36 guntas of land at Manchanayanahalli through T. Nanda Krishna since the assessee being a company was not permitted to acquire the agricultural land for formation of residential sites and layouts and later said land was sold by T. Nanda Krishna to SPR Developers Pvt. Ltd. for a consideration of R....