9911796707
TMI Blog1999 (2) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ern. The assessment of an income arising for exports as the undisclosed income of the appellant, without allowing the statutory relief under s. 80HHC of the Act, is illegal and contrary to the finding of the learned AO himself. 4. Without prejudice to the above, the observations of the learned AO as contained in para 5(e) of the assessment order are uncalled for, illegal and irrelevant and against the facts of the case and deserve to be deleted. 5. The assessment made by the learned AO on 28th Nov., 1997 is illegal, void and even against the facts of the case in as much as the learned AO has failed to serve on the appellant the mandatory notice as required under s. 158BC(a)(i) of IT Act, 1961, after the transfer of its case from Chennai to New Delhi vide CIT, Tamilnadu's order dt.14th Oct., 1997, effective from15th Oct., 1997. 6. The learned AO failed to appreciate that the earlier notices including that issued on30th June, 1997, had become invalid in view of the order of Madras High Court dt.11th Sept., 1997, which had quashed the order dt.10th June, 1997passed by the learned CIT transferring the case of the appellant from Chennai toNew Delhi. It is, therefore, prayed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of CIT vs. Stepwell Industries Ltd. (1997) 142 CTR (SC) 345 : (1997) 228 ITR 171 (SC) and Addl. CIT vs. Gurjargravures (P) Ltd. 1978 CTR (SC) 1 : (1978) 111 ITR 1 (SC). Responding to the arguments of the learned Departmental Representative it was submitted by Shri Prakash Narain that in case the judgment of Supreme Court in the case of National Thermal Power Co. Ltd. is gone through, it would be clear that their Lordships of Supreme Court have clearly observed that in case non-taxable item is taxed or a permissible deduction is denied there is no reason that the assessee be denied an opportunity of raising question before the Tribunal for the first time. Since after allowing deduction under s. 80HHC of the Act, the same was denied to the assessee, the assessee's case is covered by the observations of their Lordships of Supreme Court and as such the additional ground required to be admitted. The decisions rendered in the cases of Gurjargravures (P) Ltd. and Stepwell Industries Ltd. were on the facts as available in these cases and as such they could not be applied to the assessee's case. 3. We have carefully considered the rival submissions and have also gone through th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en. Chapter XIV-B relates to special procedure for assessment of search cases. As per definition of undisclosed income given in s. 158B(b) of the Act, undisclosed income includes any money, bullion, jewellery or valuable article, etc. based on any entry in the books of accounts or documents which has not been or would not have been disclosed for the purposes of this Act. As per s. 158BB the income already returned has to be excluded. The assessee has already been assessed under s. 143(1)(a) of the Act. During the course of the original proceedings the assessee had declared all the facts relevant for asst. yr. 1995-96. The claim of the assessee in respect of s. 80HHC was accepted and deduction was allowed. There was no fresh material discovered during the course of searches which could have led to the denial of the claim in the proceedings taken under Chapter XIV-B of the Act. As would be evident from the material on record detailed questionnaire issued to the assessee was duly replied to by the assessee. It was shown that there was no undisclosed income discovered as a result of search for which the framing of assessment under s. 158B could have-been justified. Reliance was placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the assessee was not entitled. 6. We have carefully considered the rival submissions. We have also gone through the specific material to which our attention was drawn. We have also gone through the relevant decisions as cited on both sides. Chapter XIV-B lays down special procedure for framing assessments in the cases of search. Amongst special features are the concept of block period consisting of 10 years and special procedure for framing assessment in relation to undisclosed income as a result of search. Income assessable under the Chapter is the one which is discovered as a result of searches conducted after a specific date. The undisclosed income can be either in the form of money, bullion, jewellery or any other valuable article or thing or any income based on any entry in the books of accounts or other documents or transactions, etc. The aforesaid income is to be the one which has not been disclosed for the purpose of the Act. Thus the prerequisite condition for bringing the income to tax under the aforesaid Chapter is that it has to be undisclosed income in terms of definition given in s. 158B(b) of the Act. The aforesaid undisclosed income stands in direct contrast to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rehouses/godowns of M/s AVT Group of Companies. The initial rent agreed to be paid was not paid in the end. Rent of Rs. 45,994 represented the warehouse charges paid to various parties for temporarily using their godowns/warehouses for sorting and repacking of tea. The exports made by the assessee were supported by the documents namely evidence in the form of invoices for exports, packing list for invoices, export order copies, bill of lading, shipping bills, insurance cover, inspection report, certificate of origin, GR declaration forms, Lab test certificates, weight measurement certificate, masters receipt, confirmation of receipt of goods by the buyer, export realization certificate, bank statements where exports proceeds credited, purchase invoices for tea, purchase invoices for packing materials transport bills and other documents. The banking facilities were availed of on the strength of the personal property of the managing partner Shri M.A. Kharim. Material was also brought to show that the benefit of exports was ultimately enjoyed by the partners of the firm by way of drawings. Against this no evidence was brought on record by the learned Departmental Representative. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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