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TMI Blog2013 (11) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the prescribed time limit of six months of the date of transfer. The denial of deduction u/s.54F is for the reason that the investment in the residential flat at Pune was made by the assessee only on 15.12.2006. Though the assessee could do so; the limit for the same being two years from the date of transfer, i.e., 26.11.2005, he had to, in terms of section 54F(4), deposit the sum not appropriated toward such investment in the capital gains account scheme with a specified bank or institution by the due date of filing the return of income u/s.139(1) for the relevant year. That having admittedly not being done, the assessee could not validly claim deduction u/s.54F. The facts and circumstances of the case being undisputed, we find the Revenue’s basis for denial of deduction u/s.54F, are completely valid - Decided against assessee. Unexplained income u/s 68 - Held that:- the explanation with regard to that nature and source of credit being satisfactory or not, keeping the entirety of the facts and circumstances of the case into account, is to be drawn. The decisions cited by the assessee have been with reference to the one of positive inference. It is the cumulative effect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: Sr. No. Name Amount 1 Smt. Asha Babladi Rs.1,65,00,000/- 2 Smt. Manisha Dani Rs.1,65,00,000/- 3 Sri Satish Babladi Rs.35,00,000/- 4 Smt. Jyoti Babladi Rs.30,00,000/- 5 Sri Rajesh Babladi Rs.65,00,000/- Total Rs.4,60,00,000/- The same was to be paid by 31/12/2005, failing which the delayed payment would attract interest @ 12% p.a. The full payment, however, could not be made by the prescribed date, and was finally paid only by 15/6/2006. The issue arising is the year in which the long term capital gain arising on the transfer is to be assessed. While the assessee claims it to be the year of the receipt of the full and final payment under the award, i.e., A.Y. 2007-08, for which it claims to have returned the same, as per the Revenue, the same, i.e., full payment, is not relevant as the transfer was complete and the capital gain inured on the award being declared on 26/11/2005, so that the entire capital gain arises for AY 2006-07. The assessee has, however, raised a legal issue, claiming the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raj Pratap Singh (supra) also drawing on the decision in the case of Madhupuri Corpn. v. Dy. CIT (2002) 256 ITR 498 (Guj.). The basis of all these decisions is that there is no restriction placed by law on the issuance of a common authorization, which is of course to be based on reason/s to believe, on the strength of materials and information with regard to the concealed income or assets of persons in respect of whom search action is initiated. As explained, the search is of a premises, etc., so that the warrant of authorization is issued qua a premises, i.e., a different warrant would stand to be issued for each different place which is to be subject to search, of course in respect of the persons whose income/assets are suspected to be secreted or held at the said place. Further, as the said person/s may not be available at the said premises at the time of search, the obligation on the search party to produce and show the search warrant is to the person who is at the time relevant time in charge of the said premises; the search in the case of Raghu Raj Pratap Singh (supra) being on a bank, which was believed to hold undisclosed deposits (in the form of FDRs) of the persons in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicating plurality of names. It does not in any manner indicate an AOP comprised of the said persons. It would be a different matter if the materials with the Revenue are for the undisclosed income/assets of an AOP comprising them, but the subsequent assessment/s is framed in their individual names on the strength of evidence found with regard to their individual assets in search. The assessee has no such case, which, where so, could only be on the basis of the facts and not a bald statement/s. In fact, even in such a case, there is no bar in law for framing assessments in the names of different individuals or, even for that matter, whose names are not mentioned but qua whom material as to undisclosed income stands found, though the same would be u/s.153C and not section 153A. In the instant case, there is no iota of evidence, nor is it the assessee s case of it being so, of any joint economic or commercial activity by the four named persons, to suggest even remotely of income/assets of an AOP. In fact, by all available counts, the information, or at least one of the informations, leading to the search action, is the monies received from ANL under the Arbitration Award dated 26. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to arbitration. The terms of reference therefor was that the sole arbitrator was to fix the quantum of compensation and the time when the claimants have to handover the vacant possession of the property to the respondent (Clauses 2 and 5 of the reference agreement dated 20.10.2005/PB pgs. 31-38). Vide an arbitration award dated 26.11.2005 (copy on record/PB pgs. 21-24), the compensation was awarded at Rs.4.60 crores and the claimanttransferors were directed to handover possession of the property to the respondenttransferee forwith (refer Clauses 1 to 4 of the arbitration award). A transfer can arise only with mutual consent and agreement, so that it can, in the facts and circumstances of the case, be said to have taken place on the resolution of the dispute as well as the terms and conditions of the transfer, vide the said arbitration award, which stood accepted by both the parties. That is, on 26.11.2005, or immediately thereafter. The same provides for a compensation of Rs.4.60 crores to the transferors, including the assessee, defining their individual shares, to be paid by 31.12.2005 (which date incidentally also falls within the same previous year, i.e., financial year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim for the transfer date as falling in f.y. 2006-07 on the basis of delivery of possession in that year, being made with reference to a letter of possession dated 20.06.2006 (PB pg. 54). The said letter is of no consequence. Firstly, for the reason that the same does not mention the date on which possession was handed over. Secondly, we have already explained that this makes the assessee s claim self-contradictory. In fact, this aspect stands also discussed by the ld. CIT(A) vide para 1.17 and 1.18 of his order, and whose findings, including with regard the non-admissibility of the said letter in evidence, has not been rebutted by the assessee before us, so that the same cannot be considered in evidence. 5.3 The only issue, therefore, that arises and calls for our adjudication is the eligibility of the assessee s entitlement to deduction u/s.54F; the investment in specified bonds u/s.54EC having been found to be within the prescribed time limit of six months of the date of transfer. The denial of deduction u/s.54F is for the reason that the investment in the residential flat at Pune was made by the assessee only on 15.12.2006. Though the assessee could do so; the limit for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hon'ble high court, he would continue, that the A.O. is bound to issue notices u/s.153A for each of the six years immediately preceding the assessment year relevant to the previous year in which the search or requisition is made and, two, is empowered to assess or reassess the total income of the assessee for each of those six years as well as for the assessment year relevant to the year of search or requisition. That is, there are no fetters placed by law, and the A.O. is obliged to frame the assessment for those years assessing the total income without any restriction. In other words, there is no conditionality of discovery of any incriminating material, which qualification could itself be a subject matter of dispute. 9. We have heard the parties, and perused the material on record. 9.1 In our view, the plea being canvassed by the assessee cannot be accepted in view of the decision by the hon'ble high court in the case of Anil Kumar Bhatia (supra), which effectively answers the issue under reference vide paras 18 to 22 of the said Judgment. It has been abundantly clarified therein that the jurisdiction to assess or reassess is assumed on the basis of the search or requisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of the search proceedings dated 10.08.2006. These facts are conspicuous by their absence in the return of income for the relevant year, i.e., A.Y. 2006-07, filed on 31.07.2006, i.e., prior to the date of search. As such, even considering, for the sake of argument, some merit in the assessee s contention that section 153A could not be invoked in the absence of any incriminating material, the same would not be applicable in the facts of the instant case. This is in view of the material found in the assessee s case impacting his assessment for A.Y. 2006-07. It is not necessary that the said material is to be independently found for all the assessment years under reference, as once the A.O. validly assumes jurisdiction u/s.153A, he is duty bound to issue notices and frame the assessment for each of the six years immediately preceding the assessment year relevant to the year in which the requisite search is made as well as the year of such search. The caveat by the hon'ble high court vide para 23 of its Judgment relates to a case where no incriminating material at all is found for any of the said years. It may be noted that in that case too additions were made for years other than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eness (of the credit); the assessee being obliged to prove the credit in its books of account on the parameters of identity (of the creditor); creditworthiness and genuineness. This is for the reason as the income of the donor, Shri Vikas Bafna, for the two years for which the documents have been filed, being financial year ending 31.03.2002 and 31.03.2004, reveal it to be at Rs.1,76,741/- and Rs.1,55,068/- respectively, with the withdrawals for the two years being at Rs.83,218/- and Rs.62,064/- respectively, leading to the inference of him being a man of little means, leading a frugal life. With regard to the genuineness of the gift, the findings are even more indicting. The donor has no relationship with the donee, and is claimed to be a friend. No special need or occasion attends the gift, which has been utilized by the assessee donee for investing in ICICI Prudential Mutual Fund, so that the apparent need for receiving the gift is the said investment, which (gift) is thus presumed to be an accommodation entry. The bank statement of the donor for the relevant year has not been furnished, citing absence of any power with the assessee under law to requisition the same. Finally, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, going just beneath the surface, again raises genuine doubts in the matter. Firstly, the balance-sheets are unsigned, and the portfolio is the same, at Rs.92.78 lakhs for both the years for which the balance-sheets stand submitted. Surprisingly, of the same, no interest arises from two parties to whom Rs.90 lakhs, or the bulk of the capital, stands advanced. Neither does the donor earn interest nor recalls the said advances, which, even at 12% p.a., would yield him an income which is a multiple of his combined income from all other sources. That the assessee is unable to produce the bank statement of the creditor for the full year, but does so only for a part of the year, i.e., up to the date of the gift, is again quizzical, if not highly unusual, and no convincing explanation for this unusual state of affairs is furnished. 12.5 The assessee has placed reliance on some decisions. However, as afore-stated, the matter is purely factual, i.e., based on primary facts on which inference as to a finding of fact, i.e., the explanation with regard to that nature and source of credit being satisfactory or not, keeping the entirety of the facts and circumstances of the case into a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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