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TMI Blog2014 (3) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.08.2007 and also other information during the course of search could be the material for previous six years to initiate proceedings under Section 153A of the Act – Held that:- Though the estimate slip reflects the actual purchase and sale of gold made in the business concerns of appellant assessees, the sale bill was always for lesser quantity than the details reflected in the estimate slip - By this process actual sales were not reflected was the information gathered during 2006 by the Commercial Tax Department - Search was in 2007 - There was material in black and white at least for these two years – thus, there was enough information and material to presume the nature of accounting and also modus operandi in maintaining the records by the assessee - Relying upon Commissioner of Income-tax Versus Hotel Meriya [2010 (5) TMI 556 - Kerala High Court] none of the provisions under Chapter XIVB mandates, for making block assessment there shall be evidence regarding the concealment of income for every year for the block period. There is no prohibition or embargo on the department to consider this information for assessment or reassessments contemplated under Section 153A - There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te slips instead of sale bills? 2. The undisputed facts that led to filing of the above appeals are as under: There were six jewellery business concerns of the appellants which are admittedly sister concerns. There were two shops at Thiruvananthapuram, two shops at Kottayam, one at Kollam and another at Kottarakkara. All the six business concerns pertain to Sunny Jacob family. So far as assessment for income tax and Commercial Tax, all the six are different entities, though the partners of all the six business concerns belong to one and the same family. In this background, one has to appreciate the challenge made by the appellant assessee so far as order of the Tribunal. 3. The entire litigation arises on account of search conducted by the Revenue on 21.08.2007 in the business concerns of the appellant assessee, apart from various residential houses. Based on the pre-search enquiry conducted on 24.07.2007, by purchase of gold ornament by the personnel from the Investigation wing of the department, the entire process commenced. Said purchases from two shops of the appellants, one pertains to purchase of 2.040 grams of gold valuing about 1940/- and another was 1.540 grams ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to assessment year 2008-09 during which a search was made and the last portion was with reference to assessment year 2001-2 in ITA No.692 of 2010 pertaining to alleged gift of Rs.3,47,580/- received from Sri.George Joseph through banking channel. 6. The Tribunal, so far as previous six years assessment from 2002-03 to 2007-08, opined that the statements of cashier and other persons, so also other material collected from the Commercial Tax department needs to be examined after giving an opportunity to the tax payer, since the tax payer had no occasion to explain the material collected by Sales Tax Department during their inspection on 22.04.2006. It also opined that as the proceedings initiated were under Section 153A, the assessing officer can take into account all evidence, including the material found during the course of search operation. Therefore, in all fairness, one more opportunity should be given to the appellant assessee to present their case before the assessing officer. Hence, the orders of the assessing officer pertaining to assessment years 2002-03 to 2007-08 were set aside and the entire issue with regard to addition of suppressed sale was remitted back to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(Appeals) deserves to be confirmed. 10. During the course of arguments, he also contended that, though all the six shops are sister concerns, information collected from one of the shops cannot be the information for other sister concerns. Therefore, there is no justification in placing reliance on the information collected during pre-search enquiry for all the six business concerns of the tax payers. According to him, wherever the information was collected such information has to be considered with reference to that particular assessee and not other assesses. This is in addition to the argument that whatever information collected during the course of search proceedings cannot be made relevant for the previous six years by initiating action under Section 153A. 11. As against this, learned Standing Counsel for the department contends that proceedings under Section 153A also has to be concluded based on best judgment after proceeding with the matter in accordance with the procedure contemplated under Section 153A of the Act. According to him once a reply is given to the show cause notice issued by the department, the proceedings have to be considered in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e customer, but they issue bills on finalization of the sales. This statement of Mr.Sunny Jacob was considered with reference to other information collected. Daily summary sheet pertaining to business transactions a day prior to the search, that is 20.08.2007, was recovered and seized during the search operations. There were 37 sales as per the daily summary sheet. The actual sales recorded in the day book were much less than the details recorded in the summary sheet. In other words only 30.84% of the real sales were recorded. Mr.Bijimon, Manager of the Kottarakkara showroom was not able to give any explanation for the above discrepancy as per the observations of the Assessing Officer. 15. During the course of search at the premises of Sunny Jacob 916 Jewellery, Pazhavangadi, Thiruvananthapuram, Mr.Joshy Abraham, Cashier gave statement explaining the difference in the sale bill and the sales effected through estimate slips. He replied that, when customers select particular item for purchase, estimate slips are prepared through the computer. However, as per the estimate slip given to the customer, ornaments would be handed over to the customer. Mr.Mathew Eapen, Floor Supervisor o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2008-09. However, the information gathered during the search proceedings with reference to Commercial Tax department pertains to 2006. Inspection by Commercial Tax department was on 24.02.2006. Commercial Tax department also found similar deficits in the maintenance of accounts and the records by the appellant assessee. Commercial Tax Department also opined, sales bills were not issued for the entire sales made by them though estimate slips was prepared for the actual sales. 20. In other words, though the estimate slip reflects the actual purchase and sale of gold made in the business concerns of appellant assessees, the sale bill was always for lesser quantity than the details reflected in the estimate slip. By this process actual sales were not reflected was the information gathered during 2006 by the Commercial Tax Department. Search was in 2007. There was material in black and white at least for these two years. Therefore, there was enough information and material to presume the nature of accounting and also modus operandi in maintaining the records by the assessee. 21. In the case of Hotel Meriya it was held that none of the provisions under Chapter XIVB manda ..... 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