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TMI Blog2014 (4) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal fall into error in deleting a part of the amount added back by the AO as the assessee's undisclosed income on account of consideration received for property sold (ITA 251/2013). 2. On 27.05.2003, a search and seizure action under Section 132 of the Income Tax Act, 1961, ("the Act") was carried out in the case of Mr. Y.C. Wadhawan, the assessee's husband. As a result of that search, carried out on Mr. Y.C. Wadhawan (a separate assessee), the evidence and material were seized in the form of a draft agreement to sell and the carbon copy of a receipt. Shri Wadhwan was proprietor of M/s R.R. Enterprises (India). The business premises of M/s R.R. Enterprises were covered under Section 133A of the Act. Notice under Section 158BC of the Income Tax Act was issued. These assessees were served by affixture on two separate dates for filing a return of income for the Block Period within 15 days. A "nil" return of income was filed on 15.03.05. Notice under Sections 142(1) and 143(2) were issued. These remained unanswered. Even the final show cause notice dated 12.05.05 remained unanswered. Therefore, the AO completed the assessment on the basis of the material available on record. 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands. 5. The appellant contends - in the grounds of appeal before us and in the arguments - through her senior counsel, Ms. Prem Lata Bansal, that the Tribunal fell into error in overlooking that the subject assessments were without jurisdiction and nullity as no search was conducted as to trigger the power to make a block assessment. Elaborating on this, it was submitted that the only basis for conferring jurisdiction upon the assessee, relied by the Revenue, was the search of her locker. Admittedly, no material was found, no panchnama was drawn nor was she issued with any subsequent notice. In these circumstances, adding further amounts to her assessed income on the basis of material seized from another individual assessee, who happened to be her husband, was illegal. Learned counsel also highlighted that the recourse made to Rule 29 of the Tribunal Rules to look into the pachnama and statements was unwarranted in the circumstances of the case. Learned counsel emphasized that the materials in the form of documents evidencing alleged undervaluation of the sale of immovable property, leading to alleged undisclosed income, was in fact recovered during the course of the search pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduce Sections 158BC and 158 BD of the Income Tax Act. They read as follows: "158BC. Procedure for block assessment. Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then (a) the assessing officer shall (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1-1-1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1-1-1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice, a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period: Provided that no notice under section 148 is required to be issued for the purpose of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sband. However, this warrant brought the assessee within the ambit of Section 158BC. The other aspect is that the assessee was present when her husband's premises were searched, and had even signed the panchnama, which recorded the seizure of the documents which were ultimately used by the AO in her case. Neither is there is any escape from this aspect. 10. Crucially, the Court here notices that one of the clear distinguishing factors between the facts of this case and the judgments relied on behalf of the appellant is that a separate warrant was issued in respect of the appellant. V. Ramaiah (supra) was not a case where a separate warrant had been issued in respect of the assessee. The judgment in Pushpa Rani (supra) was a one of its kind order, premised on the understanding that the issuance of warrants in respect of jewellery did not justify an addition in respect of other items. This Court is of opinion that the observations in that case cannot be read as determinative of the law on that subject nor can such distinction sought to be drawn to nullify assessments where materials in respect of one assessee are yielded in the search of another, and in respect of both, separate war ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the argument that the provisions of section 158BC of the Act were not applicable, the Tribunal has observed that it was never the case of the assessed that the document in question (Annexure A-11) was not recovered from its business premises or that it did not belong to it or that the entries regarding expenditure aggregating to Rs.14,88,754 were not made by its employee; vide letter dated 7-11-1996 the assessed had categorically accepted that the entries in question were made by its accountant, though for some other purpose; again on 15-11-1996 the assessed reiterated the same explanation and an affidavit of the accountant was filed stating that the figures mentioned on the document were imaginary figures; this explanation was again retracted and one Babulal Goenka was produced to own the said entries, which, according to Goenka were again typed by assessee's accountant. The Tribunal found that the assessee had knowingly and admittedly given different explanations in respect of the same document and, therefore, its yet another explanation that the subject transactions, though typed by its accountant, were made by the said Goenka lacked credence. It is pertinent to note that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e additions were invalid. 13. As to the merits, this Court is of the opinion that the findings of the lower authorities are based on a proper appreciation of the facts. The documents, in the form of the (unsigned) agreement to sell do disclose that the real - and undisclosed - consideration for sale of the property was far in excess of what was in fact reported in the assessment. The inferences drawn by the AO were consequently justified. However, the CIT (A) was of the opinion that since only a portion of the property had been gifted by the assessee's husband to her, the entire addition could not be made in her hands. This finding was affirmed by the ITAT. This being purely a question of fact, this Court does not propose to interfere with it. 14. The assessee sought leave to rely on additional grounds. We notice that various aspects were agitated before the ITAT, which proceeded with the appeal on all the questions urged. As regards jurisdiction too, the appellant had advanced submissions before the ITAT. However, the question of lack of jurisdiction of the AO had never been agitated in the first instance at the time of assessment. This too, in the opinion of the Court, is an ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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