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TMI Blog2015 (1) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... goes by the factum of the Department itself treating the only documents, namely, receipts as not true; or their failure to record the statements of any individual including the authorized representative of the company, the very basis for the proceedings ceases to exist. - Assessing Officer as well as the Tribunal proceeded on the assumption that the appellant was under obligation to explain the factum of payment. When the amount was not recovered nor was said to be in the control and custody of the appellant, there was no basis for initiating that proceedings. - Decided in favour of assessee. - I.T.T.A. No. 148 of 2004 - - - Dated:- 24-12-2014 - L. Narasimha Reddy And M. M. Seetharama Murti,JJ. For the Appellant : Sri Y. Ratnakar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (for short the company) in which he himself and his family members have substantial stake. The Assessing Officer passed an order of Block Assessment on 31.01.2003 adding a sum of ₹ 10,00,000/- to his income and levying tax as provided for under Chapter 14B of the Act. The appellant filed an appeal before the Commissioner of Income Tax (Appeals)-I, Hyderabad. The same was dismissed on 22.08.2003. Thereupon, he filed an appeal before the Tribunal and that was also dismissed on 28.04.2004. Sri Y. Ratnakar, learned counsel for the appellant submits that the very recording of statement from the appellant was without basis, since no cash or other incriminating documents were recovered during the search. He contends that if the receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idencing payment and taking refund of a sum of ₹ 10,00,000/- in a transaction with Mr.Prabhakar Reddy, nothing else was noticed or recovered in the search. Section 132 of the Act confers power upon various authorities of the Department to conduct search. Since it entails in penal consequences, every step stipulated therein is required to be followed meticulously. The recording of statement under sub- Section (4) of Section 132 of the Act would take place, as a sequel to the search. It is only when a person is found to be in possession and control of any books of account, documents, money, bullion or jewellery, that his statement can be recorded. The sole basis for recording of statement from the appellant herein is the recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment did not cross-verify the matter from any authorized representative of the company. Therefore, whether one goes by the factum of the Department itself treating the only documents, namely, receipts as not true; or their failure to record the statements of any individual including the authorized representative of the company, the very basis for the proceedings ceases to exist. The Assessing Officer as well as the Tribunal proceeded on the assumption that the appellant was under obligation to explain the factum of payment. When the amount was not recovered nor was said to be in the control and custody of the appellant, there was no basis for initiating that proceedings. We, therefore, allow the appeal and set aside the order of B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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