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TMI Blog2016 (6) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... ains no undisclosed income belonging to any other person other than the searched person. Under these circumstances, the proper course of action here should have been notice u/s.148 and not notice u/s.158BD since the AO of the searched person himself is not sure as to how and under which provisions the notice should be issued. Thus as Shri Tayyab Habib Chotani has already admitted such cash payments as his undisclosed income, therefore, the provisions of section 158BD cannot be applied to the case of the assessee and the proper course of action should have been issue of notice u/s.148. We therefore find merit in the submission of the Ld. Counsel for the assessee that the notice in the instant case could have been issued only u/s.148 and not u/s.158BD. Therefore, the additional ground raised to be decided in favour of the assessee. - ITA No.604/PN/2010 - - - Dated:- 29-4-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM Assessee : Shri Nikhil Pathak Revenue : Shri Hitendra Ninawe ORDER PER R.K.PANDA, AM : This appeal filed by the assessee is directed against the order dated 24-02-2010 of the CIT(A)-II, Pune relating to the block period 1991-92 to 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said seized document saying that they are not related to him. The assessee enclosed the account extract of Shri Tayyab Habib Chotani in his books of account showing outstanding balance of ₹ 33,90,491.46 payable by him to Shri Tayyab Habib Chotani on 26-02-2004. Since the assessee initially stated that the paper does not belong to him and subsequently admitted only a part of the transactions reflected on the said seized paper, i.e. only the cheque portion, the AO in order to justify the correctness of the claim of the assessee summoned Shri Tayyab Habib Chotani and recorded his statement u/s.131 of the I.T. Act. He also issued a letter summoning the assessee asking him to appear before him and explain on the admission made by Shri Tayyab Habib Chotani wherein he has categorically admitted the following facts : (i) The seized document, i.e. part No.6, Bundle No.1, page No.18 sezied from the residence of Shri Tayyab H. Chotani during search and seizure operations from the assessee on various dates in respect of sale consideration of the property at S.No.208, Yerawada sold by him to the assessee as per agreement dated 18- 10.-991 and 14-04-1992. (ii) That the said paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed on behalf of the assessee asking for further date for cross examination. It was also made a condition that the department should issue summon to other persons named by him for cross examination. In view of the above tactics adopted by the assessee, the AO held that the assessee is not cooperating in providing the information being asked for and he is shifting his stand on the issue. In respect of furnishing the desired information completely and correctly the assessee is trying to complicate the matter by asking examination of persons to whom department has neither examined nor collected any information. The assessee has also made a complaint before the concerned CIT for shifting of his case from the present AO to some other person which was rejected by the CIT. In view of the above and in view of the reasonings given at para 7 of the assessment order the AO held that cash payment made by the assessee to the tune of ₹ 50,39,695/- is the undisclosed income of the assessee for the block period 1990-91 to 2000-01. 6. In appeal the assessee challenged the validity of the notice issued u/s.158BD as well as the addition made by the AO to the tune of ₹ 50,39,695/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the Appropriate Authority s certificate u/s.269UL(3) of the Act, has been cited, which is based on the agreement dated 18.10.1991. However, this certificate of the Appropriate Authority, in which no objection has been given for transfer of the property based on the apparent consideration mentioned in the agreement, is in a different context altogether. It is clearly mentioned in this certificate dated 24.12.1991 submitted by the appellant in the appellate proceedings as under : This no objection certificate is issued without prejudice to any income tax proceedings pending or contemplated under any other provisions of the I.T. Act, 1961. Therefore, this no objection certificate was issued in the context of that particular section only, and has got nothing to do with the subsequent Block Assessment proceedings under Chapter XIVB initiated as a consequence of search having taken place, in which documents showing cash transactions pertaining to sale of this particular land were seized. Therefore, this contention of the appellant is not found to be tenable in law and ground No.2 is liable to be dismissed. 14. So far as ground No.3 is concerned, which is regarding reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.143(2) was issued and served within the stipulated time. Thus, the ground raised by the assessee on the time barring issue is not correct. Along with this report, the Assessing Officer also sent the Xerox copy of the notice as well as postal acknowledgement which has been duly stamped by MIs. Siddharth Builders, the appellant's proprietary concern. Copy of this report along with the enclosure was duly handed over to the appellant's representative on 22.9.2006. In view of this fact this objection of the appellant is also liable to be rejected. 7. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : The following grounds are taken without prejudice to each other On facts and in law, 1. The asst. order passed u/s.158BD r.w.s.158BC is barred by limitation since the notice issued u/s.158BD was time barred. 2. The asst. order passed u/s.158BD r.w.s.158BC is null and void on the ground that no proper satisfaction has been recorded as required by law. 3] The learned CIT(A) erred in confirming the addition made of ₹ 50,39,695/- on the ground that the assessee had made unaccounted payments to Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh facts are necessary for verification, therefore, the legal ground should be admitted. 10. After hearing both the sides and in view of the decisions of Hon ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383, Jute Corporation of India Ltd. reported in 187 ITR 688 and the decision of Hon ble Bombay High Court in the case of Ahmedabad Electricity Company reported in 199 ITR 351 the additional ground raised by the assessee being legal in nature is admitted for adjudication. 11. So far as the ground of appeal No.1 is concerned the Ld. Counsel for the assessee submitted that the above ground is decided against the assessee by the Hon ble Supreme Court in the case of CIT Vs. Calcutta Knitwears reported in 362 ITR 67. In view of the above submission by the Ld. Counsel for the assessee ground of appeal No.1 is dismissed. 12. So far as the ground of appeal No. 2 as well as additional ground is concerned they relate to the validity of 158BD proceedings. The Ld. Counsel for the assessee at the outset drew the attention of the Bench to the satisfaction note of the ACIT, Central Circle-1(1), Pune who is the AO of Shri Tayyab Habib Chotani to the ACIT, Circle-2, Pune ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 158BD which reads as under : Undisclosed income of any other person : 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed [under section 158BC] against such other person and the provisions of this Chapter shall apply accordingly. He submitted that a plain reading of the above section shows that for issue of notice u/s.158BD the AO of Shri Tayyab Habib Chotani should be satisfied that there is undisclosed income of Shri Shirish C. Karia recorded in the seized documents. The AO of Shri Tayyab Habib Chotani should thereafter transfer the books of account or documents or assets seized belonging to Shri Shirish C. Karia to the AO of Shri Shirish C. Karia. Since the paper in the instant case was found from the residence of Shri Tay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A). He submitted that since the paper containing the cash payments made by the assessee was found from the place of Shri Tayyab Habib Chotani during the course of search, the AO of Shri Tayyab Habib Chotani had forwarded satisfaction note to the AO of Shri Shirish C. Karia. Therefore, the 158BD notice issued by the AO of Shri Shirish C. Karia is perfectly valid. 18. So far as the merit of the case is concerned he submitted that the Ld.CIT(A) has given justifiable reasons for sustaining the same. Despite repeated opportunities given by the AO the assessee could not conclusively prove the entries in the seized document as explained or not belonging to him. He has also not availed the opportunity of cross examining Shri Tayyab Habib Chotani despite sufficient opportunities given by the AO. He accordingly submitted that under the facts and circumstances of the case the addition made by the AO and sustained by the CIT(A) should be upheld. 19. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. The first issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in terms of section 158BC in respect of any other person, the conditions precedent wherefor are : (i) satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act ; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person ; and (iii) the Assessing Officer has proceeded under section 158BC against such other person. 12. The conditions precedent for invoking the provisions of section 158BD, thus, are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under section 132A of the Act. 21. Since in the instant case Shri Tayyab Habib Chotani has already admitted such cash payments as his undisclosed income, therefore, the provisions of section 158BD cannot be applied to the case of the assessee and the proper course of action should have been issue of notice u/s.148. We there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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