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TMI Blog2009 (3) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the action of the AO holding cash of ₹ 22,35,000 to be belonging to the appellant even though the documentary evidences furnished categorically indicate that the said money actually belongs to the various concerns of Labh Group controlled by the appellant. 4. The learned CIT(A) erred on facts and in law in confirming the action of the AO determining undisclosed income at ₹ 22,35,000 in spite of the fact that the cash seized and retained under s. 132A was ₹ 19,13,000 only. 5. The learned CIT(A) erred on facts and in law in confirming the action of the AO holding cash of ₹ 2,15,000 seized from Smt. Jayaben Govindbhai Patel as undisclosed income of the appellant even though no such finding to that effect was given in her assessment made under s. 158BC. 6. The learned CIT(A) erred on facts and in law in confirming the action of the AO not granting credit of the retained cash of ₹ 19,13,000 and accrued interest thereon while issuing the demand notice on the block assessment. 7. The learned CIT(A) erred on facts and in law in confirming the action of the AO charging interest under s. 158BFA amounting to ₹ 19,276. 8. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in that particular robbery case, six persons were arrested by the police authority. Interestingly, it is to be aware that the original complain was lodged by Shri Harin K. Shah for the robbery of ₹ 5,000 only but subsequently after recovery of huge cash of ₹ 18.20 lacs (correct amount of ₹ 19,13,000) from the seven persons, he changed his statement that robbery was not of ₹ 5,000 but of ₹ 22,35,000 which were belonging to the group cases of Labh Construction Industries Ltd. (b) The abovementioned contradictory statements of the complainant Shri Harin K. Shah led a belief in the minds of IT authorities that the amount recovered by the police officers was unaccounted requiring action under s. 132A of the IT Act, 1961. The IT authorities accordingly issued a warrant of authorisation under s. 132A on 30th Aug., 1995 and served upon the police authority for the seizure of cash of ₹ 19,13,000 lying in their custody. The police authorities however objected to hand over the said cash on the ground that cash obtained by them had become 'Muddamal' and could not be handed over to other authorities till the criminal proceedings are complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority from the seven persons on various date(s) which are summarized as under to understand the real facts of the case. Sl. No. Name of person S/Shri Cash recovered on Total 28-8-1995 29-8-1995 4-9-1995 1. Nilesh G. Dhobi 7,00,000 ' ' 7,00,000 2. Bhavin R. Modi 1,05,000 ' ' 1,05,000 3. Jagruti P. Raval 1,85,000 ' 45,000 2,30,000 4. Swetal Rameshchandra 2,60,000 ' 48,000 3,08,000 5. Pragnesh M. Kothari 55,000 ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shilp Construction 31,488.51 30,000 Total 26,75,474.54 22,35,000 (g) It was claimed by the claimant i.e., group cases of Labh Construction Industries Ltd. that the cash of ₹ 22,35,000 was given by Shri Harshad Waghela to his friend Shri Harin K. Shah on 14th Aug., 1995 for the safe custody as Shri Harshad Waghela was to leave Ahmedabad for personal affairs. It was a fact that on the same day i.e. on 14th Aug., 1995, the amount of ₹ 22,35,000 was robbed in the night from Shri Harin K. Shah by the seven miscreants for which an FIR was launched (lodged) by Shri Harin K. Shah on 15th Aug., 1995 that the amount robbed was of ₹ 5,000 only. However later on during investigation proceedings conducted by the police authority, Shri Harin K. Shah changed his statement that amount robbed off was not ₹ 5,000 but it was exactly ₹ 22,35,000. On the basis of the above facts, the block assessments under s. 158BC were originally finalized in the cases of two assessees determining undisclosed income in their hands vide orders pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the balances of various concerns was ₹ 26,75,474 out of which ₹ 22,35,000 was given to Shri Harin K. Shah for safe custody. However, the AO, after examination of the books of account, noticed that in Labh Properties (P) Ltd. in which cash balance of ₹ 8,69,034 has been shown an amount of ₹ 8,01,000 was deposited in cash on 14th Aug., 1995 itself i.e., on the date of theft which was shown as receipt of sale of flat of Anita Prasun Shah. The AO also observed that the assessee had cash deposit of ₹ 2,15,000 on 24th July, 1995 in the name of Maya H. Mehta and ₹ 50,000 on 29th July, 1995 in the name of Murli N. Devnani and ₹ 1,00,000 in the name of Arun Shukla in the month of April 1995 itself. The AO also observed that the amount of ₹ 8,01,000 from Anita Prasun Shah was not substantiated and in the agreement also showed that she had deposited the amount of ₹ 9.95 lakhs with the builder in respect of the said premises. She had also made payment of ₹ 8,01,000 on the date of agreement as earnest money, then it should have been mentioned in the agreement entered into with the LPPL. The AO concluded that till the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed money, he has taken help of developing cash balances in the accounts of various concerns. The AO treated the amount of ₹ 22,35,000 as undisclosed money of the assessee and, accordingly, the same was added as undisclosed income under s. 158BD of the Act. 5. Aggrieved by the order of the AO, the assessee carried the matter in appeal before the learned CIT(A). The learned CIT(A), vide order dt. 29th March, 2006, confirmed the addition and, hence, the assessee is in appeal before the Tribunal. 6. The Authorised Representative of the assessee raised a pertinent question stating that the notice issued under s. 143(2) of the Act was barred by limitation. He, therefore, submitted that the assessment order may be quashed. He further submitted that the assessee filed his return of income in response to the notice issued under s. 158BD of the Act on 30th June, 2003. The notice under s. 143(2) of the Act was issued and served on 6th April, 2005. He claimed that in view of the various judicial pronouncements, notice under s. 143(2) of the Act should have been served on the assessee within the period of twelve months from the end of month in which return has been filed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, following the same decision, we declare the assessment order as null and void in this case also because notice under s. 143(2) was not served upon the assessee within the prescribed period. Hence, on this ground also the assessment order is liable to be quashed. The same is accordingly quashed. 10. Similarly, the Delhi Bench of the Tribunal in CPR Capital Services Ltd. vs. Dy. CIT (supra), observed as under : 10. From the above submissions of learned Departmental Representative for the Revenue, in the instant case, it stands admitted by the Revenue that no notice under s. 143(2) has been issued and served upon the assessee within 12 months from the end of the month in which the return has been filed by the assessee as provided under proviso to s. 143(2) of the Act. Hence, respectfully following the ratio of decisions (supra) the block assessment framed by the AO is invalid in the eyes of law and the same is accordingly quashed. Since we have decided this legal issue in favour of the assessee and against the Revenue, we do not consider it necessary to decide the remaining ground as raised by the assessee on merits. The order of the learned CIT(A) is set aside. ..... 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