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TMI Blog2016 (10) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... essee - ITA No.736/Bang/2016 - - - Dated:- 26-8-2016 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER and SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Appellant : Shri H.N.Khincha, CA. For The Respondent : Shri Sanjay Kumar, CIT(DR) ORDER Per INTURI RAMA RAO, AM : This is an appeal filed by the assessee directed against the order of the CIT(A)-11, Bangalore, dated 26/02/2016 for the assessment year 2010-11. 2. The assessee raised the following grounds of appeal: 1. The learned Assessing Officer had erred in passing the order in the manner passed by him and the learned Commissioner of Income tax (Appeals) has erred in confirming the same. the order passed being bad in law and are liable to be quashed. 2. In any case, the learned Assessing Officer had erred in assuming jurisdiction U/s. 153C of the I.T. Act and the learned Commissioner of Income tax (Appeals) has erred in confirming the same. The orders as passed lack proper jurisdiction and same are liable to be quashed. 3. In any case and without prejudice, the learned Assessing Officer had erred in making an addition or ₹ 75,12,096/- to income of the appellant on account of difference in stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/4/2011 was 18,355.370 gms whereas as per report in Form 3CD, opening stock as on 01/04/2011 was 13,295.370 gms and the difference of 5060 gms between the stock register and the details as per Form 3CD, was brought to tax by adopting the rate of ₹ 1632 per gm. When the assessee was called upon to explain the difference in stock, it was submitted that difference in stock of 4603 gms was on account of gold taken as advance under MP Deposit Scheme (MPDS) from various family members numbering to 22. The above explanation tendered by the assessee in support of difference in stock of 4603 gms was rejected by the AO on the following grounds: 1) It is seen from the seized books of account that the first entry of gold as per seized material Annexed MPJ/S-7 ledger is period F.Y 2009-10 and second entry is in F.Y 2011-12. Copy of page 27 of Annexure A/MPJ/S-7 dated 12.03.2012 is enclosed as (Annexure-1 to this order). The Annexure A/MPJ/S-7 consists of the books of account for the period 01.04.2009 to 31.03.2010. The same is roughly reproduced in English as under; Parties had deposited 4603 grams of gold under Shri MP gold Deposit Scheme. This evidence proves that the entry re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gister. There is no evidence to segregate the (jewellery) in normal stock from the jeweelary alleged to have been made out of M.P Deposits scheme. The difference amount was brought to tax as unexplained investment. 3. Being aggrieved, an appeal was filed before the CIT(A) who vide impugned order, dismissed the appeal. It was, inter alia, contended that there was no satisfaction recorded by the AO of the person searched and therefore, the proceedings initiated u/s 153C were not valid in law. This contention was negatived by the CIT(A) after verifying from the assessment record that the AO has recorded a satisfaction note dated 01/10/2013 and the satisfaction note was reproduced by the CIT(A) as under: ' During the Course of search action u/s 132 dated 12.03.2012 in the case of Sri Gouthamchand Banthia, the assessee has made declaration of ₹ 70,00,000/- for A.Y.2011-12 and ₹ 80,00,000/- for A.Y. 2012-13 in hands of Shri. Gouthamchand (HUF). there same needs to be assessed. Hence, please put up notices u/s 153C for A.Y. 2006-07 to 2012-13 As regards merits of the addition, the CIT(A) confirmed the addition. 4. Being aggrieved, assessee is before us i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same, there was no need of recording of separate satisfaction and in this connection, he relied on the decision of the Hon ble Allahabad High Court in the case of TVS Securities Finance (P) Ltd vs. CIT (42 taxmann.com 441)(All) and the decision of the Hon ble Kerala High Court CIT vs. Dr. T.M.Kuriachan (32 taxmann.com 165)(Ker). He further submitted that the proceedings u/s 153C were validly initiated as the kartha of the assessee had declared undisclosed income u/s 132(4) of the Act in the hands of P.Gouthamchand, HUF. On the merits of the issue, ld.CIT(DR) submitted that the AO was justified in rejecting the explanation, as no corroborative evidence was filed to establish that the assessee had received gold under MP Deposit Scheme. Doubts raised by the AO, as mentioned in the assessment order, had remained unsubstantiated. In the circumstances, the addition should be confirmed. 5. We heard rival submissions and perused material on record. At the first instance, we shall deal with validity of the notice u/s 153C of the Act. It is a matter of record that kartha of the assessee i.e. P.Gouthamchand had given a statement u/s 132(4) of the Act offering income of ₹ 80 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be invalid by reason of any mistake, defect or omission if such notice or proceedings or assessment is otherwise valid under the Act. This provision enacts the principle that mere non-mention or mention of a wrong provision of law in a proceeding or order cannot be a ground to invalidate it if that is otherwise permissible and valid under law.......... . Thus having regard to the provisions of section 292B of the Act, we hold that mere mention of wrong section in the notice does not vitiate the validity of the very notice issued for filing return of income. Thus, the contention of the assessee that notice issued requiring assessee to file return of income is invalid, cannot be accepted. As regards recording of satisfaction, the CIT(A) had observed that the AO has recorded a satisfaction note and the satisfaction note was also recorded in his order. As regards the contention of the assessee that satisfaction note has to be recorded again by the AO of the assessee who has jurisdiction over him, no material was produced before us that no such satisfaction was recorded by his AO. In absence of material on record, we are unable to appreciate the contention of the assessee. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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