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TMI Blog2018 (3) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... t or the returns that he had disclosed earlier. In these circumstances, the addition made was justified. - Decided in favour of the Revenue - ITA 1003/2017, C.M. APPL.41767-41768/2017 & 3505/2018 - - - Dated:- 12-3-2018 - MR. S. RAVINDRA BHAT AND MR. A.K. CHAWLA JJ. Appellant Through: Sh. Arvind Kumar with Sh. Harshvardhan Sharma, Advocates. Respondents Through: Sh. Zoheb Hossain, Sr. Standing Counsel with Sh. Deepak Anand, Advocate. MR. S. RAVINDRA BHAT 1. The question of law framed in this appeal is as follows: Was the addition upheld by the impugned order, on the basis of statements made by Sh. Suresh Kumar Gupta and the materials seized from his premises justified in the facts and circumstances of the case given that the premises were separate, though a common warrant under Section 132 of the Income Tax Act, 1961 was issued in respect of both? 2. A search and seizure operation under Section 132 of the Income Tax Act, 1961 [hereafter the Act ] was conducted at the premises of the appellant-assessee on 30.07.2009. The search included the assessee s brother Mr. Suresh Kumar Gupta ( S.K. Gupta hereafter) who lived in the first and second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment pertained to him but were made in the course of the proceedings and search of his brother s premises (to which he was a third party), the materials so seized became third party material for which notice was mandatorily required. It was argued, in other words, that in the absence of a notice under Section 153C, the assessment was illegal. This contention was rejected by the Tribunal. The assessee had challenged the substantive addition with respect to the apportioning of interest income in the hands of the other brother. He had contended that the ratio of 40%:60%, i.e. 40% attributable to him on account of the appellate order of the Commissioner made in his brother s case which was followed in his case as well was not legal. The Tribunal rejected this contention. 5. The Tribunal, by its impugned order, rejected the assessee s arguments, and held, inter alia, as follows: On careful consideration of the above rival submissions and vigilant and careful perusal of the material available on record and on respectful consideration of the case laws cited at bar before us, we observe that the documents and consolidated balance sheet, as available in the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome should be assessed in the hands of AOP is concerned, we do not find any force in this contention as there was no AOP in existence during the relevant assessment years and it is also not clear as to which AOP the income should be assessed. At this juncture, we again point out that vide Company Law Board order dated I 3.1.2009 both the assessees have agreed to divide the assets of the group which was headed by late Shri Suraj Bhan Gupta between them in the ratio of 60:40 and being a beneficiary of the assets in such ratio, the authorities below were right in taxing the income therefrom in the same ratio in the hands of respective assessee-appellant. Consequently, ground no. 3 of the assessee is dismissed. 6. Mr. Arvind Kumar, learned counsel argued that the documents seized from the possession and control of S.K. Gupta from his residential office premises cannot be presumed under the law, to belong to the assessee, in terms of Sections 132(4A) and 292C of the Act. It was argued that there has been no investigation, examination or statement taken under oath under the Act, in case of the assessee by the Income Tax Department, from which there could be a reasonable assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fronted to him; he also admitted that a hard disk was seized in the course of the search. The statement of S.K. Gupta too was made available before the final assessment order was framed in the case of the assessee. Based upon the statement as well as the settlement recorded by the Company Law Board on 13.08.2008, it was concluded that the amounts required to be added were to be in the names of the assessee and S.K. Gupta since they were brothers and children of one late Suraj Bhan Gupta. These amounts during the relevant period were attributable to the business that their deceased father had with them. On account of the search, which occurred later, the income could not be assessed in the case of late Suraj Bhan Gupta nor assessed in the status of an Association of Persons (AOP). In this regard, it was pointed out that the assessee was afforded opportunity to deal with the statement made by his brother and also deal with the apportionment of the rights and liabilities of the parties in terms of the compromise/settlement between S.K. Gupta and the assessee, before the final assessment was made. Mr. Zoheb Hossain stated that having regard to all these facts, there was no necessity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue was justified in arguing that a separate notice under Section 153C was unnecessary. These facts are that both the assessees are brothers. Both were involved in the common business and the assessee used to be in-charge of the accounts. Given these, there was no necessity of issuing notice under Section 153C and following the separate but elaborate procedure prescribed therein. 14. The Court is also cognizant of the fact that so far as the materials seized from S.K. Gupta s premises are concerned, arguendo the assessee s submission that he had no control and had to be given a separate opportunity with respect to the documents attributable to his (assessee s) accounts and the affairs would have been justified had he been denied the relevant materials. However, such is not the case. The statements made by S.K. Gupta like the assessee s own statement, the relevant documents in the form of the compromise/settlement and other details were made available to the assessee to enable him to make submissions before the Assessing Officer (AO). Therefore, the substance of the procedure prescribed under Section 153C was followed. In other words, there was no failure of natural justi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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