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TMI Blog2018 (6) TMI 1462X X X X Extracts X X X X X X X X Extracts X X X X ..... B and 234C of the Date of Hearing 14.06.2018 Date of Pronouncement 27.06.2018 Income Tax Act, 1961. 5. The appellant may be permitted to add, alter or delete the grounds of appeal." 3. By virtue of the authorization of the Director of Income-tax (Investigation), Ludhiana, under section 132(A) in the case of the assessee, Satta Operators Group of Cases were subjected to search and seizure operations on 21.06.2010. Assessment jurisdiction over the assessee was transferred to the circle by the Commissioner of Income Tax, Delhi-IX, New Delhi vide order dated 18.11.2010 with immediate effect. The seized documents in the group were received in the circle 19.02.2012. In accordance with the provisions of section 153A of the Income Tax Act, 1961, a notice dated 28.02.2012 u/s 142(1) of the Act was issued and served upon the assessee, requiring him to file return of income in respect of AY 2011-12. In response to the notice, the assessee filed his return of income, duly verified and signed as per the provisions of section 140 of the Act, returning a total income of Rs. 33,48,502/- + Agriculture income of Rs. 3,25,580/- on 14.10.2011. Notices under section 142(1) of the Act along with a qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of order u/s 132A of the Act. Thus, the statement recorded on 17.06.2010 was prior to search and seizure operation. The Ld. AR further submitted that the provision of sub-section (4) of Section 132 of the Act is not applicable for search and seizure authorized u/s 132A of the Act. The Ld. AR submitted that the statement recorded on 17.06.2010 was recorded at CIA(HQ) Police, Ludiana when the assessee was under Police custody. The assessee was in custody from 13.06.2010 till 19.07.2010. The CIT(A) has given the said finding in para 5 of the order observing that no conclusive or substantive findings can be drawn from such statement. The statement given on 17.06.2010 was under duress and also cannot be taken on oath not being statement u/s 132(4) of the Act. The addition cannot be made on the basis of statement not taken on oath without any corroborative material evidences. Hence, the amount of Rs. 1.07 crore earned from satta operation was added without any material corroborative evidences. The Ld. AR further submitted that no credential has been given to statement recorded on 30.08.2010 which was given in response to notice u/s 131(1A) of the Act. The material evidences of source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed under Section 153A, the issuance of notice under section 143 (2) of the Act is a mandatory requirement. He submits that it cannot be construed as an empty formality or a procedural defect which can be cured, but goes to the root of the matter and fatal to the validity of the assessment. He contends that the law laid down by the Hon_ble Supreme Court in Hotel Blue Moon v. DCIT, 321 ITR 362 is equally applicable to the cases where return has been filed under section 153A of the Act. He also relies upon the judgments of R. Dalmia v. CIT, 236 ITR 480 (SC), CIT v. Pawan Gupta, 318 ITR 322, CIT v. Lunar Diamond Ltd. 281 ITR 1 (Del), CIT v. Vardhman Estates 287 ITR 368, CIT v. Bhan Textiles 287 ITR 370 and Raj Kumar Chawla v. ITO, 277 ITR (AT) 225. 7. On the other hand, learned counsel for the revenue argues that the assessment being under Section 153A, there is no requirement of issue of notice under section 143(2) of the Act. He submits that in any case, there is no prescribed proforma for issuing the notice. The notice is usually issued in the proforma marked as "ITNS-33". It is a communication by the AO to the assessee giving him the opportunity as required under section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curable. It is to be noted that the above said judgment was in the context of Section 158BC. Clause (b) of Section 158BC expressly provides that "the AO shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of Section 142, sub sections (2) and (3) of Section 143, Section 144 and Section 145shall, so far as may be, apply. This is not the position under section 153A. The law laid down in Hotel Blue Moon, is thus not applicable to the facts of the present case. 10. The decision of Lunar Diamond Ltd. (supra), Vardhman Estates (supra) and Bhan Testiles (supra) relied upon by learned counsel for the assessee related to the requirement of service of notice upon the assessee within a prescribed time and thus not applicable to the present case. The case of Pawan Gupta (supra) related to mandatory issue of notice under Section 143(2) of the Act in the case of regular assessment as also on block assessment. This being not a case of assessment based on search under Section 153(A), the same is not applicable to the present case. In the case of Raj Kumar Chawla (supra) relied upon by learned counsel for the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13. The words "so far as may be" in clause (a) of sub section (1) of Section 153A could not be interpreted that the issue of notice under Section 143(2) was mandatory in case of assessment under Section 153A. The use of the words, "so far as may be" cannot be stretched to the extent of mandatory issue of notice under Section 143(2). As is noted, a specific notice was required to be issued under Clause (a) of sub-section (1) of Section 153A calling upon the persons searched or requisitioned to file return. That being so, no further notice under Section 143(2) could be contemplated for assessment under Section 153A. 14. No specific notice was required under section 143(2) of the Act when the notice in the present case as required under Section 153 (A) (1) (a) of the Act was already given. In addition, the two questionnaires issued to the assessee were sufficient so as to give notice to the assessee, asking him to attend the office of the AO in person or through a representative duly authorized in writing or produce or cause to be produced at the given time any documents, accounts, and any other evidence on which he may rely in support of the return filed by him. 15. Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: "5.3 I have considered the assessee's submission as well as the impugned order. It emerges that the Police seized Rs. 1,07,00,000/- from the residence of the assessee. The raid was on 13.06.2010. This was followed by search and seizure operations u/s 132 and in his statement recorded, the assessee had admitted that the cash of Rs. 1,07,00,000/- found from his possession pertained partly to Satta Operators and Rs. 35,00,000/- to Shri Jasmer Singh and Shri Sunil Kumar Gupta. Later on, the assessee changed his statement to state that the cash found pertained to his Diary business and that it was lying with him since he was supposed to make a payment on account of purchase of property from Smt. Beermati Devi. It was submitted that the property was for Rs. 1.27 crs of which Rs. 10,00,000/- was given as advance. It was also stated that he had to change his statement as he was coerced by the Police. Cash book of Naman Diary and affidavits of Smt. Beermati Devi, Shri Jasmer Singh, Shri Sunil Kumar Gupta and Shri Roshan Lai Verma were filed. However AO emphasised on the admittance by the assessee before the Police authorities. The source of cash explained to be on account of cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, the source of the cash of Rs. 1.07 crores clearly came from satta business. Now if one peruses the statement dated 30.8.2010 (copy placed in PB page 10- 13), the assessee claims his business comprised of dairy [since last two years] and property business. This is a complete volte-face. In response to Q.8, he maintains that his admittance to involvement to satta business was under Police pressure, while at the same time he concedes that there was no policeman present at the time of recording of the statement on 17.6.2010 and there was no pressure from the Income tax Department.... The assessee goes on to explain that the cash of Rs. 1.07 crores was from sale proceeds of milk of about two and a half months, sold through retail. Now from the aforesaid discussion, it is rather evident that the assessee is well versed with the nitty-gritty of satta business. The incomings of the satta business were admittedly invested in assessee's business. It is nobody's case that assessee is not running a dairy farm. The issue for consideration is about the source of the cash seized from the residence and whether assessee can be said to have cogently explained his case that he was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately after making a statement on 17.06.2010 but he did not retract statement dated 17/6/2010 but changed his version only on 30.08.2010. The inordinate time lag from 19/6/2011 to 30.8.2011 in not retracting the statement, the absence of any evidence such as cash books, audited accounts of earlier years etc. of changed version on 30.8.2011, non allegation of any coercive action or threat by Income Tax department on 17/6/2010, all such circumstantial facts goes against assessee. Therefore, the lower authorities did correctly as not to believe the statement made by the assessee on 30.8.2011. 02. The assessee has shown source of the above sum of Rs. 1.07 crores as cash withdrawn by him from M/s. Naman Dairy. A partnership firm, wherein, he is a partner. Now to verify the veracity of the money withdrawn from M/s. Naman Dairy it is important to look at the balance sheet of that firm as on 31.03.2010 and 31.03.2011. It is interesting to note as on 01.04.2010 the sundry creditors in the books of the assessee were of Rs. 36.25 lacs whereas, as on 31.03.2011 it reached Rs. 62.10 lacs. That may be because of the increased operation the business. However startling facts have come to the no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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