9911796707
TMI Blog2000 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... s are drawn by the debtors from their own bank accounts and at times the cheques are obtained from other concerned persons with whom the purchasers may have transactions. The purchase price so realised, however, is duly credited to the profit and loss account of the petitioner. As is stated, on affidavit-in-reply, by the respondent, Joint Commissioner of Incometax, certain seizure operations were carried out against Mahendra H. Shah and Hemant C. Shah of Bhavnagar in exercise of powers under section 132 of the Act. The petitioner's case is that during the course of search proceedings against the above two named persons with whom the petitioner has no direct concern, no books of account or documents or any assets belonging to the petitioners were discovered, so as to come to the conclusion against the petitioner that it had any undisclosed income, for resorting to his assessment for the block period in accordance with the provisions contained in Chapter XIV-B of the Act. The petitioner, therefore, has assailed and seeks quashing of the proceedings initiated by the respondent, joint Commissioner of Income-tax, by notice dated August 29, 2000, at annexure A, directing the petitioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such search or, as the case may be, the date of such requisition ; (b) 'undisclosed income' includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act." In assailing the action initiated by the impugned notice against the petitioner for alleged undisclosed income based on the search and seizure proceedings conducted against the two above-named persons, learned counsel, Shri S. N. Soparkar, very strenuously urged that the condition precedent for exercising the powers under section 158BD is that the documents or assets belonging to an assessee should have been seized or requisitioned during the course of search proceedings against the third party. As this condition precedent is not satisfied in this case because no documents or assets belonging to the present petitioner-assessee were found in the search proceedings, the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The petitioner, Rushil Industries Limited, during the financial years 1998-99 and 1999-2000 had deposited a sum of Rs. 58,72,000 in cash and received cheques/demand drafts to the bank account of Shri M. H. Shah in the garb of having made sales to Royal Enterprises, Mumbai. The transaction was not found to be genuine. During the course of search and enquiry made at Mumbai by the investigating team it was revealed that Royal Enterprises stated to be situated at 163-A, Prabhat Colony Road, 201, Udai Building, Santa Cruz, East Mumbai, do not exist at any such address. The premises were found actually to be a four storeyed residential building and Flat No. 163-A and Flat No. 201, were occupied by Navin joshi and Nilesh N. Dixit, who were petty traders and doing small scale marketing. The search operations prima facie revealed that the petitioner, Rushil Industries Limited, has convened unaccounted income to the extent of Rs. 58,72,400 into legally accounted funds by making bogus sales to Royal Enterprises and crediting the funds to its books of account conveniently through bank account maintained by Shri M. C. Shah. The above finding is corroborated by the statement of Shri M. C. Shah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eized or requisitioned, but, it is not correct on the part of the petitioner to contend that action under section 158B cannot be taken unless in the search operations against a particular person books of account or other documents or assets showing undisclosed income of any other person are found. A bare reading of the provisions of section 158BD (quoted above) would show that for taking action under the said section, the Assessing Officer is merely required to be satisfied that the books of account or other documents or assets found in the search show undisclosed income of a person other than one against whom the search was conducted. Merely because no books of account or other documents or assets were found in the search against the two abovenamed persons it cannot be said that no action for alleged undisclosed income was called for against the petitioner under section 158BD. The expression "undisclosed income" had been defined to include income based on an entry in the books of account or other documents "which has not been or would not have been disclosed for the purposes of this Act". In our considered opinion, the definition of "undisclosed income" would include any entries i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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