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TMI Blog2021 (2) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... p to the AY 2008-09 till 07.12.2007 therefore, the seized material constitute incriminating material disclosing undisclosed income of the assessee. The seized material leads to the satisfaction that it has a bearing on the determining of the total income of the assessee at least for the assessment years for which the assessee did not file any return of income. Accordingly, do not find any substance or merit in this contention of the assessee and Grounds No. 1 to 5 of the assessee s appeal are dismissed. Estimation of income by applying NP @ 1% of gross sales being excessive - HELD THAT:- Except the contention of excessiveness, the ld. AR of the assessee has not brought any material to show that the actual income of the assessee for these years is very less than 1%. Since the assessee has not produced any books of account as well as other supporting documents therefore, the N.P. applied by the ld. CIT(A) at 1% is very reasonable and proper and does not required any interference. Accordingly, appeals of the assessee dismissed. Assessment on substantive basis by AO by applying N.P. at 2% which was restricted by the ld. CIT(A) to 1% - AO rejected the books of account of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on identical facts and the second set of common grounds relates to ITA No. 52 to 55/Alld/2019. The grounds raised for the AY 2005-06 and 2009-10 are reproduced below: AY 2005-06 1. BECAUSE the assessment proceeding initiated under section 153C without recording of any valid satisfaction note in the case of person who is subjected to search under section 132, is vitiated and liable to be annulled. 2. BECAUSE no incriminating material was found that could form the basis for initiation of reassessment proceeding under section 153C of the Income Tax Act, 1961. 3. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in holding that addition of 5,52,345/- made substantively in the hand of Shri Ajay Kumar Vijay Kumar and protectively in the hands of appellant is to be examined on merit and sustaining addition of ₹ 2,76,171/- substantively in the hands of appellant and deleting the substantive addition made in the hand of Ajay Kumar and Vijay Kumar who was carrying the business of pump. 4. BECAUSE up to 07.08.2007 the business of the retail out let was carried out by Ajay Kumar and Vijay Kumar in terms of agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sale of petrol and high speed diesel commonly known as Petrol Pump) by Indian Oil Corporation Ltd. (IOCL) vide LOI dated 07.01.1994. There were two partners namely Shri Gulab Chand son of Shri Babu Lal and Shri Suresh Kumar Rakesh son of Sri Shyam Lal at the time of LOI and commencement of business of the assessee firm. Thereafter these two partners decided to handover the operation of the pump to Shri Ajay Kumar and Vijay Kumar vide general power of attorney dated 08.01.1999 and they have started the operation/business activities of the petrol pump from 15.10.1999. The original partners Shri Gulab Chand and Shri Suresh Kumar Rakesh also authorized to Shri Ajay Kumar and Vijay Kumar to operate bank accounts of the firm for smooth conducting of the business. They continue to do the business activities on behalf of the original allottees up to 07.12.2007 when the control and administration of the business was again taken back by the original allottees from Shri Vijay Kumar and Ajay Kumar. Thereafter there was a search and seizure action carried out u/s. 132 of the Act on 03.02.2011 at the residential and business premises belonging to Vaishwya Group of cases. During the search and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147/148 as well as u/s. 153C cannot be invoked for protective assessment. He has further contended that the assessee firm was constituted on 07.12.2007 and prior to that the income cannot be assessed in the hands of the assessee firm he has referred to the partnership deed dated 07.12.2007 as well as the PAN allotted to assessee on 01.12.2007 and submitted that prior to 07.12.2007 assessee firm was not in existence and hence assessments framed by the Assessing Officer in the name of the assessee are void ab initio. The ld. AR has submitted that the mandatory condition for invoking the provisions of Section 153C has not been satisfied in the case in hand and therefore the entire proceedings are illegal and without jurisdiction. He has also relied upon the decision of the Hon'ble Supreme Court in the case of Manish Maheswarivs. JCIT 289 ITR 341 as well as decision of Hon'ble Rajasthan High Court in the case of CIT vs. Smt. Saraswati Devi, 2012 ITR 445 and contended that the Hon'ble High Court has held that the protective assessment is practically no assessment in the eyes of law. Even otherwise the filing station was run by Shri Ajay Kumar and Vijay Kumar as per the attor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence person prior to 7.12.2007. It is pertinent to note that the assessee firm was very much in existence right from the beginning as it is evident from the LOI dated 07.01.1994, the power of attorney given by two partners namely Gulab Chand and Suresh Kumar Rakesh in favour of the Ajay Kumar and Vijay Kumar and also deed of mandate for operating the bank account by Shri Ajay Kumar and Vijay Kumar. The authorization for operating the bank account is signed by the partners of partnership firm namely Meja Filing Station as it is clear from the copy of the letter of mandate executed by the assessee firm through its partners on 02.11.1999. Thus, M/s. Meja Filing Station was a partnership firm as on the date when the letter of mandate was signed and executed by the assessee firm through partners Shri Gulab Chand and Suresh Kumar Rakesh in favour of Shri Ajay Kumar and Vijay Kumar. These documents have been reproduced by the Assessing Officer and are undisputed documents obtained from the Bank of Baroda, Meja Road, Allahabad. Therefore, the execution of partnership deed on 07.12.2007 is nothing but reconstitution of the partnership firm, which was already in existence having the same par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs ₹ 2000/- are made in the name of Suresh Chandra and other family members BA-1 LP-33 HAI Payment vouchers of Hotel Ajay International in respect of rent of Meja Filling Station @₹ 15,000/- p.rn. BA-1 LP-33 HAI Payment vouchers of Hotel Ajay International In respect ot rent of Meja Filling Station @₹ 15,000/- p.m. S-1 (Office of Arhatia Nagar Co.) LP-6 Ramji Vaish Annexure Part-A, M/s Meja Filling Station, A.Y.2005-06 RA-1 {Reside nee at 86, New Bairhana) LP-7 Ramji Vaish Order of Commissioner, Allahabad ;n the case of Meja Filling Station Vs D.M., Alld RA-1 LP-8 Ramji Vaish In the books of Meja Filing Station. Ledger A/c of Kapoor Chand Sons 10. Therefore, the above documents found and seized during the search and seizure action belongs to Meja Filing Station including ledger accounts of assessee in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of retails outlet of selling petrol and high speed diesel and therefore, the material found and seized during the search and seizure action pertaining to the F.Y. 2007 shall have no bearing on determination of the total income of the assessee when the assessee has already declared the income from such business. The Assessing Officer has passed an identical order by applying the N.P. @ 2% after rejecting the books of account but the seized material which was found during search and seizure action reveals that the assessee is engaged in the business and once the assessee has already declared the income from said business in the return of income filed u/s.139(1) then the said seized material which reveals the details of the transaction of the FY 2007 up to 07.12.2007 would not be considered as incriminating material to have any effect on determination of the total income of the assessee for these years. Therefore, the addition made by the Assessing Officer in the proceeding u/s. 153C for the Assessment year 2008-09 from 07.12.2007 to 31.03.2008 to AY 2010-11 are not based on any material revealing undisclosed income. Accordingly, the additions made by the Assessing Officer for these y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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