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TMI Blog2024 (2) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... entire facts and evidences in the form of seizure of books of account including cash book, statement of the appellant assessee and Sri J.M. Kothari u/s 131, statement of parties who made the payment to the entities of the appellant assessee recorded u/s 131 and the letters of Sri J.M. Kothari and the appellant assessee evidencing sufficient explanation regarding cash seized to be belonging to the aforesaid entities and reflected in their cash book were well available on record. Thus impugned order relating to block assessment u/s 158BC(c) passed cannot be sustained and is hereby set aside. Decided in favour of assessee. - HON BLE JUSTICE SURYA PRAKASH KESARWANI AND HON BLE JUSTICE RAJARSHI BHARADWAJ Appearance: For the Appellant : Mr. Saumyajit Dasgupta, Adv. For the Respondent : Mr. Prithu Dudheria, Adv. 1. Heard Sri Saumyajit Dasgupta, learned counsel for the appellant/assessee and Sri Prithu Dudheria, learned junior standing counsel for the respondent/income tax department. 2. This appeal was admitted by this Court by order dated 08.10.2004 on the following substantial questions of law: i) Whether the assessment of the sum of Rs. 12,57,150/- in the hands of the appellant was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the name of M/s Zenith Finvest (P) Ltd. The aforesaid search was resumed on 12.08.1999 under the same warrant and 17 sets of documents including computerized cash book, journal, bank book, ledger and trial balance etc. relating to M/s. Zenith Finvest (P) Ltd., ARC Finance Ltd., the appellant/assessee and his family members were seized, but the search was not finally concluded and seals were again placed on the entire place. Again, the search was resumed on 22.09.1999 under the same warrant in the name of M/s. Zenith Finvest (P) Ltd. and again seven sets of documents including ledgers, journals, etc. relating to aforesaid business entities were seized and the search was concluded. The aforesaid search conducted with respect to the entities relating to the appellant/assessee shall be referred hereinafter as the first set of search. 4. Simultaneous search was conducted in the premises of Sri J. M. Kothari on 6th, 7th and 13th August, 1999 under the search warrant in the name of GIS Limited, at Ruby House, 6th Floor, 8, India Exchange Place, Kolkata-1 in which cash found of Rs. 12,57,150/- in the safe in possession of Mr. J. M. Kothari was stated by him to be belonging to his son ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 60,000/- seized from another safe from the same premises belongs to your son which was kept by you. Another amount of Rs. 2,30,000/- which was seized from your office chamber at 8th floor of Ruby House on 11.08.99 as also has been claimed by you to be belonging to your son Sri A.V. Kothari. Please explain given the fact that that you are a Chief Executive of the Kothari Group of Companies, working full time for the Kothari Group of Companies and handling the affairs of different Kothari Group of Companies exclusively. How can you support your claim that you had kept cash allegedly belonging to your son in the office premises of the Kothari Group of Companies which are nothing to do with your son what evidence you can produce to support your claim ? As. 1 ) My son Sri Ashok Vardhan Kothari has his separate business under a separate set of companies having office at 32A, C.R. Avenue, Trust House , Kolkata. Since he did not have adequate safe place to keep cash he had given me the aforesaid cash to keep in my custody. Since the vault and safe in Ruby House are accessible to me I had kept the cash safe there. My son Sri A. V. Kothari has also filed a letter confirming my claim bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtnership firm that it belongs to his aforesaid three entities. The break-up was also given. Thus, the cash found in the search from possession of Sri J.M. Kothari was established by the appellant assessee before the assessing officer, to be belonging to his three entities, which was supported by the cash-book which was seized by the Income Tax Department during search. The cash balance as was reflected in the cash-book of the entities concerning the appellant assessee was neither doubted nor could be doubted. The parties, who paid the amount under hire purchase agreements to the entities of the appellant assessee, had appeared pursuant to notices issued by the Income Tax authorities under Section 131 of the Act 1961 and they affirmed the agreements and payment of money thereunder. The only ground vaguely taken by the assessing officer to reject was that those persons have failed to specifically evidence the source of payments. 10. Once the payments by such parties to the entities of the appellant assessee pursuant to hire purchase agreements were supported by the books of account and other documents, there was no occasion to doubt the availability of cash in hand as reflected in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 132A of the Act. Under section 158BD of the Act, if an officer is satisfied that there exists any undisclosed income which may belong to a person other than the searched person under section 132 or section 132A of the Act, after recording such satisfaction, may transmit the records/documents/ chits/papers etc to the Assessing Officer having jurisdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of the said other documents relating to such other person, the jurisdictional Assessing Officer may proceed to issue a notice for the purpose of completion of the assessments under section 158BD of the Act, the other provisions of Chapter XIV-B shall apply. 39. The opening words of section 158BD of the Act are that the Assessing Officer must be satisfied that undisclosed income belongs to any other person other than the person with respect to whom a search was made under section 132 of the Act or a requisition of books were made under section 132A of the Act and, thereafter, transmit the records for assessment of such other person. Therefore, the short question that falls for our consideration and decision is at what stage of the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te could be prepared at either of the following stages : (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; (b) along with the assessment proceedings under section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. 14. Section 158BD is a machinery provision, inserted in the statute book for the purpose of carrying out assessment of a person other than searched person under Section 132 or 132A of the Act, 1961. Under Section 158BD of the Act, 1961, if an officer is satisfied that there exists an undisclosed income which may belong to a person other than the searched persons under Section 132 or Section 132A of the Act, 1961 then after recording such satisfaction, he may transmit records/documents/chits/papers etc. to the Assessing Officer exercising jurisdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of the documents relating to such other person, the jurisdictional Assessing Officer may proceed to issue a notice under Section 158BD for the purposes of completion of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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