TMI Blog2014 (1) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... - Decided against Revenue. - D. B. Income Tax Appeal No. 204/2011 - - - Dated:- 4-12-2013 - Ajay Rastogi And J. K. Ranka,JJ. For the Appellant : Mr. R. B. Mathur ORDER By The Court: (Per Hon'ble Ranka J.) This appeal under Section 260A of the Income Tax Act is directed against the order of the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short ITAT) dated 21.11.2008 and is relevant for the block period 1.4.1995 to 20.3.2002. 2. The brief facts emerging on the face of record are that search operation came to be carried out by the authorised officers of the Income Tax Department on 20/03/2002 at the residential and business premises of Vaidya Shri Narayan Das Swami at Phulera. During the course of search, incri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration (RFC) and/or State Bank of India and/or SBBJ and it was submitted that it is a tentative project report so that the company may obtain a loan and effectively make alteration and modification and construction necessary for the industry, which was needed by it. On being queried to prove the source of income and the investment as per the project report is concerned, it was submitted that whatever investment has been made is duly reflected in the books of accounts. However, the books of accounts have been lost and even an intimation report was submitted with the Vishwakarma Police Station. Further, in the alternative, it was submitted that it contains only projection of the figures and do not suggest that assessee has made any investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the said order of the CIT (A), an appeal came to be preferred by the revenue before the Tribunal while cross objections were filed by the respondent-assessee. The revenue challenged the deletion of the addition on the basis of the project report to the extent of Rs.36,21,692/-, the assessee challenged the initiation of proceedings under Section 158BD. 6. The Tribunal after considering the entire issue came to the conclusion that not only the addition has rightly been deleted by the CIT (A) amounting to Rs.36,21,692/-, but also accepted the contention on behalf of the assessee that the proceedings initiated under Section 158BD was bad and even quashed the assessment. It is this order of the Tribunal, which has been assailed before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs. 8. He would further contend that the assessee got prepared the project report and naturally acted upon it and the figures did not match/tally with the figures shown in the return of income over the years. He would further contend that the books of accounts were stated to be lost when queries were raised to produce the books of accounts. If the said figures were part of books of accounts and the assessee came out with the plea that the books had been lost and just to create evidence requisition slip of one of the police station was produced, which is insufficient to come to the said conclusion. The Tribunal ought not to have decided the issue on merits and to give its own conclusion and in deleting Rs.36,21,692/- on merits. 9. He wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.02.1996 satisfies the requirements of Section 158BD of the Act. The said notice does not record any satisfaction on the part of the Assessing Officer. Documents and other assets recovered during search had not been handed over to the Assessing Officer having jurisdiction in the matter. No proceeding under Section 158BC had been initiated. There is, thus, a patent non-application of mind. A prescribed form had been utilized. Even the status of the assessee had not been specified. It had only been mentioned that the search was conducted in the month of November, 1995. No other information had been furnished. The provisions contained in Chapter XIVB are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for submitting them to financial institutions. The project report, which was submitted to the RFC with total project cost of Rs.61.40 Lacs against which RFC vide letter dated 29.3.1996 intimated to sanction Rs.31.25 Lacs against the application of Rs.38 Lacs made by the respondent-assessee and it is an admitted fact that the assessee did not avail any loan on the said project report. Similarly, the assessee company also furnished a fresh project report indicating the cost of project at Rs.65.06 Lacs to SBBJ, but the SBBJ Bank vide its letter dated 23.10.1996 sanctioned term loan of Rs.25 Lacs and cash credit limit of Rs.10 Lacs and these facts indicate that the project reports which were found in search were not acted upon by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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