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2010 (5) TMI 890 - AT - Income TaxBlock assessment - undisclosed income - proceedings u/s 158BD - search u/s 132 carried out in the business premises of M/s. Ohm Organizers, Surat on 29.10.1999 - books of accounts and documents seized - HELD THAT:- We admit the additional ground for adjudication in view of the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Corporation Ltd. –vs.- CIT [1996 (12) TMI 7 - SUPREME COURT]. Admittedly, in this case, search u/s 132 was carried out in the business premises of M/s. Ohm Organizers, Surat on 29.10.1999. Certain books of accounts and documents relating to the assessee were also seized. The AO found that certain investment in purchase of flats/ shops were made by the assessee and payment of on-money was made by him to the builder. Thereafter certain inquiries were carried out from the assessee u/s 133(6) by way of notice issued on u/s. 133(6). Further letters were also issued. However, notice u/s 158BD was issued to the assessee on 04.02.2005. In the impugned order, the ld. CIT(A) upheld the legality of action u/s 158BD. Following the decision in the case of ACIT vs. Vimal Vadilal Shah and vice-versa and others [2010 (5) TMI 889 - ITAT AHMEDABAD], we hold that the block assessment famed in case of the above assessee is not legally valid and therefore is quashed for the reason that notices u/s.158BD was issued in this case long after completion of assessment in the case of person searched i.e. Ohm Developers. Imposing penalty u/s. 158BFA - HELD THAT:- In quantum appeal filed by the assessee, the assessment framed by the AO is quashed, therefore penalty levied by the AO u/s 158BFA is also quashed. In the result, both the appeals filed by the assessee are allowed.
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