TMI Blog2008 (9) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... e warrant of authorization shall have to be executed by the authorized officer in order to justify invoking of the jurisdiction by the AO u/s 153A of the Act - It is established on record that joint search warrant was issued in the name of the assessee and M/s. Rajat Gems Jewelleries (P.) Ltd. Ld. DR also filed copy of panchnama drawn on execution of the search warrant which clearly mentioned that the premises of the assessee was subjected to search. It would, therefore, prove that search warrant is issued in the name of the assessee and search is conducted in its premises and panchnama is also drawn, therefore, requirements of section 153A are satisfied in this case. The ADIT (Inv.) in his report also submitted that warrant of authorization in the case of assessee is executed which was sharing the same premises with M/s. Rajat Gems Jewelleries (P.) Ltd. This fact is not disputed by ld. counsel for assessee. Therefore, we do not find any substance in the arguments of ld. counsel for assessee. There is no infirmity in the findings of the ld. CIT(A). We confirm his findings and dismiss this ground of appeals of the assessee in both the years. This issue is, therefore, decided aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rading. The Assessing Officer considering the material on record made the additions on merit on account of disallowance of other expenses and depreciation. The assessee challenged the initiation of the proceedings under section 153A as well as additions on merit. It was briefly submitted that neither a search was initiated nor any books of account, other documents or assets, etc., were requisitioned. Only survey was conducted in the business premises of the assessee on 182004 and some books of account were impounded. In the case of the assessee-company, no panchnama was ever drawn and further no books of account were seized. It was, therefore, submitted that mandatory conditions precedent to frame assessment under section 153A are not satisfied because no search was conducted therefore, no assessment can be framed. The assessee in the support of contention relied upon certain decisions which are incorporated by the ld. CIT(A) in the impugned order. The ld. CIT(A) considering the submission of the assessee decided this issue against the assessee. The findings of ld. CIT(A) in paras 4.1 to 4.1-2 are reproduced as under: "4.1 The appellant, in first ground of appeal common to all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the appellant-company nor it is denied that it was not covered during search and seizure operation. The only emphasis thus placed is that no authorization and in the least no separate authorization was issued in the name of the appellant-company. It may be further stated that once search and seizure operations are carried out in various entities of the search group having common business premises it is always not necessary and possible to prepare separate panchnama as very often books of account, documents as well other valuables pertaining to various entities of the group are found from common premises as well premises not belonging to a particular entity. Thus, the inference drawn by appellant that since no separate panchnama was prepared, there was no Authorization issued in the case of the appellant-company cannot be said to be justified and proper. Further the conduct survey under section 133A in a different business premises of the appellant-company being shop Nos. 47, 48 and 49, 1st Floor, 23, Bada Sarafa, Indore, cannot also in any way support the appellant's contention that since survey operation were carried out in different premises no search under section 132 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorization, therefore, its name was not mentioned due to oversight. It is also stated that warrant of authorization was issued and executed in the case of the assessee which was sharing the same premises with M/s. Rajat Gems Jewelleries (P.) Ltd. Ld. DR, therefore, submitted that since warrant of authorization is issued in joint names of assessee and connected group and warrant is executed and panchnama is drawn therefore, requirements of section 153A are satisfied. Ld. DR submitted that even in the appraisal report, the name of the assessee and its premises is mentioned which is subjected to search. Ld. DR submitted that the assessee did not deny the business premises covered by warrant of authorization and the panchnama before ld. CIT(A) and it was not denied that it was not covered during search operation, therefore, submissions of ld. counsel for assessee are devoid of merit and liable to be rejected. Ld. DR submitted that proceedings under section 153A have been validly initiated. 6. We have considered the rival submissions and the material available on record. Section 153A of the Act provides- "153A. Notwithstanding anything contained in section 139, section 147,sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property [which has not been, or would not be, disclosed] for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), [then,- (A) the [Director General or Director] or the [Chief Commissioner or Commissioner], as the case may be, may authorise an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner or Commissioner], but such [Chief Commissioner or Commissioner] has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in section [120], it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation from the [Chief Commissioner or Commissioner] having jurisdiction over such person may be prejudicial to the interests of the revenue:] [Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii):] [Provided also that nothing contained in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. [Explanation.-For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.] [(4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (8) or sub-section (9) shall be exercisable by such Assessing Officer.] (10) If a person legally entitled to the books of account or other documents seized under sub-section (1) [or sub-section (1A)] objects for any reason to the approval given by the [Chief Commissioner, Commissioner, Director General or Director] under sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents [and the Board may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit]. (11) [***] (11A) [***] (12) [***] [(13) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under sub-section (1) or sub-section (1A).] (14) The Board may make rules in relation to any search or seizure under this section; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer- (i) for obtaining ingress into [any building, place, vessel, vehicle or aircr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued and the search is conducted and panchnama is drawn, the assessments for all the seven years including the current year have to be completed under sections 153A, 153B and 153C. Even the assessments which are completed before the date of search shall get reopened and those assessments where the proceedings are pending at the time of search shall abate. The Assessing Officer, therefore, shall assess or reassess such income for all these years. 8. The above provision, therefore, provides for reopening of the completed assessment or abatement or the pending assessments takes place irrespective of whether any incriminating material is found during the course of search or not. It can be illustrated by taking an example that if during the course of search and seizure proceedings, certain unaccounted valuables or money is found at the time of search without there being incriminating material or document for any other year or years, even then all the six assessments preceding the assessment year in which search took place shall get reopened. Similarly, if requisition is made then irrespective of whether there is anything incriminating found against him in relation to other year or yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section. 132 of the Act. It may be illustrated by taking an example that if warrant of authorization under section 132 is issued in the name of "A" after 31-5-2003 but his premises is not searched for the purpose of executing the warrant of authorization and the warrant of authorization is kept unexecuted, the question arises whether the Assessing Officer still should proceed under section 153A of the Act for the purpose of framing the assessment or reassessment of the six assessment years immediately preceding the assessment years relevant to the previous year in which such search is initiated or requisition is made without executing the search warrant. The answer would be 'No' because it would be a futile exercise. It may be added here that jurisdiction can be assumed by the Assessing Officer to initiate assessment proceedings to issue notices once search is initiated under section 132/requisition made under section 132A. He gets actual jurisdiction only on issue of notice, which could be issued under section 153A [unlike section 158BC(a) in block assessment] with no necessity for inference of escapement of income or under-assessment as under section 147. Should it mean that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of account and other documents had not been delivered to the requisitioning authority. The proceedings initiated under section 148 were valid. However in the proceedings for reassessment under section 148 of the Act, material or evidence relatable to the documents for which the requisition had been sent under section 132A could not be taken into consideration." 10. Considering the above provisions as noted above in the light of the provisions of section 153A of the Act, it would be clear that once the warrant of authorization or requisition is issued and search is conducted, panchnama is drawn, the completed assessments for all the relevant years would get reopened irrespective of whether any incriminating material is found or not in relation to a particular assessment year. However, the warrant of authorization shall have to be executed by the authorized officer in order to justify invoking of the jurisdiction by the Assessing Officer under section 153A of the Act. 11. Ld. DR produced the copy of warrant of authorization under section 132 of the Income-tax Act which is issued in the joint names of M/s. Rajat Gems Jewelleries (P.) Ltd. and M/s. Rajat Tradecom India (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of assessee is executed which was sharing the same premises with M/s. Rajat Gems Jewelleries (P.) Ltd. This fact is not disputed by ld. counsel for assessee. Considering the above discussion, we do not find any substance in the arguments of ld. counsel for assessee. There is no infirmity in the findings of the ld. CIT(A). We confirm his findings and dismiss this ground of appeals of the assessee in both the years. This issue is, therefore, decided against the assessee. Issue No. 2 13. On ground No. 2, assessee challenged the ad hoc addition of Rs. 30,000 and Rs. 40,000 in both the years out of various administrative expenses. On ground No. 3, assessee challenged the addition of Rs. 26,310 and Rs. 21,000 for both the years being disallowance of depreciation at 1/5th. The assessee submitted before Assessing Officer that assessee is a company and above expenses are incurred exclusively and solely for the purpose of business of assessee-company and there is no element of personal user out of telephone expenses, vehicle expenses, car insurance expenses and office expenses. The Assessing Officer, however, disallowed the same without pointing out as to how these expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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