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2015 (4) TMI 671 - ITAT LUCKNOW

2015 (4) TMI 671 - ITAT LUCKNOW - TMI - Validity of assessment u/s 153C (ITA No. 503/Lkw/2013.) -Satisfaction recorded by Ao is not proper - Additions by AO based on petition before settlement commission - Issue of telescoping - Held that:- It is seen that in the present case, satisfaction was recorded by the A.O. of the searched person and the case is covered against the assessee by the judgment of Hon’ble Jurisdictional High Court rendered in the case of classic Enterprises [2013 (4) TMI 520 - .....

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nd other information produced by the assessee before the Settlement Commission. This is not in dispute that the assessee provided this information before Settlement Commission about his additional income. Since, the assessee did not provide the detail about the year in which, this income was earned by the assessee, the A.O. made substantive addition in A.Y. 2005 - 06 being search year and made protective addition in 1999 - 2000 to 2004 - 05 on protective basis. It is noted by learned CIT (A) in .....

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ttlement Commission, which is not specific, it has to be accepted that part of such income might have been earned in these earlier years and hence, in view of these peculiar facts, we grant telescoping and direct the A.O. that the additions confirmed by learned CIT (A) in A. Y. 1999 - 2000 to 2003 - 04 as noted above should be considered as part of surrender before Settlement Commission and therefore, the net addition in this year is confirmed to the extent of ₹ 344000 only (Rs. 438500 - 9 .....

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peals, all appeals are filed by different assesses for different years but since the issues involved are common, all these appeals were heard together and are being disposed of by this common order for the sake of convenience. 2. First, we take up the appeal in the case of Sri Ram Singhare Yadav for A.Y. 2005 - 06 in ITA No. 503/Lkw/2013. 3. As per Ground No. 1, the assessee has raised the issue regarding satisfaction recorded by the A.O. u/s 153C. This is the case of the assessee that the satis .....

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Ltd.,54Taxmann.com295(Del Trib.) g) Pepsi India Holdings (P) Ltd. vs. ACIT, 228 Taxman.com 116 (Delhi) 4. Learned D.R. of the Revenue supported the orders passed by the authorities below. 5. We have considered the rival submissions. We find that in the case of Pepsi Food (Supra) , Hon ble Delhi High Court has considered a judgment of Hon ble Jurisdictional High Court rendered in the case of CIT vs. classic Enterprises, 358 ITR 465 (All.). Hon ble Delhi High Court has observed in Para 7 that thi .....

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High Court rendered in the case of Digvijay Chemicals Ltd. vs. ACIT, 248 ITR 381 and in that case, the issue involved was requirement of recording satisfaction u/s 158BD and it was held that even recording of satisfaction in writing is not mandatory. 6. In the case of CIT vs. classic Enterprises, 358 ITR 465 (All.), It was held by Hon ble Allahabad High Court that since at this stage the proceedings are at the very initial state, the satisfaction is neither to be firm or conclusive. In the pres .....

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ed in the case of CIT vs. classic Enterprises (Supra). Since this judgment is of Hon ble Allahabad High Court, it is binding on us and therefore, we are not discussing various judgments cited by learned AR as noted above except CIT vs. Gopi Apartment 365 ITR 411 (Allahabad) because these are not binding. In that case, it is noted by Hon ble Allahabad High Court that as per categorical finding recorded by Commissioner (Appeals) and the Tribunal, there is no material showing the recording of satis .....

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he A.O. on the basis of offer made by the assessee in petition before Settlement Commission. 8. It was submitted by learned AR of the assessee regarding this issue that the offer was made by the assessee before Settlement Commission to avoid botheration and buy peace but later on, the assessee got legal advice that there was no need to offer additional income before Settlement Commission and to pay tax thereon because in fact, there was no additional income. He submitted that the petition was he .....

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sub section (3) to section 245HA, the A.O. can use all material and other information produced by the assessee before the Settlement Commission. This is not in dispute that the assessee provided this information before Settlement Commission about his additional income. Since, the assessee did not provide the detail about the year in which, this income was earned by the assessee, the A.O. made substantive addition in A.Y. 2005 - 06 being search year and made protective addition in 1999 - 2000 to .....

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4 is this that if this addition in A.Y. 2005 - 06 is confirmed than also, the amount of such addition in this year should be reduced by the amount of other additions confirmed by CIT (A) in earlier years as per same order by allowing telescoping those additions confirmed in earlier years. Learned AR of the assessee submitted that since the offer before Settlement Commission was without year wise and other break up, telescoping should be allowed. Learned DR of the revenue submitted that telescopi .....

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addition was made in each year on protective basis and in A.Y. 2005- 06 on substantive basis. Learned CIT (A) has confirmed an addition of ₹ 16,500 in A.Y. 1999 - 2000, ₹ 10,500 in A.Y. 2000 - 2001, ₹ 22,000 in A.Y. 2001 - 2002, ₹ 20,500 in A.Y. 2002 - 2003 and ₹ 25,000 in A.Y. 2003 - 2004 on different account apart from confirming the addition on substantive basis in A.Y. 2005 - 06 being offer before Settlement Commission. Total of all these additions comes to S .....

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04 as noted above should be considered as part of surrender before Settlement Commission and therefore, the net addition in this year is confirmed to the extent of ₹ 344000 only (Rs. 438500 - 94500). 12. In the result, the appeal of the assessee stands partly allowed. 13. Now, we take up the appeal in the case of Sri Rajjan Lal Vinod Gupta (HUF) for A.Y. 2005 - 06 in ITA No. 504/Lkw/2013. It was agreed by both sides that the facts and dispute in this case are identical to the facts and di .....

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g ₹ 420,000 Offer before Settlement Commission Less the addition of ₹ 10,000 in A.Y. 1999 - 2000 and ₹ 2,500 in A.Y. 2001 - 02 confirmed by Learned CIT (A). 14. In addition to this, there is one more issue in this case regarding confirming of addition of ₹ 8,000 in A.Y. 2005 - 06 by estimating the receipts. On this issue, we find no infirmity in the order of learned CIT (A). 15. In the result, the appeal of the assessee stands partly allowed. 16. Now, we take up two appea .....

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ect of offer before Settlement Commission. We have also allowed telescoping in that case. On same line, in this case also, all three issues are decided and net addition of ₹ 212,000 is confirmed in A.Y. 2005 - 06 on substantive basis being ₹ 422,000 offered before Settlement Commission Less the addition of ₹ 10,000 in A.Y. 1999 - 2000 and ₹ 200,000 in A.Y. 2001 - 02 confirmed by Learned CIT (A). Since telescoping of addition confirmed in A.Y. 2001 - 02 of ₹ 200,000 .....

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for A.Y. 2001 - 02 in ITA No. 507/Lkw/2013 and for A.Y. 2005 - 06 in ITA No. 508/Lkw/2013. It was agreed by both sides that the facts and dispute in this case are identical to the facts and dispute in the case of Sri Ram Singhare Yadav in ITA No. 503/Lkw/2013 and this appeal can be decided on same line. In that case, we have approved the validity of Notice u/s 153C and have also upheld the addition on substantive basis in A.Y. 2005 - 06 in respect of offer before Settlement Commission. We have a .....

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02 is dismissed. 20. In addition to this, there is one more issue in this case regarding confirming of addition of ₹ 7,500 in A.Y. 2005 - 06 by estimating the receipts. On this issue, we find no infirmity in the order of learned CIT (A). 21. In the result, the appeal of the assessee for A.Y. 2001 - 02 is dismissed and for A.Y. 2005 - 06 is partly allowed. 22. Now, we take up two appeals in the case of Rajjan Lal Vinod Neeraj Gupta (HUF) for A.Y. 2001 - 02 in ITA No. 509/Lkw/2013 and for A .....

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in this case also, all three issues are decided and net addition of ₹ 214,250 is confirmed in A.Y. 2005 - 06 on substantive basis being ₹ 422,500 offered before Settlement Commission Less the addition of ₹ 7,500 in A.Y. 1999 - 2000 and ₹ 200,750 in A.Y. 2001 - 02 confirmed by Learned CIT (A). Since telescoping of addition confirmed in A.Y. 2001 - 02 of ₹ 200,750 is allowed in A.Y. 2005 - 06, the appeal in A.Y. 2001 02 is dismissed. 23. In addition to this, there is .....

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