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QUALITY LIQUOR AGENCIES Versus ASSISTANT COMMISSIONER OF INCOME-TAX

2015 (11) TMI 387 - KARNATAKA HIGH COURT

Income from 'seconds' - Whether the transaction of 'seconds' having been recorded in the normal course in the ledger maintained, the income therefrom for period April 1, 2002, to September 12, 2002, was excludible from the block assessment in the light of the provisions of section 158BA ? - Held that:- The learned counsel admits that the appellant is maintaining two sets of accounts which is not permissible in law merely because subsequent to the search held on September 12, 2002, the assessee h .....

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h the parties except the parties names and the amount. Much emphasis is placed by the learned counsel appearing for the appellant, on annexure C, to bring this document under section 158BA(3) of the Act which provides that undisclosed income, if recorded on or before the date of search or requisition in the books of account or other documents maintained in the normal course relating to such previous years shall not be included in the block period. We are unable to appreciate this argument advanc .....

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BR>
Transactions with Kaveri Bar -unexplained investment of the appellant in block assess ment under section 158B(b) - Held that:- It is admitted fact that Sri Elias Gerald D'Silva has given the statement before the Departmental authorities on September 16, 2004, wherein it is stated that he had received ₹ 2,50,000 in cash on February 18, 2002. Now, the case of the assessee-firm is that two partners of M/s. Kaveri Bar had made the payment to Sri Elias Gerald D' Silva and the assessee- .....

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stances create a doubt regarding the genuineness of the said partnership deed relied on by the assessee. After a detailed examination of the documents, the Tribunal has arrived at a conclusion that the assessee-firm has failed to explain the source of the amount of ₹ 2,50,000 paid to Sri Elias Gerald D' Silva. These are pure questions of facts and the findings given on these factual aspects cannot be interfered by us in this appeal. - Decided against the assessee - I. T. A. No. 498 of 2009 .....

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: Question No. 1 Whether the Tribunal was justified in upholding the inclusion of ₹ 1,64,158 being income from 'seconds' for the period April 1, 2002, to September 12, 2002, in block assessment when the said income did not fall within the definition of undisclosed income under section 158BA of the Income-tax Act 1961 ? Question No. 2 Whether the transaction of 'seconds' having been recorded in the normal course in the ledger maintained, the income therefrom for period Apri .....

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e wholesale liquor business. A search was conducted under section 132 of the Income-tax Act, 1961 (hereinafter referred to as "the Act" for short) at the business premises of the assessee-firm/appellant on September 12, 2002, and at the residential premises of Sri Sunil Kumar, partner of the firm. Certain material containing agreements with Mr. Elias Gerald D' Silva for the purchase of Kaveri Bar was found and seized. Similarly, certain materials relating to the unaccounted sale of .....

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to Mr. Elias Gerald D' Silva of ₹ 2,50,000. Appeals filed by the appellant-firm against the said assessment order were dismissed by the Commissioner of Income-tax (Appeals), Mangalore. Being aggrieved, the appellant filed an appeal before the Income-tax Appellate Tribunal, Bangalore, which was rejected and the said order is assailed in this appeal. 3. The learned counsel, Sri S. Parthasarthy, appearing for the appellant argued that ₹ 1,64,158 was declared in the regular return fi .....

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he said income shall not be included in the block period. The learned counsel elaborated his arguments contending that the two sets of accounts were maintained by the assessee and in one set, this income was recorded and the assessee has also filed the returns disclosing this income of ₹ 1,64,158 in the returns filed for the assessment year 2003-04 and as such, the Tribunal without appreciating these material facts, has brought this amount of ₹ 1,64,158 as undisclosed income falling .....

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ppearing for the Department contended that subsequent to the search conducted on September 12, 2002, the amount of ₹ 1,64,158 was disclosed in the returns filed for the assessment year 2003-04, the assessee-firm had not maintained the regular books of account, the said undisclosed income would have gone unnoticed and has come to light only on the search conducted by the Department. Further, it was argued that the source of cash payment of ₹ 2,50,000 made to Sri Elias Gerald D'Sil .....

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sequent to the search held on September 12, 2002, the assessee has filed the returns for the assessment year 2003-04 disclosing the amount of ₹ 1,64,158 held to be undisclosed income, would not carry any conviction. The reliance placed on by the learned counsel on section 158BA and annexure C said to be a document maintained by the assessee-firm disclosing the details of the said undisclosed income is not acceptable since the said document is very vague, without having the details of dates .....

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e block period. We are unable to appreciate this argument advanced by the learned counsel. No law permits maintenance of two sets of accounts, i.e., one unaccounted and the other accounted. Such scheme of maintaining two different sets of accounts is totally forbidden in law and no credential value can be given to such illegal accounts maintained by the assessee. At no stretch of imagination, this document at annexure C would be considered as "other documents" maintained in the normal .....

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