TMI Blog2012 (4) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... i Satish R. Mody ORDER PER AMIT SHUKLA (J.M.) : The present appeal has been filed by the department against order dated 09.05.2007 passed by CIT (Appeals)-IV, Mumbai for the block period passed u/s.158BD on the following grounds of appeal :- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of `.13.5 Lacs u/s.68 and bogus interest expenses of `.3,68,958/- and `.3,300/- u/s.69C, when the assessee had failed to discharge his onus in conclusively proving that creditworthiness of donor and genuineness of transaction. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) while relying on the statement of the lender, affirming the loan failed to considered the documents and other corroborative evidences found during the search at Shri Khemchand Shah. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in accepting the retraction of Shri Khemchand Shah, alleged leader after a gap of 7 years, from his statement on oath recorded at the time of search. 4. Further, placed in the above factual and legal scenario, the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CIT vs. Salman Khan in Income Tax Appeal No.508/2000, held that the provisions of section 292 BB will not be applicable prior to the Assessment Year 2008-09, as it was brought in the statue w.e.f 01.04.2008. 6. We have heard the rival submissions of the parties on the preliminary issue of additional ground as has been raised by the learned AR on behalf of the respondent/assessee. Before adjudicating the said issue as have been raised in additional ground, the relevant facts and background of the case are that, a search and seizure action u/s.132 was carried out in the case of M/s. Amar Ferro Metals P. Ltd. and M/s. Ampex Trading Co. During the course of search action at the premises at 38, 2nd Floor, 2nd Bhoiwada, Mumbai belonging to M/s. Ampex Trading Co., it was found that Shri Khemchand Shah was also doing his business. During the course of the assessment proceedings of M/s. Amar Ferro Metals P. Ltd. and its directors, it was found that the number of documents seized at the time of search pertained to the undisclosed income of M/s. Meenakshi Metallics P. Ltd. On this background, the proceedings u/s.158BD were initiated against the M/s. Meenakshi Metallics P. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other evidence to be recorded, the nature of which would not only be a defence to the appeal itself, but may also affect the validity of the entire assessment proceedings. If the ground succeeds, the only result would be that the appeal would fail. The acceptance of the ground would show that the entire assessment proceedings were invalid, but yet the Tribunal which hears the appeal would have no power to disturb or to set aside the order in favour of the appellant. That order would stand and would have full effect in so far as it is against the respondent. The ground would serve only as a weapon of defence against the appeal. Hence, the refusal of the Tribunal to allow the assessee to challenge for the first time before it the validity of the notice and assessment under section 34 while considering the appeal filed by the department against the order of the Appellate Assistant Commissioner was not in accordance with law. 6.2 Similarly, in an another decision of the ITAT Mumbai Bench in the case of DCIT vs. M/s. Edelweiss Capital Ltd., Mumbai in ITA No.3971/Mum/2009 vide order dated 15.02.2011, after relying upon the judgment of Bombay High Court in the case of CIT vs. Gilbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (2) read with proviso raises the point of jurisdiction of the Assessing Officer to take up the matter for scrutiny or verifying the contents of the return after issuing notice under this Section. Such a scrutiny or verification of the return can be done only if notice under this Section is served upon the assessee within a period of twelve months. Thus, proviso puts an embargo for service of notice within a stipulated time. This embargo raises a point of limitation and is very vital to framing of assessment. The failure to adhere the same, renders the additions made in the assessment order illegal. This position of law has now been settled by the Hon ble Supreme Court in the case of CIT Vs. Hotel Blue Moon, reported in 321 ITR 362. Thus, the legal ground raised by the respondent is purely a question of limitation for issuance and service of notice which deserves to be admitted as it is a legal mandate upon the court to deal and decide the issue of limitations, if it has been raised by any of the parties at any stage, even though it was not raised or considered earlier by any of the authorities below. Moreover, for adjudication of this issue, no investigation of issuance or servic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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