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Shri. Jamnalal Purohit C/o M/s. Paliwala Dairy Farm Versus The ACIT Circle 16 (3). , Mumbai and vice-versa

2016 (4) TMI 1134 - ITAT MUMBAI

Validity of block assessment - Held that:- CIT(A) ought to have taken the panchnama dated15/12/1997 as the last panchnama within the meaning explanation 2 to section 158BE of the Act. Contrary to this, the Ld. CIT(A) has upheld the findings of the AO treating the so called panchnama dated 06/01/1998 as the last panchnama and also held the assessment order passed on 31/01/2000 as a valid order. Hence, in our considered opinion, the impugned order passed by the ld. CIT(A) is apparently erroneous a .....

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ASKARAN (AM) AND SHRI RAM LAL NEGI (JM) For the Appellant : Shri. Devendra Jain For the Respondent : Ms. Rupinder Brar O R D E R PER RAM LAL NEGI, JM These appeals pertain to assessee Shri. Jamnalal Purohit, for the block assessment period 1988-89 to 1998-99. IT(SS) No 187/M/03 and IT(SS) No.175/M/03 have been filed by the assessee and the revenue respectively against order dated 27.12,2002 passed by the CIT(A) xvii, Mumbai for the block period 1988-89 to 1998-99. For the sake of convenience, bo .....

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see had full-fledged processing unit, a chilling plant, cold storage and business premises. 2.1 A search and seizure action was carried out in the business premises of the assessee at 48, Nath, Madhav Park, C.P.Tank, Mumbai and Miraj on 15/12/1997. During the course of search some cash and incriminating documents were seized from the residence and business premises of the assessee. As alleged, the assessee used to sell milk and milk products outside the regular books of account and for that purp .....

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aliwal Dairy Farm, prop. Shri. Jamnalal N. Purohit and NIL income in the respect of M/s. Ghanshyam Dairy Products, stating that the income of M/s. Ghanshayam Dairy Products has been included in M/s. Paliwal Dairy Farm as both the concerns are owned by him. In response to notice u/s 142(1)/143(2) the assessee filed reply and furnished some details on 05/01/2000. Some more documents, which were required to be filed by the assessee, were not filed and since the case was getting barred by limitation .....

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onal ground of appeal that the assessment is barred by limitation. The Ld. CIT(A) partly allowed the appeal of the assessee, however, dismissed the additional ground of appeal holding that search was conducted on 15/12/97 and concluded on 6.01.98 (wrongly written as 16.01.98) therefore, the assessment order has been passed within limitation period i.e., on 31/01/2000. 3. The assessee has challenged the impugned order passed by the Ld. CIT(A) on following effective grounds. 1.1 On the facts and c .....

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t period: 1988-89 to 1998-99 1.3 The Learned Commissioner of Income Tax(Appeals) ought to have appreciated the fact that the restraint order u/s 132(3) does not amount to seizure in view of Expln.(2) to section 132(2) of the I.T.Act, 1961. 1.4 The Learned Commissioner of Income Tax(Appeals) ought to have appreciated the fact that the order u/s 132(3) is not a panchnama as referred to in section 158BE of the I.T.Act, 1961 and hence the assessment stood barred by limitation on 31/12/1999 and not o .....

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asis of warrant of authorisation for the search dated 14/12/1997. Prohibitory order under section 132(3) in respect of bank accounts etc. was made on 15/12/1997. Order vacating/lifting the prohibitory order was made/prepared on 06/01/1998. The Ld. AR submitted that section 158BE prescribes a time limit of two years from the end of the month in which last of the authorization for search was executed and in the present case last authorization was executed on 15/12/97, therefore, the assessment ord .....

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2003) 128 Taxman 149 (Delhi) 4). M. Sivaramakrishnaiah & Co. vs. Asst. CIT (2005) 93 TTJ (Vishakha) 1035. 5). Madhavana House building Co-operative Society.vs. Asst. CIT (2002) 76 TTJ Bang) 948. 6). Mr. Shahrukh Khan vs. Asst. CIT (Mum) 104 ITD 221. 7). T.S.Chandrasekar vs. Asst. CIT (2000) 113 Taxman 26 (Bang) 8). Javed Mohd. Peshimam vs. Dy.CIT (2007) 12 SOT 34 (Mum). 9). Assistant Commissioner of Income Tax v. Shree Ram Lime Products Ltd. (2012)17 ITR 0001(SB) 10). Commissioner v. White & .....

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as rightly dismissed this legal ground of appeal. 4. We have heard the rival submissions and also perused the material place before us including the judicial pronouncements/decisions relied upon by the parties, in the light of their respective contentions. As per the facts emanating from the record, the search was contended on 15/12/1997 and panchnama was prepared on same date i.e. on 15/12/1997 vide which prohibitory orders u/s 132(3) in respect of bank account etc. were made. The prohibitory o .....

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Bench of Mumbai Tribunal in Deputy Commissioner v. Adolf Patrick Pinto (2006) 284 ITR 207 (Mumbai) following the law laid down by the Hon ble jurisdictional High Court of Bombay in CIT vs. Mrs. Sandhya P. Naik & Others (2002) 253 ITR 534(Bom), has decided the similar issue in favour of the assessee. In the said case the Hon ble court has held that by passing a restraint order under section 132(3) the time limit available for framing block assessment order cannot be extended. Similarly, by s .....

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in order to determine whether the search has come to and or not, what is required to be seen whether the documents are valuable beings kept under have been appraised or not. Explanation 2 to section 158 BE does not mean that the time limitation will not start till the prohibitory order passed under section 132(3) is in operation……. 6. In the case before coordinate Bench, the search party visited twice at the residential premises of the assessee on June 19, 1998 and August 1, 1998. .....

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res and debentures incorporating the distinctive numbers of the shares and debentures. The question before the Tribunal was whether inventory prepared on 19.6.1998 or inventory prepared on 1.8.98 was the last inventory within the meaning of explanation 2 to section 158BE of the Act. The Tribunal answered the question as under:- Keeping in view the facts of the case and the case law referred to above, we are of the view that the last of the authorisation was executed on June 1998 and the panchnam .....

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nchnama is drawn in the given case on authorisation, one cannot construe that the subsequent and the last of the panchnama issued as one flowing out of the search as a last of the panchnama referable to explanation 2 to section 158 BE. Once the warrant of authorisation has been issued and the premises is searched and the search party leaves the premises, there is the end of the search and what could be postponed is only seizure of the article and issuance of prohibitory order; however, limitatio .....

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ommences from the date of panchnama which reveal that a search was carried out on the day to which it relates. If it is found that the panchnama does not reveal that a search was at all carried out on the date to which it relates then it would not be a panchnama relating to a search and consequently, it would not be a panchnama, which finds mention in explanation-2 to section 158BE of the Act. It is this proposition which has been upheld by Hon ble Jurisdictional High Court in CIT vs. White & .....

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ding the Mumbai ITAT, discussed in the foregoing paras, in the present case, the CIT(A) ought to have taken the panchnama dated15/12/1997 as the last panchnama within the meaning explanation 2 to section 158BE of the Act. Contrary to this, the Ld. CIT(A) has upheld the findings of the AO treating the so called panchnama dated 06/01/1998 as the last panchnama and also held the assessment order passed on 31/01/2000 as a valid order. Hence, in our considered opinion, the impugned order passed by th .....

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lenged the impugned order passed by the ld. CIT(A) dated27/12/2002 for the block assessment year 1988-89 to 1998-99 on the following effective grounds:- 1. On the facts and in the circumstances of the case and in law the Ld. CIT a erred in coming to the conclusion that the assessee s undisclosed income should be worked out with reference to the net profit percentage disclosed by the assessee on its recorded purchases in its regular books of a/CS for the AY 1991-92. 2. On the facts and in the cir .....

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