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2016 (6) TMI 526 - ITAT MUMBAI

2016 (6) TMI 526 - ITAT MUMBAI - TMI - Validity of assessment u/s 158BD - Held that:- The provisions of sec. 158BD, in our view, contemplates that the satisfaction should be arrived in an objective manner by the AO of searched person and thereafter, he should hand over the relevant documents to the AO of other person. A careful reading of the letter dated 21.8.2000, referred above, would show that the AO of the searched person has merely given the facts relating to the admissions made by Shri Gy .....

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n u/s 132(4) of the Act is rebuttable one.

Accordingly, we are of the view that the AO of the searched person has merely intimated the details of search proceedings to the AO of the assessee and the same, in our considered view, shall not constitute “satisfaction” about “undisclosed income” as contemplated u/s 158BD of the Act. Accordingly, we find merit in the contentions of the assessee on the legal issue. Accordingly, we hold that the “satisfaction” mandated u/s 158BD of the Act wa .....

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e directed against the order dated 28-01-2004 passed by Ld CIT(A)-XVIII, Mumbai and they relate to the block period from 1.4.1988 to 17.12.1998. 2. The assessee is a partnership firm engaged in civil construction business. The revenue carried out search and seizure operations on M/s R.K. Madhani & Co. u/s 132 of the Act o 17.12.1998. Consequent thereto a notice u/s 158BC was issued to the assessee and the assessment was framed. The CIT(A) annulled the assessment, vide his order dated 31.5.20 .....

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ot record satisfaction as mandated u/s 158BD of the Act. The Tribunal, vide its order dated 29-12-2010, quashed the assessment order holding that the notice issued u/s 158BD is bad in law. In the proceedings before the Tribunal, the revenue had filed a letter 21.08.2000 issued by the assessing officer of the searched person to the AO of the assessee. The Tribunal passed the order on the presumption that the parties had agreed that there was no satisfaction recorded and the said fact was an admit .....

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29.12.2010. While passing the order on the miscellaneous petition, the Tribunal expressed its view on the letter dated 21.8.2000 claimed by the revenue as satisfaction note. 5. The assessee challenged the order passed by the Tribunal on the Miscellaneous petition filed by the revenue before Hon ble High Court of Bombay. The Hon ble High Court, vide its order dated 23-01-2015 passed in W.P. No.162 of 2015 and W.P. No.150 of 2015, upheld the recall of the order, but set aside the observations made .....

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nces of the communication dated 21st August, 2000. The regular Bench of the Tribunal to whom the revenue s appeals both on quantum and penalty are restored for hearing would not be influenced in any manner by the observations made in the impugned order on the merits of the controversy. 6. Accordingly the appeal of the revenue and the cross objection of the assessee came to be heard by this bench of Tribunal. The Hon ble Bombay High Court, in its order dated23.01.2015 referred above, held that th .....

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s satisfaction note contemplated u/s 158BD of the Act. However, the contention of the Revenue is that the Act does not prescribe any format for recording satisfaction and hence the letter dated 21.8.2000 shall constitute the satisfaction note contemplated u/s 158BD of the Act. 8. We heard the parties on this issue and perused the record. Since the controversy surrounds the letter dated 21.8.2000, referred above, we extract the same hereunder, for the sake of convenience:- Cir.25(3)/Appra/2000-20 .....

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p of cases on 17.12.98 & 18.12.98. During the course of search action, statement of Shri Gyanchand was recorded u/s. 132 of the I.T.Act on 18.12.98. Shri Gyanchand R. Madhani has made disclosure of ₹ 46,00,000/- in the group of cases which are as under : ₹ 30 lacs in the hands of M/s. R.K. Madhani & Co. ₹ 10 lacs in the hands of M/s. Gyan Construction Co. ₹ 60 lacs in the hands of M/s. R.K. Chemical Disclosures are made on account of inflated expenses and incrimin .....

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are of the view that the AO of the searched person makes a reference to the disclosure made by Shri Gyanchand R Madhani and further states that disclosures have been made on account of inflated expenses. The AO further intimates that the appraisal reports are self explanatory and accordingly requests the AO of the assessee to take necessary action. 9. The provisions of sec. 158BD reads as under:- Where the assessing officer is satisfied that any undisclosed income belongs to any person, other th .....

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