TMI Blog2009 (9) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... s in sustaining addition of ₹ 338145/- out of the addition of ₹ 5475710/- made by the Assessing Officer. 2) Commissioner of Income Tax (Appeals) ought to have deleted the entire addition of ₹ 5475710/- made by the Assessing Officer on presumption and assumption, which is not permissible in block assessment. 3) As decided by various judicial authorities no addition can be made in the block assessment on assumption and presumption. Therefore, Commissioner of Income Tax (Appeals) ought to have deleted entire addition instead of deleting ₹ 5137565/- and sustaining ₹ 338145/-. 4) Looking to the facts and circumstances of the case and detail submissions made before the Assessing Officer and Commissioner of Income Tax (Appeals), the Commissioner of Income Tax (Appeals) is not justified in sustaining ₹ 338145/- out of total addition of ₹ 5475710/-. 5) Addition made by Assessing Officer on the basis of one person conflicting statement in the appellant hands is not justifiable in view of the ruling of the Madras High Court reported in 282 ITR 259 and ITAT Ahmedabad Bench judgment in the case of Patel Rajeshkumar Kantilal Co. Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot of the case. 7. In the instant case, a search u/s 132 of the Income Tax Act, 1961 (in short the Act) was conducted in Chitra Group of Cases on 12-12-2008 and during the search in Chitra Publicity Company loose papers as per Annexure A-18 was found and seized and page 16 of this was a summary of the commission payment made during 1-4-1996 to 31-3-2001. These payments were related to the commission paid to (the assessee) an ex-employee of Chitra Publicity Company. On perusal of page 16, the AO found that M/s. Chitra Publicity Company had debited a total sum of ₹ 54,75,710/- in the name of Shri Kaushik R. Shah and various persons who have come through him. In view of this facts, proceedings u/s 158 BD of the Act were initiated in the case of Shri Kaushik R. Shah and notice u/s 158BD of the Act dated 10-11-2003 was issued and served upon the assessee on 13-11-2003. In response to the notice u/s 158BD of the Act, the return for the block period was filed by the assessee on 10-9-2004, showing undisclosed income at nil. Thereafter, the AO issued notices u/s 143(2) and 142(1) on 16-2-2005. Vide these notices, the AO asked the assessee to explain the commission payment to the tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the ITAT , Delhi B Bench in the case of Dy. CIT Vs. C. S. L. Securities (P) Ltd. (2008) 15 DTR (Del) (Tribunal) 318. On the other hand, Shri Alok Joshi, learned DR submitted that the notice issued on 10-11-2003 u/s 158 BD of the Act was a valid notice and in accordance with law and, therefore, no adverse inference may be drawn. 12. We have heard the rival submission and have also perused the materials available on record. The decisions cited by either party were also duly considered. In our view, the issue is squarely covered in favour of the assessee and against the Revenue by the decision of ITAT Delhi B Bench in the case of Dy. CIT Vs. C. S. L. Securities (P) Ltd. (2008) 15 DTR (Del) (Tribunal) 318 (supra). In the above case, notice u/s 158BD of the Act issued to the Principal Officer of M/s. C. S. L. Securities (P) Ltd. by the Dy. CIT, Cental Circle-3, New Delhi reads as under: Notice under s. 158BC r.w.s 158BD of the IT Act, 1961 Office of the Dy. CIT Central Circle-3, New Delhi D. 26th Nov.,2002 To The Principal Officer, M/s. CSL Securities (P) Ltd., 36, Sant Nagar, East of Kailash, New Delhi - 10065 Sir, In pursuance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder s. 132A or documents or assets have been requisitioned under s. 132A. Sec. 158BFD, however, provides for taking recourse to a block assessment in terms of s. 158BC in respect of any other person, the conditions precedent wherefore are : (i) satisfaction must be recorded by the AO that any undisclosed income belongs to any person, other than the person with respect to whom search was made under s. 132 of the Act; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the AO having jurisdiction over such other person; and (iii) the AO has proceeded under s. 158BC against such other person. 12. The conditions precedent for invoking the provisions of s. 158BD, thus, are required to be satisfied before the provisions of the said chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under s. 132A of the Act . 9.1.1 In that case a search was conducted in the premises of Shri Rameshwar Maheshwari, who was one of the directors under s. 132 of the IT Act and his wife on 21st Nov., 1995. During the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice under s. 158BC/D of IT Act, 1961 PAN/GIR No. Block period: 1st April, 1985 to 20th March, 1996 Income-tax Office: Dy. CIT Special Range-15, New Delhi Dt. 26th Oct., 1998 To, Principal Officer, New Delhi Auto Finance (P) Ltd., 174, Katra Baryan, Delhi-6 In pursuance of the provisions of s. 158BC/D of the IT Act, 1961, you are required to prepare a true and correct return of your total income including the undisclosed income in respect of which you as an individual/HUF/firm/company/AOP/BOI/local authority are assessable for the block period mentioned in s. 158B(a) of the IT Act, 1961. The return should be in the prescribed Form No.2B and be delivered in this office within 16 days of service of this notice, duly verified and signed in accordance with the provisions of s. 140 of the IT Act, 1961. Sd/-(D.V.Singh), Jt. CIT Special Range-15, New Delhi, Recd. On 29th Oct.,1998 By. Sh. J.B. Aggarwal. 9.2.1 After comparing the contents of the notice with the notice issued in the case of Manish Maheshwaei (supra) and while dealing with the contentions raised regarding vagueness of the notice, the Hon'ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a different view from that taken in Manish Maheshwari (supra) and in fact could not press her case very far in the face of the clear law laid down by the Supreme Court. 22. Under the circumstances, we have no option but to answer the substantial question of law in the negative, in favour of the assessee and against the Revenue. 9.2.2 An identical issue was considered by Tribunal Chandigarh Bench in the case of Anil Kumar Jagadhari (supra). In that case also a similar notice was issued. The Bench has reproduced this notice in para 34 of its order which is as under: Notice under s. 158BC r/w s. 158BD of the IT Act PAN No. Office of the Asstt.CIT 35-A Yamuna Nagar Dt. 15th March, 2002 To M/s Dasondhi Ram Kishen Chand Pansari Bazar, Jagadhri. I In pursuance of the provisions of s. 158BC r/w s. 158BD of the IT Act, 1961, you are required to prepare a true and correct return of your total income including the undisclosed/Firm/HUF are assessable for the block period ended as on 14th Sept., 1999, mentioned in s. 158B(a) of the IT Act, 1961. The return should be in the prescribed Form No. 2B and be delivered in this office within 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Manoj Aggarwal has not been mentioned nor any other detail is given in the notice. This notice further shows non-application of mind on the part of the AO. The satisfaction of the AO is not discernible from the contents of the notice which appears to be on prescribed proforma only. In view of the above, in our considered opinion, since the notice does not contain or record the satisfaction of the AO nor other details, such notice is to be held as vague and following the ratio of decision of the Hon ble Supreme Court in the case of Manish Maheshwari (supra) as well as the latest decision of the jurisdictional High Court in the case of New Delhi Auto Finance (P) Ltd. (supra); we hold that the notice is not valid as the same does not meet the requirement of law as propounded by the Hon'ble Supreme Court in the case of Manish Maheshwari (supra) and the Hon ble Delhi High Court in the case of New Delhi Auto Finance (P) Ltd. (supra). 9.5 After considering the above aspects we, therefore, accept, the contention raised by the assessee in ground No. 2 of the cross-objection. This ground, therefore, stands allowed . 14. It is relevant to state that we have perused the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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