TMI Blog2012 (8) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... o the persons and recorded their statements but the person whose names were appearing denied having either brought cash from MIDC office of the assessee to his city office or the persons who were allegedly given cash to the assessee for depositing the same in their bank account. The Ld CIT(A) has rightly held that nature of the transactions are totally different and having no nexus with each other, the benefit of the peak cannot be given. So far as the merits are concerned, the evidence is against the assessee. Nothing has been placed before us to show that there was no denial by those parties in respect of claim of the assesse. In our opinion, no interference is called for in the order of the Ld CIT(A). Accordingly, the addition is confirmed. - ITA No. 873/PN/2008 - - - Dated:- 31-8-2012 - SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER Appellant by : Shri M.K. Kulkarni Respondent by : Shri Mukulesh Dube ORDER Per R.S. Padvekar, JM The assessee has filed this appeal challenging the impugned order of the Ld CIT(A), Kolhapur dated 07/05/2008 for the A.Y. 2005-06. The assessee has taken the following grounds in the appeal: 1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year immediately preceding the assessment relevant to the previous year in which the search is conducted or requisition is made and the Assessment Year relevant to the previous year in which the search is conducted or requisition is made u/s. 153A(1)(b) of the Act but as per Clause (b) to Sec. 153B(1), some time limit is fixed and that suggests that even in respect of assessment year relevant to the previous year in which search action is conducted, all the seven assessments must be framed as per the provisions of Sec. 153A. He submits that once the search is conducted, then the Sections 153A, 153B and 153C come into operation and even in respect of the Assessment Year relevant to the previous year in which search warrant is executed, the said assessment also goes along with preceding six assessment years. It is submitted that the non-obstante clause indicated at the beginning of Sec. 153A of the Act brings into existence the independent code in itself. The non-obstante clause provides that whatever is provided or is contained in Sec. 139, 147, 148, 149, 151 and 153 in the case of a person where search has been initiated u/s. 132 or requisition proceedings u/s. 132A, then all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment/reassessment, the reassessment would be limited in scope having regard to the fact that jurisdiction under section 153A in such situation is a result of an action as per the provisions of sections 132 and 132A, i.e., the income already assessed plus undisclosed income/undisclosed assets pertaining to a specific year would become the total income for such year. In the second situation i.e., in the case of proceedings in relation to an abated assessment, the scope of provisions of section 153A would be little wider in a sense that there has to be one assessment/reassessment for such year and, therefore, in addition to the undisclosed income/assets, the other claims of the assessee, which may normally fall within the scope of provisions of section 143, section 143 read with section 144 or section 143 read with section 147, would also be covered. Similarly,, the scope of assessment under section 153A for the assessment year relevant to the previous year in which search took place or requisition was made would be wider, i.e., it would also cover the matters of section 143 of the Act. Thus, in nut-shell, section 153A can be summarized as a combination of section 143, section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the previous year of search in normal course and, in case of failure of the assessee to do so, the Assessing Officer can issue notice under section 142(1) of the Act to file the return under section 139(4). 15. Thus, absence of requirement of issue of notice under section 153A for the year of search, in our opinion, does not result into an inference that assessment of previous year of search is to be made as per the normal provisions of the Act, specially when state of provisions of section 153A is not different from scope of provisions of section 143 for making assessment of total income of such year. We may further add that, in case, any notice under section 153A is issued in case of such previous year, the same should be construed as issued under section 142(1) as the scope object of these two provisions on the aspect of requiring the assessee to file the:return is same. Even otherwise, under the new scheme, total income has to be computed as per the normal provisions of the Act and tax, interest and penalty also is to be levied as per the general provisions of the Act applicable to such assessment year, hence. there cannot be any prejudice to the assessee merely becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the provisions of section 153, the time limit for completion. of assessment under section 143(3) is more than the normal time limit available to the Assessing Officer for completing the assesment under section 153A read with section 153B of the Act. Further, if the assessment, of search year is to be completed under section 143 as such, then, there appears no reason as to why such assessment should be completed within the time limit prescribed under section 153B(I)(b) andnotwithin the time limit prescribed und.er section 153. Accordingly, we agree with ld. CIT DR that a purposive and harmonious construction of these provisions should be done. 18. Further, the provisions of section 153C(2) also provide for completion of assessment in respect of the person other than the person referred to in section 153A in the manner provided in section 153A. No doubt; the provisions of section153C(2) provide for specific situations wherein the assessment in respect of the assessment year relating to the previous year in which search is conducted under section 132 or requisition is made underseccdon 132A has to be made in the manner provided in section 153A. However, in our opinion, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions 153A, 153B and 153C ? So far as the time limit for assessment is concerned, it is provided in Sec. 153B(1)(b). The Ld Counsel fairly admitted that the assessment is completed as per the time limit as povided in the said proviso i.e. within the period of 2 years from the end of F.Y. 2004-05 as admittedly, the assessment is completed on 29.12.2006. Hence, the A.O has made the compliance of the mandatory condition in completing the assessment as provided u/s. 153B(1)(b) of the Act. 10. Then next question which arises for consideration is whether the A.O has considered the seized material found during the course of search for framing the assessment of the assessee or not. We find that the A.O has considered the seized material found during the course of search and the assessment is not merely based on the books of account and record Akbani Salim Abdul Gaffar A.Ys. 2005-06 Page of 13 produced by the assessee during the course of the assessment proceedings. What is to be seen in the substance of the assessment order and not merely format of an order. In our opinion, merely because Sec. 143(3) is typed by the A.O but otherwise, the substance of the assessment is in conformity tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Canvasing 13 24-07-2004 800,000 Kadri Canvasing 14 30-06-2004 200,000 Vikas 15 03-07-2004 82,950 Hitesh Bhai Total .. 4,454,950 12. The A.O. sought explanation of the assessee in respect of those transactions. The assessee contended that as regards the cash inward transactions mentioned on page Nos. 7 to 19 of the inventory No. 36, the various persons mentioned there have merely acted as postman to bring the cash from MIDC office to Shahupuri office of the assessee. The A.O asked the assessee to give the addresses of all the above persons who were allegedly acted as merely postman carrying cash from MIDC to Shahupuri office. As noted by the A.O, the assessee gave the addresses of two persons, namely Kadri and Anil Patil to whom the A.O issued summons on the addresses given by the assessee. The summons issued to Shri Anil Patil could not be served because the addr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -7-2004, it was noticed that on that day, the receipt side was less than the payment side. The A.O has also observed that there was no reason for the assessee to bring cash from residence to MIDC, Gokul Shirgaon and again bring the same cash all the way from Gokul Shirgaon by hands of some third party. The A.O. treated the entire cash transactions found in the seized material was treated as recovery from un-recorded loans/advances from the above mentioned parties by the assessee for the A.Y. 2005-06. 15. So far as transactions of cash outward are concerned, the A.O. referred to page Nos. 17 to 19 of inventory No. 36. Those recorded transactions were also not reflected in the regular books of account of the assessee. The assessees stated that the cash has been deposited by him in the Bank as the same was given to him by the said persons for depositing in their bank accounts and also for giving it to some other persons. The A.O has given details of the 29 persons in respect of which transactions of cash outward aggregating ₹ 37,97,500/- are found. As noted by the A.O, the summons were issued to those persons and their statements recorded u/s. 131 of the Act. Those persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val submissions of the parties and perused the record. The Ld Counsel pleaded for giving the benefit of the peak. We find that the Ld CIT(A) has considered the plea of the assessee on the issue of considering the addition on the peak. As per the statement of the assessee, the cash inwards were related to the sales but the cash outwards were in respect of the money given by the assessee's customers for deposing the same in their Bank Account. As per the own explanation of the assessee, the outward entries of the cash which have the different nature of the transactions. We find that the A.O issued summons to the persons and recorded their statements but the person whose names were appearing denied having either brought cash from MIDC office of the assessee to his city office or the persons who were allegedly given cash to the assessee for depositing the same in their bank account. The Ld CIT(A) has rightly held that nature of the transactions are totally different and having no nexus with each other, the benefit of the peak cannot be given. So far as the merits are concerned, the evidence is against the assessee. Nothing has been placed before us to show that there was no denial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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