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RAJESH SUNDERDAS VASWANI Versus ASSISTANT COMMISSIONER OF INCOME TAX

2016 (10) TMI 549 - GUJARAT HIGH COURT

Assessment u/s 153C - unexplained payment - whether there was sufficient material to prima facie show that in such handwritten noting in the seized document, reference to 1105 was a cash payment by the petitioner to B. Nanji - Held that:- This is not a case where the satisfaction recorded by the Assessing Officer of the searched person can be stated to be based on no material. There is thus prima facie material to suggest that incriminating documents seized during the search belonged to the peti .....

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THE RESPONDENT : MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These petitions arise in common background. Facts being similar, we may refer from Special Civil Application No.15980/2010. The petitioner is an individual. He has challenged a notice dated 28.8.2009 issued by the respondent Assessing Officer under section 153C of the Incometax Act, 1961( the Act for short). 2. Facts are as under. A search operation under section 132 of the Act was conducted .....

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Assessing Officer of the petitioner issued the impugned notice calling upon the petitioner to furnish the return of the income for the assessment year 2003-2004. It is this notice, the petitioner has challenged on various grounds. Main ground of the petitioner however, is that the respondent authority had no jurisdiction to issue such a notice. Firstly, because according to the petitioner, no satisfaction as required under section 153C of the Act was recorded by the Assessing Officer of the sear .....

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he search conducted by the authority on the Avirath Adi group of entities. The petitioner has not been engaged in any undisclosed transactions. The petitioner had not made any purchases from B. Nanji nor had made any payments for any purchase of land. The entire premise for issuing notice against the petitioner is factually incorrect. In short, he questions the very foundation for issuing notice. 4. On the other hand, learned counsel Shri Manish Bhatt for the department opposed the petition cont .....

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of the Act. At our request, he had also placed original files of the department for our perusal which contains a satisfaction note dated 28.8.2009, as also a detailed personal appraisal compiled on 21.8.2008. Referring to such materials, counsel for the Revenue submitted that in face of such overwhelming evidence, the petitions be dismissed. He contended that the petitions are filed at a premature stage and at this stage, even before the assessment is completed, the Court would not interfere. In .....

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ion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets, shall be handed over to the Assessing Officer having jurisdiction over such other person and that the Assessing Officer shall proceed against each such other person and issue notice and assess or reassess income of such other person in accordance with the provis .....

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e was recorded by the Assessing Officer of the searched person. In fact, on 28. 8.2009, he had recorded that a search was conducted in case of one Kamlesh Dhanopia at his residence on 23.5.2009. During the course of search proceedings, certain loose papers were found in the premises which were seized. One such document was a computer printout taken from the books of accounts of the present petitioner maintained on the computer and, therefore, belonged to him. In view of such facts, he was satisf .....

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ne the petitioner's grievance in this respect at this stage, are the issues which, for the present, we are not commenting. 7. We may now advert to the petitioner's contention of this being a case of no evidence. According to the counsel for the petitioner, we may recall, in the present case, the Assessing Officer of the searched person could never have recorded such a satisfaction. Before referring to the materials on record and dealing with this contention, we may notice that in case of .....

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with law. In the process, the Supreme Court made the following observations : 13. In the instant case, it transpires from the record that the jurisdictional Assessing Authority, upon having a reason to believe that the documents seized indicate escapement of income, has issued Show Cause Notices under Section 153C to the assessee for reassessment of his income during the assessment years 2001-2002 to 20062007. Thereafter, upon request of the assessee, the Assessing Authority has furnished him w .....

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stead of filing the Writ Petition impugning the said notices. It is settled law that when an alternate remedy is available to the aggrieved party, it must exhaust the same before approaching the Writ Court. In Bellary Steels & Alloys Ltd. v. CCT, (2009) 17 SCC 547, this Court had allowed the assessee therein to withdraw the original Writ Petition filed before the High Court as the said proceedings came to be filed against the showcause notice and observed that the High Court should not have .....

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approached this Court against the judgment and order of the High Court which had dismissed the Writ Petition filed by the assessee wherein challenge was made to the show cause notice issued by the Assessing Authority on the ground that alternative remedy was available to the assessee. This Court concurred with the findings and conclusions reached by the High Court and dismissed the said appeal with the following observations: 5. This and the other facts cannot be taken up for consideration by t .....

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ntertained the Writ Petition and instead should have directed the assessee to file reply to the said notices and upon receipt of a decision from the Assessing Authority, if for any reason it is aggrieved by the said decision, to question the same before the forum provided under the Act. 17. In view of the above, without expressing any opinion on the correctness or otherwise of the construction that is placed by the High Court on Section 153C, we set aside the impugned judgment and order. Further .....

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y any observations made by the High Court while disposing of the Writ Petition. If, for any reason, the assessment order goes against the assessee, he/it shall avail and exhaust the remedies available to him/it under the Act, 1961. 8. In case of Chhabil Dass Agarwal (supra), the Supreme Court reiterated that when alternative remedy is available, the High Court would not ordinarily entertain a writ petition under Article 226 of the Constitution. The Court observed as under : 20. In the instant ca .....

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ive and not a mere formality with no substantial relief. In Ram and Shyam Co. vs. State of Haryana, (1985) 3 SCC 267 this Court has noticed that if an appeal is from Caesar to Caesar s wife the existence of alternative remedy would be a mirage and an exercise in futility. In the instant case, neither has the assesseewrit petitioner described the available alternate remedy under the Act as ineffectual and nonefficacious while invoking the writ jurisdiction of the High Court nor has the High Court .....

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e documents seized during the search belonged to the petitioner. Only in order to meet with such a contention, we may refer to some of the documents and other materials on record. The document in question is a printout from the computer which was allegedly seized from the premises of the searched person Shri Kamlesh Dhanopia which carried a title Sunderdeep Builders with which the petitioner is related and it is a copy of ledger between 1.4.2007 to 31.3.2008 of the account of one B. Nanji Enterp .....

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his document would demonstrate that the petitioner had made total payment of ₹ 11.45 crores to B. Nanji, of which ₹ 40 lacs was through the banking channel. To further this argument, the Revenue would rely upon a document which the petitioner has produced at AnnexureJ1 to this petition which is a handwritten loose document containing various entries with dates and figures, total of which comes to 1105. Reference to B. Nanji is found against several of these entries. With the aid of o .....

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reply filed by the respondent in which it is stated interalia as under : Page No89 of AnnexureL is the copy of the ledger account of M/s B. Nanji Enterprises Ltd. in the books of accounts of Sunderdeep Builders, proprietory concern of the petitioner. It is a computer printout taken from the books of accounts of the petitioner maintained on computer and hence belongs to the petitioner. Hence as per the provisions of section 153C of the Act as the document belonging to the petitioner was seized du .....

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ory or legal requirement of providing along with the notice, the details of the seized material on the basis of which the proceedings u/s 153C have been initiated. However, the copy of the relevant seized documents were duly provided to the assessee during the course of assessment proceedings along with the notice dated 23/11/2010 issued u/s 142(1) of the Act for A.Y. 2009-10. ...The petitioner himself has admitted that Page No89 are the amounts given by the petitioner in FY. 200708 by cheques t .....

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