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P. Gouthamchand (HUF) , C/o M/s. M.P. Jewellers Versus Deputy Commissioner of Income-tax, Central Circle 2 (1) , Bangalore.

2016 (10) TMI 879 - ITAT BANGALORE

Validity of assessment initiated u/s 153C - validity of the notice challenged - Held that:- Having regard to the provisions of section 292B of the Act, we hold that mere mention of wrong section in the notice does not vitiate the validity of the very notice issued for filing return of income. Thus, the contention of the assessee that notice issued requiring assessee to file return of income is invalid, cannot be accepted. As regards recording of satisfaction, the CIT(A) had observed that the AO .....

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the Act. - Decided against assessee - ITA No.736/Bang/2016 - Dated:- 26-8-2016 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER and SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Appellant : Shri H.N.Khincha, CA. For The Respondent : Shri Sanjay Kumar, CIT(DR) ORDER Per INTURI RAMA RAO, AM : This is an appeal filed by the assessee directed against the order of the CIT(A)-11, Bangalore, dated 26/02/2016 for the assessment year 2010-11. 2. The assessee raised the following grounds of appeal: 1. The learned .....

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d. 3. In any case and without prejudice, the learned Assessing Officer had erred in making an addition or ₹ 75,12,096/- to income of the appellant on account of difference in stock and the learned Commissioner of Income tax (Appeals) has erred in confirming the same. On the facts and circumstances of the case and the law applicable, the addition as made/confirmed being erroneous is to be deleted. 4. The lower authorities have erred in holding that the claim of the appellant is neither refl .....

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The interest having been levied erroneously is to be deleted. 8. In view of the above and other grounds to be adduced at the time of hearing it is requested that the impugned order be quashed or atleast the addition as made sustained be deleted and the interest levied be also deleted. 2. Briefly facts of the case are that the assessee is an HUF engaged in the business of dealing in gold and jewellery. A search and seizure operations under the provisions of section 132 of the Income-tax Act, 196 .....

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970/- be treated as return in response to notice u/s 153C of the Act. Subsequently, notice u/s 143(2) dated 20/9/2013 was issued and served on the assessee and the assessment was completed u/s 143(3) r.w.s. 153C of the Act vide order dated 28/03/2014. While doing so, the Assessing Officer (AO) made addition of ₹ 75,12,096/- on account of difference in stock of gold as per stock register and details in report of Form 3CD. The AO noticed that as per registered impounded on 12/03/2012 as per .....

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r MP Deposit Scheme (MPDS) from various family members numbering to 22. The above explanation tendered by the assessee in support of difference in stock of 4603 gms was rejected by the AO on the following grounds: 1) It is seen from the seized books of account that the first entry of gold as per seized material Annexed MPJ/S-7 ledger is period F.Y 2009-10 and second entry is in F.Y 2011-12. Copy of page 27 of Annexure A/MPJ/S-7 dated 12.03.2012 is enclosed as (Annexure-1 to this order). The Anne .....

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the financial statements filed alongwith the returns of income for AY 2010-11 or earlier year. 3) The assessee claimed such entry of 4603 grams was under M.P. Gold deposit scheme in which gold was deposited from 26 persons who happen to be his relatives. There are no agreements with the alleged depositors of MP Gold Deposit Scheme. 4) The financial statements of the assessee such as Balance sheet were examined. It is found such deposits are no where reflected in the financial statements. 5) As .....

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nd (Individual) are also is silent about the alleged gold deposited with the assessee. There is nothing pertaining to this transaction in the financial statements of Mr. Gauthamchand (Individual). 7) The assessee also claims no monetary benefit such as any Interest' or 'Profit' is given to the depositors. 8) The confirmation letters ponts such deposits were made in year 1999. On examination of the facts, it is seen without any form of monetary benefit or any form of reciprocation, th .....

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ertaining to the alleged MP Deposit scheme. The assessee on where has maintained any separate column or working in the stock register. There is no evidence to segregate the (jewellery) in normal stock from the jeweelary alleged to have been made out of M.P>Deposits scheme. The difference amount was brought to tax as unexplained investment. 3. Being aggrieved, an appeal was filed before the CIT(A) who vide impugned order, dismissed the appeal. It was, inter alia, contended that there was no sa .....

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00,000/- for A.Y.2011-12 and ₹ 80,00,000/- for A.Y. 2012-13 in hands of Shri. Gouthamchand (HUF). there same needs to be assessed. Hence, please put up notices u/s 153C for A.Y. 2006-07 to 2012-13 As regards merits of the addition, the CIT(A) confirmed the addition. 4. Being aggrieved, assessee is before us in the present appeal. 4.1 Learned AR of the assessee submitted that the original notice u/s 153A dated 01/10/2013 was issued to the assessee. However, the assessment came to be complet .....

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133, 8137,8138,8136, 8135 & 8132/Mum/2010 Assessment years: 2002-03 to 2007-08 • V.K. Fiscal Services Pvt. Ltd. V. DCIT (Delhi)(Trib.) ITA nos. 5460.5461,5462,. 5463, 5464 AND 5465/Del/2012 AYs 2004-05 to 2009-10 • DSL Properties (P.) Ltd. V. Dy. CIT (2013) 60 SOT 88 (URO)(Delhi)(Trib.) • ACIT. v. Inlay Marketing Pvt. Ltd(2015) 167 TTJ 273 (Delhi)(Trib.) • Pepsi Foods P. Ltd. v. ACIT (2014) 367 ITR 112 (Delhi)(HC) • CIT. v. Gopi Apartment (2014) 365 ITR 411 (All.)(HC .....

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k register and the report in Form 3CD is only account of receipt of jewellery under the scheme called MP Deposit Scheme. He submitted that even confirmation letter from the depositors have been filed. Thus, he submitted that no addition is called for in the circumstances of the case. 4.2 On the other hand, ld.CIT(DR) submitted that the assessee having participated in the assessment proceedings without raising any objection as to the validity of the notice issued u/s 153C, he cannot raise objecti .....

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erala High Court CIT vs. Dr. T.M.Kuriachan (32 taxmann.com 165)(Ker). He further submitted that the proceedings u/s 153C were validly initiated as the kartha of the assessee had declared undisclosed income u/s 132(4) of the Act in the hands of P.Gouthamchand, HUF. On the merits of the issue, ld.CIT(DR) submitted that the AO was justified in rejecting the explanation, as no corroborative evidence was filed to establish that the assessee had received gold under MP Deposit Scheme. Doubts raised by .....

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not under challenge. Needless to mention that statement given in the course of search and seizure proceedings u/s 132(4) constitutes material or document sufficient to give rise to jurisdiction u/s 153C of the Act. Admittedly as there was no warrant of search against the appellant, provisions of the Act do no authorize the AO to issue notice u/s 153A of the Act. However, in this case, though the notice was issued u/s 153A of the Act, the assessee filed return in response to same and participated .....

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rn of income, etc., not to be invalid on certain grounds. 292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, no .....

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t in the case of Bharathi Cement Corporation vs. CIT (356 ITR 74) had interpreted the provisions of section 292B of the Act as under: ............It may however be noted that Section 292B of the Act enacts no assessment, notice, summons or other proceedings taken by the authorities under the Act shall be invalid by reason of any mistake, defect or omission if such notice or proceedings or assessment is otherwise valid under the Act. This provision enacts the principle that mere non-mention or me .....

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